One step forward

The tenth round of Nepal- Bhutan bilateral talks on the long drawn out refugee problem that concluded last Wednesday has finally given some hope that it might lead to the repatriation of the Bhutanese refugees. This is because Bhutan has at last agreed to go ahead with the proposed "verification" plan. But there needs to be caution as Bhutan in the past has either reneged on understandings or has delayed taking necessary follow-up decisions. Perhaps, international pressure on Druk regime to show flexibility on the refugee deadlock might have led to some "progress" in the last round of talks. This was the second time within the year 2000 that Nepali and Druk representatives met to resolve the decade-old refugee impasse. It is, however, too early to predict whether the agreed field verification will ultimately lead to repatriation of over one hundred thousand refugees with dignity and honour. The possible differences between Bhutan and Nepal while "categorizing" the refugees cannot be ruled out. Neither can the agreement on verification issue at this stage be considered a major breakthrough.

The agreement between Nepal and Bhutan clearly underlines that family as the unit of field verification and in cases of those without family, the refugees will be verified individually. The minimum cut off age agreed for the verification stands at 25 years. Nepal and Bhutan are to form the verification team within this week and the deadline to actually visit the refugee camps has been set for the end of January. This agreement appears to be based on the compromise US proposal that combined both family and individuals for verification purposes. Bhutan’s sincerity will be tested within this week as they have to name their representatives to the verification team within this week.

The Nepal-Bhutan agreement during the tenth round of talks has not specified how long the field verification would take. What are the measures that can prevent the possible differences between the two countries while identifying the refugees? When will the actual repatriation of the refugees take place? The actual repatriation of the refugees at this juncture seems to be years away even though the government has claimed the recent meeting a diplomatic success. The fact is that Thimphu regime may not allow resettlement of those refugees who were evicted from Bhutan under physical or emotional pressure to make it look like voluntary emigration. It must not be forgotten that Bhutan itself had initially proposed the verification of the refugees but later adopted the dilly-dally tactics. The fear that with the passage of time, the refugees - many of whom are Nepali speaking - will be assimilated with the local population is genuine and therefore the problem must be settled as early as possible. Bhutan must not be allowed to buy time any more. Both Nepal and Bhutan deserve praise for its achievement at the tenth round of talks, but much will depend on how sincerely both sides name their officials for the verification team and how well the verification process actually moves forward. The 100 thousand plus refugees, who spent a decade of their lives in refugee camps, must now be allowed to go back home. The tenth round was just a step, albeit an important one, towards that direction. Other necessary steps must follow in quick succession.

Nepal-India trade issues

By Sushil R Mathema

At a time when most of the South Asian economies were relatively performing well both in terms of agricultural and non-agricultural growths, the unprecedented rise in oil prices in recent past suddenly disturbed the growth processes of the growing economy of the Asian sub-continent. The old days seem to have gone now as Asia recovered spectacularly from the regional recession by attaining the annual average growth of about seven percent over two years due to high import demand from the United States. Now that a break has been observed in the position of Asian banks, which are demonstrating relatively weak performances and, that sharp rise seen in public debt over the past three years has virtually put strong set back in the growth performance and, therefore, it has been estimated to slow down within the range of 5.0 percent to 5.5 percent.

It was an universally accepted fact that export factor was the main player which demonstrated a vital role in the recovery of Asian economy even after the crisis. But the emerging Asia’s growth has, however, begun to slump because of the weaknesses recently observed in the performance of Asian banks and the rising public debt.

One cannot deny the truth that strengthening Nepal’s growth performance requires strong export growth. Nepal, after eight years of liberal economic liberal policy, has been able to recast its shape as the improved one in the past two years (including the running fiscal year) in terms of growth achievement. In parallel with 5.9 percent growth observed last year, the country is expecting the robust growth of 6.0 percent this year triggered by favourable monsoon performance and a relatively better prospect of the industrial and services sector whose performance was significantly contributed by increased export demand. In other words, it is noteworthy to mention that the rising positive turn in the external sector has stood as one of the strong supporters of the Nepalese economy, thus, maintaining remarkable foreign reserves equivalent to Rs. 93843.2 million in FY 1999/2000.

Notwithstanding the reality that Nepal’s export sector is very much vulnerable with its small base and limited diversification when viewed from the long-term basis, the government has laid emphasis on improving this sector with progressive commitments made in each budget speech. The budget for FY 2000/2001 has also committed to adopting strategic policies for export promotion such as to emphasize on enhancement and development of export- oriented industries, are based on local resources which have adequate value addition. The long-term export policy is also in the offing to develop strategy for providing adequate competitiveness for ready-made garments in the international market for 2005.

Another significant shift observed in the external sector is that Nepal’s trade with India has been increasing. A glance at total foreign trade during FY 1998/99 and 1999/2000 reveals that trade with India has increased by 42.3 percent compared to only 21.0 percent growth in other countries. The increased trade with India has an important bearing on the country's growth performance. This is because of the fact that Nepal’s exporting countries with other countries are very much limited to Woollen Carpets and Readymade Garments, securing almost 82 percent share in the total exports. While the demand for Woollen carpets has been declining due to the European recession economy and saturation factor, the future of readymade garments is uncertain particularly after 2005. Maintaining a quality standard in its exportable commodities has been an intricate issue in the industrial sector of Nepal, whose efforts at maintaining quality have been futile. The dubious nature of quality of Nepal’s exporting items has been a matter of serious concern to foreign importers. The three monthly figures of the running fiscal year show that woollen carpets' and readymade garments' export growth has declined by 18.2 percent and 23.5 percent respectively. The newly -introduced item- Pashmina, though taking a strong pace with its export amounting to around Rs. 33 million, cannot be accepted as a stable exporting commodity viewed from the long term prospects.

In contrast, the miraculous emergence of manufactured exporting commodities to India in recent years has generated hope in sustaining diversification of the export sector of the country. The export of such items such as biscuits, vegetable ghee, noodles, tooth paste, polyester yarn, soap, Pashmina and others have been significantly contributing to strengthening the exports to India. It is very much understood that India is a huge market for Nepal’s export items, if the country is able to produce diversified products to meet its neighbouring country’s demand. This would enable Nepal to curtail its huge trade deficit with India to a larger extent in a very short span of time.

But time and again, the export performances of the two commodities have been halted by the development of non-palatable issues such as raising non-tariff as well as tariff barriers in some cases by the southern neighbour. Take for instance, the imposition of SAD (Special Additional Duty) of 10 percent by India in the recent past. This action defies the spirit of the 1996 Trade and Transit Treaty between Nepal and India that guarantees duty free access to Nepalese products into Indian market. Similarly, non-tariff barriers such as in the transport of certified vegetable ghee on the border areas at time and again, imposition of tariff by quarantine check posts on agro-products of Nepal, in fact, is a discouraging factor to export potential. Although, such issues were dealt timely and solved with the efforts of both the governments, this kind of uncertainty in trade policy has, no doubt, put a brake on the continuity of the export growth of potential goods to India. The apprehensions from the local government on the border side such as confederation of Indian Industry, seeking the government to terminate the preferential trade agreement with Nepal, concern of Directorate of Vanaspati, Vegetable oils and fats, Ministry of Consumer Affairs and Public Distribution on the Nepalese origin in case of Vegetable ghee, the decision to file an anti-dumping duty petition by the Federation of Engineering Industries of India with the designated authority are delicate issues that are constantly threatening the export potential of the country to the southern block.

On top of it, Nepal has to maintain fixed exchange rate with the Indian currency in order to basically avoid currency substitution. Nepal’s external sector is suffering through unavoidable depreciation of its currency vis-a-vis the green back dollar. The sharp rise in global oil prices and the subsequent depreciation of Indian currency against the US dollar have stirred the depreciation of Nepalese currency vis-a-vis US dollar by around 7.4 percent between the May-November, 2000. Although the depreciation makes Nepal’s exports cheaper in the international trade market, huge costs on import of oil and transportation of raw materials and intermediary goods have inflated the cost of production of goods, thereby by not making export goods cheaper as expected.

In view of constraints and limitations faced by Nepal in its exchange rate regime as well as in exports prospects to India, Nepal has to develop a two-pronged approach in its exchange rate and trade policy. While stability in exchange rate mechanism is necessary to have comparative advantage in export trade to third countries, a review on fixed exchange rate regime with the Indian currency may be needed, should the Indian currency go on weakening beyond an envisaged limit. And again, the diversification and identification of new exportable commodities is to be adopted as a long- term prerequisite to enable the promotion of export-oriented industries and thereby increasing both convertible and non-convertible foreign exchange earnings. More importantly, to mitigate the problems encountered in exports to India, Nepal should be able to attract as many people as possible for establishing joint venture industries with India in the country. This will facilitate to solve a number of problems associated with export potential to India and help in securing a larger segment of the Indian market for its exports without causing apprehension to the related small industries, based on the border states of India.

Bandhs- questions and more questions

By Utpal Raj Misra

We Nepalis have been witnessing the days called bandhs quite frequently this decade. And it has been quite some time now that I have been trying to figure out what these bandhs actually imply.

What are bandhs supposed to prove and what benefits do they have for the nation? (One tends to get a feeling that it is beneficial as people who call for them call it "Nepal Bandh" or "Valley Bandh" in such a manner that it is a matter of pride).

Political organisations that call these bandhs say that it is a way of showing protest over something and telling the government that they have support of the general public. But I wonder who on earth would be happy to support a bandh?

Which businessman would want to bear loss for a day just in order to show support for someone or something?

Which student would like to lose a day’s education (which he has already paid for) for something that does not concern him?

Or which driver of a public vehicle would be happy to stay home the whole day, while he knows that he won’t be able to earn a penny with his vehicle locked up inside a garage?

And what about the poor daily wage earners, the labourers and the like? Can one expect that they support a bandh knowing too well that they and their families will have to sleep that day with empty stomachs?

No person with some national sentiments would ever support a bandh.

Would a nationalist support a bandh knowing that even a day of closure would have an adverse affect on the country’s economy (of whatever is left of it)? Or support it, while understanding very well that a day of bandh would paralyse all the state machinery and that it would discourage more and more probable tourists from visiting the country hampering the country’s biggest industry?

Well one does not even need logic to realise that neither law fearing common men nor a nationalist would ever support a bandh. But then why is a bandh always "successful"?

Everyone knows and says that it is because of fear. Fear of vehicles being burnt if found plying on the streets; fear that shops will get vandalised if open; and fear that people will be manhandled, if found getting on with their daily activities.

In other words, the public fear vandalism, hooliganism and utter state of anarchy. And aren’t these words always associated with anti-social elements?

So, I come to the conclusion that all those who call bandhs and those who support them are anti-nationals, anti-social elements or fools.

So, I think it is high time now that all Nepalis decided what they are. Anti-nationals or fools?

If we don’t identify ourselves with any of the two things (anti-nationals and fools), then I presume we will no longer have any bandhs in future. Or maybe I am wrong. Maybe bandhs are what sovereign people do. As Nepali intellectuals claim that we are sovereign.

We and our sovereignty

By Basanta Lohani

Last week for two consecutive days, emotions boiled and spilled onto the streets of Kathmandu. Five persons were shot dead by police firing for reasons not known to them. Likewise, hundreds of others were injured. The city of Kathmandu bore a look that resembled the days of 1990’s People’s Movement for the restoration of democracy. Was it for another revolution this time? Not quite so. It all happened because an Indian man, Hrithik Roshan, who has suddenly become the hottest property of India’s film industry since last year, allegedly made derogatory remarks on Nepal and the Nepalese people in an interview to the star plus channel about three weeks back. Roshan, in that interview, was perplexed for his resounding successes in just too sort a period of time. But now after the incident in Kathmandu, he seems to be more perplexed of the happenings because of his alleged utterances which he denied that he had ever uttered. He says he has his interview tapes available for anyone to verify.

Kantipur daily has reported how the story rolled on. It started with half a dozen kids under the guidance of two adults burning an effigy in Chitwan’s Balmandir square. An unidentified man described this incident to the vernacular weekly, Chitwan Post, which in turn used it as a news .The editor, who lived in the same locality had seen the effigy burning , published the story without verifying something which he had not heard himself. The next day, students became furious when they read this news.

Like monsoon waves, this emotion-laden wave soared high, and finally pouring into the capital, killing five people including two school children and destroying millions of property. But nobody came to declare that he or she had heard Ritik saying so, except repeating that they had heard someone saying so. Still, the wild frenzy continued unabated for two days. The question now is how could anyone kill five persons who did not know reasons behind the furore? This brings three points into focus. They are: a) Our nationalism b) the growing frustration and c) political craftsmanship

Nepal’s nationalism has been amazingly linked to India’s behaviour towards us ever since it performed a role in our democratic struggle in 1950, the way it secured the 1950’s treaty from Mohan Shumsher, and then reinstalled him, after thrusting upon us its Delhi Compromise, as democratic Nepal’s first prime minister against whose regime the whole struggle was fought. Because of its attitude towards retaining the kingmaker’s role and meddling in our affairs constantly, the Nepalese have become apprehensive. It just reflects a small nation’s psychology. India’s dealing with Nepal- what I describe in terms of India’s as "I’m OK - you’re not OK position," - has bred enough contradiction in this relationship over the years.

Nepalese people were cheated in Koshi and Gandaki, and even in Mahakali. The water sharing arrangement is not based on much -talked about principle of equality. The 1990’s blockade and its subsequent effort to secure the Mohan Shumsher type agreement from the then Panchayat regime gives a glimpse of its psyche. Its behaviour in Laxmanpur barrage was amazing because it lacked even the basic human sensibility. It built the barrage violating international rules, and inundated paddy fields and houses of people living near the barrage site to store Rapti river's water to irrigate its land and then also created a controversy as if we were at fault. It levied value-added tax on Nepal’s manufactured goods exported to India against the spirit of Trade treaty, and then scrapped it after bargaining for Indian sub -standard automobiles’ entry into Nepal. For the last six months, something known as quarantine duty on Nepalese agricultural products has been levied, which again is against the spirit of existing trade treaty between the two countries, and like value added tax, it may have been introduced to bargain out something else from this small and poor country. Chief minister of India’s boarder state of West Bengal has described the quarantine duty as illegal and voiced his concern to waive it

Likewise, last year, the Indian media bombarded for making Nepal guilty of the hijacking of Indian Airline’s (IA) aircraft to Kandahar by Muslim militants, cancelled all IA flights to Kathmandu for six months, while resuming flights to Pakistan, and presented an innocent Nepalese aboard the aircraft as one of the hijackers. India has raised a non-issue like cheap Chinese goods finding its way into India through Nepal, while making Nepal as a dumping ground for its manufactured goods. India’s inability to converge its policy towards Nepal into one of genuine friendship of "I’m OK - you’re OK" planes has always made its policy dualistic - the one of what today’s reality is, and the other that of the continuity of British colonial foreign policy. Thus, it has become like zero sum game where India has always gained only by making Nepal to lose while sharing Nepal’s water resources, among other things. This is the main reason why this relationship has not been able to find a stable equilibrium causing erratic rhythms.

This is the ground reality that truly makes us apprehensive. Based on this reality, the way Nepalese youth in particular so violently reacted to the alleged utterances of an Indian actor is spontaneous and, thus, can the whole episode be explained but only partially. A pro-Nepal could be anti- anybody in safeguarding Nepal’s broader national interests but emotions need not run that blind. The fact is that we can not choose our neighbours. And again, the fact is we have to protect our interests. Just because an Indian youngster, who is one out of one billion Indians, and officially, who is a non- entity, whose allegedly derogatory remarks on us does not justify an action of this kind that resulted in the death of five Nepalese and destroyed millions of property. If some one from Nepal speaks something against a country, will it run the people of that country amock destroying their own property? I do not think so. Now the question arises why did the emotion boiled so much? One way to find its answer could be a growing frustration of people who are dejected, disappointed and have had enough apathy due to the corruption and irresponsibility of rulers, and because of the ineffective and unproductive system. Increase in per capita income or gross domestic product is the concern of economists but not of the common men who are finding themselves being robbed off when they go to the market to buy their necessities. The rulers have ruthlessly looted this country for the last ten years, mutilating democratic norms and values for this purpose.

The recent case of naked loot is the Lauda Air deal on the initiative of prime minister Girija Prasad Koirala who, reassuring the members of the parliament in Public Accounts Committee, has promised to take action against the guilty. Against whom is he taking the action? Against himself? Bhattarai in a recent interview has openly questioned: what has Koirala done other than making his family and himself rich? He linked this question to blessing -seeking psyche when he said: ‘why is India supporting such Koirala regime?’ The Maoists have already declared their government in two districts and are busy marshalling their strength in more areas.

In this process, the country is becoming weak everyday. Is it that the behaviour of politicians is tuned to be perfectly rational in multiplying their hidden rhythm of greed, hypocrisy, dishonesty and loot under the disguise of being the saviour of innocent millions? This is the human history of struggle where a common man is used only as a brick in the super structure of greed and callousness of his hero ideal. Who delineates moral codes? And, who drives social passions? These are questions whose answers have loaded aesthetic values. Where are we in this game played by those harbouring their ambitious designs? As I am completing this write up, Kantipur daily was brought in, where I read the statement of a man by the name of some Malkani, leader in ruling Bharatiya Janata Party of India. What he said does not suit his stature. The way he talked about Nepal’s sovereignty, citing King Tribhuvan and Indian first prime minister Nehru, is redundant, outrageous and a total nonsense. I strongly condemn his evil outpour. Let him and persons like him study Nepal’s history incisively to get the feel of how the Nepalese have fought to keep their country’s sovereignty unfettered, and are as firm as Sagarmatha as ever before. We are small, we are poor but when it comes to our motherland, we are resolute.