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| Kathmandu, Friday February 07, 2003 Magh 24, 2059. |
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Economy and peace
The Nepal Security
Exchange (NEPSE) index has climbed up by 25 points since the announcement of the truce
between the warring government and the Maoist rebels. Call it a peace dividend.
Fortunately, there are also other positive indications on economic front: tourist arrival
has increased by 11 percent in January compared to the last year figures; import bill has
gone up, so has the sales of diesel. The latter two indicate a rise in economic
activities.
The collective message
is that investors are clamouring for a conducive business environment and the current
economic downslide can be turned around. Much will depend on how quickly the fragile truce
can be consolidated into a lasting peace. Unfortunately, peacebuilding is a painfully slow
and tricky process that can easily undo the glimmer of hope that we see now in the
economic horizon.
Therefore, the parties
to the present conflict should immediately show some seriousness to nurture these shaky
gains in the economic arena. The Maoist rebels have called off the planned Nepal strike
and the strike in the educational institutions. It is a good step forward, but much more
can be done, and should be done immediately. For instance, come March and we enter the
peak tourist arrival season in Nepal. A joint statement from the Maoist rebels and the
security forces reaffirming the security situation in Nepal for the tourists can rebound
their arrival rates in the next season.
Likewise, investors,
particularly foreign investors, need assurance that their life and investment are safe in
Nepal. Attacks by the Maoist rebels in the joint venture industries in the past have
severely eroded investors’ confidence in Nepal as a safe and sound investment
destination. Their confidence needs to be restored.
Moreover, the prolonged
negotiation process and the transition that follows, even if peace is to last here, would
create policy level and procedural confusion, which will act as a serious damper on
economic activities. Make no mistake, Nepali economy is too weak to go through that
confusion for long.
If the short term
economic concerns demand apt handling, the long-term issues deserve even better attention
and a judicious treatment. Worldwide unemployment, poverty, inequality, and social
exclusion are at the heart of the explosive social conflicts. And we are just awakening to
the reality that poverty anywhere is a threat to peace and progress everywhere.
As the country is
breathing a sigh of relief, thanks to the much warranted ceasefire, we confront an
Everest-sized challenge of creating an inclusive and vibrant economy. We don’t have a
luxury of neglecting the economic challenges, both the short and long terms, while we
negotiate our positions and parochial interests in the peace talks. It should be our
priority from the day one. |
