South Asia’s Industrial Development Joint Venture Essential

By Khilendra Basnyat

IN development literature, the industrial sector has been emphasised as the engine of growth. However, so far, industrialisation in most South Asian countries has only a marginal effect on the disruption of surplus population from rural areas. It is because agriculture occupies a pivotal position in South Asian economies. In terms of Gross Domestic Product (GDP), it accounts for about three-fifths in Bangladesh and Nepal, two-fifths in India and one-third in Pakistan and Sri Lanka.

Employment

Agriculture is also the major source of employment in this region. About 90 per cent of the labour force in Bhutan and Nepal are employed in this sector. In fact, South Asia’s rural poor are persistently utilising the available land for cultivation. They depend on wasterland for their food, firewood and fodder needs. The existing practices of land use patterns are notable to even fulfil the rural poor’s basic needs. Therefore, it is essential to pay attention to industrial development.

Over the past one and half decades, South Asia has witnessed a moderate rise in the share of the industrial sector. The contribution of this sector to the GDP rose from 25 per cent in 1980 and 30.2 per cent in 1997.

The share of industry in GDP was the highest in Sri Lanka (32.3 per cent and the lowest (17 per cent) in Maldives in 1997. Its share in Bangladesh, Bhutan, India, Nepal and Pakistan were 28, 19.2 , 31.9, 19 and 26.4 per cent respectively in 1997.

In the past few decades, Bhutan, Maldives and Nepal have recorded a more impressive increase in the share of industry than other South Asian countries. In most South Asian countries, the main industry is textiles and clothing. The second largest industry is chemical which has doubled in Bangladesh in 1983 over 1970, trebled in Pakistan over the same period, and remained stagnant in Nepal and Sri Lanka. In India, it occupies the third position.

In the industrial sector, the homogeneity among the countries observed in the case of textiles and clothing disappears for the other manufacturing value-added items. In India, machinery transport equipment occupies the second place in industry. In Sri Lanka, there had been a decline in the sector in the past few years. However, Bangladesh, Bhutan, Maldives and Nepal have not made progress in this industry.

Most South Asian countries import huge quantity of capital goods from abroad. Such goods include metals, machinery (including electric machinery and transport equipment), petroleum oil and lubricants, fertilisers, minerals, chemical elements and compounds, foodstuff and edible oil, etc.
It is only India that exports some finished goods such as textile products, readymade garments, engineering goods such as textile products, vehicles, etc.

Pakistan also exports large amount of textile goods to other countries. However, both of them face the problem of high tariff barriers and protect against their exports. They also encounter the problem of qualitative efficiency of their goods in the competitive market. Since they do not have sufficient industrial capacity or technical know-how for full exploitation of their resources, they usually face under pricing of their agricultural products in the world market. Also, they do not have reserving facilities and bargaining power vis-à-vis developed countries.

By nature of their economies, most South Asian countries are dependent on foreign capitals for their industrial growth and development needs. However, the problems are increasing in the present crisis of the world economic order, which is totally in favour of developed countries. In recent years, structural transformation is in vogue in most South Asian countries. One aspect of such transformation of these countries’ economies in the diversification and broadening of they’re industrial structures from one predominated by simpler industries to the more advanced and more knowledge-intensive industries.

Over the past decades, the industrial structure of South Asian countries has moved toward diversification in a sustained manner. Although the degree of specialisation has declined over 1985-95 for most South Asian countries, the extent of the change varies across the border. Sri Lanka followed by Nepal has recorded most improvement towards diversification of the industrial structure. In the past few years, India, has recorded 23.3 per cent decline in the levels of specialisation while Pakistan 17.5 per cent. In the case of Bangladesh, the progress towards diversification has been rather slow with only a 2 per cent increase over a decade.

In reality, South Asia’s economy has witnessed structural transformation in its production sector during the last two decades. However, the extent of such transformation has varied across the regional countries.

The growth rates of industry in this region achieved during the 1990s have been higher than those recorded in the 1980s. This shows that the pace of structural transformation has gained speed. However, manufacturing industry in most South Asian countries is still dominated by textiles and apparel and food processing. No doubt, most South Asian countries have pursued development strategies emphasising industrial development with a great dependence on import substitution. However, in the 1980s and the early 1990s, attempts were made by these countries to move away from the orthodox substitute industrialisation strategies and to liberalise internal policies in order to integrate domestic economies with the global economy.

The shift in the policy perceptions of South Asian countries is conducted by opening up their economies, liberalising the industrial sector from control and facilitating the inflow of foreign capital and technology for sectional restructuring. Consequently, there have been positive impacts on industrial productions in these countries.

Since the past few decades, India has made considerable progress in small industrial sectors such as textiles, food processing industries, pulp and paper, light engineering goods, chemicals and pharmaceuticals, cement, iron and steel products and commercial vehicles, and non-manufacturing sectors such as hotels and restaurants, construction, etc.

Like India, Pakistan has made headway in constructing viable infrastructure for science and technology. The Pakistan Council of Scientific and Industrial Research is a major organisation, which conducts research and development works related to industry. Among others, it undertakes research and development in oils and fats, food and fermentation technology, solar energy, ore processing and metallurgy, glass and ceramics, paints and plastics, pharmaceuticals, fine chemicals, polymers, leather etc. Such works have been fruitful to expedite industrial development in Pakistan.
Today, several Indian public sector undertaking and private industrial houses are in a position to undertake turnkey projects in a large number of manufacturing industries, electrification projects, electronics and telecommunication as well as civil, mechanical and electrical projects.
In fact, India has attained a high level of technological development and managerial capacity, which can be shared by other South Asian countries profitably. It can collaborate in establishing joint ventures in neighbouring countries, which processes adequate raw materials for industrial development.

Joint Ventures

In fact, joint ventures can be started in Bhutal and Nepal for cement, in Bangladesh for paper, fertiliser and natural gas and in Sri Lanka for rubber goods. Such ventrues will not only improve the balance of payment situation of the small countries of the South Asian region but will also improve both trade and industrialisation process in these countries.

Don’t Prop Up Phone Firms; Let Them Fail

By David S. Isenberg

TELEPHONE companies of all kinds are in trouble. Their stock is plummeting. Their enormous debt is mounting. Workers are being laid off. They’re sinking so quickly, in fact, that they’re calling for government bailouts to survive. Last month, the Federal Communications Commission held hearings to look into the causes of the current telecom free fall. Many speakers confused causes with effects. Weak balance sheets, overcapacity and the recent speculative bubble are effects, not causes. If the FCC attempts to treat the symptoms, it risks missing the causes and prolonging the agony. Instead of spending billions of tax dollars propping up the telephone companies and delaying the inevitable, let them fail — and fast. By doing so, an astounding new era of telecommunications will be launched that is just as inevitable.

The primary cause of the telecommunications meltdown is obsolete telephone-company equipment. Now when you make a phone call, it is routed through a network designed for one thing only: talking. The network can’t handle, say, Web surfing, e-commerce or e-mail.

The more specialised a tool is, the fewer new uses there can be for it. That’s why you can use your screwdriver for a thousand different tasks, but your electric can opener for just one. And that’s why you can count on your fingers the new services your telephone company has introduced. It took a couple of decades to get caller ID off the ground, and for transmitting those dozen extra characters, the telephone company charges you $5 a month.

Compare that with the rate of innovation on the Internet. Sure, there are some terrible ideas on the Internet, but you also get e-mail, instant messaging, streaming audio, e-commerce and Web logs that make it easy to publish material on the Web, to name just a few. Innovation happens so much faster on the Internet than on the telephone system because the Internet is designed to be as non-specialised as possible.

The Internet and the phone network stand in direct contrast. The phone network is hardwired to do just one thing. The Internet is a vibrant source of innovation in a free market that has driven user costs way down. The telephone network is aging, hostile to innovation and so expensive that the seven largest U.S. telecommunication companies now report more than $250 billion in long-term debt — and there’s much more worldwide.

Most critically, the Internet can do everything the telephone network does. And more. And better. And cheaper. The Internet is already carrying telephone traffic cheaply, reliably and with such high quality you don’t even know it is there. So rather than prop up the corpses of telephone companies, the federal government ought to let them fail. Investors who hold the stocks and bonds of the failed companies would absorb their mountain of debt, a painful prospect for sure. But the debt is going to be paid off either by the investors who took the risk or by taxpayers chasing bad money with good. In either case, a fast failure now would be cheaper and less painful than a slow one later.

Financial failure won’t mean our telephones are going to stop working. Just as the Federal Aviation Administration ensures that bankrupt airlines still fly, the FCC will ensure that bankrupt telephone companies still complete phone calls. It’s not just about maintaining the current level of service. Believe it or not, there is a positive side to this collapse. Telephone companies, weakened by bankruptcy, would lose their lobbying clout and have a harder time snarling the spread of high-speed Internet access and keeping competition off the market.

As the new network is built, we’ll see a tremendous outburst of innovation. It’s already there, straining at the bit. The Internet today could take over everything the old network does, and, at the same time, unleash a new wave of technological innovation that would make the U.S. economy grow again. The half-million telephone-company workers already laid off would find productive new ways to use their network knowledge in this next technological wave. The cost of connecting — by voice or keyboard — would plummet because not only is the new technology vastly simpler and cheaper, but the mountain of bad debt behind all of that obsolete technology would be leveled.

A bailout of the old telephone companies would not only throw money down a hole, but also would delay this new technology boom that’s waiting to happen. When Elvis died, one pundit cracked, ‘’Good career move.’’ That’s the advice we would give to the obsolete telecoms: Fail — fast.

Ranajit Malla The Last Ruler Of Bhadgaon, II

By Gun Dev Bhattarai

PRITHIVI Narayan Shah’s strategy worked in his favour. That is to say Prithivi with the assistance of Bhadgaon recaptured Naladum and Mahadeopokhari. Though Prithivi did not hand over Naladum and Mahadeopokhari to Ranjit Malla, he agreed to help Ranjit in capturing Changu. Prithivi was outwitted by the combined forces of Kathmandu and Patan to the effect the former was forced to escape to Bhadgaon where he, it was stated, remained as a refugee for a year. Jaya Prakash Malla repeatedly cautioned as to the designs of Prithvi Narayan Shah but Ranjit Malla turned a deaf ear to the words of Jaya Prakash.

Prithvi was not in a mood to rely on the integrity of Ranjit Malla. He by dint of the bravery of the Gorkhalis went on capturing Pharping, Chitlang, Dahachok, Sibapuri one after another. Moreover, Prithvi planned to occupy Dhulikhel, Banepa, Panauti and the like. Ranjit Malla realised his folly by not complying with the advice of Jaya Prakash as to the designs of Prithvi. Nevertheless, the realisation of the dangers from Prithvi was short-lived as soon as the first battle ot Kirtipur came to an end once again their unity came to an end.

Prithvi Narayan was not in a position to occupy the Nepal Valley unless and until he adopted another means. He adopted the policy of economic blockade after capturing the outskirts of the Valley. The occupation of Makwanpur facilitaled Prithvi to block the south passage. In the courses of time Kathmandu and Patan were occupied and Jaya Prakash and Tej Narsimha, ruler of Patan fled to Bhadgaon. Prithvi requested Ranjit to hand over the fugitives to him. Ranjit having realised his follies became adamant enough not to yield to the demand of Prithvi. The rulers of the Valley fought tooth and nail against Prithvi’s forces but it had became quit late to the effect Bhadgaon also fell into the hands of Prithvi. However Ranjit Malla was permitted to go the Kashi.

Ranjit Malla was a ruler with mixed propensities. His relation with Jaya Prakash was not good. He sought the military assistance of Prithivi to thwart the military ambition of Jaya Prakah Malla.
In one way Ranjit Malla failed to realise the long term political strategy of Prithvi. Ranjit Malla was a ruler possessed of religious ideals. He was equally liberal towards the vanquished enemies. He was enlightened and liberal in many ways. He would seek the counsele of his people under abnormal circumstances.

Ranjit Malla felt considerable satisfaction from his vast collection of manuscripts which covered all conceivable subjects on earth both in arts and sciences. Ranjit Malla was the only legitimate and direct descendant of Yakshya Malla on the male line. He was highly respected and revered by his people. His long tenure of kingship had made him matured enough to have wide range of knowledge. His predecessors were experienced rulers and that is why he had inherited the values and norms or administrative qualities.

The political condition of Patan and Kathmandu was not good in comparison to that of Bhadgaon. Under such circumstances prevailing in Kathmandu and Patan Ranjit Malla could not utilise his position, influence and power to promote unity in the Valley to face the common danger threatening the very existence of the Malla dynasty. If Ranjit Malla had applied his good services to come to terms with the rulers of Kathmandu and Patan he might have averted the dangers posed by Prithvi Narayan Shah.

Some historians have blamed Ranjit Malla for the downfall of the Mallas. In fact, all the rulers of the Valley without any exception were equally responsible for their fall. That is why Prithvi Narayan Shah exploited the prevailing situation of the Valley and wiped out the Valley rulers one by one by dint of his strategy associated with the bravey of the Gorkhalis.