|
MARCH, 2002 |
|
|
|||
|
||||
|
Economy & Policy |
|
Peace and Development
By Prakash Chandra Lohani The hankering for peace is a part of human existence. We want peace because we want to be happy and it is hard to be happy when there is hate, violence and war. And yet as we look around the world violence, killing, destruction and even unthinkable brutality is spread in all the five continents of our planet. In our own country we are helplessly watching our own people kill each other and are not able to come up with any solutions to stop it. We are finding that we who claim ourselves to be a tolerant and peaceful people are in fact capable of the worst manifestation of brutality and terror. Suddenly peace has become a precious phenomenon that can no longer be taken for granted. War is the antithesis of peace. In one sense we could define peace as the absence of war. They are two sides of the same coin and we can not think of one while ignoring the other. Promoting peace then implies understanding the causes of war and being wise enough to control or better eliminate it over time. The last of-course is a Herculean task which mankind has never succeeded in the past; yet it is a cause worth striving for. Nationalism and Culture If we look at human history wars were fought because the rulers wanted more wealth and power. In the feudal age the ruler was the state and the people were the instruments to project his interest, whims, ambitions and delusions in the form of war. Violence was the game of the ruling class and the common people were the instruments necessary for the purpose. Gradually with the age of enlightenment and industrial revolution, society became more complex. New structures and institutions became necessary to coordinate the tasks of an increasingly sophisticated production structure. Education became essential because technology required knowledge and with it came increasing consciousness about the structure of economic and social relations in the society. It is during this period that people started becoming consciously aware of their culture and connected it with a specific national identity, thus giving rise to nationalism as a new and powerful source of action and behavior. This new energy and awareness was then used to define national interest and to mobilize the people for its achievement. In the feudal era too taxes were collected and armies were raised for war but it was all an expression of the king or the emperor’s worldview that had little to do with the interest of the people. In the age of industrial revolution and nationalism, however the mobilization of the people was increasingly in the name of the nation, its people, its way of life and culture. This new orientation required changes in political behavior. Rulers that did not recognize this new reality were overthrown and economic and political changes continued to evolve in an interactive mode over time. The substitution of the ruler’s interest with national interest has been a vast jump in terms of socio-economic and political evolution that recognizes the primacy of the people and their right to human dignity and happiness as the overriding basis for governmental action. Gradually people were transforming themselves from subjects to citizens, and yet for peace between and among nations was not necessarily any more secure than in the past. National interest often projected, as an expression of the cultural identity and the economic welfare of the people became the new slogan of the ruling class. In this scenario, clash of national interest rather than the raw ambitions of power and wealth of the feudal lords became the new cause of conflict and war. National interests are often the economic and political interest of the ruling elite pursued with the support of the state. During the last three hundred years industrial revolution, the great advances in science and technology and the spirit of nationalism defined the broad framework of interstate relations. The logic of national interest howsoever it may have been defined provided the basis of drawing a framework to conduct relations with other nations. The clash of national interests became the cause of war. National Interest How is national interest in any way different from the interest and objective of the ruler in the age of feudalism, if both are equally agreeable to destruction and war? This question merits attention. War in the days of feudalism was generally an expression of the desire of the ruler and his vassals to increase power and resources for their benefit and the mass of the people were mostly irrelevant in the decisions. The definition of national interests on the other hand tends to be more broad based and the involvement of the masses in the war enterprise takes both an ideological and institutional form that can make it much more viscous and powerful. In the nineteenth century the ideological, institutional and technological changes, primarily in the western world, worked hand in hand in giving a sharper focus to the concept of national interest that required the involvement of an increasing number of common people. Clash of national interest resulted in war both at the center and the periphery often for establishing new colonies scattered all over the world. For the European powers of the nineteenth century the economic logic of unbridled capitalism plus the new advancement of technology provided the rationale and the means to pursue the path of colonialism unleashing war and destruction in societies all over the world. In this process countries like China and India that were far richer than many European nations up until 1760 were pauperized to the extent that by the middle of the 20th century they had joined the ranks of the underdeveloped countries of the world. Calculation by Prof. Angus Maddison shows that China and India had together 46 percent of the GDP of the world in 1700 while Europe had 23 percent. The USA did not come in the picture at all. By 1952 however China and India had only 7 percent of the world’s GDP while Europe and the USA claimed 58 percent. Even Adam Smith considered as the father of modern economics declared in his writings in 1776 that " China is a much richer country than any part of Europe". The second half of the 20th century has seen a rapid disintegration of the colonial system and a reawakening of all the major countries of Asia. The Eurocentric world system and worldview is definitely for a change. An alternative was provided by the Marxist-Leninist perception that challenged the ideological framework of the West and offered an alternative vision for life and living. The ideological implications of this alternative defined the contours of a clash of national interests and led to a competition in both economic and military areas. In this competition between the ghosts of Adams Smith, David Ricardo, Marx and Lenin capitalism itself has undergone a significant change that becomes obvious if one were to compare it with the logic of free enterprise at the beginning of this century. The end result however, has been the retreat of orthodox Marxism. Marx was great in his analysis of the reason for the downfall of the capitalist system but he had precious little to say about the problems of production and distribution in the post capitalist era. This theoretical lacuna was never repaired. Gorbachev tried to cover this weakness by combining both Marx and Adam Smith into a kind of economic and political cocktail but we know that it failed to raise the total factor productivity of the Soviet system. Naturally the Soviet economic strength could not support its military requirements in a competitive race and the system collapsed. We can all be thankful that the cold war ended peacefully. For many Third World countries finding a balance between the alternative models available in the second half of the twentieth century remained almost a passion giving rise to various homegrown models of economic and social transformation. In the social field, a new sense of awareness about one’s culture and identity has led to various forms of social polarization leading to violence and conflict on issues that were unheard of only a few decades ago. In the economic field trying to combine the best between the logic of socialism and capitalism, led even large countries like India to the verge of bankruptcy in the 1980’s forcing a change in the development paradigm that is now strongly capitalistic in character. For China capitalism in the name of socialism with Chinese characteristics is making a remarkable comeback leading to explosive growth in income and output. It is these changes that are bound to produce significant changes in the distribution of economic and military power in the world in the years to come. By the end beginning of 1999’s the cold war was over and for the first time in this century the world was unipolar. The USA was the uncontested superpower and its influence is to be observed even in the remotest corner of the earth. But as historian Paul Kennedy has observed international system is subject to constant change. And we are bound to see a lot of changes in the years to come. First, it would be reasonable to predict that a reversal in the decline of Asia that started during the second half of the 18th century will increasingly gain momentum in the next two decades. Much will depend upon the trend in China and even more important India, which still has remained somewhat of a laggard in achieving its growth rate potential. This would mean that the present unipolar world which in any case is gradually turning into uni multipolar will in the next two to three decades turn into a multipolar world of many civilizations each with its own set of national interests. All wars and conflicts in the last three hundred years were basically among nations of the same civilization. But this could change in the future. As Samuel P Huntington observes, managing conflict in a multipolar and multicivilizational setting could be much more difficult than in the past. What then can we say about the future prospect of peace in the world? Even in a multipolar world the USA will probably remain the most important power in the foreseeable future but there will be others in the competition both from Europe and Asia. From a mid term perspective, Huntington’s perception of a uni-multipolar world where we will experience a world with one superpower and many great powers seems likely to remain valid. It will however be an unstable world where the super power and great powers will resemble an oligopolistic structure with one large company providing price leadership that the other companies accept as given. In this case the dominant country the USA will try to set the rules concerning political and economic transactions in the world. Great powers are expected to follow the guidelines and maximize their gain within the given framework. Like in economic model relating to price leadership in an industry some countries may find the rule unsuitable for them and go on to challenge it. Still one or more great powers may join hands to form a coalition to ask the superpower to negotiate a new framework .In this scenario even among the great powers civilizational consideration may determine the nature of coalition to challenge or negotiate with the superpower. On the other hand with the passage of time as the economic and military dimension of the great powers tends to approach that of the superpower we will then have the problems of a multipolar world with members coming from different civilizations. It will be a complicated world as Huntington suggests with different sets of national interests that may not always be compatible. How can peace and stability be assured in this kind of a multipolar and multicivilizational world in the future? The Future To answer the question posed above is not easy. But we can make a beginning. The probability of war increases and even more so in a multi-civilization context when the international mechanism for conflict resolution is unable to entertain and process various demands arising out of a clash of national interests. At least in this front the world has learnt a lot. Institutional innovations to deal with conflict situations on an international scale are being tried and this represents a bright spot for the future. Specifically, three kinds of problems will have to be dealt with. They are: (a) The sharing of gains from trade: In the past when colonialism reigned supreme, there was no question of the mutual sharing of gains of trade. Colonial trade, it is now well documented, was used for financing the industrial expansion of the colonizer and the impoverishment of the colony. International trade that is based on the dynamics of the principles of comparative advantage, however, is totally different from the colonial and mercantilist version of " free trade" where discriminatory tariff and state power were used to deindustrialize the colonized countries. Generally, international trade can be a powerful engine of growth and welfare of all the parties involved and it is a mistake to view it as a zero sum game where the gain of one nation means a loss of another. Actual sharing of the gains of trade however remains a controversial issue. Since the second half of the 20th century sharing of the gains of trade has remained a major bone of contention and it will continue to remain as a major question of potential conflict in the future. However, in recent years institutional mechanism to deal with these issues are being visualized even though their focus is on the problems and interest of the richer countries of the world. The establishment of the WTO is a step in this direction. The success of this institution in initiating measures of affirmative actions on a global scale for those nations that have been left behind because they were caught in the "predatory appetite" of colonial exploitation and stagnation is yet to be seen. It should take the initiative to help the developing countries to catch up with the more advanced nations through an expansion in mutually beneficial trade and assure a level playing field over time so as to minimize the conflict of national interests taking a destructive turn in our multicivilizational world. (b) Democratization of international decision making institutions: As the balance of economic and military power changes over time it will have to be reflected in the decision processes of international economic, financial and political institutions at various levels. This is difficult because the existing powers drawn primarily from one specific civilization will find it hard to accept that their relative position in the hierarchy of power in the international system has changed or could change in the future. Europe, for example, produced 40 percent of world GDP in 1890; in 1998 it had decreased to 23 percent. Similarly the high point for the USA in terms of world production was in 1952 when it produced 28 percent of world output. By 1998 it had decreased to 21 percent and this trend will continue in the years to come. (c) New International institutions: At the regional level may be necessary with some power and muscle to mediate regional level problems among nations within a region so that they do not become a threat to international peace. This is again a difficult proposition because it can easily give rise to the "sphere of influence" doctrine of the past. On the other hand a definite mechanism to solve minor problems at the regional level from snowballing into major problems of international tension would seem to be necessary. It allows greater opportunity for tackling the really pressing problems of a future multicivilizational world. (d) Security framework for conflict prevention: For many years to come the problem of social polarization associated with rapid changes in the socio-economic structure will generate new forces of tension, violence and terror. An international mechanism to address its underlying causes and control it from spreading to other countries and region will need to be put in place so that it does not lead to destruction and despair on a large scale. This again is a difficult proposition since it directly concerns the issue of national sovereignty and independence as well as underlying issues of social change and development and the evolving structure of justice and fair play in the international system. For small countries of the world like Nepal, the 21st century will be relatively safe if the international community can gradually move to a rule based system in defining norms and values of inter-state relationship. It provides some measure of security against arbitrary actions and strong-arm tactics by the larger powers and helps to define a political and economic landscape within which the country can hope to maximize its national interests. It is not going to be easy. Existing and potential superpowers and great powers will find a rule based system of international relationship difficult and cumbersome because it will tend to restrict their freedom of action when they think their national interest can be served better in an alternative manner. On the other hand, the mutually beneficial expansion of economic linkages and the cost of non-cooperation and hegimonism can be expected to provide the incentive to search areas for defining common rules and behavior. It is neither going to be simple nor easy but it will remain an objective worth striving for. (Dr. Lohani is a former Minister for Finance and Foreign Affairs). Today's Problems
Basically three types of problems are being faced in the industry sector today. The first one is related with revenue administration where the government seems to be concerned only with revenue collection forgetting the problems of the taxpayers. The second is the local level hassle created by the local authorities on the name of local governance. This is further complicated by the inactivity of the local level bureaucrats and lack of cooperation from the local politicians. Then the third problem is related with the labour. The major industrial areas, such as Birganj-Hetauda, Kathmandu Valley and Biratnagar, are suffering from chronic labour problems. The CDOs of the respective districts are not being cooperative. Unless the private sector gets rid of these three problems, industrial growth is going to stagnate further and eventually decline. Public-private partnership The government and other public authorities have repeatedly failed to honour the spirit of public-private partnership they preach. Be it in the case of prudential norms for the banks or the directive to them regarding the Business Credibility Information (BCI), the problem that emerged later forcing the Nepal Rastra Bank to make changes in its original decisions are results of the lack of a friendly attitude of the public authorities towards the business sector. Though they have been showing a sympathetic attitude when the business community approaches them with grievances after certain government decisions are made, they would have done much better to win the support of the private sector if they had made prior consultations. We are aware that international pressure is mounting to bring about certain reforms in the business system. But we also have to weigh the costs of such reforms. The private sector is ready to cooperate with the government to make such assessments. Recent NDF meeting The immediate feeling of the business community after the declaration of emergency was of a fear that the resources would now be diverted from development activities to providing security. But as the donors in the recent NDF meeting laid down very strong emphasis on good governance, we can hope that the government now will work more to set the house in order. The practice so far of bringing out ambiguous policies should be put to an and. We need clear and practical policies. From what we have felt from the interaction we had with the government and the donors during the pre-NDF meeting consultations, we are again afraid that the government would move forward on its own way without caring much about what the civil society and the business sector think. Poverty alleviation has been declared as the only objective of the forthcoming tenth plan as well. Employment creation has been recognized as the precondition for poverty alleviation. Accordingly, a policy is also in place, at least in words, for encouraging the private sector investment so as to achieve poverty alleviation. But it has to be borne in mind that if the private sector suggestions are not listened to by the government, investment will not increase as expected and the objective of poverty alleviation is again going to be only a pipe dream. Private sector initiatives We must also accept that the private sector has failed in providing a vision for the future of the nation. However, the situation is now changing. We were made to participate in the recent NDF meeting in Kathmandu and Pokhara and also in the formulation of the Tenth Plan. These experiences have enlightened us a lot. Now it is the private sector’s turn and it has indeed started some initiatives. As the first step, FNCCI, as the representative organisation of the country's private sector, has already put its view to the prime minister and other ministers in a recent meeting with them. It also explained its views to the leaders of the opposition parties. All the senior leaders of the political parties are now aware of what the private sector wants. Having in a way completed the first phase of its work, now FNCCI is in the process of making public its vision about the future of the national economy. For that we are going to set up a team of experts to study and find out where exactly are the ills of the economy rooted and also to identify the areas where our comparative advantages lie vis-a-vis the neighbouring countries and the rest of the world. Anti-corruption initiative of FNCCI Business community is also accused of helping corruption. To reform this image, the business community has now taken a firm step against corruption. The Corporate Ethics Forum (CEF) set up in FNCCI recently is such a step. FNCCI President is himself heading this anti-corruption cell. Anti corruption drive can best be furthered through an institutional way. If one tries to do it on an individual capacity, it may cause many inconveniences. Hence the CEF under FNCCI. Recent trends in business We have spoken strongly in favour of SAFTA. By the end of 2002, our negotiation regarding WTO membership will take a concrete shape. Probably we will be WTO member by the 5th ministerial meeting. But majority of Nepali entrepreneurs are traditional and family based. This is going together with the economic liberalization policy speeded up under the new political system since 1990. The industrial sectors that emerged as a result of this new system are finding it difficult to keep harmony with the traditional entrepreneurial mindset. So, the challenge today is in bringing about a harmony in these divergent trends. Govt's duty There are four or five areas where the government has to focus now. The first is that of security, which of course includes both national as well as industrial security. Secondly, we need a one-stop solution to all our problems. Experience shows, the Industrial Promotion Board as provisioned in the Industrial Enterprises Act has not been effective. The decisions of the minister in charge of one ministry may not be honoured by the one in charge of other ministry. We need a chain of command. With the Board of Investment headed by the Prime Minister at the top then the Industrial Promotion Board headed by the minister, we also suggest a lower level body headed by at least the joint-secretary. Next, the government has to help the private sector in some selected sectors or sub-sectors by providing infrastructure, helping in international promotion or by some other manner. Such sector may be those plagued by sickness, such as medium sized hotels and textile, or sectors where there are very good prospects, such as religious tourism. If the points we have explained to the political leaders are appreciated by them and they use their energies for decisions geared towards solving these problems, all the complaints (such as employment not being generated, revenue not being collected etc.) will vanish. (Based on an interviews with Khetan who is the Second Vice President of FNCCI) |
|
Cover Story
| Editorial | World
Trends | Business News | Marketing | ICT
& Development | Economy & Policy | |
|
Send your feedback to the editor: bizline@mos.com.np |
