Nepal's WTO membership sooner the better

Bob Kerr, Public Affairs Officer, US Embassy

I am honored to be on the dias this afternoon representing the United States Embassy. Honored because working on the WTO conference last November was among my first major tasks in Nepal. And it is an area that I believe passionately in, because I believe the evidence is so clear that increasing trade is the very best strategy that a country can pursue, particularly countries with poorer economies, to grow out of poverty and to provide improved economic opportunities for their citizens.
President Bush's newly appointed chief trade representative, Robert Zoellick, recently spoke in front of what is called "The Kangaroo Group" in Strasbourg France on the Bush administration's vision for increasing global trade. The Kangaroo Group advocates for free trade and free movement in
Europe. Mr. Zoellick's challenge to the group was to "cooperate in promoting democracy, freedom, open markets, and societal and individual opportunity." As I have also observed in the countries in which I have served, "strong democratic values and free market, vibrant economies go hand in hand. And today a higher percentage of the world's people are living in democracies than ever before. And there is an increasing recognition that with economic and political liberty the genius of the individual can invigorate societies and create unimagined opportunities. In today's world, capital moves around the globe at the click of a mouse; communications across borders, and continents, cost a fraction of the price of even 20 years ago." Today, the challenge for all countries, including the developing world, is to fight to get on top of global trends.

Reflecting on the desire of some in the U.S. to slow down the push for free trade in light of reduced growth in the U.S., Zoellick pooh poohed neighsayers by pointing out that "protectionism only depresses investor confidence and prolongs sluggishness." In the U.S. we have found that expanded trade - imports as well as exports - improves our well-being, leads to better jobs with bigger paychecks, more competitive businesses, and better goods and choices at better prices for U.S. citizens. NAFTA, the famous trade agreement uniting markets in North America, is attributed to itself adding 7% growth to the U.S. economy since 1995. But, more importantly, NAFTA helped grow the Mexican economy by more than 22% during that period.

Not just in Mexico, but throughout the developing world, free trade has proven to be essential for economic growth. A recent World Bank study analyzed the economic performance of globalizing and non-globalizing developing countries. The study found that in the 1990s, the income per person for globalizing developing countries grew more than 5 percent per year. For non-globalizing countries, annual incomes declined by more than 1 percent per year. The study also showed that as trade grew and economies expanded it was the economies of poorer countries that benefited the most as per the experience between Mexico and the United States. Absolute poverty among developing countries that have embraced globalization has dropped sharply in the last 20 years.

In his May speech, Zoellick announced as the number two U.S. trade priority "extending the benefits of trade liberalization to the developing world, and thus helping to integrate these countries more effectively into the global economic system." And the United States is committed to assisting developing countries to expand their capacity to take part in trade negotiations and to assist in the implementation of complex trade agreements through contributions to the WTO's Global Trust Fund for Technical Assistance. This fund is available to assist developing nations with new technology as well as specialized seminars and workshops offered by WTO officials. And we at the U.S. Embassy in Nepal certainly encourage Nepal to take advantage of these programs.

One last point from Mr. Zoellick's speech, and I made this same point last November, of vital importance is maintaining and increasing public support for free trade. "Although capital and information moves markets in moments, some industries and communities cannot adjust so rapidly. Understandably, frightened people will call for protections. But a failure to adapt andimprove will not restore companies to profitability or revitalize communities. Rather, protectionism where it exists now and in the future will be a drag on the investment climate in Nepal.

Here in Nepal, the U.S. Embassy is committed to doing whatever we can to promote improved living standards for Nepali people through increased trade liberalization, and, hopefully, WTO membership in the near future. Last November we supported NEFAS and the Nepal-American Chamber of Commerce in the organization of an excellent workshop on WTO, and we brought to that workshop Patrick Macrory, an expert on WTO and the special field of how developing countries such as Nepal can best take advantage of WTO's Dispute Resolution mechanism. And we were very pleased to follow through on this
conference by helping to publish the conference papers.

I think you will find this an excellent discussion of the variety of issues that face Nepal and all developing countries as they pursue WTO membership. And I encourage each of you to read the volume carefully. The seven papers cover a broad range of issues affecting WTO and Nepal. They each are insightful and thoughtfully prepared. And I commend each of the authors for his thoroughness and diligence. The people and government of Nepal need to be well informed to best meet the challenges of today's global economy, and this publication will do much to improve local understanding of the WTO
issues. And my hope is that the book will do much to move the accession process forward. For, with WTO sooner is better than later, now is better than tomorrow.

Speech by Public Affairs Officer Bob Kerr at WTO Book Launching Ceremony organised by NEFAS on Monday afternoon-Chief editor.

Financing of Local Development Projects

By Ajay Ghimire, Ace Finance Company Limited, Kantipath, Kathmandu

This paper is an appeal to the local political leaders to shun the belief that local people cannot be the master of their own destiny. The unique gift of God to man has brought human civilization to this state of development. The unique gift is not Money; it is the power of human brain. We seem to have lost faith in the ability of our brainpower to take us forward. We seem to be taking the path of devolution not evolution. As a resident of local community we think and believe that aid from Kathmandu is essential to our community development. As a citizen of Nepal we think and believe that aid from Delhi, Beijing, Washington or Tokyo is essential to the development of our country. If we think and behave this way for long, are we not likely to become leeches from human beings?

Most individuals do not beg to run their home affairs. Why should a community beg to run its community affairs? Do not mistakenly believe that the ministers in Kathmandu or donor agencies in London or Washington than your own people are more concerned about your community development. Most individual lives do not become rich by begging. Similarly, most places do not develop by begging. Do not misunderstand me. Capital from Kathmandu could tremendously change the pace of your community development. Capital from London, Tokyo or New York could put Nepal in a very fast track of development. We need to understand the difference between begging for aid and attracting capital for development.

The belief that you need money first to develop is a myth. In the absence of desire to improve and application of our own thinking to bring the improvement, we will reduce to parasites depending on somebody else to improve our plight. The development that continuously depends on others is not sustainable. The money could be attracted with the brain. The problem is that we refuse to utilize the unique gift of God to man -–the power to think and act. As local leaders I urge you to think and act on the following suggestions:

1. Identify your development needs correctly.

Most of the time our identification of our community need and demand is incorrect. In political and public speeches we boast about erecting a five story palatial school building in Darchula or Taplejung. Such boasting is based on misconceived notion that children in villages need school. Please understand that children in villages do not need a school. The children need education not school. At much less money spent more wisely better education to village children could be provided. Similarly people demand transportation not highways. High cost highways may not be the best way to meet the demand for transportation. They do not demand power generation plant, they demand the services that electricity provides.

2. Make the consumers bear the true cost of services received from development projects.

Under the present policies consumers do not bear the true cost of services they receive. For example, the taxes collected from the vehicles do not meet the cost of using the city roads and bridges in Kathmandu? The implication is that Nepali public is subsidizing Kathmandu vehicle users. Failure to cover these costs from the end users pushes up the demand for such roads. Increasing demands because of distortion in pricing would result in serious misallocation of capital for development. Services provided by developmental projects are highly price-elastic. Changing incentives could significantly affect the demand for electricity, water, road-use, etc. Therefore if at local level you cannot make consumers pay for the true cost of such services, pressure the government to make necessary changes in policy.

Capital is a constraint that can be overcome, not an insurmountable hurdle.

Once the possible projects have been identified based on the true demand let the professionals evaluate which projects can generate adequate return to raise capital for financing. Through proper mix of government and private financing the required rate of return on the projects can be reduced. If there is commitment from local community and projects can generate adequate return raising capital will not be an insurmountable hurdle. Pressure the government to allow local municipalities to issue financing instruments to build and maintain development projects with the cost of such financing to be born by user fees or taxes.

Conclusion:

If local community leaders are committed to development of their community they must try to reduce reliance on ministers in Kathmandu and donor agencies outside. They should, with the help of professionals if required, spend time on identifying demand driven self-sustaining developmental projects. They should fight for the flexibility to price the services the development projects provide. They should also fight for their ability to raise finance and authority to service the financing cost from the users of the services that projects provide. For a community truly committed to development and willing to use thinking power of the people in it, capital cannot and will not be an obstacle. It can be a constraint that can be taken care of.

The melodrama " Democracy" that is being played in the backs of the citizen is getting harder and harder to swallow these days. The Political leaders are nothing but soap stars who are here only to fill-up their pockets by the display of their shenanigans – which is nothing but comical and has reached the point of absurdity. And the leaders of proper lineage with badge of honor of being dissident in the past, the septuagenarians, are only after absolute power and establishing dynastic oriented political hierarchy in the name of democracy. And I say welcome to democracy in Nepal.

In careful analysis of these troubling and despairing times we the " thinking people" have had a bad case of inertia fed by apathy and introspection that borders on self destruction. We have a silent voice that does not have the resounding effect of populist rhetoric nor do we have the rapt audience who can understand our message in the bottle -shaped by foreign MBAs’ or just let us say of different prospective. The fault lies not with the people but us- we have made no effort to connect with the people and have taken high handed attitude as if we are insulated from the ills and effects that is present in the system. We tend to over intellectualize, rationalize, and have limited our discussions & debates among closed inner circle of like-minded people. It is the crux of the problem.

Now we have to make an effort to spread the message that transcends all strata of population. We should propose model of practical democracy that is home grown and readily accepted because of its capacity to accommodate and not marginalize rights and issue of the country and its citizens. Unless a system of governance can give value to its citizen – it is not a valid system and should therefore be discarded. Nation should have the capacity to make wrongs right – this does not mean people who see things in different light should be branded undemocratic or anti – government. They have the equal right to profess and undertake such initiative. The question might arise what is home grown democracy? Briefly, it is a democracy that should be molded to fit the nation’s aspirations based on its overall geopolitical situation, economical and social indicators. The focus should be in tackling grass root issues and problems- that creates awareness, due importance, and most of all makes people locally active in their own development work. The community based development work is critical in bringing the community together and enhancing their skills in identifying their own unique problems and hence solutions. The alienation of community, among citizens, and among the political is mostly due to Center government acting as the " be all, and end of all." Instead of creating a transparent society there is more and more indication that every spheres of life is influenced by dark force that cannot be seen only heard. The Mafia like grouping of race, class, and region is taking a hold of this country. Is this what Democracy is all about.

Political parties have had a field day in showing their true colors and they have morphed to be the nemesis they fought against. The case scenario is just the same -few elitist have hijacked the course of the nation on a pretext of so-called- mandate own by coercion, vote buying, playing race card, and simply enjoying the naivete of illiterate masses. All that is to show for is mansions for few and skill development on horse trading- that is it. Has a nation benefited by getting their civil liberties – not the least instead they are busy protecting their civil liberties from disorder and fringe outfits such as Maobadis. The feeling of alienation, insecurity, and total apathy towards the government is the general feeling of the citizen. Who is to be blamed – the leaders of course but we are also to be blamed. It the duty of responsible citizen to demand better governance not take anything lying down. If political parties can rule on the basis of our support then they are also liable to act for our best interest but it is not the case. What has happened in Nepal after the restoration of democracy is that the political parties have been thoroughly effective in creating divide on basis of political affiliation of the masses. This gives them huge advantage. It is so because for citizens we lose our one voice that can make or break any government. This schism has been created not intentionally but by nature of political structure we have adopted. In quest to become Thomas Jefferson – it did not occur to people entrusted to build constitution to have a look in the mirror. The system works well only in environment that is conditioned or society that has the maturity to accept. None is true in case of Nepal. The freedom fighters heavily influenced by the people from the South just took for granted that once in power everything will work out fine because they were fighting for just war and that was democracy. It is like Maobadis taking control without the clue of governance but just on the basis of their ideology, right or wrong. After ten years of abuse of power it is conclusive now that it looks as if only transfer of power took place not the promise of good governance based on tenets of democracy.

Instead of being unifying factor the political parties are hell bent on bringing fissures amongst the people by liberally using colors and signs to divide and rule. The political discourse has taken a new meaning - it is almost a religion verging on zealotry. Democracy in Nepal is what people in the pulpit say it is. And is it any wonder that definition is correlated with their best interest or interest served first, and if by any chance they see the threat or perceive threat then they jointly condemn, left & right, without giving benefit of the doubt. This is what democracy is all about in Nepal - from dropouts, to common man, and by & for exclusive members of parliament. I need not go any further. It is a sorry state of things and everyone is aware of it but no sensible man wants to dip his hand in pool of sharks but may be this is where everything has gone wrong. The problem is evident and so is the solution. Time may not be too far when we as Nepali have to make a hard choice to standup and be counted or just be a head count in a system that has no social or economical value for an individual or a society.

We stand witness to the biggest flawed experiment on the life of common citizen. In the name of upholding civil liberty and principle of democracy- nation is slowly and gradually disintegrating into nation that has collectively resigned to accept the hara-kiri of decay and destitution. The thinking and doer citizens of the nation have nothing to show for except wallow in incrimination and attend seminars that outline the flaws and sorry state of the nation. In a nation run by third class political actors, most of them high school dropouts, bent on holding onto power without the care in the world for common people – it is only matter of time before start of the fire. Welcome to hopelessly democratic Nepal.

By : Pravin

: Lainchour, Kathmandu
Date : June22nd,2001

Headline | 5 Question  | Editorial | 2nd Impression | International | Past