Nepal can expect to gain much from the WTO membership

It is indeed a great pleasure for me to welcome you all this afternoon on behalf of Nepal Foundation for Advanced Studies to the book launch of its latest publication –WTO Globalization and Nepal. But first and foremost, I would like to take this opportunity to extend the heartfelt condolences of NEFAS at the tragic and untimely demise of their late Majesties King Birendra and Queen Aishwarya and other members of the Royal family. NEFAS is deeply shocked and saddened by the tragic event and with the deepest respects, offers its heartfelt tributes and prays for the eternal peace of the departed souls. We at NEFAS also take this opportunity to extend our hearty felicitations to His Majesty King Gyanendra Bir Bikram Shah Dev on His Majesty's enthronement and wish for progress and prosperity in the country through His Majesty's dynamic constitutional leadership.

The current NEFAS publication to be launched is, as most of you are aware, a result of a two-day NEFAS, NUSACCI, U.S. Embassy sponsored seminar held some time ago. The idea behind the publication is to initiate discussion   and debate on the subject, weigh the pros and cons of membership to the world body and moreover, provide the WTO cell of the government the necessary input regarding accession to the same.

The idea of Nepal joining the world body stems from the fact that theoretically, a severely landlocked Nepal can expect to gain much from the WTO membership. That it will be entitled the right to transit facilities and that such a perennial access could help Nepal fulfill its desire of opening itself to the outside world. But this also raises a host of questions that Nepal being a LDC, and a severely landlocked one at that, will need to seriously mull over. For example, whether we will be capable of ensuring that gain from the accession to the world body will accrue in practical terms and whether Nepal is prepared to shoulder obligations and socio-economic burdens brought about by the membership.

There can be no doubt that Nepal does have a large potential for economic growth, provided that prudent use of natural, cultural and human resource is well planned. But Nepal will certainly need to raise its efficiency and international competitive edge in both product specialization and diversification. That the intrinsic structural weaknesses of LDCs like Nepal are likely to be constrained in carrying out negotiations on a host of issues, including through dispute settlement procedures, due to the lack of a well equipped mission in Geneva is another point that needs to be seriously considered.

Though the first ministerial meet in Singapore held in 1996 explicitly agrees to strengthen and improve the LDCs negotiating positions vis a vis the WTO on certain issues, Nepal nevertheless, will have to prepare itself to face the impact exerted upon its socio economic norms, values and institutions besides the colossal changes in the existing economic and cultural milieu the membership will undoubtedly bring about.

There is, however, an agreement of sorts that Nepal would have to join the WTO sooner than later and that it would lose out by not doing so. But adequate homework on our part would have to be put in before joining the world body. The belief that the WTO has been given the extensive mandate to enforce multi lateral trade agreements on member states, review their domestic policies and establish a fair means to settle disputes, makes the idea of accession attractive to LDCs. In this regard Nepal is optimistic, and rightly so, that in a rule based regime there will be a fairer chance to defend national interests and be active participants in formulating and executing evolving economic rules and norms that govern the world market. But in order to benefit we have to play and to be versatile at the game would be using the WTO field to advantage and building an increasingly robust, globally linked economy for years to come.

There can be no doubt that significant benefits accruing from WTO membership for countries like Nepal would be the Dispute Settlement Body, a potentially invaluable tool which can put smaller economies to advantage when negotiating trade disputes with larger economies. Obviously, this would also hold true in the case of smaller landlocked states like Nepal vis a vis their larger neighbors.

There are however, two points that merit serious looking into both by the government and its WTO cell. The first is whether previous bilateral agreements among WTO member states will remain valid, and if so whether joining the WTO would really be worth it. And secondly, if opposite is the case, whether we will have the political will to take up issues to the Dispute Settlement Body of the WTO against a larger and all powerful neighbor should the need arise. These are pertinent questions that merit serious attention – questions that are likely to surface at a later stage.

We are grateful to the American Embassy, particularly to Mr. Robert C. Kerr and Harka L Gurung of the American Center for supporting this NEFAS endeavour from its formative stage right down to its publication. Special thanks are also due to all the paper writers and commentators and Chairpersons of respective sessions for their cooperation in making this publication possible.

In conclusion I would like to mention here that NEFAS today also mourns the tragic and untimely death of Kumar Khadga Bikram Shah. In his death the country has lost a true scholar and NEFAS a loyal friend and steadfast supporter. His lively, jovial and friendly presence will continue to be badly missed in all future NEFAS programmes. We convey our heartfelt condolences to the bereaved family and pray for the peace of the departed soul. It is to the fond memory of late Kumar Khadga the scholar and staunch nationalist that NEFAS with profound respect dedicates the present volume.

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.  

Koirala: No easy exit

By Yuba Raj Koirala

Yuba Raj Koirala

"I will take my 14-point proposal [for national consensus] to its logical end. This is my commitment." P. M. Girija Prasad Koirala.

Prime minister G. P. Koirala faces one of the greatest impasses of his entire political life both morally and rationally. Tough, it is still too early to predict, however, chances are very high of seeing him losing the latter since he knows it too very well what future entails him if he quits the present position as head of the executives and seeks solace in his troublesome party and contends with its presidency which won’t perform miracles any more.

Despite all the alleged corruption charge, inefficiencies, nepotism and the pressure form the oppositions, Koirala still wants to take his 14 point proposal to its logical end and wants a dignified exit, but how? He is still housing the notorious former civil aviation minister Mr. Chatuat alleged of corruption and charged by the commission for the Investigation of Abuse of Authority, CIAA in the infamous Lauda deal. He is not the only one to be put behind the cell, along with him there may be hundreds who have benefited from Koirala’s office and benefited him as well who would also follow the suit if the successive government after him dares to bring those into account.

Despite the seemingly realistic strategic paper many critiques have failed to notice the hidden motives behind his 14 points proposal. Koirala, by bringing the oppositions into the round table consensus and getting them engaged in the agenda was hoping to divert the attention and criticism of his allegations away from the centre thus paving the way for a smooth exit. He wants his successor to believe that Koirala; despite his flaws, was a man not to be ignored, after all he left them with something to do.

Koirala may be contemplating on the mid-term election despite the hue and cry form his own party officials and despite the pressure from the oppositions not to dissolve the parliament but only to resign from the prime ministerial post but the million dollars question is how can he go to the people now asking for the ballots and promising more promises. What will be his agenda in the election?

Supposing that he himself may not be contending the election however, he will still be the party president which requires him to campaign for his party candidates and appeal to the people that the Nepali Congress has not still lost its libido. On the contrary, if he decides to contend the election, the chances of him being physically abused are as much higher as those of the secured votes. Given, many of his allies in his constituency by now have already turned into red, hot chilly like comrades who may not be patient enough to listen to his proposals. They are men of action who speak with guns and their guns are speaking louder than Koirala’s promises.

And the fact that if his slightest presence during the funeral procession of the late Royals was sufficient enough to provoke a havoc what guarantee is there that his hovering in the constituency for that long can also not invite a disaster of higher magnitudes. Amidst the shouting of anti Koirala slogans and stoning of his vehicle he barely managed to perform the rituals.

Koirala is definitely a failed leader and the crux of the matter lies in there that that is the least he would ever want to see and hear. Ousting Bhattarai he came to office with his high-flown promises of good governance, transparency, curbing corruption and punishing the Maoists. As the fate would have him he ended of having completely triggered the matter and remains entangled ever since.

Had he acted in a manner befitting to his position constitutionally, had he made his presence felt in the nation as a prime minister, had he shown the skills and dedication to console and share sorrows and sympathy with the grief stricken and bewildered public, he would have turned that incident into an opportunity to consolidate his power base thus paving the way for a smooth transition to democratic institutions as well as his own departure from political life that he is so much seeking after. He had the means as well as the ends to do so not only as a Prime minister but also in the capacity of the minister for the security affairs of the palace. Why he chose not do so is not know but what is know is that he is trying to tap that in with his 14 points proposal. He wants to make his liability another’s assets.

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