Reform way forward for New Nepal

The ride to the economy is not easy for the new government. For years, Nepal's economy has long been entangled in its structural problems. The economy is in ruins--as per some indicators, and a sign of improvement is looming.  Now, adoption of an appropriate fiscal policy is the way forward.  In order to stabilize the macroeconomic balance, we have to promote a new round of reform. The country is still pursuing dual economy. Owing to majority—more than 65 percent—of rural population, a single economic development strategy will not reap the advantage.  For crafting Nepal’s economic reform, the political leadership should take a bold decision. 

Before exploring Nepal’s new economic development possibilities, it’s worth knowing the challenges.

Uneven development

Nepal has been facing the problem of imbalanced development for decades. Since the fifth 5 year development plan the concept of regional development emerged, thereby allocating budgets in equitable basis. However, the distribution was never justifiable. Surprisingly, some influential districts have been disbursed up to a quarter of the national budget, while others were granted only an amount less than a hundredth. The situation worsened after the political change in 2046 BS. Some influential—leaders, MPs and bureaucrats, due to their higher echelon gave out more to their particular districts. For example, in Morang and Sunsari districts, where most of the Prime Minister, Finance, Home and other ministers belong to, have been given a big chunk of the national budget. Likewise, top bureaucrats from National Planning Commission, department of Irrigation, Physical Planning and the local development division also used their power to draw budget into their home town or districts.

The unequal distribution battered hard on other developing regions. They barely received regular development budget. It affected more to Karnali and Far Western districts. Beside the western hill areas, some districts in the plains—Mahottari and Dhanusha also got to suffer by budget crunch. As a result, these areas have human development index below the national average. People in those areas could never feel the presence of the state.

Highway Economy

The construction of East-West highway by the then King Mahendra helped to foster economic activities around the areas; however, only the eastern part of the country reaped benefits. High way helped to develop small market towns around it, which has reached up to 125. Another road, mid-hill highway has also laid foundation for most market towns and increased trade and industry in those mountain patches.

In fact, the lifestyle change in the eastern part of the highway is clearly visible whereas the western part still struggles to thrive. The insufficient infrastructure and scattered settlement-- necessary for the growth of economic activity is somewhat lacking in the west.  For example, 1993 BS, Biratnagar-Sunsari has been developed as an industrial area. Later, Birgunj and Bara-Parsa were developed as Industrial Corridor. In contrary, poorly developing manufacturing units in Butwal , Rupandehi , Banke - Kohalpur, Kailali are besieged for market access long distance of transportation, that have severely obstructed the economic activities.

So far, except in some binding conditions, the mid and far western districts didn’t feel the presence of the state. After the people’s movement, 2046 BS NGOs finally accessed to Karnali, identified injustice, and started pouring some fringe support. Though, the NGO culture merely made them more dependent.

Poor Industrial Development

Although industrialization began quite late, in 1993 BS, the progress is still infantile. During Rana Regime some Jute and match factory were established. In Panchayat era, other countries--Russia, China, and India supported to lay the foundation of the textile, sugar, cement, leather shoes, paper, pharmaceutical and additional factories. However, approval of establishing industries was very difficult because of the intervention of the palace. By acquiring shares up to 51 percent, absolutely for free, the Palace used to ascertain license to such industries. Therefore, no industry, including multinationals, could thrive during the autocratic rule. Its contribution to the GDP, once reached to 19 in 1995/96 has plunged to 15 percent as of now.

Moreover, more than a thousand of large and medium scale industries were closed due to a decade long people’s war. In addition, around twenty thousand of small and cottage industries also followed the similar fate.  

Worsening agricultural sector

Agriculture sector contributes 35 percent to Gross Domestic Product (GDP) and 65 percent of employment is also degenerating. In the 1970's, Nepal was exporter of agro products, contributing up to 40 percent of GDP. However, total production of food in the country is not sufficient to feed us. Therefore, we are importing hefty sum of grain and vegetable to suffice our need. Due to low production and productivity, agriculture is being abandoned. The production cost exceeds farther than the cost of the same imported goods.

High unemployment

Unemployment is towering because of the lesser opportunity in both the agriculture and industry sector due to their sluggish progress. For example, one in eight youths entering the job market every year gets a job. The only door open for them is to pack their bags, cue on the line, and go for foreign employment.  Currently, the rate of out-migration of 18-40 years of youth is more than 65 percent. The fleeing of working age population abroad is a great risk for the growing economy.

Lack of good governance and opacity

From the good governance perspective, Nepal is in dismal condition, as the corruption index says. Lack of good governance has contributed to deterrence in the economic development. Lack of good governance and opacity is regarded as the main cause of Nepal’s underdevelopment.  It increases the cost of development projects, and reduces spending. Donors also question on the expenditure thereby reducing their aid and investment. This is a great setback for countries like Nepal who depends heavily on foreign aid.

High trade deficit

Nepal is hit hard at present by a massive trade deficit of nearly 5 billion Rupees.  The total income of over a year is merely sufficient in importing petroleum. Substituting import has become just a daydream. At this juncture, there is a dire need to think about a policy—if implement—can substitute imports and increase exports.

If we have to drive the economy towards sustainability and stability, there is an immediate need of the second round of reform. And it should address all those aforementioned challenges.

Religious Tourism: Are we doing enough?

The diverse cultural wealth of Nepal provides huge potential for religious tourism. Motivating domestic visitors and attracting pilgrims from neighboring countries is of great importance.  

Nepal’s rich cultural heritage offers an ample possibility for religious tourism. The population—enriched with several castes, ethnicity and nationality is a portrait of a great cultural legacy. The variety of societies is a great cultural wealth in itself. The harmony among culture is a pride. However, has Nepal ever been able to harvest the benefits from its rich cultural diversity? Is there any mechanism where we can sell our rich family tradition? Or have we ever harvested substantial gain from religious tourism?

So far, Nepal’s religious tourism has always been dependent on luck. As the religion is dependent on faith, the path of its development has remained reliant on destiny. As a resolution, religious tourism in Nepal is following a stunted growth.

Approximately 300 to 330 million pilgrims visit the world's key religious sites every year, reports the World Tourism Organization. Likewise, Americans traveling overseas for "religious or pilgrimage" purposes has increased from 491,000 travelers in 2002 to 633,000 travelers in 2005 (30% growth), estimates the U.S. Office of Travel and Tourism Industries. This image indicates that religious tourists are getting.

However, religious tourism is one among the most promising sector in Nepal. In fact, Nepal harbors fertile ground for flourishing two of the world’s eminent religion—Hinduism and Buddhism. The country slotted between India and China shares a piece of the larger history of ancient civilizations blossoming in the area. Consequently, this tiny southern Asian state offers holy land for the Buddhists of the world. In addition, similarity in history, culture and geography with the vast populace of the south of Himalayas-- across the Ganges plains-- allures millions of Hindu pilgrims of India. Moreover, the country with abundant temples, monasteries and shrines are of outstanding importance for the predominant number of fans in Nepal and abroad.

Nepal is garnered with rich cultural diversity and harmonious religious co-existence among Hindu, Buddhist, Christian, Muslim, Bon, Kirat, Jain and Sikh. For the Hindus, there is one among the holiest--Pashupatinath Temple situated in Kathmandu. Devghat in Tanau district is also a famous spot for Hindus. Likewise, Lumbini, the birthplace of Lord Buddha is one of the most revered places for Buddhists in the world, is sited in Rupandehi district. In addition, there are monasteries and caves where Guru Rinpoche meditated. Up in the Himalaya of Mustang district Lord Vishnu is believed to reside in the temple of Muktinath. The district also contains Bonpo shrines. The holy lake of Gosainkunda near the mountain top is devoted to Lord Shiva. 

A routine of religious and ethnic festivals are enjoyed in these pilgrimage sites. The large number of devotees, both Nepalese and Indians, visit Pashupatinath temple during Shivaratri. They also celebrate Maghe Sankranti in Devghat and Kumbhamela in Chatara, Sunsari. 

Several honored religious leaders, priests, saints, monks and Maulanas have been inhabited these places. They have been preserving cultures; motivating people for visiting the place, and inspiring devotees for of pilgrimage.     

However, the epic significance of the religious sites and the perpetual efforts of those religious figures are still insufficient. As a result, Nepal has not been able to showcase its religious hotspot to the prospective customers—pilgrims and tourists—in the region. 

For example, in India, religious tourism has been given an utmost priority. Religious figures, government, private sector and media are playing a significant role in promotion. Most of the locations of mythological significance are already enlisted in scriptures. For example, Gaya, Kashi, Puri, Badrinath dham, Kedarnath dham, Haridwar, Dwaraka etc have already collected hoards of publicity in religious teachings. Next, their media and film also played a significant role in promoting religious tourism. Some Bollywood movies portrays religious sites. The television channels also encourage their viewers to believe in their respective believes and promote religious tourism eventually. Furthermore, celebrated religious persons—there are many in India—play an important prominent role for influencing people for pilgrimage. As a result, countless people flock to India annually in their voyage for religion.

Moreover, people of Mecca, the Muslim holy place, do not need agriculture because the God has given them the pilgrimage as their yearly crop. Millions of Muslims go to the Islam’s holiest site, Saudi Arabia to take part in the year’s haj. The annual haj ceremony brings approximately 16.5 billion dollar—3% of GDP to Saudi Arabia. Next, Jerusalem, a holy metropolitan for all three Abrahamic religions, also draws large number of pilgrims. Likewise, huge number of Shia Muslims visit shrines in Iraq.

Despite having Buddhists’ holy site—Lumbini in Nepal, an adequate mechanism is still lacking. World’s second largest economy—China is just at the northern border. Although Buddhist population is rapidly being converted to Christianity in China, the remaining number of Buddhist in the country are still higher than any countries in the world. If Nepal can attract them, it would be enough for sure.

There is a need to attract religious tourists/devotees by promoting pilgrimages through religious personalities, government agencies, private sector and media. Definitely, media has a profound effect—proved by many researches—on customer’s motivation. A regular discussion on pilgrimage sites in media with eminent spiritual personalities has a profound effect on potential visitors. It helps local devotees/pilgrims to explore native religious places of divine reputation rather going India or China because travelling to other countries has become riskier for Nepalese pilgrims.

In a nutshell, we have to promote our religiously valued holy sites to our citizen first, that will save a huge sum of money from going abroad. Besides visiting Indian cities or Manasarovar of China for religious tour, we have to explore our historically important places. Next, the strategic location of Nepal between two great Asian cultures—India and China gives us a great opportunity to earn, develop and prosper. This can also be possible through religious tourism. Also, attracting the prospective tourists of the Indian Sub-continent to visit the Nepalese pilgrimage destinations is a big battle to be won.