People in Nepal still blame India for their economic woes

People in Nepal still blame India for their economic woes
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First Published: Sat, Sep 20 2008. 01 10 AM IST

Growing aspirations: Having been traditionally close to Nepal’s monarchy and the Congress party, India is blamed not only for its power woes, but also for the high prices in that country. Utpal Bhaska
Growing aspirations: Having been traditionally close to Nepal’s monarchy and the Congress party, India is blamed not only for its power woes, but also for the high prices in that country. Utpal Bhaska
Updated: Sat, Sep 20 2008. 01 10 AM IST
Kathmandu: A day after Nepal’s Prime Minister Pushpa Kamal Dahal returned from a four-day tour of India, people here are divided on whether such foreign trips are good, or bad for the country.
Growing aspirations: Having been traditionally close to Nepal’s monarchy and the Congress party, India is blamed not only for its power woes, but also for the high prices in that country. Utpal Bhaskar / Mint
But many of them are unanimous in identifying the source for most of their problems— India.
The India visit by Dahal, a former Maoist rebel who is better known as Prachanda, is his second to a foreign country after becoming prime minister in August. He visited Beijing for the closing ceremony of the Olympic Games.
Prachanda leaves for the US on Saturday to take part in the United Nations General Assembly session.
“Will he (the prime minister) only go on foreign tours, or will also do something for us?” asked a 30-year-old executive, who didn’t wish to be named.
The visit to the US will mean Prachanda has gone to three countries in his first 40 days as Nepal’s prime minister.
Not everyone frowns on the new leader’s foreign trips.
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Nepal, the youngest republic in the world (the winners of the April elections that preceded Prachanda’s ascent to the prime minister’s post abolished monarchy) is wedged strategically between India and China and cannot afford to ignore these two countries, both of which have significant regional and global aspirations.
“Without global ties, the country cannot stand anywhere. With the changed political situation in the country, this is the right way ahead,” said 45-year-old Raj, who owns a shop that sells souvenirs. He gave only one name.
Anthropologist Manohar Karki said Prachanda is trying hard to bolster ties with the international community.
But there are those who, like the unnamed executive, say that there are more important things for Prachanda to do at home. And some are not sure he and his government can meet expectations.
“The government has limited resources and because of that, it will be impossible to meet the expectations,” said Dinesh, 43, who works at a currency exchange and gave only one name.
There are other, real issues as well.
Unemployment is high; labour is militant and unorganized; and the country is yet to come up with policies that can attract foreign investors. Nepal is in the process of creating a new constitution—this needs to be in place and passed by the assembly before the end of 2010.
“Attracting investments into this country is easier said than done. For that, we will have to put the right policies in place. We have to get our labour more organized,” said Prithvi B. Pande, chairman and chief executive officer of Nepal Investment Bank, one of the top three banks in the country.
Radhesh Pant, managing director at Bank of Kathmandu and president of Nepal’s Banker Association, argued that FDI (foreign direct investment) implementation policies are distorted by bureaucratic delays and inefficiency. “FDI is directly related to peace, security and stability,” he said.
A human rights worker, who did not want to be named, claimed that the business community was more comfortable with the old system that encouraged crony capitalism.
Meanwhile, most Nepalese blame India for many of their problems, including a recent increase in the price of many products.
The two countries have, in recent weeks, sparred over the issue of the Kosi floods, with each holding the other responsible. Nepal also blames India for power shortages (Indian power utilities are active in Nepal and supply part of the country’s power requirements). India has also traditionally been seen as closer to the monarchy and the Congress party in that country than the Maoists.
“The prices are rising here because of the high prices in India,” said Raj.
A senior official at the Indian embassy here said much of this feeling is the remanent of “anti-India sentiment engineered” by the monarchy. “There is still a residual feeling among the Nepalese of being dominated by its neighbour and 95% of the Nepalese believe that India is an aggressor country,” added this official, who did not want to be named.
This has hurt India’s investments in the country.
“The fate of Indian investments in Nepal is very bleak. Companies such as Dabur are facing labour problems,” said another senior official at the Indian embassy, who asked not to be named because he is not authorized to speak to the media.
The size of Nepal’s economy is around $12 billion (Rs55,560 crore), with a current GDP (gross domestic product) growth rate of 5.6%. Nepal’s per capita income is $470 per annum, around half of India’s.
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First Published: Sat, Sep 20 2008. 01 10 AM IST