The present economic model of Nepal has a number of interesting structural characteristics. First, it focuses on imports. The government gets most of its revenue from import which is the basis for financing public expenditure, mostly regular expenditure necessary for the functioning of the state. In an import-based revenue structure, there is an embedded incentive to maintain luxury imports.
The Trump administration in the US has come up with the Indo-Pacific doctrine which in many ways is a restatement of Barak Obama’s pivot to Asia, known as the rebalance doctrine. Both doctrines are of the same origin and carry a shadow of the famous Thucydides trap that was popularized by Harvard Professor Graham Allison in the 1990s.
Recently I was in San Francisco to attend a meeting of Non Resident Nepalis (NRN). While in the hotel lobby I met an old friend, Mahesh, a high tech professional and a naturalized American citizen of Nepali origin. Our conversation centered on an incident that reflects in many ways the present political commotion in the US.