In an immensely diverse and complex social, political, and economic arena, Nepal continues to fight an uphill battle with poverty that threatens to engulf even the hopes of future sustainable development. Perhaps it is not a phenomenon exclusive to Nepal. Renowned economist Paul Collier, in his influential book, The Bottom Billion: Why the Poorest Countries Are Failing and What Can Be Done About It, pinpoints the reasons that have kept the world's least developed countries in the poverty trap. Identifying the core aspects, his analysis revolves around the so-called ‘bottom billion’, which refers to the roughly one billion people living in countries that face persistent economic and political challenges. These nations, Nepal included, are often afflicted by civil conflict, weak governance, geographical disadvantages such as being landlocked, and underutilization or mismanagement of natural resources.
Focusing on the challenges that countries like Nepal face, Collier provides critical insights into why developing countries often cannot break the chains of poverty, despite the efforts made worldwide. From The Bottom Billion, we can rethink poverty alleviation strategies in Nepal and provide pragmatic alternatives for the country to tackle some of its most serious developmental questions.
Nepal's fight against conflict and governance
For Collier, civil unrest is indeed one of the most significant barriers to be broken for development in the poorest countries of the world. In contemporary Nepal, for example, this is a very critical concern, since its history has already been storied by internal civil conflict, particularly during the ten-year-long Maoist insurgency from 1996 to 2006. The insurgency had really blasted Nepal's infrastructure, the economy, and social life, and now carries a legacy of mistrust and insecurity with the disorganization of governance. Although the country's national publication first declared an end to the Maoist insurgency in the year 2006, the very political upheaval that followed, combined with its obsession with multitude and inter-ethnic conflicts, continued to rob Nepal of a steady growth trajectory.
According to Collier conflict as a cause stirs up a continuous cycle of economic collapse, weak governance, and renewed instability. The long and terrible atrocities of insurgency have set a back mark in the economy and politics of Nepal. Even with the termination of the insurgency, the country has not been able to achieve a more permanent peace, owing to the increasingly unstable political landscape, ethnic tensions, and lack of efficacious governance structure.
Ultimately, Nepal continues to externalize the scar left by internal wars due to the absence of effective governance. Besides, protests and strikes, mostly initiated by some political groups, further impede the developmental works. The government thus has the least efficiency in carrying out its main duty of making provisions for its citizens. Collier, therefore, argues that whenever a government has no law and order, it becomes much more difficult to create an environment for the economic growth necessary to sustain any development at all. Exactly this situation is what has found itself in today's Nepal.
One of the most important lessons from The Bottom Billion is that international interventions for peacekeeping and conflict resolution must become a part of the effort to rebuild fragile states such as Nepal. According to Collier, peacekeeping forces, that is the ones sent by the United Nations, can be instrumental in the stabilization of conflict-worn nations. Nepal has avoided war in the last few decades, but it is still plagued by political instability and sporadic internal unrest. In any case, work needs to be done with a more sustained push from the government and international partners towards a much-expanded vision of peace and stabilization.
Lessons from Southeast Asia
Another critical issue that Collier raises in his book, which Nepal cannot afford to neglect either, is the problem of bad governance. Corruption, flimsy institutions, and poor leadership still stalk Nepal and pose a hindrance in moving forward. Corruption is one of the factors that allow poverty to thrive in the absence of transparency of government dealings, lack of public services, and failure to deal with the needs of marginalized communities together. Corruption permeates both public and private sectors. That is due to frequent political instability, which creates an atmosphere whereby political leaders prioritize themselves rather than the plight of their people. Collier's argument that strong governance institutions are necessary for sustainable development is a lesson that Nepal must take to heart.
There are several focuses for Nepal: strong institutional building and development. Good governance, rule of law, and transparent institutions form the solid foundation armed with which a country can prosper towards economic growth. Neatly summed up is Collier's argument that improved governance should be the core of foreign aid: that argument becomes widely pertinent to Nepal, for example, where aid goes to the wrong hands or is misused by corrupt officials. Much of the effort by Nepal to reduce poverty would benefit by focusing on institutions capable of governing well, providing public services efficiently, and ensuring resource allocation is put into place where fairness is guaranteed.
The geographical trap: Nepal's landlocked reality
One of the significant insights of Collier is that being landlocked hinders development. This has deep implications for Nepal since it is a landlocked country with no direct access to the international shipping routes. Thus, this adds extra burden to trade and relegates competitiveness to the global marketplace. The high costs of transport to and from neighboring nations, especially when the trade routes are not reliable or too expensive, negatively impacts trade with Nepal.
Due to these, it is found that landlocked countries usually suffer price hikes in goods transported from ports. This cannot be self-sufficient and need to have independent port access. Nepal is not spared from it, as it goes through India and partially through China for trade access. However, it becomes especially susceptible to such hurdles arising from internal political tensions, like what happened during the imposition of the border blockade by India in 2015.
In Collier's view, landlocked countries such as Nepal can potentially benefit a lot from regional arrangements and trading partnerships. The first will be very beneficial to countries like Nepal. Transportation to global markets trade-off becomes cheaper, giving rise to new economic opportunities for Nepal. China's Belt and Road Initiative is already embedded in Nepal's infrastructure from China. It is, therefore, essential for Nepal to add any beneficial staggering from such initiatives while ensuring that regional cooperation translates into long-term economic vitality. The transport sector within the country also has to be strengthened within the country in order to combat the challenges presented by being a landlocked country. The infrastructure of Nepal is, on the whole, less developed, especially in rural parts, which lack roads, electricity, as well as healthcare and education facilities. With a strengthened national infrastructure and connectivity, Nepal can take advantage of more trade among countries through an internal facilitation of resources, as well as create more equitable access to opportunities across her people.
The resource curse: External wealth transforms into internal mismanagement
Nepal is not blessed with oil and mineral resources. However, we have done wonders with natural resources-hydropower. As Collier explains, there is a resource curse attached to countries endowed with natural resources, where most of the income generated ends up triggering economic volatility, political instability, and corruption rather than benefiting a country or its citizens. Nepal's hydropower, echoing what Collier says, is perhaps the clearest case of how natural resources could be a blessing and a curse.
The rivers of Nepal can produce a huge amount of electricity, but it hasn't yet succeeded in harnessing rivers’ full potential. The critical problem of underutilizing its natural resources to bring in economic prosperity becomes more aggravated with the storm of the internal political disturbances, institutionalized corruption, and absence of conditions for the strategic planning. Currently, the Nepali hydro-power sector is highly underdeveloped. Various foreign countries are willing to invest in Nepal's hydropower projects, but it has not been proactively developing the regulatory environment that promotes such investments. On a very serious note, Collier warns Nepal regarding the resource curse. If Nepal should develop its resources properly, then the guidance of Collier is absolutely necessary. Quite different from the resource-rich nations, lonely pursuit for a country occurs away from the dated standards on management of natural resources. That is to say, developing transparent or accountable public institutions for resource management that include a long-run investment in that resource's revenue, like hydropower, is indispensable.
The role of assistance: Lessons from Nepal
Criticism of conventional aid, as propounded by Collier, comes very close to Nepal, as foreign aid becomes a popular source of funding development projects in Nepal. Although aid has played crucial roles in rebuilding recovery from natural disasters and political instability, the effectiveness has been far limited. Traditional aid, according to Collier, tends to be narrowly focused on immediate relief from poverty which, in the long term, doesn’t promote sustainable prosperity.
That means foreign aid for Nepal has already been mismanaged or squandered by corrupt officials. Most of the projects have not succeeded in providing long-term benefits because they have not emphasized building strong institutions and good governance. Collier's call for performance-based aid, in which aid transfers from donor countries are tied to specified levels of governance and anti-corruption improvements, could apply usefully to Nepal. Rather than simply handing out cash, the international community can help Nepal build the institutional capacity that it needs to govern effectively and achieve sustainable development.
Moving ahead: A new way for Nepal
The issue is not a magic bullet for poverty. It is the realization that treatment of the root causes takes years of commitment to good governance, institution building, and regional collaboration.
First and foremost, Nepal must go through governance reforms. That is, it must address the corruption, strengthen the institutions, and make the state resources put into the framework for the benefit of all citizens. Secondly, there should be steps towards improving regional trade and connectivity to make up for the losses suffered by being a landlocked country. Thirdly, this country should commit itself to ensuring natural resources are managed transparently and benefit equitably across society. Lastly, Nepal has to work with the international community so that there are development assistance efforts on concrete and qualitative improvements of foreign aid to turn into support for sustainable development.
A collaborative strategy for development in Nepal
As Nepal develops further, the insights from Paul Collier's The Bottom Billion can be valuable for those wanting to see the country out of poverty. With systematic and methodical grasp of the resources and its possible utilization the chances for poverty reduction is heightened and the barriers that undermine development like, say, corruption, civil unrest and political instability, can also then be gradually eliminated. With this transformation, a long-term and strategic approach to development, Nepal can readdress its challenge and build brighter fortunes for its entire citizens.
