The US Marshall Plan was named after the then US Secretary of State George Marshall. The plan was a result of Marshall’s conviction that economic stability is pre-requisite for political stability in Europe. “It is logical that the United States should do whatever it is able to do to assist in the return of normal economic health to the world, without which there can be no political stability and no assured peace,” said Marshall in a speech given at Harvard University to offer the American aid for the plan.
Effectiveness of the Marshall Plan was equally impressive on both economic and political fronts. The years 1948-1952 saw the fastest period of economic growth in European history during which industrial production soared by 35 percent. Agricultural production substantially surpassed pre-war levels. Poverty and starvation of the immediate postwar years disappeared, and Western Europe embarked upon an unprecedented two decades of growth that saw standards of living increased dramatically. The plan fostered European integration and trade relations. As desired, it ultimately enabled European countries to win an assured peace by reducing discontent and bringing political stability.
Indeed, Nepal too needs a comprehensive recovery program like the Marshall Plan. If a big dose of fiscal stimulus is not injected, we can look forward to even bigger political and economic crisis. Experiences of several countries across the world have shown that political stability becomes elusive in the absence of economic opportunities, when a bulging generation of gullible young men cannot find jobs and support families, and instead seek fortune through violence.
When opportunity-deprived youth lose faith on political system, they fall prey to disappointment and disillusionment. These semi-uneducated people become so malleable that every apathetic political party finds it easier to play on their innocence and ignorance. The Maoists did it and continue to do so, and the Madhesi parties, Matrika Yadav’s party and other ethnic parties too are trying to do the same. Political parties will continue to cash in on the growing frustration of youth under the pretext of ethnicity, nationalism and any other saleable propaganda.
To avoid further deterioration of national economy political parties must give up hollow politics and unite for an economic campaign.
Issues such as the High-Level Political Mechanism, the Maoist’s hollow nationalism and ‘civilian supremacy’, the political leaders’ blame game and ethnic politics are all abstract concepts. To consider that a new constitution and state restructuring is panacea for all economic ills is a sheer ignorance. Ethnic federalism has never been a key variable to drive a country’s economy anywhere in the world. Even if it did, in a small country like Nepal, the impact on economic growth will be minimal. Most likely the only beneficiaries will be a handful of politicians engaged in ethnic politics.
What the county needs more urgently is creation of jobs, productive farms and factories, vibrant tourism, proper healthcare and schools. Without these, any political agreement or state reforms will not work. Then again political instability, fringe political violence, bandas and strikes, deterioration of rule and law, criminalization of society will continue no matter how many federal states we create.
On the other hand, the present state of the economy, with the Balance of Payment swinging into a deficit of over Rs 20 billion and import hovering six times higher than export, we need an immediate relief package. It is a fact that the economy which withstood a raging Maoist-war for a decade has now fallen into serious trouble. Look at the past. As the industrial base squeezed due to insurgency, a new variable, remittance, surfaced with vengeance to keep the economy going. The volume of remittance soared to Rs 209.69 billion over the last fiscal year, from a mere Rs 4.5 billion in the fiscal year 1995/96.
At a quick glance, declining imports and capital flight appear to be the surprise causes behind the present economic mess. However, the bitter fact is that a fall in imports and capital flight are normal phenomenon in any politically instable and poorly-governed country. It had been happening in Nepal over the decade and will continue. Un/fortunately, we did not realize it, because a spectacular growth in remittances was adequate to offset these losses and postpone the crisis till a later date i.e. the present.
But, the rise in remittances has saturated because most people who have gone to work in foreign lands, now, don’t feel the need to. So, the ratio of Nepalis entering the foreign job market and leaving it in the days ahead will almost be the same, creating a small fluctuation in remittance inflow. To make matters worse we lost all our industrial bases due to rampant bandas, and politicized labor unions – now we have no other variable to uplift the economy. Only now has the economic crisis finally arrived.
To avoid further deterioration of national economy political parties must give up hollow politics and unite for an economic campaign by putting aside partisan agendas and taking up economic issues. No single party can drive the country out of the looming crisis and clear up the nation’s economic woes which are deep-rooted and seemingly perpetual. If the country is not to be destined to remain poor and suffer from recurrent crises, the parties’ next centerpiece of agreement should be economy and they must chalk out strategy to promote only available variable for growth i.e. export.
It is shameful that the parties, which call themselves revolutionaries and true representatives of ethnics groups, like the UCPN (Maoist) and Madheshi parties have never once announced a progressive agenda nor outlined a convincing vision to help the nation and all its regions to flourish. They are busy in hatred-based politics and encourage communal disputes. They are the ones responsible for disrupting the rule of law, vitiating business atmosphere through bandas and strikes, encouraging impunity and obstructing development activities.
Let us frame a mega campaign to quickly rebuild the post-conflict economy. If anything, this should be an initiative Nepalis should rally for. In a country scarred by a decade-long war and divided by social exclusion, this initiative can help us to heal and unite. And, let us hope politicians can figure out a way to help us out of, both, the political and economic graves that we dug ourselves.
krish.regmi@unh.edu
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