Market-led economy is a cut-throat environment. As such, the state role must not be exaggerated but serve only as facilitator, not as a deterrent or master controller. The state must promote innovation, talent and entrepreneurship

Economic liberalization of market economies induced several countries into alliances and regional groupings. Countries in regional groupings reaped maximum benefits accruing from economic liberalization and free market. This made sense to some leaders for ‘time and tide wait for none’. Well managed economies grew with new opportunities created by liberalization. New wealth was created by innovative entrepreneurs. Globalization became smoother due partly to connectivity and mobility, and exacting standards of information technology.

New challenges emerged from new economies and wealth distribution skewed towards innovative entrepreneurs. The good news is that global poverty fell sharply and China was leading the way forward. Nearly 800 million people were lifted out of abject poverty in China as a result of economic liberalization and open market strategy. Subsequently fault lines started emerging in world economies, with widening wealth gaps.

No one foresaw an upcoming rift from this trend which widened further without being noticed. Cracks appeared in large and small capitalists and state controlled economies alike. Most analysts attribute surge in nationalism and political populism following trade liberalization phenomenon. Industrialized countries are facing flares of populism as economic growth faltered, income dropped and consumer spending fell while new wealth was concurrently created elsewhere.

Countries must, thus, figure out what development equation is appropriate for a particular country and remain flexible to likely phenomena in open market economy. New economy opens new opportunities and creates new wealth. New wealth creates innovation and recreates opportunities and challenges, and the wheel keep on turning so long as the market environment is open and free.

New economic development mantra is driven by innovative technology. There are, nonetheless, few pointers for China is experimenting with, carefully and successfully, market economy drive with state creating supportive growth environment and overseeing social justice and seemingly balancing across economic sectors. In countries like Nepal, we are exploring no new ways of doing things due to compartmentalized thinking and fear of doing something new.

In parallel, there is also unabated temptation for controlling everything that government and leadership could lay hands on for political leverages. Perspective on economic development gets murkier with unstable governments, absence of rule of law, lack of coherent policy, strategy and economy driver, lack of sound strategies, poor governance, nepotism and state corruption.

With a vibrant and educated working-age-youth combined with stable resources from diaspora, Nepal could have accrued benefits from liberalization of trading environment with collaboration from both emerging economies like China and India - barring constraints arising from unabated political quagmires and polarizing intrigues. There is still time for inventing the right spin on economic drive in open market settings, modeling in the likes of China, India or ASEAN.

This will, however, require building meritocratic human resources across institutions and bureaucracy. One should not shy away from new opportunities and close doors for fear of challenges as we say “no pain no gain”, perhaps, a tall order in prevailing predicaments of Nepal.

New market economy is a combined phenomenon of consumer behavior, technology, innovative entrepreneurship and self-regulating demand-supply elasticity conundrum. This equation has no direct role of state for open market is driven by consumer choices, innovative entrepreneurs and technology advances. Given the current economic health of Nepal policy strategy could be reconfigured with guiding principles ensuring fair and reasonable wealth creating environment.

Market-led economy is a cut-throat environment. As such, the state role must not be exaggerated but serve only as facilitator, not as a deterrent or master controller. The state must promote innovation, talent and entrepreneurship. If this fails to occur innovative entrepreneurship will shift to another more attractive location.

Finance is essential grease to economy and this sector is also not immune to changes. Increasingly, many countries in the West are replacing cash and paper transactions with chips and e-banking. We are not far from the day when we will carry no cash in pocket. One plastic card or a portable smart mobile device or embedded chip would be adequate for stress free mobility and daily errands. Such development was unthinkable a decade ago. It is obvious, innovation and evolutionary application of logarithms on technology platform will be the driving force of future.

We are living in a new economic world order of shifting patterns in human behavior, innovation and the surroundings increasingly impacted by information technology and growing artificial intelligence trend; an ineluctable future to be reckoned with. This is an exciting moment of our lifetime and to be able to witness this transformation. Cheers to young tech-savvy geeks. Surely, the next generation would surely see through it all.

Neupane is President of We for Nepal based in Switzerland