TAKING STOCK: Should self-sufficiency be our goal?


When I ask children, “what do you want to be when you grow up?” The answers range from pilots and airhostesses to computer programmers, teachers, and everything else. No one wants to be self-sufficient.

That self-sufficiency is folly is evident to every child, yet this is beyond the comprehension of governments.

In India, Gandhi, advocated a boycott of British goods. The ‘swadeshi’ movement, which symbolised the struggle against a colonial power, was carried over to post-independent India by Nehru. India sealed itself from global trade to protect its industry from competition. Imports were an anathema and tariff and non-tariff barriers ensured that Indians did not enjoy any of the world’s consumer goods.

The results were the opposite of what Nehru and Indira Gandhi envisaged; they wanted India to become a manufacturing giant, it became a dwarf. Instead of developing world beating products, the goods produced were so shoddy that India became the world’s most profitable market for smugglers.

Consider what would happen if, in the name of self-sufficiency, we stop buying or selling. First, we would have to provide water and food for ourselves. For most, this alone would take up all working hours.

We would be pushed back to the prehistoric times and life would be preoccupied with surviving from day to day. Trading within our family would ease the situation. Each member could then specialise to everyone’s benefit. My wife could do the cooking, while I did the farming and hunting.

Trading within the country would make life better still, but consider what would happen if you barred all imports into Nepal. There would be no kerosene, petrol, cars or planes.

Trade makes life better for everyone, and the maximum benefits go to those countries, which do not restrict international trade. People will be better off if they have an unfettered right to buy and sell from anyone anywhere in the world.

This is obvious, and yet politicians and businessmen continue to use ‘sophisticated’ arguments to restrict our right to buy and sell. I, as a businessman producing sugar, will gain if import of sugar is banned. But I will be laughed at if I say, “I want to make more money, please stop competition from foreign sugar”.

What will I do instead? I will argue that imports are harming my workers and investors, and ask for a ban in national interest. I might further influence politicians to act for me with ‘gifts’, and very soon they will be mouthing my language.

If the customer has to pay a few extra rupees every time he buys sugar, who cares? When you multiply the effect of these policies over thousands of items, you get poverty, destitution and a living standard which harks back to the Stone Age.

For Nepal free trade is even more important than it is for big countries like India or China. These giants can, at least, get some benefits from free trading between their billion plus populations.

Little Nepal with its limited population has to trade internationally to prosper. Look at what happens to people of small nations, which are closed to trade. North Korea, Zambia, and Haiti come near to being sealed from the world. Their people starve and their citizen’s life expectancy are the lowest in the world.

Countries, which are open to trade provide opportunity to their people to buy what they want from the cheapest source in the world. This leads to an ability to sell your products worldwide. If you have a low-cost economy because all imports are duty-free, you will become a very effective exporter as well. Think, whether tiny Hong Kong would have become an international trading powerhouse without free trade or would it have remained what it was prior to 1945 — an unknown rock?

If Nepal removes custom duties and other restrictions on imports, it will become a powerful trading nation.

Cheaper imports will mean cheaper products to export as well. Here being landlocked — by China and India — would become Nepal’s biggest asset. Sell to them and you sell to over a third of humanity.

(The writer can be contacted at: everest@mos.com.np