Global downturn Looking through Nepali prism

Today, the so-called global village of ours is unsparingly beset by the global financial crisis. It has spread far and wide with no country remaining unaffected by its negative impact. Not even the highest policymakers and the knowledgeable economists could predict when the meltdown festering now could be arrested. However, it is accepted that the vaulting greed of the few to amass wealth sustained by the unfettered free market practice has caused the financial and economic jitters, never experienced after the Second World War.

However surprisingly, no one has taken responsibility for the widespread financial and economic damage the crisis has brought to bear on the common people of the world. Certainly, the hard hit will be the poor people of developing countries and in particular, the masses of the lowest strata of the least developed countries. Developing and least developed countries are responsible under no circumstances for the downturn of this massive scale. However, the people of these countries are being punished for no fault of theirs, but of the great financial players of the rich countries like the US, EU, and Japan that have enjoyed the highly sophisticated life with all material comforts.

When we look at this dizzying crisis of the massive magnitude from the Nepali perspective, Nepal as a nation with one of the tiniest economies characterized by underdevelopment and social stagnation has to see the global downturn as an asteroid hit bringing various sorts of the financial and economic malaise putting further burdens on the shoulder of the common people who have been long experiencing a murkier financial and economic crunch alongside disturbance and destabilization loaded by the long-lingering socio-political conflicts. To date, there appears no sign of stoppage of the deteriorating scenario.

The government leadership of Nepal responsible for the management of the finance and economy argues that the Nepali economy is not hit by the crisis as it is insulated from the globalized financial network. But, the critics of the government disapprove of the argument and say that the Nepali economy has been already hit by the declining remittances, lowering number of tourist arrivals, slowing down of trade, etc. Furthermore, the grants and loans that Nepali receives from abroad will go down, if not now, in the months to come.

Sensible people disagree with the government’s argument and point out the stark reality of Nepal’s high dependence on foreign resources, particularly for most needed and core development activities to uplift the poor Nepali society. Undoubtedly, the Nepali economy comes more under the glare of the globalized process than that of the insulated situation. Most funds for development accrue from areas of the US dollar, euro, and yen. Unfortunately, those are the areas that are heavily affected by the downslide. Nepal’s poor economy with no ability of its own to move on for development has to ask for more money and material from hard hit rich countries.

The current financial crisis has more to do with the rich international community than with the domestic concern of Nepal. Naturally, Nepal has to plead for inclusion of funds in the stimulus package or normal budgetary management of rich countries to help poorer economies. This could provide some relief to the Nepali economy. Neither the Nepali people nor the people of any other developing countries are responsible for the present international crisis. Helping the poor people of developing countries means helping rich countries themselves in turn in view of the interconnectivity of the global economy.

The crisis has taught an unforgettable lesson to the underdeveloped countries like Nepal. As a precautionary step, Nepal should raise its voice to create an international fund whose objective should be to help needy counties facing the downturn to keep them from further deterioration. Such a step could help prevent poor countries from becoming the breeding ground of terrorism and social turbulence.

Conscious people are aware of the process that the current financial crisis has thrown out globally. Reportedly the architectures of the World Bank, IMF and others are being refashioned to cope with the emerging situation in the international financial system. Certainly, Nepal should represent the needs and aspirations of the deprived people at such forums with sound propositions for a better deal for it. It is high time to contribute to the building of our own society and other societies facing problems like ours?

Above are not propositions tinged with naivety but they reflect a real need. They could be advanced at international forums where other countries with situations like ours could come together to work with us. Concerted efforts and solid preparation are needed. To move on, economists and diplomats of Nepal need to team up with action-oriented vision sensibly and systematically.

Shrestha is an ex-foreign ministry official