Economic growth : A tough goal for Nepal

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Some people are struggling for earning money; most of the people are struggling for creating the money while almost all of us are struggling for not knowing how to play with the money. Money is directly linked with economy. Nepal is facing a great problem in present stage for the economic growth of the nation. Yes it has gone through many political changes time and again. But the economic development has not been gone high in any of the changes. Looking up to the economic climate of development, it requires good infrastructures, skilled workforce, quality education and research & development. And present Nepal lacks most of these requirements of economic climate. Infrastructures are not developed in every corner, skilled workforce is forced to be foreign labor, education system is not the qualitative as it needs to be as educational institutions are more business oriented only and the research & development works are haphazard. Looking to all these realities, it is very tough goal for Nepal towards the economic growth.

About 7 billion people are living in this world. 1 out of 5 people survive on less than a dollar for a day. 1 out of 4 people do not have access to drinkable water. 1 out of 8 people suffer from malnutrition. But this is 21st century; an era of technology and world is changing rapidly. Not all the nations who are economically strong now, had a better past. Every nation had gone through war or poverty or famine or crisis or downfall. But only some stand up rapidly through those tough situations with intelligent techniques, others are still trying and some are still down. Only some nations are economically strong in the world at present while others are in confusion on the economic webs. In present world, world’s economy is dependent on the economy of some great nations like: US, China, Japan, Germany, UK, India & others. They have the world’s largest economy in current period.

At present, so called new Nepal is being leaded by combined communist party. It is their real exam for creating new Nepal. They must focus in these things for the economic growth of our Nepal. Land, labor and capital are the basic needs of the economic development. Our country has land, but it lacks the enough labor and capital. Labor refers to each and every professions and skilled manpower. And this manpower at the present time is abroad for the earnings. Talking about the capital, it is also lacked in our nation. So, the present government should focus on these basic needs and work on them as per requirement rather than confusing the people by false dream of development. The first step to get this tough goal could be the deep study of the other nations step towards their high economic growth rate. Without studying or doing a deep research we cannot walk a step forward. Nepalese government, workers, stakeholders, private companies and we all people need to learn a lot from other nation’s economic growth history. I would like to give a short example of economic growth of China, South Korea and Germany here.

China is world’s largest nation with maximum number of population. And it’s also a nation with strongest economic condition among the rest of the world. But there are lots of struggle for this economic success. During 1970s the nation was living with 30% of people living under poverty. But after 1978 AD this nation changed its face. Agriculture is the main part behind the economic success of China. More investment was done in agriculture sector and farmers were allowed to sell their crops in open market which helped them for success in agriculture. With more advanced technology in agriculture and open market is the major element for the success in agriculture. And after agriculture foreign direct investment is the next vital element that made China economically strong. Due to high population, there was high efficiency and low paid workers, and this lead high foreign investment in China. And with the time this rate was increased rapidly and this became what it is now. Nepal could learn that new technologies could help to upgrade the productivity in agriculture and foreign investment with better policy that favors own nation would lead to the economic growth of our nation Nepal.

Korea is also another best example of economic growth form where Nepal could learn a lot from this nation’s history. At present situation, they have high influence for Nepal as most of the Nepalese are working there and high remittance enters from Korea. But, someday Korea was one of the poorest countries in the world. It got independence in August 15th 1945 AD from 36 years of Japan’s occupational rule. The condition of the nation was so weak that people were suffering from poverty and starvation. Instead of going towards development, Korean War broke out and a single Korea split into North and South. Then South Korea started its journey towards economic growth. In 1953 AD Korean Per Capita GNP was 67$ and after 60 years it became world’s 12th economically powerful nation. There are many reasons behind this success. The first reason was sacrifice of the Korean people towards starvation and poverty for their children’s education. Even though parents have no food to eat they sent their children to school. There was also the rule of compulsory primary and middle school education for every child. And there is something hidden behind the scene. Education system was also practical. There was practical based education system. And later this helped Korea to produce highly educated and trained work force. This highly trained manpower is the great evidence to prove that it’s the backbone for economic growth of South Korea. But after some years, foreign AID started to enter in South Korea for helping poor and helpless. This results the economic downfall of Korea which was on the way for economic development. This proves that poverty never ends from foreign AID. They make every nation more dependent. If people were independent before, it makes them moving towards dependency leaving their own duties and work. And in 1961 AD, Military Regime takes power in the South Korea. This regime took economic development as high priority. “Economic Planning Board” was formed with a great power for economic planning and allocating budget. This board developed 5 years plan which was known as blue print for economic development of South Korea. This plan came into action in 1962 AD. But USA reacted negatively to this plan due to wrong information gave by US ambassador for Korea to White House. But Korean government doesn’t give up. They go on with plan. Then, next step was to send trained workers to West Germany for inviting foreign economy. After some years Korean government invested in textile industry, wig industry, needle industry and others. The rate of export increases rapidly in 1964 and 1965 AD. Then slowly steel industry, coal industry, chemical industry and ship industry grew. Powerful engines were also started to build. Steel mill got great success. In 2009 AD it became world’s 4th largest producer of steel. Here I want to denote that Korean government had planned so greatly with a long sight vision. They planned to start making small things at first which will help them to start building other great things which needs those small things to be complete. Korean government educated their children about making those things at first, and then started building steel, needle and engines. Then they planned to build things which need steel, needle and engines. Their ship industry and automobile industries are the then industries. After some years, Korean government also faced bankrupt. But living of people was not difficult. They all helped each other greatly that living standard of Korean people increased greatly. This was called as “New Community Movement” in 1970s. Former US president had also quoted that, ” In order to rid itself of its poverty African government must adopt Korea’s New Community Movement” as its role model.”Another great step of South Korea is converting a crisis to opportunity. In 1973 AD and 1978 AD it faced oil crisis which doesn’t make Korea downfall, instead it grew above by challenging the situation and producing more things which are required for other nations. Semiconductor industry was another industry which plays great role for economic growth of the South Korea. After well economic development of the nation, Korean music, song, drama and movies started to develop. And I would like to opine here that what Nepal is facing today is the confusion in economic development. We are entertaining ourselves in music, song, arts, dramas and movies which are the final elements for economic development. We have so weak roots and stem but we are painting the leaves. Edmund Phelps who was a winner of 2006 Nobel Prize Laureate in Economics had said,” Economic growth is dependent on the character of the nation.” If we look towards history of economic growth of South Korea it seems true because Korean people sacrifices their life to send their children to school, they were hardworking and loyal towards their government. And also every government worker’s and private worker’s behavior is directly connected with economic growth of the nation. There are lots of things that we all Nepalese should learn from it. The major learning for our government workers and stakeholders could be, there must be practical based education for every child who could be well trained man power in near future and nation must build the place where that man power would be utilized. Only then our Nepal would experience economic growth otherwise our every man power would be utilized by other foreign nation like its prevailing nowadays. And for upgrading living of every people in every corners of our nation, we could also take “New Community Movement” of South Korea as a role model.

Germany had its own steps for its strong economic growth. Mittelstand businesses are the main backbone for great economic growth of Germany. They are small or medium sized manufacture businesses run by one family. And every Mittelstand business is specialized in one product. 80% of work force of Germany is employed in these kinds of businesses. This business does frequent research and update their technology which leads their success. Government also had special policy for these kinds of private companies that support the whole nation. Many German students go to Technical school after completion of their high school for their job training and from there directly into Mittelstand Company. And this is also the reason that employment rate of German youth is higher than others in Europe. Employ of these companies also receives sufficient salary, facilities and even health care facility. This increases employer’s loyalty towards company so most of the employ stay long term or even lifelong in a same company. From Germany we need to learn that for success of any company it needs frequent research and update in technology, workers should have social security, efficient salary and facility so that they would show their performance fully and loyally. And major learning can be similar to that of South Korea, practical based education system. If education can create well trained manpower for the nation, that nation would utilize them fully if there is right place to utilize. If there is no practical based education, only great companies could not help for economic growth of the nation and vice versa.

Nepalese government workers, stakeholders and all Nepalese should be aware that old education system could not bring the change in economy of the nation; there must be practical education with vocational trainings compulsory for getting effective manpower in future. And with the same side new companies should also be established with modern technology where those produced manpower could be fully utilized. Those companies and industries will exist for long if the resources from our own country are utilized either natural or human resource. Until and unless such companies are established our goal won’t be fulfilled.

Our government need to learn a lot from the history of economic development of the countries which were on war, poverty and famine but economically strong at present. As Government workers are the one who can bring the change directly, they need to be aware that for the economic growth of our nation there must be one economic board which just looks for the economic planning, working and development of the nation. But that board needs to be far from politics and should have the power to do every development works independently. Then there must be certain planning and structure for the economic growth of our Nepal. And educational system should be developed as per the required of manpower in future within the nation. There must be good social security and health security for every worker. Corruption should be strictly prohibited in each and every field. There must be strict punishment for everyone who takes bribe. Foreign AID, NGOs or, INGOs are not the means for sustainable development of any nation, either the nation should take those responsibilities or they should mobilize them under their strict guidance and in smart way. Nepal government should bear their duties or responsibilities for the good social changes by themselves. As our Nepal is rich in natural resources planning to utilize each and every natural resources of our Nepal should be made scientifically, so that the rate of exports would be higher than the rate of import. We all Nepalese should highly focus our need on the goods those are made within our nation. We all need to plan for each and every difficult situation. Nepal government should think that our Nepal should be made capable of handling every Nepalese comfortably even though there is blockade by neighboring nations for a year or more.

Finally, qualified and well trained manpower, regular researches for the development, politically free separate economic board, well planned infrastructures, quality education, social and health security for every employers, utilizing national resources [water, herbals, trees, river, lake, vegetables, fruits, etc.], establishing industries or factories which produces things that are required for our daily uses, updates of the technology in every field are the beginning steps and elements which are required for the economic development in our Nepal. As the changes cannot be grabbing suddenly, we need to be smart. As we lack skilled manpower and capital which are the key sources for economic development, we have land and resources. So, the only way out for Nepal would be: Tourism, Hydropower and modern agriculture. These are the first key door for raising capital of the Nepal which will help for further steps. The present government should think about it and work on it smartly as soon as possible. But if they just focus on their profitable tasks confusing the people as they are doing now, economic growth of our nation will remain tough goal of Nepal and unfulfilled desire of Nepalese for more decades and more centuries.

*Dhungana is Program Officer at CWIN Nepal, Myagdi


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