Pseudo-Nationalism Is About Political Desperation and Sure Sign of Economic Collapse

ASIA--PACIFIC, 19 Jun 2023

Kedar Neupane - TRANSCEND Media Service

Context and Background

15 Jun 2023 – Perception matters. Nepal’s perception in business world is perhaps zero, to say the least. Economic scenarios have completely changed from the time of “baby boomer” generation days of 50s, and most of the boomer did not even notice profound economic, political, and social behavioral due to the advance of information technological changes that have occurred all around them and in neighborhoods. Economists and planners failed to adapt to behavioral socio-economic changes and stuck with narrow tunnel vision, being unable to come ‘out-of-the-box,’ to recalibrate strategies and policies in changing global and regional economic environment.

Nepal is neither unique, as widely purported by political opportunists, nor alone in global context just being between the two big countries. It is the way people have been conditioned their minds to think. There is no country in the world, which is not unique, but would repeatedly claim so to stifle economic development. Singapore is unique, which was just a fishing village in the sixties and surrounded by murky sea waters around it, with no known natural resources. But it has become the most advanced country just by exploiting its lack of resources into a gateway to shipping, maritime commercial base, and modern financial center of the world. Nepal, therefore, is not a sandwich (term coined centuries ago) between the two giant neighbors but it is a connecting bridge linking world’s two policy shapers of the future. Nepal must simply play right tunes of the day and be responsible by orchestrating pragmatic economic policies linking with the region and beyond, and not remain stuck in isolationism of super nationalism.

A nation’s economic prosperity is feasible if the political economy is fully aligned with wealth creation and promoting good governance together with associated reforms. That is how most economies are functioning and growth continues. It is not the same in Nepal, Zimbabwe, Cuba, and Venezuela, where focus is on narrow ideological bandwidth shrouded with misgivings, excessive nationalism, and fearmongering for political survival.

We must look beyond creating economic roadblocks and our borders for economic emancipation of people. SAARC is not an economic union for it is merely a tea-party club of weak and corrupt nations in the international corruption perceptions index. Expecting something miracles out of this club, after decades of existence, is a waste of energy and time. India has rightly moved beyond the realm of this club whereas other members of this club are seemingly stuck with old mind-set because they have run out of creativity and re-thinking.

Switzerland, like Nepal, is sandwiched between big the European economic and military powers. It is landlocked and has mountains and lakes with little known natural resources. It is unique for it is encircled all around by prominent powers of the world and has witnessed two great World Wars. Despite this, it has turned every corner of the nation into a paradise for business, trade, culture, tourism, finance, and model for direct democracy, as well as leader in precision industry, high-tech hot-spot destination, and international business and humanitarian player.

The Gulf states in the Middle East (with sand, oil, and gas only) successfully exploited underground natural resources and steered economic development. This was possible with a massive injection of foreign capital investments, technology, vibrant migrant population, and products are traded worldwide. In Asia, Japan, Singapore, and South Korea, without much natural resources, also achieved spectacular economic development by adopting right strategies with large scale foreign direct capital investment and transfer of technology from the West. India, China, Vietnam, Indonesia, Malaysia, the Philippines, and Thailand are accelerating their economic magnification with pragmatic economic strategies and growing in tandem with the ASEAN. Bangladesh has, in recent years, joined the bandwagon and surpassed expectations and growing rapidly and has turned itself into the second largest garment manufacturing and exporter in the world. On the other hand, with excessive corruption and limitless greed for political power and authority Sri Lanka has turned itself into poverty trap.

Why Are We Lost in Illusionary Pathways and Failed in People Prosperity?

Why is Nepal unable to achieve respectable economic development and growth despite claim on seating on a vast hydro-power energy-store at a time of when energy-hungry world is clamoring for clean energy? Perhaps, this is where people have missed something somewhere and population of Nepal is disillusioned by falsehood of political rhetoric. What is needed is the sheer determination and will of the people with visionary leadership that would drive changes and shape nations’ destiny. This nation has wasted time for not making best use of its strategic natural strength and opportunities and missed capitalizing uniqueness into a natural strength for economic development and people prosperity. This is a sad story of the century even though Nepal is well placed on the lap of two economic giants of this century.

Talking of super economic nationalism in an era of interdependent market economy environment is disillusionment, if not anathema or Harakiri. Economic nationalism and sovereignty have long been dumped by emerging nations including India, China, Indonesia, Brazil, Thailand, and Vietnam. Super nationalism is about economic protectionism. It means creating barriers; a failed system of the past that did not contribute to economic development and sustainable growth. This is not an investment-friendly entrepreneurial environment. However, a self-reliant economy is fundamental to economic security, but it does not have to be with ‘super nationalism’ myth for it gives wrong economic message. This does not inspire entrepreneurial zeal for private investments, innovation and capital creation which generates new wealth. It is not consistent with democracy in a market economy where entrepreneurs and astute consumers converge, and the economic wheel churns its naturally forward.

Inordinate emphasis on economic nationalism cannot lift the population out of poverty because economic development plan serves only as leap-service strategy for elites for their political survival and grip on power, which benefits only them. Access to liberalized world market of past decades recorded one billion people out of abject poverty globally. This is by no means a small feat. BRICS countries were on the forefront and reaped benefits through economic cooperation and market reforms, and policy synergies that followed globalized trading and economic environment and achieved economic growth and social transformation; never seen in economic history of the world. Those who did not follow the mainstream trends, like Nepal, Zimbabwe, Cuba, Venezuela were left outside of the growth curve.

Evidence indicates economic and social transformation could not be accrued with economic nationalism myth. Economic exploitation of natural resources will be comparatively advantageous and productive with massive injection of new capital, efficient technology, dynamic entrepreneurship, and access to large markets for economic viability. Otherwise, it would be a short-lived strategy, doomed to collapse. The way forward is to embrace economic pragmatism based on market collaboration, cross-border trade, supply value chain, and modern technology and with robust social compact, not mere political alliance, and rhetoric on regressive nationalism. This does not require political alignment with any ones or groupings as demonstrated by Singapore and Switzerland.

Economic nationalism was popular during ideologically dominated two superpowers during the Cold War. Super nationalism was the by-product of superpower political philosophies and ideological rivalries between themselves. With the lifting of the Iron Curtain and breakup of USSR, economic groupings like EC/EU, ASEAN, NAFTA, BRCIS, Shanghai Cooperation Organization, RCEP emerged as a way forward. China became the global manufacturing hub while India dominated the Silicon Valley with knowledge economy and new wealth was immensely created, unprecedented in economic history. Countries like Cuba and Venezuela in Americas, Zimbabwe and Eritrea in Africa, Nepal, Mongolia, North Korea, and Myanmar in Asia remained trapped in their inward-looking economic supper political nationalism myth. Most people in these countries have remained economically poor to date and have compromised their quality of life.

In the past decades, India has succeeded in creating a favorable atmosphere for growing large urban middle-class consumer base (four hundred million+) and continues to widen domestic and regional market. It is going regional as well as global. India is shedding off its political and economic super nationalism zest of the past. In recent times, it has been engaged in re-calibrating higher economic stakes and looking for more opportunities. It is branding itself with a business-friendly message, creatively and has succeeded to a substantial extent. This has spurred an aura of positivity in perceptions by not sending contradictory signals to the business world. This is unlike in Nepal where negativism is overwhelming and pervasive while political elites are focused on only political survival and party interests.

The outcome:  Nepal’s political elites and governance system have failed to chart pragmatic development pathways. This perception does not allude to positive sentiments in creating a business-friendly landscape which would attract external private capital inflow for investment. Nepal’s political environment lacks economic pragmatism when most of the regional trading avenues remain trapped inside the super nationalism-tunnel.

In the multi-polar political world of today business-as-usual, based on failed narratives, is not the answer. Economic nationalism did not work in the past. How could we convince ourselves that it would work in future? We need rapid courses in development pathways that envisage inclusive economic growth and prosperity for citizens. Democracy and republicanism without economic prosperity of citizens is a mere delusion.

Implications and Way Forward

No doubt, Nepal is a country faced with several economic and political corruption challenges. Revelation of fake Bhutanese refugee swindle, run by the government machinery, demonstrates the unlimited corruption and violation of human rights of nationals when the government stripped citizens nationality by switching into refugees within its territory for export elsewhere. The country’s political impunity and its dysfunctionality, corruption and economic isolation are the major bottlenecks in attracting foreign direct investment for taking advantage of global economic opportunities. This situation has, in turn, adversely affected the economic well-being of most citizens and created a sense of hopelessness among the population. In this, the young population have little or nothing other than to pack their backpacks up and depart for destinations elsewhere looking for better opportunities.

To address the challenges, Nepal needs to undertake significant reform in several areas, including trade, investment, governance, manufacturing, tourism, clean energy, for example. One critical step would be to develop a more conducive business environment that encourages foreign direct investment, entrepreneurship, creativity, and innovation. This can be achieved only by governance stability, and by improving the friendly regulatory framework, combating red tape and corruption, nepotism, and impunity, and increased access to open financing for small and medium-sized enterprises.

Additionally, Nepal needs to strengthen its trade relationships with India and China and other countries in the region and beyond. The country has already taken some steps in this direction by joining the Belt and Road Initiative and the South Asian Free Trade Area. But progress is limited to the signing of documents, with no visible progress yet on the ground. More needs to be done to diversify the country’s export base through comparative productivity advantages and attract foreign direct investment in areas such as manufacturing, agriculture, services, value chain, infrastructure, and tourism industry.

At the same time, Nepal must address its political challenges by promoting good governance, transparency, and accountability and combating corruption. This will help restore trust in the political system, which is crucial for attracting economic investment. Additionally, Nepal needs significant structural reforms to address its economic and political challenges and promote economic prosperity for its citizens. This requires a concerted effort from the government, private sector, and civil society to create a more conducive environment for foreign direct investment, entrepreneurship, and innovation.


Kedar Neupane is a founding, executive board member of the Nepal Policy Institute, an independent think-tank , a retired senior UN official, and president of ‘We for Nepal’ association based in Geneva, Switzerland where he lives. He has worked in several countries in Africa, the Middle East, Asia and Europe in his 38 years of service with the UN system and was Senior Change Management Advisor to UN High Commissioner for Refugees. Views expressed are his personal analysis and do not represent of institutions.

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This article originally appeared on Transcend Media Service (TMS) on 19 Jun 2023.

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