Unleashing the Vajra sets the context to understand the key issues that drive Nepal’s economy. The author examines the other key sectors—the private sector and the development sector—closely to understand the different distortions that exist in the society, from cartel behaviour to rent-seeking. The book also deals with the emergence of the global Nepali, and the dichotomy as Nepal itself continues to be inward-looking.
Below are few facts, which reflect Nepal’s economic situation currently, taking into account its economic history as well:
Influence of the caste system
The Nepali economic system, until the abolition of the caste-system, revolved around the Hindu philosophy and way of life. So in such a society the discourse around development and the role of development partners popularly known as donors becomes very complicated.
Third World Country
After the Second World War, Nepal, along with the least developed of the former colonies—those lacking in industrialization, capitalist institutions and democratic governance—became eligible for foreign aid as members of the ‘Third World’. The first aid package Nepal received was part of the US-led Marshall Plan.
Lack of Foreign Aid Policy
Exhibiting an attitude of dependence, Nepal did not bother to have a comprehensive foreign aid policy until 2002. The lack of a national body directing and coordinating aid was a considerable drawback—not only did it compromise the sovereignty of the nation, it often directly challenged the will and intentions of the government.
The interest and accounting of remittances has become even more important as the total remittance crossed the billion-dollar mark in 2005. In 1993, the remittance to GDP was just 1.5 per cent, as recorded in the World Bank report. It swelled to 28.31 per cent in 2018.
The Non Resident Nepali Act
The Non-resident Nepali Act, promulgated in 2009 means that NRNs, who are not citizens of Nepal, could purchase land, acquire assets and invest in Nepal, and also have dual citizenship in the case of certain countries.
Impact on real estate
Houses are often rented from people who are close to the renting agency’s staff, while vehicles are rented from influential individuals at rates higher than the going market rate. These provide nice commissioning counters for development agency staff workers and a secondary source of income for well-placed and high-ranking officials.
Nepal has historically been at its most prosperous when it has leveraged this geographical position. Today, this opportunity emerges again-and in order to take advantage of the growth of India and China, Nepal needs to hitch its wagon to the fast-moving engines to its north and south. For a deep-dive into Nepal’s past, present and future pick your copy of the book today!