On/Off the Record
By P.R. Pradhan
Nepal is also suffering from the Sri Lankan disease. What is happening in Sri Lanka today, we don’t need to explain it. Following the severe economic crisis, Sri Lankan politics has fallen into turmoil. When the foreign currency reserve became empty, the island country in our neighbourhood invited the present political crisis. The reason for inviting such a worst situation is non-visionary leadership in the island nation. Surely, the terrorist attack last year and the Covid-19 pandemic have contributed to totally stopping the tourist arrival in Sri Lanka, by ending the chances of earning foreign currency, also an adverse effect on the remittance revenue was witnessed due to the pandemic.
Moreover, investment in ambitious and large infrastructural projects by taking foreign loans without a realistic cost-benefit analysis, reducing VAT and other taxes, and reluctance in managing fertilizer are the mistakes committed by the rulers in Sri Lanka. The family rule and non-transparent deals and corruption have also contributed to the bankruptcy of the economically vibrant island nation Sri Lanka. Taking foreign debts and spending the debts on projects having no immediate returns and misuse of the fund by the political leadership has bankrupted the island country.
Sri Lanka always remained an advanced nation in all sectors within the South Asian region, however, the foreign forces had always tried to destroy the island nation and the island nation had to remain engaged in foreign-sponsored terrorism, LTTE, for around three decades. The island nation had successfully overcome such a challenging armed conflict.
Today, Sri Lanka is economically destroyed, yet, once the global economy will take a normal course and political corruption will be curbed, the country can overcome the present crisis as the island country is rich with economic potential.
Nepal is also passing through an adverse economic situation. Although the leaders in the government are claiming that Nepal’s situation cannot be compared with Sri Lanka, the fact is that if the present downgrading of the economic indicators will continue further, the country may face a more serious crisis than Sri Lanka shortly.
Sri Lanka, having a strong base on agriculture, tourism, export trade and remittance has abruptly bankrupt. Nepal has no strong base on export trade and agriculture except for tourism and remittance revenue.
Nepal has encouraged the culture of consuming foreign products, our export trade is very negative; local industries have already shifted their investment towards trading business and that too in import of luxury goods; the government’s distribution mechanism is very weak; there is a lack of good governance; commission business is rampant. More seriously, the government is compelled for taking foreign loans to run the present federal set-ups. In the past five years, the country’s debt burden has become double. If such a trend of taking foreign loans just to function federal structure, sure, the Nepali economy will face a serious crisis.
The fact is that despite the Nepal Rastra Bank’s efforts for curtailing imports of luxury goods, it has not declined. The foreign currency reserve is continuously declining and there is no improvement in the balance of payments. The three governments – federal, provincial and local – have focused on the populist programme by introducing different distribution-oriented non-productive sector expenditures. The government is unable to focus on substituting imports of agricultural and other products. The government is happy with the customs revenue collected from imports of luxury goods.
The tourism sector has not been able to return to a normal position. More seriously, the remittance revenue has surprisingly declined compared to the past years’ record, which means, the informal channel, or say, Hundy has become active.
The national economy is facing an economic trap as the government’s general sector expenditure has inclined to a greater extent due to the adoption of federalism. The government cannot think about economic improvement measures as it is under pressure from operating the federal structures which have added expenditure for operating the provincial and local governments. It seems federalism could be the main disease of collapsing our economy. Once, the economy is collapsed and with poor infrastructural and industrial bases, Nepal may face the worst scenario than Sri Lanka.
This is a very crucial time and now the intellectuals, the Nepal Army like the security organ, which is responsible for safeguarding the nation’s sovereignty and economy, and other economic institutions, must monitor the nation’s economy and put pressure on the government for measures needed to save the national economy. They should focus on removing the present political structure imposed by foreigners, which has become an unnecessary burden for the nation. Besides, they should put pressure on good governance and corruption control and rule of law to save the economy and the nation as well.
Perhaps, these sectors are aware of the newspaper headlines of the high-level setting, policy corruption and commission in which those top-ranking political leaders are involved. This is the time to bring all of them under the legal net and give necessary punishment as per the crime they have committed.
The recent practices of manipulating the customs tariff by the finance minister while presenting the budget for the new fiscal year, strong domination of those commission agents and brokers are the subject of investigation and if they have committed the crime, which is an act of the traitor, and thus they have to be punished.
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