Nepal‘s economy is still in primitive stage :Dr. Pudasaini
Dr. Thakur Pudasaini, Faculty, American College of Commerce and Technology .He also Worked as an Economist in Central Bureau of Statistics, Government of Nepal and also Worked as an Assistant Director, Nepal Electricity Authority, Nepal
Dr Thakur is the past president of America Nepal Society ,Washington DC .
Interview with Dr Thankur Pudasaini :
Overall how you explain the situation of Nepalese economy?
Although, Nepal has adopted liberal economy since 1990, the economic progress has not geared much due to the decade long political unrest in the country. Nepal has adopted mixed economic policy where government and private sectors go side by side in order to maintain economic stability in the country.
Again, Nepal’s economy is fueled by remittance. Low saving, high prices for all necessary goods due to the high inflation rate, low investment, high unemployment, and high import plus less export leads to huge trade deficit, all these indicators forced Nepalese people to live in an abject poverty.
Still, majority of the people depends on agriculture as their livelihood. Other economically gainful sectors such as industry, manufacturing and government services have little role to occupy the unemployed workforce.
Overall, Nepalese economy due to the year round high frequency of load shedding and inadequate infrastructure development is still as what renowned Economist W.W Rostow categorized as preconditions for take- off. This means Nepal‘s economy is still in primitive stage.
What other factors you have seen as the obstacle for the rapid economic development of Nepal?
Low growth rate (as per the reliable source it is 4 to 6 percent growth rate now), low productivity- return on capital ratio, low employment opportunity to the poor and marginalized people living in rural areas, unable to create more employment opportunity in other sectors of economy as service, mining, are the other factors associated with the impediment for the economic development of Nepal.
In the same way, the other equally important factors are vicious circles of poverty due to low income, low saving, and low investment, and inadequate infrastructure development in the rural sector where more than 80 percent people live in poverty and hunger are the other causes behind slow economic growth.
Similarly, low production, low domestic resources mobilization, high rate of disguised unemployment mainly in the agriculture sector , low investment in human capital in the form of education, training, and other skill generating activities – are the other prominent reasons liable to upset the growth of the national economy.
What consequences you have seen about the obstacles you have explained above?
It is simple to explain here. Nepalese people are suffering from hunger, disease, and poverty. Low GDP accompanied with huge trade deficit means Nepal is losing its hard currency in the form of importing goods and services in the country.
In the same time, many active population nearly about 1500 economically active population crossing the Nepalese border daily to earn their livelihood in the foreign land. It is simply because employment opportunities available in the country are very low.
Further, farmers are getting low price for their products due to the inadequate transport facilities and even the cost is high than income
High population growth triggered with malnutrition, hunger, and disease is another issue produced by the above reasons. There is wide gap between demand and supply of power. Which means the economy will be circled by low GDP, low production, low employment, and low income all the time.
The pros and cons can be simply explained as an inadequacy of all the socio-economic development of the nation and people.
Is there any panacea to cure these economic maladies?
We have an old proverb- Prevention is better than cure. Remedies can be overcome by thinking positive towards economic plan, program and policy with a scheduled time frame.
First and foremost panacea is political stability in the country. Political stability and economic development are mostly correlated variable. In the absence of one, the other cannot prosper. So there must be political stability in the country.
Secondly, adequate generation of power with the optimum utilization of domestic resources is another panacea to hit the crux of the problem. Increasing productivity and return in investment in the form of land, labor, capital, organization, and time will be possible if and only if there is adequate power supply in the country..
Third, it is equally important that giving high priority for sound policy making on industry, agricultural development of the country to enhance the employment opportunity. So that working population have no worry about their livelihood. They can find it in their own country.
Practical education and skill generating activities to the marginalized and oppressed families are the other aspects to be dealt with by the concerned.
Excluding the above, is there anything to say regarding the economic condition of the people?
Last but not the least, as we know economic prosperity in the country can be achieved if and only if there are numerous opportunities in agriculture, industry and in all nine sectors of the economy. Our country is an agrarian country. Majority of the population earns their livelihood from agriculture. So there is a need for transformation of other economic sectors as well.
Shift from agrarian to industrial, services are equally important for rapid economic development of the country.
People concerned if not start to think from today will be an economic downturn for all Nepalese people that may even bring further economic hardship. So we have to correct it in time.