Quite a while ago, I had brought up the issue of globalization and its impact in Nepal at this website. That was before Nepal became part of WTO (World Trade Organization). Now that we are now part of this great Open Free Market, i am wondering if there are any organizations/volunteer groups etc that act as watchdogs for the effects this move has had in Nepal's economy and such.
I also think it will be mutually enlighetning to hear people's reaction to and predictions about us embracing Free Trade. It should be even more interesting to see how many are simply unaware of this issue. thanks.

Well, they are not exactly "fighting" globalization in Nepal, but there are people and organisations who have done various bits of work on the issue of WTO/Globalization
and Nepal.

You may be interested to contact:

1. Shizu Upadhyay and colleagues at ActionAid Nepal.
2. Ratnakar Adhikari and colleagues at SAWTEE, Nepal.
3. Dr. Posh Raj Pandey, c/o Ratnakar

There may be others, but their names escape me at the moment. Shizu and Ratnakar may provide you with further info and contacts.

A quick google search should get you started, I'd think.

oohi
ashu

My personal disposition towards globalization

Whether we can benefit by free trade ultimately depends upon how well we deal with competition. Are we up to it? Proper environemtn for manufacturing, quality-control mechanism are some of the things badly requiring to be enhanced. Otherwise, cheap foreign imports would flood nepal, to the excitement of consumers, but severely weakening the economy.

On sectors like tourism and garment, where we have been offering low-price products, we could do well provided that good quality is maintained. Similarly, other products like vanaspati ghee, can be expected to do well given that it was doing extremely well once before India introduced Special Addition Tax. In other manufacturing front, Nepal is bound to take a rather harsh beating from international products, including Indian and chinese goods.

Things look rather bleak at the moment but it is worth a try given that there is lot of improvement in almost every sector. Who knows we may learn to survive in this tough experiment and make ourselves more competitive.

*lot of improvement = lot of room for improvement

Thank you both for your comments. I was hoping to listen to what these organizations are doing. It is not news that many poor countries of the world have fallen prey to multinational investors. It's just interesting that we have decided to become a part of the WTO when our country is going through its toughest times. I was wondering if scientific researches were carried out by organizations/govt before we signed in. What do the scholars in sajha think about our future as a member of the WTO?

Maximum20,

My experience is that most critics of globalisation in Nepal (at least the ones I meet at Martin Chautari) ill-versed in basic economics. These people take such rigidly ideological positions that I, for one, find it difficult to have open-ended discussions with them
on globalisation.

That said, just the other day, I picked up this book at Kathmandu's Sarswoti Book
Store at Pulchowk . . .

BOOK: "Between integration and exclusion : impacts of globalization in Mozambique, Nepal, Tanzania and Vietnam"
Edited by Juhani Koponen. - Helsinki : Institute of Development Studies, University of Helsinki, 2003.

*****

I haven't had a chance to read this other book yet (though I will have it within a month), but its review makes it sound really interesting.

- http://www.foreignaffairs.org/20040901fareviewessay83513/arvind-panagariya/the-miracles-of-globalization.html

oohi
"thank god for globalisation"
ashu

the book sounds like a good read and i'll def give it a shot when i get a chance.
I am not an economist and do not claim to know everything about how globalization works. My views are based simply on what became of the poor countries that welcomed globalization forces like WTO, IMF investments etc. This recent post was triggered after watching a documentary on Jamaica : Life and Debt (http://www.lifeanddebt.org/). It was shocking to see how IMF, World Bank and their likes step in when the country is going through its toughest times, promise help and end up cutting such deals that are never aimed toward alleviating the poverty of the country but toward making the country more and more dependent on these huge multinationals. I understand what you mean about the critics sounding too idealistic but that doesn't necessarily make them ignorant does it?
I know little to make an irrefutable claim either for or against globalization. But simply based on what i read in the news (the news about how it is always the poor farmers and such that protest in WTO conventions.. i know that one farmer actually killed himself while protesting.. and then there are accounts of countries like jamaica and argentina etc etc), I believe that these multinationals are there to exploit countries in turmoil. given the situation of nepal and given the level of education of nepalis (sidenote: i have read ashu's posts in sajha and i can say he appears to be one of the most knowledgeable nepalis in nepal and yet he says he has little knowledge about globalization) i am simply concerned about our government's decision to welcome foriegn investements. Was enough homework done? Can we even trust these officials with our future? Do we have aware citizens that will scrutinize the success/failure of globalization in nepal? these are some of the questions i wanted to address. any comments from any concerned individual is welcome.

well, maybe ashu knows more than i give him credit for.. but you get the idea.

Seeing how the posts: viewed ratio is so disproportionate, how about we turn this thread that has been deemed unworthy by many into a poll

POLL
I DO NOT REPLY TO THIS THREAD BECAUSE:

A. MAXIMUM20 SOUNDS LIKE A BROKEN RECORD.

B. I KNOW WHAT I KNOW ABOUT GLOBALIZATION AND REPLYING HERE DOES NO GOOD.

C. I HAVE NO IDEA WHAT THE HELL GLOBALIZATION IS SO I'D RATHER NOT REPLY.

D. (MAKE YOUR OWN)

ha ha :) My salute for your creativity, max20.

Quite surprised to see Maximum talking about 'free' this and
'free' that. I don't know but may be I have a lot of catching up
to do. When did market suddenly become 'free' (reference to
Maximum's 'we are now part of OPEN FREE MARKET') ? Might as well
say that there is such a thing as 'Free Lunch'. Probably you meant
to say 'we are now part of Global Market or Global Economy'. Also,
the qualifier OPEN is problematic.

Paradoxically, the existence of WTO itself is ample proof that so
called free trade is not 'free' either. WTO is more a multilateral
approach (very noninclusive and opaque one at that) for 'managing'
or 'negotiating' trade between member countries, where what ends
up on your plate depends very much on the bargaining powers of the
South apropos the North, and how well member countries
individually negotiate under the WTO framework, and position or
reorient their economies.

I get a little nervous every time I see the qualifier 'FREE' being
tossed about so casually.

Re: WTO, well my hunch is that most developing countries joined it
not because of any perceived net benefits (which the twin gospel
of specialization and trade promises), but because they were
afraid of being 'left out in the cold'. While the latter may be a
valid reason for joining WTO, the decision to join was hardly
taken from a position of strength or even comparative advantage.
Now that Nepal has already joined WTO (with very little public
debate preceding accession to WTO) through ADHYADESH, I don't
decry Nepal's decision at all.

I believe the sooner our policymakers reject 'FREE' this and
"FREE' that mentality, the sooner they will be able to make better
decisions in the national interests. They probably still think
freebies, junket trips, grants, charities are indeed 'FREE'. What
are free to them [if they mistakenly think so], are not
necessarily free for the country. Like Armand Hammer, the American oil
tycoon cum philanthropist, once put it: "I only give to get more." It would
be interesting to see what price India will exact from Nepal, if
it already has not, for providing military assistance to Nepal.

Free market and free trade are not free. This is not a critique of
the two, or even of globalisation. But simply my observation why
Nepali people's perceptions must change to reflect this 'nothing
is for free' reality, which is really the bedrock of economics,
at least in the socio-political-economic context.


Karmapa

Ashu is right about one thing - more often than not, discussions/debates about WTO and globalization end up taking you on an ideological merry-go-round. Capitalism and globalization don't take you to the depths of hell, nor are they the cure for all ills. But you wouldn't know if you heard two people debating about it, would you? :)

In Nepal's context, there probably won't be much change in the short term. You'll need to download the details of the agreement from WTO's website. Nepal will still be allowed to impose tariffs on a variety of goods. The market won't be immediately flooded by cheap foreign goods (through legal means anyway, the market is already saturated with cheap Chinese goods).

I don't think any real homework was done before signing the SAFTA and WTO deals. Nepal simply hopped onto the bandwagon for fear of being left out. One thing is for sure - it won't make Nepal filthy rich nor will it take Nepal down the drain. We'll probably be left a little better off or a little worse off.

PS. A favorite argument of the anti-WTO people is that smaller countries have little bargaining power at the WTO and it is ruled by the richer countries and so on. How much bargaining power did Nepal have before joining the WTO anyway? At least joining the WTO ensures a relatively fair mediation by a body that has shown recently that it can enforce trade rules.

JagaltayBhoot,
thank you.

karmapa,
your reply is funny and thought-provoking at the same time. the good news is that the parts that made me laugh are different than the parts that made me think. First off, I do know that "FREE" does not mean we are going to be flooded with free money. Free trade, as i understand, -and please anyone correct me if i am mistaken- means trade between countries without any or much restriction from the government. That is my concern. The weak Nepali industries will not receive protection from the government and will have to compete with multinational brands in a FREE market.

"republican",
I agree that it seems not a lot of homework was done prior to the signing. And you are right that the country can go in either directions. but although that thought seems to relax you, this uncertainty is what i think should be our major concern. We seem to lack watchdogs that will step in and ask the government to take action when they see that the country is headed toward more economic trouble.
A lot of cheap chinese goods are entering the market but the seller is not a single corporation. No one person (or two) is making all the profit. yes, our imports have gone up but it's mainly nepalis who are engaged in importing, transporting and selling these items thus a decent part of the money is staying in the country. I think you would agree how the case would be different if a multinational company were to take over the market and channel all profits to lands far away to a few old folks who think Nepal is probably in Italy or Africa.
Yes poor countries do not have much bargaining power before or after the treaty is singed. But what is noteworthy is that the power of bargaining power is higher after signing in. in a closed or quasi-closed market, the government might have little bargaining power but it still has the authority to control it's internal market and protect small local businesses and provide for its citizens by making the pursuit for profits secondary.

any comments, criticisms are welcome. After all, like i said, i am no economist. I'm just a concerned citizen of Nepal.

Maximus, I find it difficult to argue with people who use escape clauses such as " i'm not an economist". Kinda like insecure students from college days venturing an answer in a classroom: "Well I may be wrong but I think...". Well if you find my debunking the word 'free' funny, you should, because it is so obvious but is often wrongly applied in policymaking. Don't worry: you are not alone in finding it funny, many charlatans with even MSc's in economics, and even policymakers, do. As a result, the country pays the price.

Well certainly you have defined your understanding of 'free' trade quite correctly albeit ambiguously: you wrote:

<>

Free trade is ... trade between countries blah blah - well that's like saying a black hammer is a hammer painted black. Not useful. You have not defined ' trade' at all. "Free", because it's really such a misnomer and an ideal, is really hard to define.

But anyway your subsequent paragraphs especially words like " importing",
" transporting" and "selling" leads one to suspect that by free trade you probably mean 'free movement of goods and services between importing/exporting countries". well, that would be a very simplistic definition of free trade, if at all. any trade experts who do not use escape clauses like "I'm not an economist" like you do will tell you that movement of goods and services without government restrictions is only part of it. there are other issues like comparative advantages, fair competition, levelling the playing field, hidden subsidies, dumping, beggar thy neighbour policy (by willy nilly devaluing one's currency) to make one's exports more attractive, issue of 'enclave economy', issue of 'movement of natural persons', etc etc. free trade is more than
just goods and services crossing borders without interference.

if you think about it, barriers to movement of natural persons (embodiment of labor or 'human capital', and therefore of services) across countries such as requirements for visas, work permits, and passports are market distortions... so trade suffers majorly, but for a reason, mainly political. rethink 'free trade' the next time the American Consulate or whatever consulates refuse you visa. May be you won't find it very funny then. WTO is certainly dangling 'movement of natural persons' as a carrot to member developing countries...without going very far, but will probably use it only to exact concessions after concessions from the developing world...

while i concede that 'free trade' is really an ideal and we are far from it (a global common market is what we need), if we chuck the notion of 'free' until then, we are much better off. 'free market' comes very close to the Austrian school of economic thought but is problematic; just calling market economy [which is usually of a mixed type] suffices.

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Disclaimer: The author Maximum20* is not an economist

*compare with MAXIMUS, another registered visitor of www.sajha.com
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It was not an escape route as you condescendignly put it. I am sorry that i am not an economist (and i hated my econ classes in college) but i am sure i have a right to have an opinion. I would not be here talking about globalization and free trade had Nepal not joined the WTO. I understand that i do not meet your level of competence in these issues but think about the general nepali population. i think they need to be explained what the leaders of their country have planned for their future. They might sound like insecure college kids but you sound like those condescending scholars who mask their inability to explain issues in simple terms by putting the blame on the ignorance of their audience.

My understanding of Free Trade was probably not good enought to equip me with a perfect definition but to me "importing and exporting" is not different than "trading of goods between countries". given where my knowledge of economics stands, i accept that free trade is a lot more complicated than i can ever imagine. but honestly, i don't care if "'free market' comes very close to the Austrian school of economic thought ". I, like any regular nepali, just wish to know what's in store for me as a result of this governmental move. any thoughts?

Maximus20, well if you had put the escape clause "I am not an economist' only once, I would have understood. But you do it TWICE (in two different postings) in this same thread. Check for yourself!! What are you trying to advertise and prove anyway?

I doubt if you are even serious about this thread YOU started. But you have a tendency to reduce the discussion to a farce with your brand of humor polls. Using humor to shield one's ignorance or as cover for having nothing worthwhile to say - I see it happen all the time in Sajha threads. Wit is one thing, but your brand of humor only dumbs down the discussions. Truth is, you do not do justice to the thread you started - your own baby. You are not an economist, but who are trying to be: a clown?

You say you want to know what's in it for you as a result of this government move (probably you meant Nepal joining the WTO). But something tells me that you are not serious and don't even care but only pretend to.

Keep going, guys. Some of the heated postings above has only served to add to my knowledge of 'free trade.' This is what I love about sajha, you never know what you'll be illuminated with.

By the way, can anyone explain to me what you folks mean by ' our government was not prepared for WTO'? What should have been done?

It's sad that this came down to a personal feud. Let me quickly try to respond to some of the accusations and then maybe we can move toward something constructive. I recommend those who are not interested in this rather pointless quarrel to please skip three paragraphs.

Again, the reason i said i am not an economist was to admit my lack of proper grasp on the issues. I can say with confidence that if i had not mentioned i was not an economist and had just given my views... there would be an army of educated economists who would pounce on me for "advertising" my flawed views. So what do want Mr Karma.. someone like me, with little knowledge of classroom economics, should never dare to say anything in public? how can you blame me for being honest about what i don't know? What am i trying to prove? what am i advertising? since when is NOT knowing things a thing of pride? You don't even know who i really am. I'm sure no one here does. same goes for you. I don't know who you are and i don't care either. Trust me when i say this, i am not here to prove anything about myself. And i still fail to see how anyone can "prove" anything in an anonymous forum.

now come on.. i have a TENDENCY to reduce discussions to a farce by my BRAND of humor polls? How many times have you seen me do this? The reason i posted that poll was, (i'm sorry i'm going to repeat myself in the same thread again) i didn't get why people were not replying. Honestly. I had tried talking about globalization and Nepal in the past here. this was when nepal was planning on signing in with WTO. I wanted to know if people knew what the impact would be and if anyone was fighing it. But no one seemed to care then. Now i am back and have similar questions and no one seems to care. I honestly wanted to know if people thought i was sounding like a broken record. Look at the other options.. Yes, maybe the manner in which it was presented was not "classy" as you would perceive it. i am sorry for my unrefined ways. But hey, thanks to the poll, this thread, which was being pushed down the bottomless memory hole of Kurakani, is still surviving and some people think it is actually informative.

And your last paragraph just hurts. and again, i am not being sarcastic or whatver. This anonymous forum is not an ego trip for me. trust me when i say this that i have better things to do than pretend to be concerned about my country to a bunch of strangers who do not know my real name. I am still looking forward to your input as you seem to know more about it than i do.. (aaah.. hate to repeat but i am not being sarcastic.. really). yes i did come down a little harsh in my last post mainly because you took my words of honesty and turned them into trying to make me look like a moron who is scared to have a steadfast stance. But i have explained my reasons for having the disclaimer and i hope you understand. In short, i am admitting my ignorance, i want to learn and maybe we can educate one another here. But i should still be able to say what i think is the truth, right?

ooook... "bumbum"
I am glad that this banter is actually getting some attention and helping us understand this complicated idea called free trade. I am glad people who do not understand all the intricacies of free trade are now interested in it (2nd or 3rd category in my silly poll). And we should be. Nepal is in and we don't know much about its implications in our future.
I have my fears for free trade mainly because of the state of countries like Argentina, Jamaica, Indonesia etc etc. Governments in these countries opened doors to investors that put profit before people which is a scary idea. As far as preparation from nepali govt goes, I think it was necessary, to ensure a secure future for the local establishments, traditional farmers etc etc, that the government protect them and strengthen them before putting them face to face in a competition with multinational companies. Nepal might have a pretty good potential of benefitting from free trade but we are very vulnerable and during times of conflict, it is very easy to overlook what is happening in that end. i think it is the responsibility of the educated population to watch what is happening to our country as we can't really tust these leaders of ours.
ok that's enough for one night.

I dont see any problem with the way "free" has been used by the original poster. And I suspect noone who replied in this thread had a problem in understanding the way "free" has been used here either. As for me, the word "free" in the given context means free flows of good and services with minimal or no entry barriers. If I may quote some words of one poster here, "competitive advantage, fair competition, leveling the playing field, hidden subsidy, dumping, devaluing ones currency" etc all boil down to the same thing: more open trade or freeer or free trade. Of course, the word 'free' does not mean "phokat" here but more open. As far as movement of persons is concerned, well it depends upon how much the agreeing parties are willing to open up.


And ofcourse, nothing comes for free (i.e. phokat) in free trade. That is why the thread was posted originally i guess: to discuss its pros and cons.

*same thing: more open.... = same thing: path or barrier to more open ....

thank you jagaltaybhoot for clearly understanding my words and my intent.