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Sarup: Economic Progress Requires Reconstruction

Economic Progress Requires Reconstruction

By Kamala Sarup

It is sure, economic reconstruction will reduce poverty. If the countries promote education and values that emphasize economic poverty will diminish, in the long run. The results of reducing poverty are that when people engage in production then the killing and maiming are reduced and the general living standards are increased. A cash flow analysis of economy might be a start to determine whether or not Nepal is able to move up the economic ladder or remain on the lower rungs.

Today, humanitarian organizations, and other NGOs redistribute food, but in insufficient quantities to keep famines from occurring as a result of wars, revolutions and crop failures. It is amazing to some people that in the super-rich U.S., millions of tons of surplus food is kept in storage at great expense as a result of farm support policies while people in the U.S. and around the world go hungry. The rationale for such policies is that unloading this surplus food onto the market would depress food prices and bankrupt food producers. Such is the thinking driven by market economics.

People are greedy for money and the things money will buy. These things are called wealth. Those who have will always try to get more wealth from those who have not. Likewise, if the have-nots gain sufficient power, they will take the wealth away from the haves. Thus conflict is inevitable between the haves and the have-nots. This relationship pretty much summarizes the wars throughout history.

If we are talking about Nepal, economic disparity, social injustice and rampant corruption made Nepalese people more frustrated. Social inequality stands as a major stumbling block of economic equality. Governments should establish guidelines for credit allocation. More rural financial institutions are needed to mobilize. Special funds should be designated for loans, sometimes at subsidized interest rates, to small and medium enterprises, including cooperatives, family businesses, and private and public firms. Problems of corruption and nepotism can be overcome by making the mechanisms for allocation transparent and open to Nepalese citizen review as has been pioneered in Nepal. It is true, Nepal is currently burdened with many internal conflicts and a deteriorating economy. A country which largely depends on agriculture, it has failed to cope with the rise in demand for food grains. Tourism has gone down, exports have declined significantly and the industrial sector is in the doldrums. The country needs to learn to depend on its primary sectors and manufactured imports. The tourism industry has been considered extremely volatile in the Nepalese context, and the ongoing Maoist insurgency has drastically reduced the number of tourists coming to Nepal.

Government should understand how they can stimulate further growth in labor productivity. The efficiency and integrity of tax collection must be improved. Hospitals and Schools must be established immediately. Without such infrastructure's development, the development and functioning of the private sector will be largely a failure. The provision of cheap and reliable efficient transportation, adequate power, water management, and sanitation, to the entirety of the land-area of a nation, is the absolute precondition for successful economic growth of the private sector as a whole.

Violence and instability has pushed the country back to the 15th century. Nepalese people need loans in small amounts for a variety of purposes. To make available more funds for larger investments, savings and credit facilities can help poor people. But on the other side, most development projects have been stalled and basic rural infrastructures are badly damaged. Attainment of sustainable peace, security and economic prosperity, which largely depends on the resolution of the current political impasse, requires consensus and commitment among all political parties.

Economic development is essential but It requires economic reconstruction and appropriate mechanism to ensure higher economic growth rate. To achieve this goal, investment should increase in social sectors like education, drinking water, health, vocational training, infrastructural expansion. Creation of employment opportunities is an important factor for economic development. As we know, unemployment, poverty, inequality, and social exclusion are at the heart of the explosive social conflicts.


(Kamala Sarup is editor of )

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