ECONOMIC FOUNDATION FOR A SUCCESSFUL DEMOCRACY            NEPAL AND GLOBAL CONTEXT                                        ...
Rs.367.61 billion while the export was only Rs.60.95 billion rupees. The proportion import and export in theyear was 1:6.2...
Source: World Bank 2010 and David E. Bloom and Larry RosenbergNepal is a member of community of world‟s least developed co...
GDP of Global Regions 1950-2000 (millions of Purchasing Power Parity – PPP dollars per day)Region                         ...
has been much more dynamic. Per capita income rose more than eightfold, population more than fivefold.The growth process w...
The figure presented below (Figure 1.) shows increasing number of poor people even though the rate ofpoverty has decreased...
Indubitably, democracy is good for all and poor need more democracy than the rich because the powerof the wealth also help...
time will be as rich as China is today. That is because China grew faster in the last nine years than Indiais likely to gr...
on these four types of conflicts traps. Standard solutions do not work against these traps, he writes; aidis often ineffec...
Therefore, it is more than true that democracy cannot be replaced by any form of government than abetter and more effectiv...
depletion of environmental resources both locally and globally, and can permanently undermine theprospects for their recov...
death experience forces one to reevaluate his priorities and values – exposing the flaws in prevailing                    ...
Obviously it is market that creates wealth, generates employment, encourages research, developments andinspires new invent...
Development Economics - “Sharing the fruits of growth and globalization equally between men and women isessential to meeti...
2001 for every $ 100 worth of growth in the world‟s income per person, just $0. 60 reached at its targetand contributed to...
6.8. Mass Reestablishment and Relocation ProjectsIn each monsoon, millions of people in mountainous regions and plains of ...
2,000 geological disasters occurred in the southern part of the province from 2001 to 2010 incurring acombined direct econ...
Survival of democracy in a country depends upon the income level of its citizen. According to AdamPrzeworski (50) a democr...
scrutiny. This is the way to make the state capable and effective and this opens way to expect from it anddevelop it as a ...
(7) Mahbub ul Haq : Reflections on Human Development ( Expanded Edition) Oxford University Press, 2000, page 217.(8)Angus ...
Note: This is the updated version of the working paper was prepared for a workshop jointly organized by Friedrich Ebert St...
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Economic foundation for a successful democracy

  1. 1. ECONOMIC FOUNDATION FOR A SUCCESSFUL DEMOCRACY NEPAL AND GLOBAL CONTEXT Keshav Prasad Bhattarai kpbnepal@gmail.com1. INTRODUCTORYIn the beginning of 18th Century all countries of the World were poor as their economy was predominantlybased on agriculture. The Gross Domestic product (GDP) per capita lingered around 0.05 percent a year formillennia. Only after Industrial revolution some countries now known as advanced ones, the per capitaincome of those countries jumped to one percent a year while in the 19th century it was 2 percent that wasdouble than in the earlier Century. Before the 18th century it took 1400 years for world income to doublebut that only took 70 years in the 19th and 35 years in the 20th Century(1). In the first century CE, Asiaaccounted for 76.3 percent of global GDP while Western Europe that time accounted only 10.8 percent. In1000 CE Western Europe‟s share of global GDP was 8.7 again in Asia it was 70.3 percent .In 1820, WesternEurope‟s share grew to 23.6 percent and Asia was limited to 59.2 while the Western Offshoots countriesduring this time accounted only 1.9 percent. But by 1998 global share of these Offshoots, Western Europeand Asia was 25, 20.6 and 37.2 respectively.These days while USA, China, Japan and Germany are four largest global economies but according to GoldmanSachs in 2050 the four largest world economies will be in the order of: China, USA, India and Japan (2).82 years ago the great British Economist John Maynard Keynes made a surprising remark – quiteunbelievable that time that there will be no poverty in Britain and other industrial countries in hisgrandchildren days - by the end of 20th century. While making this remark Keynes had noticed therevolutionary march of science and technology and its application in industry. Jeffrey D. Sachs: The End ofPoverty. (3) But Britain and Industrially advanced countries achieved it during the children of Keynes‟schildren – not grand children. China reduced number of people living in poverty from 600 million to 200million in about 20 years, an achievement unparallel in human history.The greatest achievement of modern age is that there is no monopoly of any individual, group or nation overknowledge, science and technology and this is the single greatest contributing factor of prosperity for all.The massive wealth collected by many countries in the world is the result immense knowledge reserve andtheir knack over modern science technology.According to Third Nepal Living Standards Survey 2010-2011 25.16 percent Nepalese are living belowpoverty line.In 1950 average Nepalese was 19 times poorer than average US citizen, but in 2008 the gap widened andNepal became 27 times poorer (4). The gap has widened and by now average US citizen nearly earns 29times that of the average Nepalese. Nepal is among the poorest and least developed countries in the world. Nepal‟s grounds realitiesregarding the factors that could contribute to poverty reduction – availability of foods, shelter and jobopportunities to the social and economic safeties – are in are in a completely dismal situation.According to the Trade and Export Promotion Center, in the fiscal year of 2009/2010 - the total Nepaliexport was only 14 percent whereas the import was 86 percent. Total amount of import in 2009/2010 was 1
  2. 2. Rs.367.61 billion while the export was only Rs.60.95 billion rupees. The proportion import and export in theyear was 1:6.2 while in previous year it was 1:4.2.Nepal‟s trade imbalances have been widely increasing year after years. Trade deficit of Nepal in the year2009/2010 has increased by 41.5 percent (Rs.314.66 billion). It has made it clear that Nepal has to expendits valuable foreign reserve to import the daily needs. In the mean time, export based industries are facingtrouble due not only to interrupted power supply and labor unrest but the more by corruption. As a resultemployment opportunities are narrowed down. If Nepal fails to increase its internal production as well asits quality, its political instability and internal conflict will further deteriorate and the situation willfurther worsen.According to World Bank per day, over 1000 job seekers from Nepal migrate overseas. During aperiod from May 2010 to May 2011, about 400,000 people left the country to find work abroad.The total amount of remittances that comes to Nepal and its trade deficit is equal in total about Rs. 3billion. If the remittances earned by people working in India and other countries and brought into thecountry by none banking channel is also calculated, remittances claim the single largest share in nationaleconomy. It is those people who are making national economy run.Globalization has killed the distance. Principally, it is not wrong to work in other countries. China per yearearns $ 25 billion by remittances and India $ 27 billion. But they have developed a package program forsocial security benefit for such workers after they return to their country. They also run knowledge andskill training programs for them, so that they can earn more and live a life of quality in foreign soil. ButNepal does nothing to help them.Including Nepal, Afghanistan, Bangladesh, and Bhutan are other poorest and least developed countries inSouth Asia. Among 193 member countries of the UN 48 are least developed and among them 14 are in Asia.The Least Developed Countries represent the poorest and weakest segment of the international community.They comprise more than 880 million people (about 12 percent of world population), but account for lessthan 2 percent of world GDP and about 1 percent of global trade in goods.David E. Bloom and Larry Rosenberg in one of their study have presented dramatic variation in per capitaincome growth rates in South Asian countries over a period of four decades. Although the region as a wholehas been growing since 1980 with unusually largest share of India, Nepal‟s performance was a bit betteronly in 1980s and 1990s but afterwards its performance has been much disappointing. According to thetable given below South Asia‟s GDP per capita growth was low in 70s, and higher and higher in later decades(5) (1980-2000).Table - 1 2
  3. 3. Source: World Bank 2010 and David E. Bloom and Larry RosenbergNepal is a member of community of world‟s least developed countries and it feels proud to be the chair ofthis grouping. According to the United Nation mainly three things - low income, human assets weaknessand economic vulnerability (6) have made these countries least developed. These countries with low levelof socio-economic development characterized by weak human and institutional capacities, low and unequallydistributed income and scarcity of domestic financial resources have continuously been falling under chainof crisis - governance crisis, political instability and, internal conflicts.Their agrarian economies followed by an unending cycle of low productivity and low level of investmentbasically relying on the export of few primary commodities and heavy dependence upon the imports ofalmost everything from daily supplies to modern gadgets like computers and washing machines makes themhighly vulnerable to external terms-of-trade shocks.2. GLOBAL EXPERIENCES OF GROWTH AND DEVELOPMENT IN SOUTH ASIAN AND EAST ASIANCONTEXTDr. Mahbub-ul Haq - the messianic founder of Human Development Theory and Human DevelopmentReport, stated ” the countries of South and East Asia had started at roughly the same per capita incomelevel in 1960”. But by 2000 the per capita income of East Asian economies was about 27 times higher. (7)Similarly some of the poorest countries in Africa including Ethiopia and Sierra Leone were better off thanChina and India.The figures in Table 2, shows the GDP level of all Global Regions in the past half century with an unusuallyhigh growth rates for East Asia when compared with South Asia.Table – 2 3
  4. 4. GDP of Global Regions 1950-2000 (millions of Purchasing Power Parity – PPP dollars per day)Region 1950 1960 1980 2000East Asia 1,120 1,697 5,052 20,473South Asia 1,019 1,522 2,697 7,369Asia 2,139 3,219 7,749 27,842China and India 1,425 2,091 4,146 18,022Sub- Saharan Africa 537 846 1,907 2,640Middle East and North Africa 506 924 3,230 5,089Latin America 1,302 2,105 6,263 9,007Developing World 4,900 7,773 20,584 45,561Developing World Excluding China and 3,475 5,682 16,437 27,539IndiaEastern Europe 1,896 3,002 7,986 6,591Non Industrialized World 6,381 10,097 27,135 51,169Industrialized World 10,623 16,411 36,192 56,337World 17,004 26,508 63,327 107,506Source: The Pattern of Economic Growth, 1950-2000 - Institute for International Economics (www.iie.com)Table 3Growth in East Asian and South Asian Countries 2005-2012 2005 2006 2007 2008 2009 2010 2011 2012Bangladesh 6.3 6.5 6.3 6.1 5.8 5.8 6.0 6.1China 11.3 12.7 14.2 9.6 9.1 10.3 9.1 8.9India 9.1 9.4 9.6 6.2 7.0 8.6 8.1 8.2Myanmar 13.6 13.1 12.0 10.1 4.8 5.1 5.0 5.1Nepal 3.3 3.5 3.7 4.9 3.8 3.9 4.3 4.6Pakistan 6.9 5.9 3.8 2.4 2.7 3.6 4.0 4.2Sri Lanka 6.2 7.7 6.8 6.0 3.5 8.0 7.8 7.4Source: UN – LINK Global Economic Outlook 2011As the table below shows- When we look back from the beginning of Christian era all global regions whetherit was Western Europe or Africa or Asia the level of development was about the same and for the next1000 years the rate of growth of per capita of the world‟s major regions was again following about thesame trends. Even during 1000 A.D. GDP per capita of Asian and African countries was bigger than ofWestern Europe, Australia, New Zealand, Canada and USA. But from 17 th. Century Western Europe beganto take lead and when it was 1820 the difference between Asian, African and Western Europe reachedfrom double to triple. And when it was 1998, then the difference was more than 10 times biggerAccording to Maddison in the year 1000, Asia (except Japan) produced more than two third of world GDPwhile Western Europe was producing less than 9 percent. In 1820 the proportions were 56 and 24 percentrespectively. But in 1998 the Asian share was about 30 percent when compared with Western Europe andwestern Offshoots countries combined (8). If we see the table -3 below we find per capita income was mere crawling a rise of just 50 percent toaccommodate the four fold increase in population. But as Maddison accounts since 1820, world development 4
  5. 5. has been much more dynamic. Per capita income rose more than eightfold, population more than fivefold.The growth process was uneven with widening gaps. The growth and income has been most rapid in WesternEurope, North America, Australia and Japan.Table 4Level and Rate of Growth of GDP Per Capita: World and Major Regions, 0-1998 A.D. 0 1000 1820 1998 0- 1000- 1820- 1000 1820 1998 1990 international dollars Annual average compound growth rate Western Europe 450 400 1,232 17,921 -0.01 0.14 1.51 Australia, New Zealand, Canada and USA 400 400 1,201 26,146 0.00 0.13 1.75 Japan 400 425 669 20,413 0.01 0.06 1.93 Average Group A 443 405 1130 21,470 -0.01 0.13 1.67 Latin America 400 400 665 5,795 0.00 0.06 1.22 Eastern Europe and former USSR 400 400 667 4,354 0.00 0.06 1.06 Asia excluding Japan 450 450 575 2,936 0.00 0.03 0.92 Africa 425 416 418 1,368 -0.00 0.00 0.67 Average Group B 444 440 573 3,102 -0.00 0.03 0.95 World 444 435 667 5,709 -0.00 0.05 1.21Source Angus Maddison: The World Economy – a Millennial Perspective, Development Centre of theOrganization for Economic Co-Operation and development, 2001, page 28.Some people for long have upheld their belief that the economic growth started with the industrialrevolution in Europe, but some other school of thought claim that economic growth started with theexpansion of university education with the series of scientific and technological innovations in 14th.and 15th. Century (9). A very informative and interesting chart below - (10) shows a population-weighted growth history of thepast two millennia. It says over 28% of all the history made since the beginning of Christian era was madein the 20th century. When measured in years people lived, the present century, which is only ten years old,is already longer than the whole of the 17th century.According to an updated version of Angus Madison‟s figures this century has made an even biggercontribution to economic history as over 23% of all the goods and services made since 1 A.D. were producedfrom 2001 to 2010. The 21st Century is only a decade old. We still have nearly another 90 years to go, andobviously by the trend seen this century alone would produce a multiple number of goods and services thisworld has produced cumulatively in the last 20 centuries. (11). 5
  6. 6. The figure presented below (Figure 1.) shows increasing number of poor people even though the rate ofpoverty has decreased, but the number of poor people has increased in South Asia. The number of poorliving on less than $1.25 a day has increased from 549 million in 1981 to 595 million in 2005. In India, wherealmost three fourth of these poor reside, the numbers have increased from 420 million in 1981 to 455million in 2005 (12).Figure: 1.Number of Poor People has increased in South AsiaSource: Ejaz Ghani : The Poor Half Billion in South Asia from World Development Indicators, World Bank20093. DEMOCRACY OF THE POOR AND A POOR DEMOCRACY 6
  7. 7. Indubitably, democracy is good for all and poor need more democracy than the rich because the powerof the wealth also helps the rich to protect their rights, fight the injustices and advance theirinterests, but for poor it is democracy that helps them in many ways.Noble Laureate Economist Amartya Sen, in his path breaking study on Poverty and Famine – an Essay onEntitlement and Deprivation (1981) and another similar book written with Jean Drèze on Hunger andPublic Action (1989) (13) have made a detailed research on the famines of Bengal, Ethiopia and otherSahel region countries and Bengladesh and have concluded that famines, hunger and poverty are notthe result of shortage of food supply or its availability but for the inability of person to acquire foodand other commodities within the prevailing economic, social and legal arrangement denying peopleentitlements and ownership rights.Dr. Sen, in his great work “Development as Freedom” in more unequivocal terms have mentioned thatthere is connection between poverty famines and nature of government. Famines have never killed rulersand ruling elites, neither are they held responsible for that. But when there is freedom, democracy andindependent press, rulers are penalized for such catastrophes so are effectively prevented (14).Similarly, democracy is valuable in its own right as it recognizes common people as sovereign, helpspeople enjoy political freedom to participate in decisions affecting their life and protects people fromeconomic and political catastrophes (15).Just this time, as a slur to 21st century human world, Somalia is suffering from one of the greatestfamine in human history. It could kill 750,000 in the coming months, and tens of thousands have alreadydied. 1. 30,000 children have died in just 3 months. With over 12 million people are at risk. Famine isnot a natural catastrophe – drought doesn‟t have to lead to famine because in every part of the worldthis year here and that year there we have droughts.In an acclaimed book by a renowned BBC foreign correspondent Humphrey Hawksley - with richevidences he collected from seven countries representing Asia, Europe, Africa and Latin America haschallenged the democratic wave commenced after the end of cold war has reached with mostdisappointing results mainly for the poor. The central theme of the book is that in many societiesdemocracy has made the things worse and as the title of the book indicates has become a killer gameencouraging conflicts and elections in the name of democracy splitting societies on ethnic lines – makinglifes of the people more difficult and worsening public services as drinking water, education, health andemployment opportunities for the poor and needy people.An Indian interviewed by Hawksley admitted that “the Chinese economy has an inner strength “andthey “are begging”. (16) Questioning the basic logic of democracy that it accelerates developmentHawksley asks if that is so communist-run China been able to raise its peoples standard of living moreeffectively than democratic India and why direct foreign investment from democratically run countriesare pouring ten times more on China than in India (17)Renowned British Weekly has recently published a chart comparing India and China. It says - India‟sincome per head, for example, was about $3,200 in 2009 (holding purchasing power constant across timeand between countries). China reached that level of development nine years ago. The lag in socialprogress is much longer. A child‟s chance of surviving past their fifth birthday is as bad in India today asthey were in China in the 1970s. Moreover, the chart does not necessarily imply that India in nine years‟ 7
  8. 8. time will be as rich as China is today. That is because China grew faster in the last nine years than Indiais likely to grow over the next nine. (18)A POLITICAL SYSTEM OR LEADERSHIP - JUDGED FOR ECONOMIC SUCCESSPolitical leadership or a political system today is evaluated not for its political ideology, but for its capacityto run a coherent and capable economy able to facilitate growth, vitalize economy and generateemployment. The international recognition and global power status China wields today, is the outcomes ofits massive economic might vital for the political stability and economic security of many countries includingWestern Europe and even USA. Whether it is Japan, Germany, South Korea or Singapore, they arerespected for their capacity to produce enormous wealth.Soviet Union was a great political and military super power, but its weak economy could not sustain its hugepower so was collapsed. The global financial crisis of 2008-09 has deeply tarnished America‟s reputationas a global power and countries in Asia, Africa and even in Europe are eying for China‟s favor to overcometheir financial crisis.Top Pentagon officers including Defence Secretary have started to express deep concerns over weakenedposition of U.S. to maintain its global commitment for financial constraints.And China at the other hand has been showing arrogance and has started discussions on punishing U.S. withthe financial weapon it has if US moves on with policy not matching Chinese state interests as its armssupply to Taiwan. (19) It is crucial for both U.S. A. and China that China has a huge foreign reserve of threetrillion dollar foreign exchange and one third of it is in U.S. treasury bills.In this context Hawksley submitting the conclusion of his whole book mentioned above - puts readers into agreat dilemma and asks a challenging question: if the world is on the brink of destruction and you are givena chance to save your family by escaping to Cuba with provision for “far better health care “ or Haiti with“great mobile phone connection” which one would you choose? (20) .There is a great writer of our time - Paul Collier‟s who in his extraordinary book “ The Bottom Billion” ; hasconcluded that democracy in the countries of the bottom billion countries including Nepal are democraticonly superficially , merely election- focused and causing political violence instead of reducing it. Thedemocracies in these countries run without any rules, democratic cultures and traditions, and without anyfunctional checks and balances to protect people in vulnerable situation. There is no fair distribution ofresources among people and they do have no functional legal and political body to hold officials accountableto law and people. Election for them is a means for capturing state power and public wealth always a “life-and-death struggle” in which the contestants are driven to extremes contradicting the very basics ofelection.Collier suggests that, the people in 58 bottom billion countries mainly in Africa, Central and South Asia aregetting poorer and are suffering from one or more development traps:A struggle rages within each of these nation between reformers and corrupt leaders--and the corrupt arewinning. Collier analyzes the causes of failure, pointing to a set of traps, including conflict traps leading tocivil war, dependence on the extraction and export of primary natural resources, land lockedness with badneighbours and bad governance all leading to bad economy, anarchy and chaos. (21) He has detailed analysis 8
  9. 9. on these four types of conflicts traps. Standard solutions do not work against these traps, he writes; aidis often ineffective, and globalization can actually make matters worse, driving development to more stablenations.Collier‟s great research show that before an election, warring parties may channel their antagonisms intopolitics, but that violence tends to flare up once the voting is over. What‟s more, when elections are won bythreats, bribery, fraud and bloodshed, such so-called democracies tend to promote bad governance, sincethe policies needed to retain power are quite different from those needed to serve the common good.Ethnic identification predominates among the bottom billion making mockery of democratic rule. Leadershave no incentive to perform well as people vote on ethnic loyalty rather than governmental competence.This ultimately causes national identity replaced by ethnic identity; countries are cursed with bitter ethnicdivisions and patronizing instability and corruption. (22)Still, electoral shortcomings in these countries do not mean we should give up on democracy altogether. It‟sthe cheap imitation that should give us pause. As Collier explains, “democracy is a force for good” as long asit is more than a “facade.”But Collier‟s news is not all bad. If democracy (in its limited form) tends to increase political violence in thepoorest countries, the opposite occurs once per capita income reaches about $2,700. These wealthiervoters apparently expect more responsive governments, and are prone to revolt if their expectations aredashed. Since China recently passed this income threshold, the statistics suggest that it risks increasingpolitical violence unless it democratizes.On closer examination of these countries for more than a decade Collier in his another acclaimed book ” (23)and other research reports and papers concludes that democracy in bottom billion countries equalswith bloodshed, loot, murder and even genocide. Further he claims that elections without stronginstitutions for promoting accountability are means to the exploitation insurgencies and civil wars. Andultimately even the insurgencies staged against the exploitation and greed of the elites have been foundfocused on the access of financial resources rather than the commitment to people and ideology professedto serve.5. FORM OF GOVERNMENT, DEGREE OF GOVERNMENT AND INSTITUTIONS FOR DEVELOPMENTWhen the last century was going to end Dr. Devendra Raj Pandey wrote a book on Nepal‟s faileddevelopment. (24) But that time it would become too early to infer that the development that failed wasgoing to end the democratic polity Nepal initiated in 1990. The mass of great hope created by the“Janaandolan 2046” in no time turned into political dysfunctionality and stagnation, working as a catalystfor anarchy, violence and complete chaos ignited by insurgency, ethnic hatred and political destabilizationas theorized by Collier. The situation moved this way prompted for another Janaandolan and ended with theelection of a Constituent Assembly but again the situation has not improved but worsened for commonpeople snatching their hope that good days will fall upon them.When both democracy and development fail in a country indubitably conflict erupts and if it is not managedeffectively then obviously the state order collapses. The vaccum created by the sudden decline of stateauthority either will be filled by forces of more violence or terrorism or by international actors, but ineither way situation may not improve. 9
  10. 10. Therefore, it is more than true that democracy cannot be replaced by any form of government than abetter and more effective democracy with accountable government at all level. But such a democracycannot exist in isolation. Consolidation of democracy is to be joined by suitable economic and socialconditions that mainly includes- extract and distribute revenues, produce public goods and maintain stateorder by wielding effective monopoly over means of violence (25) The veteran political scientist SamuelHuntington in his classic work – Political Order in Changing Societies has stated that “the most importantpolitical distinction among countries concerns not their form of government but their degree ofgovernment. (26) Huntington again mentions that in many developing countries like Nepal people lack manythings from food to education and health but for them “there is a greater shortage – shortage of politicalcommunity and of effective, authoritative, legitimate government”. (27) In the same place Huntington hasquoted the famous American writer as - “ that there is no greater necessity for men who live incommunities than that they be governed , self governed if possible, well governed if they are fortunate ,butin any event governed”. (28)6. ECONOMIC FOUNDATION FOR A SUCCESSFUL DEMOCRACYLevel and quality of development and its distributive capacity validates democracy. In simplest termsdemocracy for all; for those who are living now and for those who will be living for all the times to come.The world‟s population now stands at seven billion and is projected to reach 9.3 billion by 2050 – doublethan in 1950 (29) The world income would be more than U.S. $ 135 trillion which now is about U.S. $ 35trillion. With these growth rates to 2050, 40 percent of this income growth will go to low and middleincome countries with average income to U.S. $ 6300 – with better life conditions. And indubitably a worldwith U.S. $ 135 trillion in GDP cannot rely on the current production and consumption practices. (30)But change does not come as an accidental occurrence, it is the outcome of brave and visionary peoples‟efforts wanting change, working for change and making a difference. The goal of economy according tonoted Nepali acedemician Dev Raj Dahal, is to increase the standard of living of people by sustainable oseof resources and transformation of society in achiving a better human order (31 ) Emminent economistRobert Skidelsky says that in economics there are no final victories and defeats, rather economicdoctrines ebb and flow obedient to changes in consciousness and in the world. Further he says theories ineconomics are independent and they do not supersede each other. (32)Skidelsky has also raised another pertinent issue. He says “ideas are not at the mercy of events in anystraightforward way. The disciplines which produce theories exhibit stability through time in theirconcepts , techniques and language.” Moreover he explains eventhough the facts are the same but they areintrepreted in in different ways, so he who controls the intrepretation controls the ideas. (33)In the lights of general situational analysis and issues as mentioned above here are some policyrecommendations that may help us in curing the miserable state of our economy as presented by acolumnist in a vernacular daily (34)6.1. Integrated Management of Economy and Ecology Failure to absorb the rapid population and income growth would lead to mass suffering and social tensionleashing -social,political and ecological catastrophes. The continuation of extreme cross-country incomeinequality could deter international cooperation, betraying the speed and sprit of globalization, despite itspotential to improve everyone‟s standard of living. Rapid population growth also tends to accelerate the 10
  11. 11. depletion of environmental resources both locally and globally, and can permanently undermine theprospects for their recovery.Cruel exploitation of primary natural resources and its export to India in the case of Nepal - is one butsufficient example that how the natural cover is being damaged and ecological havoc brought in both thehills and plains with floods and landslides.Nepal itself has evidenced that when a state is weak, it cannot provide protective shield to environment andpeople. This has also put disastrous impact on natural and environmental assets.Thus protecting the environmental assets and improve governance is one of the biggest challenge ofhumanity in the 21st century.In the last 60 years, we have made tremendous achievement in obtaining knowledge, wealth, health andhuman happiness. But, what we have failed in all these years is protecting our environment, prolonging thelife of earth and sustaining the happiness we have achieved.Desertification has advanced to an unimaginable level affecting 250 million and threatening about a billionpeople living in 110 countries and this figure could double by 2050. (35) If deforestation continues at thepresent pace, rainforests will have been eliminated from the surface of the earth by 2050. (36)Obviously, if all developing countries follow the same ecological foot marks of developed countries humanitywill need nine more planets to the size of the earth to meet the needs of the natural resources of theworld population. (37)Environmental problems like climate change would cause large dislocations in ecosystems fundamental tohuman societies and economies e.g. complete loss of world‟s major rain forest, glaciers in the Andes andHimalayas and rapid acidification of oceans leading disruption of whole marine ecosystem. This couldextinct more than 50 percent of sea lives. Besides a mere one meter increase in sea level by the end ofthis century will threaten the lives of more than 60 million people and 200 billion in assets in developingcountries alone. About 400 million more people could risk hunger and about 2 billion people may no longerhave enough water to meet their basic needs. (38)No doubt, Climate change has become the most formidable environmental threat of our time and thisaccording to World Bank President Robert B. Zoellick „is one of the most complex challenges of our century.Again, according to Zoellick as the planet warms, rainfall patterns shift and extreme events such asdroughts, floods and forest fires become more frequent. Millions of densely populated coastal areas andislands will lose their homes as the sea level rise. Poor people in Africa, Asia and elsewhere face prospectsof tragic crop failures; reduced agricultural productivity and increased hunger malnutrition and disease. (39)Besides, improving water use and water resource management including protection water reserves at local,national and regional level is a must for us. Similarly strengthening government and community capacity tomanage climate change and mitigate its possible harms and develop a joint mechanism in managing andmonitoring each other‟s activities affecting ecology. Yes in this regard not „ ego- centric‟ but „eco- centric‟ economy compatible with nature, culture , societyand the real –life world inspires a system sensitive economic policy having ability to respond todays‟ andfuture need of humanity as well. (40)Therefore at a time when Nepal is heading towards unprecedented socio- economic and politicalcatastrophes- nearly a death situation - never experienced in its history, it is time to reevaluate the wholecourse of history and remap the future options. According to Noble laureate Joseph Stiglitz a near 11
  12. 12. death experience forces one to reevaluate his priorities and values – exposing the flaws in prevailing (41)economic model and our society as a whole where there are too many people taking advantage of others.6.2. Protect farm land and increase food protectionOne third of the land used for cultivation and animal grazing was almost deserted by the end of lastcentury. During that time only 25 percent of the surface was suitable for rainwater – reliant agricultureand 35 percent of the productive land in Asia had become desert. In Latin America 73 percent of dry landsin agricultural use suffer from a kind of desertification. (42)According to the estimate of World Bank - by 2050 the world population could be 9 billion (i.e., about 50percent more than today). Similarly, the world income would increase about fourfold (135 trillion Dollar) bypresent ratio. The share of low and middle income country in the world income will be 40 percent to that of20 percent now. Average per capita income in developing countries would be US$ 6,300 and more than 65percent of the population by that time will live in urban areas. With rising income and population growth thedemand for food could double. (43)To supply food for the increased population by 2050, we need more and high quality foods. But, sustainedagriculture growth cannot be achieved by increasing the land area under cultivation. Further expansion ofagricultural land would cost highly to the environment and bio-diversity. Therefore, environment friendly,high yielding and sustainable crops farming is the only valid but responsible answer available to us. This means we need an agricultural revolution and a new sustainable agro trade policy that could ensure ourlife and safety in the new millennium. Better policy and programs to answer the problems of land and waterdegradation, deforestation and air pollution. Nutrient management, integrated pest management,conservation and policies and institutions that can promote better practice adapting climate change. (44)But, this cannot be attained without better and responsible markets for agricultural products. Better tradepractices between and among states is another crucial matter on this regard.6.3. Market integration and connected EconomyIn an age of globalization no country or no economy can exist in isolation. Economy of a nation starts withindividual and community and without local commitment and capacity to run and own projects they are sureto fail. But Local capacity and commitment depends upon the economic connections among communities andreinforcing mutual benefits. This will strengthen demand and supply side of the development.Similar is the case with regional development. Regional approaches, regional thinking and learning from eachothers have accelerated growth and development in many parts of the world. A brilliant success story nearto us is ASEAN and a failure story is SAARC- ourselves.Nepal, India, China, Bhutan, Bangladesh and Burma at one side and India, Pakistan, China and Afghanistan atthe other side if work together to develop and share the opportunities they have and exploit the hugeresource potential from water to minerals and tourism, in their region. The Bay of Bengal, Arabian Sea andHimalayan passes joining South Asia and Central Asia can become a great hub of international tradebringing huge developmental achievement and prosperity in this part of world.There is not any reason for these countries locked under huge seas of poverty, deprivation and terrorism.Starting from easy visa provision and money exchange facility among people to run business among them canin course of time result in market integration.6.4. Strengthenning Markets and Regulating its Weakness 12
  13. 13. Obviously it is market that creates wealth, generates employment, encourages research, developments andinspires new inventions. A free market is equal to individual freedom, choice, and entrepreneurialinitiative. But if the state fails to offer incentives and motivation to develop a self regulatory marketsyatem funtioning accordingly, then market forces degenerates into a greed and loot centre.Therefore, state has a market role to play and help market forces achieve the national goals – forexample expand better employment opportunities for all, ensure equitable distribution of wealth andincome by means of equal opportunities for all.Experiences have verified that capital works better at private hands and expands beyond limitation. Butcapital is also a public good so its investment must have some social or community responsibility asdemanded by law and international trade regime.Employment for all and equality of opportunities and well covered social security policy remain at theheart of a social democracy. But the state can not do it by running market and keeping means of productionunder its bureaucratic control. Instead it kills private enthusiasm and national capacity to grow. In an age of globalization if a state tries to control capital, individual capacity and private initiatives itmoves across borders more freely and more quickly than air. Waves and technology are not state valuesand regulations to control nternational financial and job markets cannot and have not worked.However, state has a role to play in national and international economy. Stae action is needed to fill thegaps where the private sector fails to comply with the standard of competency, quality and fairness inproduction of goods, services and decisions at both national and international level. According to Robert Skidelsky – a British Scholar “state as ultimate protector of the public good has aduty to supplement and regulate market forces. If we need markets to stop the state from behaving badly,we need the state to stop markets from behaving badly. (45)6.5. Injecting Women Power in EconomyA new report from the World Bank and International Finance Corporation IFC released on September26,2011 finds that women still face legal and regulatory hurdles to fully participating in the economy sodoes the economy suffers. The report rightly claims that the world‟s most competitive economies arethose where the opportunity gap between women and men is the narrowest.Another much acclaimed- World Development Report released on September 18, 2011, with a theme onGender Equality and Development also claims that even though Gender equality matters in its own right, butis also smart economics: Countries that create better opportunities and conditions for women and girls haveraised productivity, improved outcomes for children, make institutions more representative, effective andaccountable and advance development prospects for all. Similarly citing the estimate of the Food andAgricultural Organization (FAO) the report states that equal access to resources for female farmers couldincrease agricultural output in developing countries.Moreover, it also claims that eliminating barriers that prevent women from working in certain occupationsor sectors would have similar positive effects, reducing the productivity gap between male and femaleworkers by one-third to one-half and increasing output per worker up to 25 percent across a range ofcountries.Therefore blocking women and girls from getting the skills and earnings to succeed in a globalized world isnot only wrong but economically most harmful, while gender equality will have a huge positive impact onproductivity. According to Justin Yifu Lin, World Bank Chief Economist and Senior Vice-President, 13
  14. 14. Development Economics - “Sharing the fruits of growth and globalization equally between men and women isessential to meeting key development goals.”Take note of Rwanda, a country ravaged by genocide is making tremendous progress with more than halfthe parliamentarians are women including the president of the National Assembly.6.6. Not Aid but Investments and Trade with Country Specific characterDambisa Moyo - the author of an internationally acclaimed book “Dead Aid - Why Aid Is Not Working andHow There Is a Better Way for Africa” in an interview (46) and in one of her famous article, (47) , hasargued that official aid is easy money that fosters corruption and distorts economies, creating a culture ofdependency and economic stagnation. 10 percent of Africans were living in poverty in the 1970s comparedto 70 percent by 2009. This means that roughly 600 million of Africas billion people are now trapped inpoverty.If Africa continues to this aid model, the number of Africans living on less than a dollar a day in theforeseeable future will probably increase from over 70 percent to 90 percent, and many more failed states,many more corrupt governments, civil wars, and so on will become a common character of Africa. Moyo explicitly claims that giving alms to Africa remains one of the biggest ideas of our time -- millionsmarch for it, governments are judged by the alms they could collect. “Calls for more aid to Africa aregrowing louder, with advocates pushing for doubling the roughly $50 billion of international assistance thatalready goes to Africa each year”.Over the past 60 years at least $1 trillion of development-related aid has been transferred from richcountries to Africa, and it is rather disturbing to see things go in the wrong direction. About $50 billionthat go to Africa every year has completely freed African Governments from their responsibility. Theydont need to do anything. They dont have to cater to their people; they spend their time courting thedonors to get more money. Instead it is a continent run by thousands of inefficient NGOs targeting only asmall number of people.Until the governments actually rely on taxation, this cycle will continue to grow. They can just call up donorsto get more aid. Further Moyo has made her point clear that the evidence overwhelmingly demonstratedthat aid to Africa has made the poor poorer, and the growth slower - leaving African countries more debt-laden, more inflation-prone, more vulnerable to the vagaries of the currency markets and more unattractiveto higher-quality investment. Ultimately foreign aid has increased the risk of civil conflict and unrest as anunmitigated political, economic and humanitarian disaster.Even after the very aggressive debt-relief campaigns African countries still pay close to $20 billion indebt repayments per annum - a stark reminder that aid is not free. Dambisa Moyo has also providedevidences how the millions of foreign aid reaches into the pockets of African politicians and how aconstant flow of "free" money helps inefficient or simply bad governments in power. With continuous aidflows there is nothing more for the government needs nothing to do to do – reform and raise taxes, andrun development projects. Indubitably, when taxes are minimal people care little about governmentexpenses and corruption. What all the African government really need is to court and cater to its foreigndonors to stay in power.Similarly- New Economics Foundation (nef) an independent British think tank - releasing the conclusion ofa new research during World Economic Forum in Davos in January 2006; stated that between 1990 and 14
  15. 15. 2001 for every $ 100 worth of growth in the world‟s income per person, just $0. 60 reached at its targetand contributed to reducing poverty. For those living on less than one dollar a day that is 73 percent lessthan in 1980s in which $ 2.20 in every $100 worth of growth contributed to reducing poverty for thoseliving on less than a dollar a day.Therefore, Governments need to attract not more aid but more foreign direct investment by creatingattractive tax structures, better infrastructure development and reducing the red tape and complexregulations for businesses – with a concrete and measurable provision that how the local population andhost country is going to benefit from it.Whether poor Asian or African nations should also focus on increasing trade; China as well as India andEast Asian countries are promising partners. And Western countries can help by cutting off the cycle ofgiving something for nothing – but killing market opportunities in poorer countries, discouraging privatesector to work more, earn more and bring prosperity in country and at last killing public sector vital forproviding encouraging private sector do their best.6.7. Promoting the Power of ProductivityIn his book The Power of Productivity, William Lewis of McKinseys Global Institute makes an interestingpoint. He says that many developing countries have very large bureaucratic structures, much larger than ofBritain and the USA, had at the time of their development. He points out one challenge such largebureaucratic states generate: by needing revenues to sustain it, pose a threat to emerging legitimatebusinesses and industries-by seeing them as tax.The issue is not to shrink it but to make it as effective as possible. In resource-scarce low-income statespeople are to be encouraged to pay direct taxes even in a token amount and make proud that thegovernments run with their money so must be transparent, accountable and come under their regularscrutiny. In the beginning tax administration may be prohibitive on the ground of financial and managingcapacity but gradually it will bring better results. And if the larger part of the tax collected at the locallevel is spent in projects locally decided it creates enormous local enthusiasm for development.If people fail to take lead in development efforts and pay their share of it will become the prerogatives ofcorrupt politicos and bureaucracy. This ultimately will fail development, build more dependency on naturalresource turning into a “natural resource curse” or “natural resource trap” Even Nepal has a long series ofexperiences on this regards.For decades, international institutions have pumped billions of dollars into developing nations in attempts toremedy their ills through the development of their technological infrastructures, educational systems, andhealth care programs.Yet despite this infusion of capital and attention, roughly five billion of the world‟s six billion peoplecontinue to live in poor countries.Lewis further offers a practical look at why some countries are rich, why others are poor, and what we cando about it.He also argues that the key to reducing economic inequalities between rich and poor countries isproductivity and its links to competition and consumption. It further says that the only one force can standup to producer„s special privileges is consumer interests. 15
  16. 16. 6.8. Mass Reestablishment and Relocation ProjectsIn each monsoon, millions of people in mountainous regions and plains of Nepal and in other developingcountries with similar geography have to suffer a lot from landslides to floods. They have to loseeverything they have –family, land, house and cattle and evacuate the villages under constant fear ofdisaster and are forced to migrate with much uncertain future with broken families and communities. Thisis common and regular among people living in high mountains slopes and in plains by the riverside.Beyond this they are living a life away from basic human amenities and facilities – from drinking water andfood to primary health, education, transport and communication. And in all such places of sparselypopulated areas with geologically vulnerable situation providing them with these facilities seems notpossible in other 50 or more years. This has built tremendous tension among people being translated inconflict and violence too. Develop and implement appropriate resettlement projects and strategies for such possible catastrophesdriven mass relocation has become a great challenge for country like Nepal. If not addressed well, this willundermine basic human rights, increase poverty, vulnerability among people and other forms of socialmarginality.Catastrophic environmental change forced human migration, have been designated as “environmentalrefugees” and climate change has been projected by many researches to become one of the major forcesproducing mass relocations in near future.This does not end here but proceeds with loss of eco system varying from socio- ecology, availability ofresources and degradation of farm land.This will further cause disasters and catastrophes that are closely linked to economic, political and socialfactors raising the fundamental issues like equity, justice, and accountability producing landlessness,joblessness, homelessness, marginalization, social disarticulation, food insecurity, increased morbidity andloss of access to common property.Natural disaster, development disaster or absences of opportunities have displaced millions of people in ourregion. They have migrated in urban slums and even their numbers are growing fast in Nepal. Their growingpopulation has not only created pockets of poverty and vulnerabilities but has also been over straining thecapacities of environment and service infrastructures of the urban needs.Therefore, a planned resettlement and relocation projects for those sections of people as mentioned abovenot only protects and expands natural environment but also helps to eliminate poverty and acceleratedevelopment with their economic activities running in an integrated way in such new relocation centre. Theycreate markets, jobs and new economic and social networks vital for growth and development. It becomeseasier for government and public authorities to develop basic service infrastructures they are bound toprovide needed at a negligible low cost.For successful implementation of such projects some key issues are to be considered as for example suchrelocation sites are to be selected in proximity to resources to livelihoods and employments. Settlementdesign and housing are to be oriented to the social and cultural linkages of the relocated people and somespaces for people to change the design so that they have a sense of honor and ownership.China has recently initiated such a planned relocation projects for example in Shaanxi featuring highmountains and steep hills and is highly prone to natural disasters including mud-rock flows, landslides andflooding as in Nepal . According to the Shaanxi Provincial Department of Land and Resources, more than 16
  17. 17. 2,000 geological disasters occurred in the southern part of the province from 2001 to 2010 incurring acombined direct economic loss of more than $7.20 billion (48). Because of the high human and economic cost of regular landslides and floods, the provincial governmenthas moved to relocate residents of the hardest-hit areas to other parts of Shaanxi.On December 7, 2010, the government mapped out an ambitious resettlement plan. More than 2.79 millionpeople in the provinces most disaster-prone and least-developed mountainous areas will be moved over thenext 10 years. They include 2.4 million residents in 28 counties in the three southern cities, Hanzhong,Ankang and Shangluo, and 392,000 from poverty-stricken Baiyu Mountain area in the north.Beijing Review also claims that it will be the largest resettlement program in China since 1949, movingtwice as many people as the Three Gorges Dam Resettlement Program. Quoting the governor of Shaanxi -Zhao Zhengyong, the weekly says - “For the residents in south Shaanxis mountainous areas, this will notjust be a move from danger to safety but, a leap from poverty to a more comfortable life". And thisobviously can be a model for us.6.9. Not Fund for Development, but Vision, Program and Institutional Credibility for Development isthe real ProblemIn Nepal there are thousands of cooperatives providing credits and savings facilities even in distant villageswith deposits beyond imagination. And number of banks, finance companies and cooperatives and hugereserve with them have belied that there is shortage of money for investment. But inevitably there isshortage of vision on how to use the money available for sustainable growth. Grameen Bank in rural Bangladesh once was able to collect over $ 1 billion in only nine months. One billiondollar if could be raised from among poor rural family of Bangladesh, it shows that there is no dearthmoney to invest in Bangladesh or Nepal. What one Muhhamud Yunus and one Grameen Bank have done cannotbe considered a magic but a will power, vision and commitment.6.10. Lessons from the success of The Millennium Villages projectThe Millennium Villages project run by UNDP, Open Society Institute and The Earth Institute at ColumbiaUniversity has offered a bold, innovative model for helping poorest rural African communities move out ofpoverty and met with other Millennium Development Goals. Targeting half million people in 80 such villagesclustered into 14 different sites in 10 countries of Sub Saharan region , the project seems achievingmiraculous success in providing better health care, quality education and women empowerment. Thesevillages are also gaining greater strides in creating opportunity for growth with better foundations,promoting entrepreneurship and connecting markets. The success stories of this project according to UNsecretary General Ban ki Moon, has shown that “every region trapped in extreme poverty can break free,grow, and prosper.” (49)7. CONCLUSIONThe New Economics Foundation (NEF) estimates that between 1990 and 2001 “for every $100 worth ofgrowth in the world‟s per person income, just $0.60 contributed to reducing poverty below the $1-a-dayline. Communities or countries that have resisted or hesitated to adopt the “development” ideology havebeen cajoled, bribed, or threatened into conforming. Foreign aid and trade have been used to increase thestronghold and profits of multinational companies, mostly under the clever guise of helping poor nations intheir quest to “develop”. 17
  18. 18. Survival of democracy in a country depends upon the income level of its citizen. According to AdamPrzeworski (50) a democracy would die during any time with per capita income under $ 1000 with ratio one intwelve. If the income level was $1001 to 3000 the probability was one in twenty eight and if the probabilitywas between 3001 to 6055 it was one in sixty eight. In countries with more than $ 6055 per capita incomeno democracy has ever fallen. Throughout history, 70 democracies collapsed in poorer countries while nonein 37 developed countries.Institutional quality – including property rights, rule of law and sound management of macro-economic andfiscal policy is the key to economic growth and prosperity. But there is no unique and non context specificway of achieving desirable institutional outcomes. Effective institutional outcomes do not map into uniqueinstitutional designs- what works depends upon local contexts, constraints and opportunities.Attitudinal change on the part of top political leadership towards a more market oriented, private sectorfriendly policy frame work with some none interfering but with facilitator or motivational role for the stateworks.A state is association of associations; therefore a social democracy works when we have a strong,independent, socially and ecologically accountable and just market system -followed by policy andprogrammes to ensure minimum economic and social security; and making basic service infrastructure andfacilities available for all and specially poor people.But, a political, economic and social stability primarily enhanced by strong states capacity is a must forthis.Similarly, such a state capacity can only be attained by modernizing political parties and key governancebodies and structures making these institutions as well as international development agencies accountableto the people.A democracy is a certain set of values, structures, working procedures and a natural environment for itsgrowth, development and success. Therefore it is to be grown and developed in country specific socio-cultural environment – not copied or imitated and introduced in quite strange situations. In case of socialdemocracy more attention is to be given to grow it in country specific situations.For example in a social democracy government accepts greater responsibility towards the socio-economicneed of its population. But when the government does not have money or does have no policy and a programto make money to perform these responsibilities, then it is no more than a hoax.Therefore, a weak state, even without resources to run its basic function – maintaining law and order andmaking people believe that they live in a law abiding society – where everyone is free to run his socio-economic and cultural life as per the law of the nation; there will be no peoples‟ economy and ultimately a nostate economy. A country – that boasts on begging, that can produce nothing for even daily supplies of the people, that hasto depend upon foreign aids even for equipping government with basic facilities and for minimum needs-evendrinking water, primary health care and pre primary education, cannot claim to be a state rather than socialdemocratic state.To expect more and press for more from a government in a fragile country, even without capacity to collecttax is to force it to fail and ultimately collapse.Therefore, what we need to do is to build state capacity to perform basic state duties, collect revenueand use it in a legal way with ensured accountability and transparency mechanism under people‟s regular 18
  19. 19. scrutiny. This is the way to make the state capable and effective and this opens way to expect from it anddevelop it as a social democratic country.But, poor and week people cannot make a strong state. Similarly a weak state too cannot make its peoplestrong and empowered. So, a systematic democratic way of working among people, political parties, socialorganizations and trade unions and professional bodies can reinforce each other and make them bothstrong.A social democracy in simplest term is a broad based social commitment for common people, a social systemwhere everyone has a say and share in decisions and be a part of decisions that helps them secure betterlife situations. But it is not an economic populism. It does not promise for a windfall or a lottery. Itnecessities people work hard make efforts for your better life and no other will do it for you.It is private sector that creates wealth. State cannot compete with people in producing more and earningmore in manufacturing and and service sector. But government can work far better in making private sectorresponsible and in partnership with private sector. Government can run companies producing goods andservices where private sector is not motivated for various reasons. But completely state controlledcompanies and corporations, in ours as well as in other countries have become a centre of political loot andunbearable financial burden to state coffers - snatching money from poor people‟s needs.In today‟s interconnected and highly competitive global market, only quality goods and services produced inefficient, reliable, cost-effective way with smooth supply chains allow a country achieve growth anddevelopment.Developing countries like Nepal coincidentally have been facing two challenges at the same time. First theyhave very few quality products to exports and second they have to bear with several trade logisticsbarrier.Equally important for countries like ours is to understand how to address these challenges and dismantlecross-border trade impediments in a concrete and results-oriented way.Therefore, improving trade facilitation and enhancing public-private sector collaboration help to attaincompetitive edge, promote inter-agency coordination and cross-border cooperation for countries sharing acommon border - is a best way to enhance economy and build a social democracy.Indubitably,government plays a central role in financing basic social security and investment on socialsecurity. In truer terms investment on social security is investment for wealth creation. But government-financed services as health, education and training in general , have not helped people gain confidence andcompetitive edge. And this has forced a social democracy face with a weak cause. And this obviously is asector from where to begin with.References (1).Justin Yifu Lin: New Structural Economics – A Framework for Rethinking Development and Policy, World Bank, 2012 page 1.(2). ( Kishore Mahbubani, The New Asian Hemisphere, Public Affairs , New York,2008, page 51-52)(3)How We Can Make It Happen in Our Lifetime, Penguin Books, 2005, page 3. (4) Jose Antonio Ocampo and Rob Vos (edited) Uneven Economic Development, Zed Books and Third World Network in associationwith United Nations, 2008, page 1.(5) David E. Bloom and Larry Rosenberg‟s Working Paper on The Future of South Asia: Population Dynamics, Economic Prospects andRegional Coherence, February 2011.(6) The Least Developed Countries Report 2009, UNCTAD, Geneva 19
  20. 20. (7) Mahbub ul Haq : Reflections on Human Development ( Expanded Edition) Oxford University Press, 2000, page 217.(8)Angus Maddison: The World Economy – a Millennial Perspective, Development Centre of the Organization for Economic Co-Operation and development, 2001, page 27.(9) Commission on Growth and Development: The Growth Report – Strategies for Sustained Growth and Inclusive Development, TheWorld Bank 2008, Page 107.(10) The Economist on line daily Chart ( Jun 28th 2011 )(11) The Economist ibid(12) Ejaz Ghani (edited): The Poor Half Billion in South Asia What is Holding Back Lagging Regions, OUP and the World Bank 2010,page – 4.(13) The Amartya Sen and Jean Drèze Omnibus, Oxford University Press, 1999(14) Amartya Sen: Development As Freedom, Oxford University Press, 2000, page 180-181.(15) UNDP - Human Development Report, Oxford University Press, 2002, page 3.(16) Humphrey Hawksley: Democracy Kills: What is so Good About the Vote? , Micmillan, 2009 page 175.(17) ibid(18) The Economist, October 3, 2011.(19) Peoples‟ Daily August 8, 2011.(20) ibid “Please imagine?”(21) Paul Collier: The Bottom Billion – Why the Poorest Countries Are Failing and What Can Be Done About It, Oxford UniversityPress, 2007, page 17-69(22) Paul Collier ibid page 45-47(23) Paul Collier: Wars, Guns and Votes - Democracy in Dangerous Places, the Bodley Head, London, 2009, A World Bank PolicyResearch Report – The Conflict Trap- Civil War and Development Policy, jointly authored by Paul Collier, Lani Elliott, HåvardHegre,Anke Hoeffler, Maria Reynal-Querol and Nicholas Sambanis – A Co-publication of the World Bank and Oxford University Press2003 and a Research paper on Greed and Grievance in Civil War by Paul Collier and Anke Hoffler, March 13,2002.(24) Devendra Raj Pandey: Nepal‟s Failed Development – Reflections on the Mission and the Maladies, Nepal South Asia Centre,Kathmandu, 1999.(25) Larry Diamond: Promoting Democracy in a Post Conflict and Failed States – lessons and Challenges, Taiwan Journal of DemocracyVolume 2, No 2: 93-116.(26) Samuel P. Huntington: Political Order in Changing Societies, Adarsh Books – New Delhi, 2009, page 1.(27) Huntington, page 2.(28) ibid, page – 2(29) David Bloom – The Challenging Billions, Project Syndicate August 17,2011.(30) The World Bank, Responsible Growth for the New Millennium – Integrating Society, Ecology and the Economy, 2004,page 1-3.( 31) Dev Raj Dahal : Shaping Tomorrow‟s Economy – Challenges and Choices for Nepal. ( A Paper presented at a seminar organized byFES and GEFONT in Kathmandu on July 10-11, 2011)(32) Robert Skidelsky; The Crisis of Capitalism : Keynes Versus Marx in J.S. Sodhi edited Tracking Globalization – Debates onDevelopment, Freedom and Justice, Penguin/ Viking in association with Sri Ram Centre for Industrial Relations and HumanResources,2011 page-110-113.(33) Robert Skidelsky ibid page 114.(34) Tul raj Basyal – Karobar National Daily October 10,2011.(35).Federico Mayor in collaboration with Jerôme Bindé, The World Ahead: Our future in the Making, Zed Books and UNESCOPublishing House, 2001, Page 178.(36) Mayor and Bindé ibid page 154.(37) Human Development Report 2007/2008 Fighting Climate Change: Human Solidarity in a Divided World, page 3(38) World Development Report 2010 – Development and Climate Change, The World Bank, Page 4.(39) Zoellick ibid(40) Dev Raj Dahal, ibid(41) Joseph E. Stiglitz: Freefall: Free karkets and the Sinking of the Global Economy, Allen Lane 2010, page 274(42) Federico Mayor in collaboration with Jerôme Bindé, ibid Page 179.(43) Responsible Growth for the New Millennium - Integrating Society, Ecology, and the Economy, The World Bank, 2004, page 1-2)(44) Responsible Growth . . . page 9.(45) Robert Skidelsky : Keynes and Social Democracy Today, Project Syndicate (June 22,2010)(46) Interview with Dambis Moyo‟s by Joanne Myers of Carnegie Council – April 2. 2009(47) Why Foreign Aid is Hurting Africa, Wall Street Journal March 21,2009(48) Beijing Review October 6, 2011(49) Ban Ki Moon: The Power to End Poverty, Project Syndicate (October 3, 2011)(50) Self Enforcing Democracy, Department of Politics – New York University, June 28, 2005 20
  21. 21. Note: This is the updated version of the working paper was prepared for a workshop jointly organized by Friedrich Ebert Stiftung(FES) Nepal and T.P. Acharya Memorial Foundation, Kathmandu on November 17, 2011. 21

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