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Hindu Nationalism Could Hinder Modern Development

March 23, 2017

On March 19, Nepal's Rastriya Prajatarntra Party, which represents former royalists in what used to be the world's only Hindu monarchy, offered an amendment to remove the word "secular" from the constitution. This came just two days after India's ruling Bharatiya Janta Party named Yogi Adityanath, a hard-line Hindu priest, as the chief minister of Uttar Pradesh after a landslide victory in state elections.

Uttar Pradesh is India's most populous state with 200 million people and would be the world's sixth largest country on its own. BJP did not field any Muslim candidates in a state where 20% of the population are Muslims, but decided to highlighted the appeal of Hinduism to consolidate power and prepare for national elections in 2019 in a sign that "populist democracy" is replacing "constitutional democracy."

Many Nepalis seem happy with the latest developments in India, which are keeping hopes alive that their country will reassert its Hindu identity, if not become a Hindu kingdom again. The question is how this development will affect relations with India.

Between September 2015 and February 2016, India imposed a blockade on Nepal ostensibly to protest the adoption of a constitution that ignored the demands of Nepal's ethnic Madhesi population, who live on the country's southern plains and have strong ties with India. The rise of Hindu nationalism, known as Hindutva, in a province bordering Nepal will almost certainly alter the future of Nepali politics and economics.

Nepal's Hindu kingdom lasted for 240 years, until 2008, but failed to deliver much apart from wealthy monarchs, a middle layer of rent-seekers and a majority of subjects mired in abject poverty. Hinduism promoted feudalism and a caste system that divided society and created yawning income inequality. Religious beliefs based on astrology and reincarnation governed people's lives, with the poverty of many blamed on cosmic fate rather than the actions of the government. Extreme wealth was seen as the reward for exemplary past lives rather than the product of corruption. This situation rejected the modern global trend toward meritocracy.

Rent-seekers benefit

The religious practices in Nepal -- as in India -- encourage rent-seeking rather than entrepreneurial pursuits. The upper caste benefits from these beliefs since they are seen as the intermediaries between the almighty and the common people, and thus serve in rent-seeking roles ranging from finding partners for arranged marriages to helping secure government services, including getting a driver's license or health care. It has resulted in what could be described as the "Hindu rate of growth," when it comes to Nepal.

The result is a social system based on nepotism and corruption, one where social status or wealth depends on exploitation that is sanctioned by religion. Those seen as divinely favored are selected not for their individual merit when it comes to business partnerships, for example. Corruption becomes acceptable in a society where bribing gods for favors is seen as normal. As a result, there is no social ostracization of the corrupt. Indeed, they get the best treatment at high-profile social events like weddings. It also explains why political leaders who have been imprisoned for corruption can then re-emerge to take key positions.

How will Hindutva affect India's relations with neighboring countries, many of which have different religious traditions? They include two large Islamic countries, Pakistan and Bangladesh, and three Buddhist countries, Sri Lanka, Bhutan and Myanmar.

South Asian economic integration has been marred by political differences, and the addition of a religious dimension could worsen the problems. When the state tries to use religion to guide development, it can lead to political disaster, as demonstrated by European history and current developments in the Middle East and North Africa.

The South Asian region could feel the effects of the impact of Hindutva on the Indian economy and business. Brands associated with the Hindutva movement, such as Patanjali, a packaged consumer goods company, are raking in billions of dollars in India and capturing an increased market share in Nepal. Is this the sort of company that will flourish and force neighboring countries into business relationships? One thing for sure: it will be interesting to watch the development of new economic models based on an age-old religion.