July 14, 2021 Sujeev Shakya

Dissecting ‘bordernomics’

Borders should become points of facilitation, not control.

A week ago, the Nepal Economic Forum organised a talk on ‘bordernomics’ that I moderated, where different perspectives of borders and the opportunities around them were explored. No country can change its geography without conquering or ceding to another country, therefore it has to do best the way it is geographically situated. For decades, we have been using the term ‘landlocked’ to define our geographical position but we need to change this narrative and recalibrate our position as being ‘landlinked’ with two of the large economies of the world.

Borders, for those focusing on security and politics, is just a line that defines territory; but for millions of inhabitants who live on either side, it is a line they need to incorporate into their lives. The irony for Nepal is that the folks sitting and discussing borders in Beijing, Delhi or Kathmandu have rarely visited these borderlands whereas for people residing there travelling across the border is part of their day to day life that needs to be managed better but not restricted or controlled. It has been proven that economies have flourished only when borders have been converted to points of facilitation rather than points of control.

For Nepal, it is important to examine and explore the differences between the borders in the north and south. In the north, only a few border areas witness some day-to-day activities such as cattle grazing and village market access, but the large markets of China remain far. On the other hand, in the south, Nepal is integrated very well with the densely populated hinterland of India and is a bed of hot economic activities. Nepal’s market sphere expands therefore to half a billion people in the southern part.

A study of four border points of Bhadrapur and Birgunj in the south and Kodari and Rasuwa in the north examine and explore the similarities as well as striking differences between these borders from political, economic and social aspects. The study also reveals some interesting facts about how political interests steer the economic activities in these borders. For instance, not many know that the Government of China views the Kodari-Zhangmu border region and Araniko Highway as security-sensitive areas questioning the real intent of unleashing trace and economy through this point. However, Nepali border citizens are easily able to find jobs on the Chinese side as busboys, porters, labourers, and restaurant workers as well as restaurant owners. Similarly, the city of Birgunj falls victim to the political tirades between Kathmandu and Delhi, impacting the economy of the area (as evident from the months of blockade between September 2015 and January 2016). However, it is also important to bear in mind the ethnic and linguistic similarities between people along the two sides of the border has promoted significant social exchanges.

Globally, countries that have agreed on reimagining their borders have benefited the most. Europe has led these processes. When I travelled to Basel, it was fascinating to be able to cross over to three countries—Switzerland, France and Germany—for daily walks or just visiting cafes. Likewise, in East Africa, the countries that have worked hard to make the East African Community work have benefited the most. In ASEAN, trade, business and the economy of the border areas have benefited most at the cost of being disliked by the folks in capital cities. Similarly, for Nepal, too, there is an opportunity to rethink how it would like to leverage its borders with both India and China for its own economic gain.

Speaking in a panel at the recent talk, the Deputy Chief of Mission Indian Embassy, Namgya Khampa, was open to the idea of a new imagination in India-Nepal borders where we look at free movement of people, goods and services albeit with adequate digital records to ensure that security of either side is not compromised. We discussed perhaps the starting point to be working on a list of non-tariff barriers that have plagued businesses of both India and Nepal figuring out how we push for better transparency in the rules, regulations and handling of issues. We cannot eliminate all non-tariff barriers, as some of the issues are much localised. But many can be understood through deeper studies as to why Indian eggs, milk, poultry and other products have problems in getting to Nepal markets and why some Nepali agricultural products face hassles at the time of export.

I have been a proponent of Border Economic Zones, where we can leverage the strengths of the border areas collectively to help the local economies. High-quality tea leaves from Nepal can be processed legally and legitimately in the factories of India and sold through global channels. Similarly, Indian workers can legitimately work in factories in bordering towns increasing productivity and production. It is all about reimagining what does a border mean and how it can aide the economy.

The pandemic has taught us many lessons including how having an open border can be a great support system, as people can cross such borders to eke out daily livelihoods. It is important for the policymakers and diplomats in the capital cities to understand how borders are integral to the lives of many millions of people on either side of the border.

Perhaps, policymakers working around trade and economy along with people in the sphere of diplomacy and international affairs should have mandatory immersion programmes to spend a few weeks at various border points so that they can empathise on the challenges of the people and work on viable opportunities. The Nepal Economic Forum is willing to collaborate on this journey.