Sujeev Shakya

Articles & Publications

05 Oct 2021
Kathmandu Post Permalink

Towards multimodal connectivity

October 5, 2021

With geopolitics rapidly changing, Nepal needs to make multi-modal connectivity a reality.

Source: Shutterstock

For the past couple of years, there have been groups working silently to push regional multi-modal connectivity. On a trip to eastern Nepal, people get surprised to see the highway connecting India and Nepal looking so nice and good with different integrated checkpoints being developed. The pandemic has pushed back many key deadlines, but there are some serious movements on pushing connectivity within the Bangladesh, Bhutan, India and Nepal (BBIN) region. Global think tank CUTS International, and some leading think tanks in the region, have been pushing this study and development that is seeing some slow but steady progress. Through the Nepal Economic Forum, we have been engaged with many people on the border despite the pandemic to understand what regional connectivity means to future economic growth and development. 

The earlier BBIN Motor Vehicle Agreement has moved ahead, but all countries thought the discourse moved to multi-modal transport. Therefore, for Nepal, it is to talk about inland waterways like Kolkata-Kalughat, Raxaul, Kolkata-Sahebgunj, Biratnagar and Kolkata-Varanasi-Raxaul routes that can be integrated into the existing road transportation network. Similarly, for cargo transportation, it will be essential to have the railway networks linking inland container depots and integrated checkpoints. In the case of Bangladesh, rail links are also in place wherein it may not be a distant dream to have a railway that can start in Bangladesh and end inside Nepal. Further, the biggest unleashing of the multi-modal strategy would be to link with the Trans-Himalayan Railway network, wherein China can be connected via Nepal and India to Bangladesh. This is definitely not going to be a short-term objective to be achieved, but in the long run, this seems obvious.

However, for Nepal, we also need to understand that the import duty on vehicles is high, labour costs are higher, and the operation costs of Nepali vehicles are higher than those of India registered vehicles. Also, the biggest complaint from Nepali transport entrepreneurs remains that Indian vehicles continue to take short-haul work in Nepal at lower costs, eating into their business. Therefore, regulation becomes a key factor when we move towards integration. 

Going digital

Compared to a few years ago, where people moved many papers through different offices at the border points, digital platforms are now quickly replacing the brutal old ways of working. However, a lot needs to be done in changing the mind-set as people are still used to having paper backups despite progress in the Nepal National Single Window system. When a smartphone can track cargo and conclude all documentation originating in one part of the world and getting to Nepal and vice versa, it would reduce costs and delivery times. Electronic tracking of vehicles and ensuring that vehicles are not flouting the rules/regulations of the different countries they are travelling to will boost confidence. 

Many people on the border seem to be working as agents and managing incredibly informal and illegal trade, trying to create a perception around why BBIN multi-modal platforms may be a problem by citing livelihood problems. Yes, there would be a handful of people engaged in loading and unloading cargo who may lose their jobs. Still, like elsewhere in the world, they can be retrained and reskilled, and continue to work on loose cargo as the platform will only take care of containerised movement. If people are engaged in smuggling or are just acting as agents who know whom to bribe, then surely the state or anyone should be least bothered about it. However, these people have the closest links with politicians through their various local organisations, and therefore have loud voices that need to be repelled through facts and figures. 

Building awareness

The key challenge remains in building awareness of multi-modal platforms and thereby providing a better, efficient and cost-effective method of moving cargo across countries. With regionalism and geopolitics going through constant redefinition, a platform like BBIN is apt for Nepal to reach out for its exports and make its imports efficient. The success of the Association of Southeast Asian Nations (ASEAN) or the East Africa Community (EAC) members is purely based on pushing integration despite the local political challenges one has to go through. The key strategy has to be multi-pronged and proactive so that people on the ground are aware of the various benefits of moving towards a multi-country regional platform. 

Nepal needs the BBIN platform more than any of its partner countries purely on two counts. First, it is landlocked, and it has to use Bangladesh or India to access the sea and ocean; and second, more importantly, any linkages to China are most effective through Nepal. Therefore, a proactive move is required to accelerate this discourse and make the BBIN multi-modal movement a reality. 

https://kathmandupost.com/columns/2021/10/05/towards-multimodal-connectivity

27 Sep 2021
Uncategorized Permalink

My Vision for Nepal | A complete transformation of Nepal

September 27, 2021
Sujeev Shakya is a celebrated author and entrepreneur. His books include Unleashing Nepal and Unleashing the Vajra | Photo by: Pratik Rayamajhi

A complete transformation of Nepal

Three ways to realize the vision:

1)   By heralding a societal transformation.
2)   By changing our limiting mindset.
3)   By fostering a culture of learning.

Based on my work and background, I see Nepal primarily as a country of potential. When we look back over the past 30 years, the GDP has grown 10 times, quality of life and life expectancy are increasing, education access is getting better, and there are job opportunities for Nepalis not only in Nepal but around the world. When we look at all this, we can definitely call Nepal a country of potential. But we have not been able to achieve our full potential because of certain issues. 

Societal transformation

Nepal’s transformation most definitely has to be based on societal transformation. If we look at our politics, it is the reflection of what happens at our home. There is no home without a fight and we can see this reflected in Nepal’s larger political issues. If we look at our culture and value system—be it on corruption, nepotism, patriarchy, or hierarchy—all these happen in the society and are reflected nationally. So, the key would be societal transformation. Without that, there will be no economic transformation. 

Change in mindset

The second thing to look at is the change of mindset. It has been around 20 years since I first talked about Nepal being, at that point of time, the 40th most populated country in the world. Nepal is currently about the 50th most populated and in terms of economy there are a hundred countries that have a smaller size. So, we are not a small country. This narrative has to change.

We are land-linked to the two fastest growing economies in the world: the narrative of ‘landlocked’ needs to go because we are connected to a market of 2.8 billion people. That is a great potential we need to work towards. Which means we have to change our mindsets, start believing that we can integrate into this global world. We need to change our mindsets to become global citizens by adapting global practices: Be it by considering English language as important as other languages of Nepal, or allowing our regional languages to flourish, or syncing our calendars to international calendars. We also need to align our time. We are the only country with a 15-minute time difference to major time zones. 

The demographic potential

Women compromise half of our population but we hardly see them in key positions, although this trend is changing. In the 90s, only 12 percent of those giving SLC exams were girls; now it is 50 percent. If there is no nepotism, come 2030/2035, half of our ambassadors will be women. That would be a huge transformation. Fifty percent of the population that was excluded is going to be integrated and I can see women-power driving many changes. 

Along with that, our youth power needs to be taken into account. We’ve seen in the past 15 years the tremendous transformation in the IT industry—all led by young people. We are a country where 50 percent of our population is under 25, and 70 percent is under 35. The challenge is how to unleash their potential. Once their potential is unleashed, Nepal can transform beyond recognition. And it’s not difficult. In the past few decades, we have seen countries like South Korea, Sri Lanka and Ghana progress by leaps and bounds.

Learning culture

We have to have a learning mindset. We tend to not learn. We are averse to hiring smart people and getting international experts to do things. We need to create that learning culture to make the transformation. It is about taking your stories to the world and letting good stories from the world influence you.

Quick Questions with Sujeev Shakya: 

Is there such a thing as “too many entrepreneurs?”

No. Every person is an entrepreneur. You may be working for yourself or others, but you can continue to be creative. 

Are Nepal’s tax policies conducive for new businesses?

Policies are conducive, but they can surely be better. Yet the real issue is their implementation. 

Are trademark/copyright laws in Nepal too lax?

Yes, and I hope media houses stop accommodating advertisements of those who violate such trademarks/copyrights.

https://theannapurnaexpress.com/news/my-vision-for-nepal-a-complete-transformation-of-nepal-3648

08 Sep 2021
Kathmandu Post Permalink

Reviving Tourism

September 8, 2021
The pandemic, hopefully, has taught us some lessons as we reflect on our mistakes

One of the sectors to take the biggest hit around the world has been tourism, on which one out of every 10 people depends as a source of livelihood. Travel restrictions have hit the sector hard, but we can now see a silver lining as countries are learning from experiments. Singapore finally decided to open even if it is just for people from Germany and Brunei. Thailand’s experimentation with “sandbox” has gone well, and they definitely would not like to miss the new year rush.

During my last quick trip across the border in eastern Nepal, we saw people moving across the borders following the travel protocols of PCR test to get to India, and full vaccination to get to Nepal. United States citizens are now being allowed to enter Canada after 17 months. The Maldives took advantage of its location, and its arrivals in August 2021 were higher than those in 2019. Every country is looking at ways to open up for tourism. For Nepal, it will be essential to look at how it can build a good strategy and execute it.

The Right Protocols

Every country should establish protocols that are centred around the visitor to make the person feel safe and welcome. The Nepal Tourism Board can initiate live chatbots to ensure people’s queries are answered and create a dedicated call centre to answer calls. In the days of calls over the internet, this is the cheapest and most cost-effective medium. Yes, we can start opening up for people who are fully vaccinated and ensure mandatory PCR reports are taken before departure.

We need to be mindful of the requirements of the countries that people will be returning to. Our travel protocols have been developed keeping in mind the mass market labour, but we need to understand that Nepali outbound tourism will also bounce back as countries open their borders. Our airport, now managed by a private firm, competes with the bus park on aesthetics and services. Similarly, there will be more Nepalis travelling for meetings and work. And let’s not forget, there is already a million-strong Nepali diaspora settled in different countries around the world, who will be travelling on non-Nepali passports but would like to seek better treatment at the airport.

Nepal’s track record of its airport, protocols and government action has been very poor, only compensated by the hospitable Nepalis who make people’s trips memorable. We need the government and tourism trade industry to learn how to convert goodwill into government actions.

Given the way Nepal has been able to implement the control measures and non-regulation of hotels, restaurants and bars in terms of crowds or protocol, we have to be clear: No big conferences will happen in Nepal till we pull up our socks. Similarly, people who have the money and fly in private jets don’t find Nepal ready to cater to this group. Therefore, it will be back to mass-market tourism, especially from China and India, and that is what it should be. Overland tourism from India will start gaining momentum, and the key is to ensure that the folks at the border treat you as a person whose business we need rather than treating everyone as a criminal trying to smuggle something or the other. Definitely, the folks at the border have to go through some massive “customer service” training, and there could be a Tourism Help Desk manned by personnel who can speak the local language to make people feel they are welcome.

We are, after all, connected to a market of 400 million-plus people within a few hours’ driving distance. From China, it will be about flights, and as it decides to open up its skies cautiously, it will be time for Chinese tourists to travel again. For one of the Southeast Asian markets, there were support schemes under which Chinese travellers could avail of state support worth $1,500 provided they fly a Chinese airline and spend a week outside China. Given the mental health challenges the pandemic has brought about around the world, going out for many people can be the only way to bring about a change in their daily rut.

Long-term strategies

While much of the blame is put on the government, the Nepali private sector working in tourism also must introspect and see what they need to do. The associations that have converted themselves into political cartels have not helped as the focus is never on looking at the industry but at personal gains. A few champions are trying, but many are giving up. Hotels are a priority area for lending, whereas for banks they are a real estate business, and only a few are really in the business of hospitality. Further, family feuds and feuds with workers have not helped either. The business is still owner-driven, and even the largest conglomerates have decided to run the business themselves rather than bring in professional management. For someone who has spent two decades in a hotel group as a professional, this is really saddening.

We have messed up our exclusive products like mountain climbing by selling them cheap; we have not cared about trekking routes; places like Sauraha have been converted into an urban ghetto; and everyone is in a hurry to finish Pokhara and replicate that destruction in Lumbini. The pandemic, hopefully, has taught us some important lessons as we reflect on our mistakes; it is time to set things right as we open Nepal to the world again. 

https://tkpo.st/3E21KBh

24 Aug 2021
Kathmandu Post Permalink

Impose inheritance tax to change politics

August 24, 2021

Family feuds generally revolve around ancestral assets in the form of land and property.

The splitting of political parties is being widely discussed in Nepal as if it is something alien to societal norms. However, the way political parties behave is a reflection of the society we live in. Our societies have always seen family feuds, and they generally revolve around ancestral assets in the form of land and property—land being the biggest of them. It is rare to see a family where there has been no family feud for assets in the past three generations. We grew up learning how my grandfather’s family took away the family assets, and our dad and his brothers were on their own. When it happened again, we stopped speaking to one of my uncles after he took away all the assets and left us with nothing.

We siblings thought it was important to start off on our own rather than fight for the family assets, and now we do not think that was a bad idea. I am not sure how my life would have been if I had assets I had inherited and could live on the rental income. Would my siblings or I been as hardworking and push ourselves hard? Our society is one where lives revolve around inheritance. Earlier, women were excluded from inheriting parental property by law. No wonder Nepali women are more hardworking than Nepali men as they are not sure they will inherit wealth from their parents or husbands.

Weddings and funerals

Fights for family assets, especially land, form part of every discussion at large family gatherings. We remember weddings and funerals where there were showdowns between different families. I have vivid memories of people fighting over who should light the funeral pyre at cremation ghats as society determines family relations based on who attends funerals and lights the pyre. You will see warring brothers fighting for family wealth together as kriya putra (mourning sons) even though they may not be on speaking terms. It is not rare to see brothers who have had fist fights in front of hundreds sitting together at death rituals. Family members fighting in court for decades can be seen posting large obituaries in the newspapers. They all do that as there is inheritance to look forward to. The disintegration of wealth amongst Rana families, perhaps the richest rulers in South Asia, can be attributed to fights for assets across different branches of the family. Only those who chose to get professionals or kept family communications open and legal have survived.

This sense of fighting within families is reflected in our political parties. It is rare to see a political party that has not had such fights. Even the new ones have fights as the leadership of the party is seen as legitimate inheritance, which means that they are like family members fighting over inheritance.

If one has inherited a plot of land, especially in urban centres in Nepal, the usual practice is to rent it out. With sky-rocketing land prices, there are many Nepali billionaires in terms of land value. There is no incentive to become entrepreneurial. They start businesses because everyone is doing it. They do not have to think hard as the business is for identity; and if it folds up, it’s not your hard-earned money that you have lost. Some ancestor earned it for you. Therefore, it is important to tax inheritance in a big way so that what comes to one is not guaranteed, and you have to work hard early on in life like in many countries in the world.

People ask why second generation Nepali children in the United States are so successful, or some of the young people who have started businesses in the ICT sector in Nepal have flourished, and the answer for the majority would be the same. They started on their own without inheritance or moved away from their families to be independent. If we did a survey of women (daughters or daughters-in-law) below 30 years of age, many would say they would choose independent nuclear living instead of being in families where in exchange for inheritance, you have to trade your independence.

More open spaces

Japan and South Korea’s economic growth can be attributed to their 55 percent and 50 percent inheritance tax respectively as people do not wait for their parents to die to inherit their wealth. Of course, there has to be a threshold above which this should apply. Further, making a will and registering it with competent authorities should be made mandatory for everyone who owns assets, like we have to name a nominee for bank accounts and shares of companies in the event of death. This will also reduce the number of litigation after the death of the asset owner.

In Nepal, a high inheritance tax can also lead to more open spaces. With more Nepalis settling abroad, the assets in Nepal become just another bonus for them. So if there is inheritance tax, they would not mind if the local government takes over their assets and gives them the money after taxes. In Boulder, Colorado, the local government buys such houses and dismantles them, creates more open spaces and increases the prices of houses in the neighbourhood, resulting in more taxes. In Patan, we see so many abandoned houses in clusters which are mostly disputed. They can be taken over to create open creative spaces that can also generate revenue.

It is important to look at this issue deeply if we are to resolve our political landscape in the next decade. We need to have the next generation of political leaders push the cause of inheritance taxes to secure their own political future. Otherwise, in the 22nd century, we will be talking about the 150 years of different party splits and unification like in families. 

https://tkpo.st/3De3KpE

10 Aug 2021
Kathmandu Post Permalink

Unleashing the potential of Nepali sports

August 10, 2021

Since the monarchical days, the Olympics have been a junket for near and dear ones of authorities.

For those Nepalis who like to compare their country with Bhutan, the Olympics this time was an apt opportunity. Nepal, a country of 28 million people, sent five athletes and 21 officials whereas Bhutan, with a population of 800,000 people, sent four athletes and five officials. In Nepal, the Olympics have been a junket for near and dear ones of authorities since the monarchical days. Therefore, the wife of Bamdev Gautam being singled out for criticism this time is not fair. People who have generally nothing to do with the sports have been part of the delegation each time.

Like in many fields of our life (apart from selling momos), there is an association or a cartel for everything. And, of course, there is a cartel of people who control the games. The only difference here is that the cartel members may not even know the rules of the game they are associated with. But in a country where seniority, ethnicity and gender can decide what one can lead, it is not surprising to see this happen when it comes to sports. However, we need to continue to be activists of change and recognise some of the transformations that are taking place and hope we can build on them.

The potential

I have been continuously writing about this issue as I see hope. When the South Asian Football Federation (SAFF) was held in 2013, the gate money from matches did provide lots of “party” funds of both kinds—lots of parties and money for political parties! In leveraging sports we discussed how it is possible to bring about a commercial scale to activities. Perhaps, this led to some entrepreneurial pursuits around the cricket and football leagues in different parts of Nepal, some of them without the toll tax and blessing to the syndicates. After the South Asian Games in 2019, we made calls again for transformation and learning from other countries.

Building a world-class facility using the abandoned Mahendranagar Airport with private or international government efforts still makes sense. Let us look at the big medal baggers—can we ask China, Japan, or the United States to help build academies and sports facilities that can sustain through hosting tournaments? The key issue remains to get the games to be managed by people who know the game rather than political appointees, spouses, or relatives of politicians. Perhaps Paras Khadka, the just-retired Nepal cricket captain, can show the way by leading the transformations of institutions as he has led the transformation of Nepali cricket.

Much has been written about the training regimes of swimmer Gaurika Singh and the dedication of family members for her to get this far. As The Nepali diaspora of knowledge workers and entrepreneurs grow, we will see more parents putting efforts behind their children to get the foundations right. This surely requires not only financial resources but dedication. With more Nepali companies in the day and age of social media and online platforms finding newer ways of seeing the association of brands with individuals, we may see more firms willing to provide their support. So it could be Goldstar shoes finding enough reasons to get associated with the teams like many global brands. The growth and aspiration of Nepali brands going global can fill the much-needed resource gap.

The inspiration
It is heartening to see Nepali film making getting away from the shackles of all sorts of associations, and now a YouTube show like Blind Date can garner close to a million views. Music-making and sharing has changed. Instagram stars can give everyone else a run for their money. With Nepalis in 180 plus countries connected by the internet, there is a huge market for products and services along with connecting with the Nepali identity. Like we see in the arts, music and entertainment, there are many global Nepalis coming out to help, we will see similar activities. We can imagine football teams and cricket teams that are backed by Nepali corporate houses from different parts of the world, there can be no limit to imagination.

While it is easy to blame politics and syndicates in the garb of associations, they stem from how our society is structured and how we define culture—be it of caste or ethnicity-based superiority, caste hierarchies within ethnic groups, gender, and our quest for pushing seniority over meritocracy. We are a country where 50 percent of the population is under 25, and they are growing up seeing in real time what is happening around the world. When they see that countries with a smaller population than Nepal produce so many world-class athletes and sportspeople, they will start wondering why they can’t do it. They will challenge the status quo and unshackle the potential. Hopefully, by the Olympics 2028, we will see Nepal in the tally of medals. For that, there are many things that need to start today. 

02 Aug 2021
Uncategorized Permalink

Nepal’s response to COVID-19

August 2, 2021

Nepal is yet to make an announcement of plans to see how it works on economic recovery and how it will approach multilateral and bilateral agencies for long-term support through investments, grants and loans.

The first person in Nepal to be tested positive was on 3 January, but till 29 March only five have tested positive out of a total of 917 tests. When Covid19 did hit Wuhan and China in a big way and the first and only case that was tested positive in January, Nepal realised it couldn’t escape this big virus that is taking on the world. However, rather than discussing preparedness, the tourism minister was quickly making announcements of how Nepal was a Covid19 free country and people should visit Nepal, pushing the tourism agenda. It took over two months to grapple with the situation. A lockdown was announced from 17 March and it has been extended till 8 April. International flights are now barred till 15 April. For Nepal, the biggest decision was to close its land border with India as thousands of people from both country move both ways.

With our South Asian psyche, Nepalese also only took it seriously when it started to hit the developed West ⁠— Europe, UK and the US. In the past, since dengue, malaria, diarrhea and other waterborne disease became big problems in India or Bangladesh, it does not really attract the attention of Nepal. Like our food, culture, attire and other elements of day-to-day life, the West holds a much stronger ground in the country. Since this has hit the West it has also become a geopolitical tug-of-war.

The government has now formed a high level committee headed by the deputy prime minister to deal with the situation. However, given a weak government that hardly delivers and addresses the concerns of common people, there is little trust in what the government says or does. The video of a doctor talking about the ill preparedness of the government recently went viral as people could resonate with what he said. Nepal is listed as having a very high Non-communicable Diseases (NCD) burden, meaning a spread of Covid19 in Nepal can result in fatalities.

Nepal has been looking at India in terms of announcements with regard to the open border mechanisms. In Nepal, despite tints of anti-India sentiments being a major political weapon of Nepali political classes to demonstrate their nationalism, it always follows India’s footsteps. Nepal is not like Bhutan, where they have created their own disaster response system that tries to copy the Singapore model and the respected royal family lead from the front. In Nepal, like in India, political leaders make speeches on social distancing and share on social media their pictures in crowded gatherings. In India, some analysts are trying to make the closure of border by Nepal as a big issue, but we need to understand that these are times when even states and districts within India have restriction on movements.

The Nepalese are now left fending for themselves. Out of Nepal’s population of 28 million, about 3 million are outside Nepal and half a million live within the Kathmandu valley. The Kathmandu valley is the land of economic opportunity, therefore people migrate for work here. Estimates are that about 3 million of the valley’s 5 million are internal migrants; and a good number have started to go back to their villages and towns due to the Covid19 threat. Nepalis in Kathmandu valley and other areas hit by the Gorkha earthquake of April 2015 and the areas in the southern plains of Nepal that battle with flood practically each year look back at their own experiences of resilience. The whole country was brought to a grinding halt during the Indian blockade that lasted for five months when Nepal was trying to recover from the earthquake. These were times when Nepal’s power shortage peaked at more than 16 hours a day. Working from home at that point at this scale would have been impossible given the power situation. The optic fiber cable connections from China have boosted Nepali internet connections and the penetration of smartphone and social media, a helpful infusion of capacities in communications and information flow specifically during the times of a crisis.

Nepal is yet to make announcement of plans to see how it works on economic recovery and how it will approach multilateral and bilateral agencies for long-term support through investments, grants and loans to handle this major crisis. Kathmandu has instead opted to take short-term approaches. Nepal has looked up to China for supplies, and first batch of grants from Beijing have been approved and purchases made by Nepal were airlifted on 29 March. The US also has made contributions. China who thinks has gone one up in the global geopolitical game will not mind using its full strength to help Nepal as it gives a big opportunity for it to increase its soft power in India’s backyard especially when there is a government that on paper peddles communism. Twenty first century geopolitical victories are based on investments, business and soft power not selling arms to the military. For India, if it contains the virus well within its country, it will want to also extend its expertise to Nepal. Our proximity with India through land borders make the relationship unique at the same time brings about challenges in stemming movements and implementing proper screening procedures and policies.

It is all about changing mindsets to working together in getting over this global crisis. Nepali people are used to overcoming crisis, they can also tell the world how they do it.

28 Jul 2021
Kathmandu Post Permalink

Making digital transformation work

July 28, 2021

Last week, a photograph of people queuing up at the Shukraraj Infectious and Tropical Disease Hospital at Teku to get a certificate saying that they have been vaccinated filled newspaper front pages and social media posts. It was not that the people had not been given vaccination certificates, but they had been given ones that were not internationally acceptable as they did not conform to international norms, neither were they in English. In most countries, the vaccination process has been through registration online, getting appointments online and even getting certificates online. However, in Nepal, we like to ensure that the digital process does have manual intervention.

The same goes for the online registration when one fills out the form. First, the site does not work most of the time as one gets the “Your session has expired” message. The barcode on the form is never scanned on arrival. Rather, there is another manual set of records that are again handwritten. A handwritten chit with the name of the hotel is given. That is the basis of getting oneself through arrival. Similarly, for vaccination, people were asked to fill the forms online, but the vaccination process has never asked anyone to bring the code that was generated. This basically shows how far off we are from internalising the digital process.

Why we can’t go digital

There are four reasons for our reluctance to go digital. First and foremost, the manual process allows human intervention, which means money can change hands or one can influence the process. For instance, digital scanning of locked containers at the customs means that there is no way the people can make money, so the best way is to ensure that the machine does not work. Similarly, when procurement processes are underway, it is not unusual for the server to crash as a manual substitute to the process can bring about much needed manual intervention. At the Registrar of Companies, it is rare to see the system work as there is no money to be made by touts and officials if the system works fool proof.

Second, it is our love for documents. Even in banking and financial services, where most of the stuff has gone digital and automated, everyone loves to have that copy of citizenship certificate or the manual form. In a year, I lose count of how many times I submit the same document to the same branch of the same bank. Yes, they also want to play safe as if any dispute goes to court, it wants everything on pieces of paper. So, you may be doing all sorts of transactions digitally; but if something goes wrong and you have to go to court, it is only the manual documents that count.

Third, our digital solutions have to be home-grown as protectionism has been key. Governments do not want imported software, and the local cartels know how to push local solutions. So we have a stock exchange solution that is so primitive compared to the contemporary solutions that one can get from international service providers. Like international legal, accounting or consulting firms, we have serious issues with international solutions.

Finally, we do not believe in outsourcing. Globally, even the most sensitive digital work is being outsourced to competent firms. If there are some good companies that can manage issuing driving licences and vehicle registration solutions, outsource the process to them. If there are companies that can manage digital identity for financial purposes—get them on board.

Our taxation system is less complicated than that of our neighbours, and the system is pretty robust given how many points there are of manual intervention. Yes, leakages continue; but for companies that would like to do business in a clean manner, the system is pretty well oiled, and one can manage a good part of one’s tax management without human intervention. Similarly, the passport issuance system has worked well. It could be better, but given the volume handled, it is pretty efficient. We need to learn from what works.

In Rwanda, the entire government to citizen service is through a digital platform Irembo. This has made services efficient as one can pay for everything from passport, driving licence and PCR test to trade fees through this portal. There is no manual intervention anymore. The government of Rwanda is aware of the digital divide; and many of the services can be availed even if one is using a basic phone and does not have a smartphone. To make this service reach its citizens, the government is now introducing a subsidy scheme for people to be able to buy basic versions of smartphones. Unlike in Nepal, where people move back to cash from digital payment after the lockdown ends, in Rwanda, digital payment has proliferated during the pandemic. It is also about the mindset of adoption.

Digital transformation is the only way ahead as we are literally living in two worlds. In one world, we use the most advanced social media platforms, watch content over platforms, use email and other software platforms like any other citizen in the world. We chat on the most advanced platforms that are being updated and improved in real time. We are very good at doing that! However, when it comes to providing services or availing services, we like heritage variety—go manual, avoid digital. This mindset has to change as it is not the challenge of using technology, but about the mindset to make it work for day-to-day stuff also.

If one can get into the intricacies of creating VPN to access pornography or find free sites to watch a game of football or favourite movie, they should be able to manage the system to apply for driving licences online and get it delivered to one’s doorstep.

https://tkpo.st/3xg0YvT

15 Jul 2021
Himal Southasian Permalink

SAARCONOMY AND FREE TRADE

July 15, 2021

The recent meeting of the Commerce Ministers of the SAARC countries and the SAARC Trade Fair culminated in announcements and commitments. SAARC Trade Centres are going to be established and so are Corporate Clubs. The removal of trade barriers has been unanimously brought forward to 2000.

From the time the SAARC organisation was established, such announcements have been a regular feature. In December 1995, tariff cuts were announced by all the seven member countries, but the goods given such preferential treatment comprise less than five percent of the total regional trade.

Each country harps on the need for barriers to go down. But the announced tariff cut on import of chewing gum by Nepal or dental cement by Bangladesh will not boost regional trade. The true test of free trade will be when Pakistan starts importing tea from India and not from Britain.

India is still seen as South Asia´s “shark economy”, and the foundation of true free trade will be laid only when this perception starts being erased. New Delhi has taken the right step by giving most-favoured nation status to Pakistan.

Where the entire region is being strapped by liquidity, why do the governments not allow intra-region investment, wherein a share of a Pakistani company could be traded in Nepal or Sri Lanka? Why should a factory in Bangladesh not be funded by a consortium of Indian and Pakistani banks? Why is it that people in Assam cannot buy Bangladeshi goods and have to pay heavy transportation cost of bringing cargo long distances overland?

The truth is Saarconomy has thrived all along without SAPTA at an unofficial level, where gold is smuggled from Nepal into India, Bombay satta market is backed by financiers from Karachi, and Indian goods find their way into Sri Lanka. Governments need to think about formalising this trade by removing barriers.

The price of deferring this decision is being paid by South Asia´s 1.3 billion people. Freedom cannot come in stages. South Asia is either a free trade zone or not. Cutting tariffs on chewing gum and dental cement is not a start, but stalling.

15 Jul 2021
Himal Southasian Permalink

Black and white money

July 15, 2021

Two months ago, the Hawala took politicians by surprise in India and raised certain fundamental questions regarding the incestuous association between national-level politicians and the businessmen who have been holding the reins of the Indian economy. The Supreme Court´s directives to the Central Bureau of Investigation is the start, hopefully, of a much-needed drive against a rot that everyone knows exists but which has flourished unhindered thus far. The overall economic implications of such a drive is to make the Indian economy more transparent, efficient and productive. To that extent, the decision handed down by the justices is a positive economic step.

If the politics and economies of South Asia were more inter-linked, the repercussions of Hawala would have travelled swiftly to all other capitals. As things stand, however, commentators in each of India´s neighbours seem content to draw parallels and leave it at that. It is clear that none of these polities are ready, as India seems to be, to dip into the cesspool. In Karachi as in Kathmandu, they would rather pinch their noses and look away in a show of distaste.

Fingers have been raised at the prime minister of Pakistan relating to business connections of her husband, the former prime minister of Nepal, Girija Prasad Koirala, is in a tangle relating to the national flag carrier, and Gen Ershad is still fighting cases in Bangladesh for massive fraud. Nowhere, however, have things been as open and relatively transparent as in India, which speaks of a good prognosis. While India as a whole might be lagging on entrepreneurial fire, compared to China, the predictability and quality of its judiciary is one of the things that puts it in good stead versus that other Asian colossus. Hawala will benefit, not harm India in the long run.

The Hawala racket is essentially about the ill-gotten, tax-free, unreported “black money” that exists in abundance in all South Asian countries and practically runs a parallel economy in them. This black money is generated with the blessings of the politicians, who end up feeding in the same trough as partial beneficiaries. Politicians and political parties have always made money by protecting industries during the so-called socialist era, and by pushing MNCs and other bidders in the liberalised era.

Hawala was really a way to finance political expenditure. Something which is an open secret is being pushed behind a Gandhian veil that everyone sees through. It has become necessary to find a means to formalise these expenses. Though state-funded politics would be a dream, contributions to a certain extent should be openly allowed. The underlying understanding behind this idea should be that the cost of black money to the economy is higher than the cost of white money.

15 Jul 2021
Himal Southasian Permalink

What they said at CII

July 15, 2021

The timing of the Confederation of Indian Industry (CII) session on the eve of an election may have ushered a new era as far is acknowledging the role of business and commerce in Indian politics is concerned. Never before had such a jamboree of political leaders taken place in which they were expected to lay out their economic agendas before the captains of industry. Politicians have realised over the years that election manifestos have become a joke and that the influence of business houses is paramount. A hung parliament stares at the politicians and they look forward for the corporate world to bail them out.

The BJP leader Atal Bihari Vajpayee was impressive when he spoke at CII, but the other leaders were clearly uncomfortable in talking brass tacks before businessmen. It was clever of Vajpayee to have harped on the swadeshi plank, defined and adapted for the ears of Indian tycoons. At a time when lots of Indian business houses are succumbing to the onslaught of multinationals, they have found solace in the swadeshi slogan. What is clear is that while former Finance Minister Monmohan Singh has shouted himself hoarse in calling for liberalisation, the large pro-protection lobby of business houses has not gone away. And it is this lobby within the CII, breaking decorum to speak out last month, which might define how the reform process in India is going to unfold.

The coming five years shall determine whether or not India will become an economic superpower on the basis of its reforms, and how soon the government can get out of running business and industry. It is clear that reforms will not take place at the pace that Mr Singh generated these last five years. Since other economies in South Asia have keenly followed, and emulated, the Indian experiment with liberalisation in varying degrees, reforms in the other countries will also definitely slow down. Hence, can we see a South Asian deceleration, which will leave it as a whole even further behind the Chinese and the Asian tigers?

While referring to the CII meet, I must note with some chagrin that not one political party saw it necessary to focus on the regional economy —meaning South Asia´s economy as a whole. While India might have remained, and wants to remain, insular, market forces are bound to force it to look at economic relationships with Bangladesh, Sri Lanka, Nepal and—on a different plane—Pakistan. When the entire world is busy forming trade blocs, the delay in doing so in South Asia may be detrimental to the regional countries, although it is true that this insularity will affect the smaller economies like Bangladesh or Nepal than the larger two.

The bull run started by the FIIs on the eve of an election shows healthy signs as far as their trust in the Indian economy is concerned and reiterates the de-linking of politics, human rights and economic issues that is visible in the case of China. This clearly indicates that, slowly but definitely, economic agendas, and other ´non-political´ issues are having more of a role in the Indian politics than before. Perhaps the time will come when the politicos will also deign to look at neighbouring economies. Is the new government in Delhi listening?