NEPAL'S PEOPLE ARE ITS STRENGTH

Rakesh Wadhwa

If you pick up any newspaper on any day there is a good chance that you will read about Nepal's and the World's population explosion and the problems caused by it. On July 12th and 13th, various newspapers, including the Kathmandu Post, Rising Nepal and Space Time carried articles on the subject. This followed the World Population Day on July 11, when countries across the globe sought to build national and international coalitions to further their programs designed to limit population.

Unfortunately too many of us believe the canard that the world would have been a better place if you and I had not been born; notwithstanding all evidence to the contrary.

If population is the problem then why do we want to stay in densely populated cities? Why do people from Nepal's remote villages come to Kathmandu? It is only in big cities that offer opportunities of specialization and division of labor. If computers are your interest, are you more likely to find a job that you like in Kathmandu, or in Lukla? The story around the world is the same. Urban areas are rich and offer opportunities not available elsewhere.

If population is the problem then how come some of the richest nations are also some of the most densely populated? Nepal has a population density of 166 persons per sq. km. Singapore and Hong Kong have population densities 30 and 40 times greater than that of Nepal. That did not stop them from creating immense wealth. In fact, it is highly doubtful, that these small territories would have been as successful if they had significantly lower populations.

Is then the rate of growth of population in Nepal the problem? No. Hong Kong’s population grew from 7 lakh in 1945 to 5.6m in 1987, faster labour force-growth rate than any other country. Yet during the same period per capita income also dramatically rose. If Nepal's population was to more than double to 60 million from its present 23.5 million it would still not be as crowded as even the Netherlands or Korea is today.

What about unemployment? Are people in Nepal to be chronically underemployed and unemployed? Well, again the population is not the problem here. Isn't there enough to be done in Nepal? Don't we have roads to build, hospitals to construct, schools to establish? The citizens of Nepal should enjoy a transport, an educational, and a healthcare system which the people of the West and many Asian countries take for granted. All that Nepal is lacking is a system whereby its people come together and work towards providing these services so desperately needed by them.

What about overcrowding, congestion and shortages that we see daily in Kathmandu? Again, let us look closely. Scarcity and congestion prevail only where government monopolies limit the provision of services: there are traffic jams on government roads, yet no shortage of privately supplied vehicles; congested arrival and departure lounges at Kathmandu airport, but no shortage of domestic private airlines; shortages of government supplied water, but no shortage of private companies selling mineral water or private water trucks valiantly trying to alleviate a problem caused by the government. In fact private companies are suffering from lack of demand; everywhere you look there is overcapacity - hotels going empty, shopkeepers not having enough customers, cars not selling fast enough.

A few years ago the Indian government was complaining of resource shortage as a reason for waiting periods of over 7 years for government supplied telephone connections. When same responsibility was transferred to private companies, connections became cheaper and the waiting period disappeared. This happened even as the government collected thousands of crores in license fees and taxes from telecom companies. The Private sector does not face problems of 'excess' demand and 'excess' population. That complaint is only made by governments around the world. Nepal is no exception.

You, the people of Nepal, are its strength - the ultimate resource of the country. There is no problem here that a dose of smaller government, lesser regulations, lower taxes, freer trade, stronger property rights, rule of law and complete convertibility of the rupee will not set right.

If the government would remove bottlenecks, controls and regulations that hamper both domestic and foreign investment, Nepal would see an economic boom wiping out poverty and unemployment in a decade.

Economic freedom is what Nepal needs. In my last article 'Why Nepal is Poor' I pointed out that Nepal ranked 108 in the '2002 Index of Economic Freedom'. If Nepal liberalizes and takes it's ranking into the top 5, it would be rich and the Nepalese will enjoy a future and a standard of living which could be the envy of the world.

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