Guilty Nepalis in miniskirts

Posted on 23 May 2012 by NepaliKuire

Watching Nepal change over the past decade has been like seeing the West throughout a century.

NEPAL: Women demand end to sexual harassment

KATHMANDU, 23 May 2012 (IRIN) – Sexual harassment is an everyday issue for women in Nepal, particularly in urban areas. Although exact numbers are unavailable, activists say the problem is on the rise and are demanding change.

“Harassment is all over Nepal against women and the problem is big. It’s more of a problem where more people live, but it really is everywhere, and it is growing,” said Pratiya Rana, 22, a university student, and a volunteer and participant, in the country’s recent “Walk for Respect” demonstration, the Nepali version of Toronto’s SlutWalk, the international protest movement.

Rana was harassed by a gang of local men in a village an hour from the capital, Kathmandu. “They pushed and shoved me and one man grabbed my breasts and asked me for sex,” she told IRIN.

Women dressed in short skirts and leggings carried signs demanding change toward sexual harassment in public spaces and in the workplace.

“The country is in two worlds – young and old – and we young women want change. We demand the government protect the rights of women,” Rana said.

This will prove difficult in Nepal, a male-dominated, patriarchal society of 30 million where there is no real legislation to protect women, gender divisions are traditionally rigid and female empowerment initiatives are limited.

In April, around 500 women and men marched through central Kathmandu to publicize the rights of women. Their goals, published in a statement, were “to sensitize the greater problem among youths as well as other people, [of] teasing and sexual harassment”.

The women talked of verbal harassment, being solicited for sex, groping, pushing, and sexual violence, including rape.

They also called for greater awareness of the few existing laws and policies to protect women, citing the Nepal Public Offences and Penalties Act of 1970, which says that “any activities or action that carries in it a sexual nature both verbally or physically” is harassment. The penalty is a US$120 fine and sometimes jail, but the legislation is rarely enforced.

A new bill, proposed in 2012, which states that perpetrators of sexual harassment in the workplace could face up to three months in jail and a fine of nearly $300, is waiting to be discussed by lawmakers.

Nepal has yet to agree on a new constitution and with a 27 May deadline fast approaching – the 5th to date – many believe it will be some time before the bill on sexual harassment in the workplace is passed.

“I think people will see this [workplace legislation] as minor and it will be pushed back until we have new elections, and who knows when those will be,” said Rana.

Commentators say even with new legislation convictions will prove difficult. Many legislators in the Himalayan nation blame the growing sexual harassment problem on women and what they are wearing.

“If one wears vulgar dresses and appears unnatural and gets stared at by people around, who is to be held guilty?” lawmaker Sunil Prajapati asked in response to a question about the bill.

“First, they attract and excite others, and then if comments are passed they call it sexual harassment – it is not fair. The outfits and behaviour the society cannot digest should also be considered punishable,” he argued in a speech in parliament.

Female lawmakers who give credence to the idea that what a woman wears is a matter of debate, makes things worse for women, said Rana.

“What if we are wearing short skirts and no leggings? Does that mean we can be groped, touched and violated? This is ridiculous thinking, and something that should not even be discussed,” she said.

Lawmaker Yashoda Subedi noted the importance of greater public awareness and said she believes a middle ground can be achieved in order to create legislation against the perpetrators of sexual harassment.

“We must be aware of what we are wearing, and Nepali society is not the West. I understand this,” Subedi said. “But at the same time, if a woman is dressed inappropriately, words from people on the street and stares are not something she should get angry at.”

From IRIN >

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SAARC: ineffective? Or is India just too powerful?

Posted on 14 May 2012 by NepaliKuire

SAARC: Ineffective in Promoting Economic Cooperation in South Asia

BY RAGHAV THAPAR

Since its creation in December 1985, the South Asian Association for Regional Cooperation (SAARC) has sought to increase economic unity between India, Pakistan, Bangladesh, Nepal, Bhutan, Sri Lanka and the Maldives. While the organization was designed to improve both the economic and social progress of its member states, most scholars have focused on SAARC’s ability to promote economic cooperation among its members.1 South Asian scholars have attempted to compare SAARC efforts to increase economic cooperation with those of other regional trading bodies such as the European Union and Association of South East Asian Nations (ASEAN).

Unlike the EU or ASEAN, however, trade between the seven SAARC states has remained limited despite the fact that all are located within a close proximity of one another and all are part of the World Trade Organization (WTO). A growing emphasis on attracting foreign investment and seeking access to new markets in SAARC states indicates that economic progress is central to the future of South Asia. SAARC, however, is likely to play only a limited role in that future because of India’s considerable position of power over the other SAARC states. This imbalance of power within SAARC allows conflicts between India and its neighbors to undermine organizational unity. Clashes between South Asian countries end up jeopardizing the creation and effectiveness of regional trade agreements. They also lead individual SAARC countries to advance their economic interests through bi-lateral agreements, reducing the incentive to engage in multi-laterally. In the future, it seems likely that SAARC will act more as a forum to encourage regional discussion through conferences and seminars than as an architect for economic policy in South Asia.

This paper will first analyze the growing importance of trade relations among South Asian states. It then discusses SAARC’s historical problems with cooperation and how bi-lateral deals between member states have undermined the organization as a whole. Finally, it examines SAARC’s role as a mediating agency and forum for discussion among South Asian leaders.

Newfound Focus on Economic Growth in South Asia

Over the last thirteen years, the Indian government has increased its focus on economic development. Since 1991, when a debt crisis forced it to undertake a serious program of market oriented economic reform, India has gradually opened up its economy to the world. Over the time India has moved from a closed economy with heavy central planning to a more privatized economy with lower tariffs. This reform resulted in a seven percent growth rate for the economy from 1994-1997.2 Foreign investment in India also increased from $68 million in 1991 to $5 billion from 1996-97.3 To sustain this growth, New Delhi has sought access to new markets and an increase in foreign investment. India’s foreign policy has reflected the importance of these economic goals. India is increasing border trade with China and is seeking to establish trade relations with the Association of South East Asian Nations (ASEAN).4 New Delhi has placed a serious emphasis on turning India into an economic power. India is expected to become the world’s 4 th largest economy (in terms of purchasing power parity).5 It is unlikely that this emphasis on economic development will diminish in the near future. The movement to market economics in 1991 brought “irreversible” changes in India’s economic thinking—changes that will force India to constantly remain active in the global economy.6 The majority of Indian leaders, irrespective of their political parties, believe that globalization and privatization are necessary for India to reduce its mass poverty.7 This has resulted in the gradual reduction of tariffs and other trade barriers over the past decade and a half. However, India is not the only state in South Asia seeking to expand its presence in new markets.

Other SAARC states are also seeking to enhance their trade relations across the globe. India’s chief political rival, Pakistan, is openly seeking new markets and increased aid from countries in the European Union (EU) and Japan.8 It has also struggled to expand trade into Central Asia because of stiff competition from Japan, the EU and Russia. Nepal and Sri Lanka, both reliant on the Indian economy as a supplier and market for goods, would like to increase intra regional trade and foreign investment in its developing industries. Similarly, Bangladesh is also looking for new markets to export goods.9 Since a desire to expand trade in South Asia exists among the majority of SAARC nations, one would assume that SAARC would receive more attention from South Asian states.

Cooperation Troubles

SAARC is structured in a way that often makes regional cooperation difficult. Thomas Thornton argues that in regional organizations it is difficult for “countries to establish balanced relations when one has a significant advantage in power over the other states.”10 In the case of SAARC, India is the most powerful country in terms of its economic might, military power and international influence. Thus, India’s potential as a regional hegemon gives SAARC a unique dynamic compared to an organization such as ASEAN.11 Pakistan was initially reluctant to join SAARC due to fears of SAARC succumbing to Indian hegemony. Indeed, if India does take a prominent role in SAARC, it could further fears that India will use SAARC for hegemonic purposes.12While the smaller states in South Asia recognize that they will need India’s help to facilitate faster economic growth, they are reluctant to work with India, fearing that such cooperation will admit Indian dominance in SAARC.13

Aside from a few overtures to its neighbors, India has done little to allay the fears of other South Asian states. The core of these fears is likely derived from the displays of India’s power by New Delhi in the past. Realizing its considerable advantage in military and economic power, India has consistently acted in an “arrogant and uncompromising” manner with its neighbors.14 Bangladesh is afraid of India exploiting its geographical position to redirect water flows vital to Bangladeshi agricultural production. Nepal and Bhutan are still worried about India’s control over their world trade and transit links as their geographical position will always make them dependent on India.15 These disputes between India and its neighbors have directly affected SAARC.

Namely, disputes between South Asian states have undermined SAARC efforts to promote regional trade. These disagreements make consensus building and cooperation among SAARC states complicated. Attempting to promote regional cooperation while doing little to resolve regional conflicts makes SAARC’s mission looks nearly impossible.16 Moreover, SAARC has no institutional mechanisms or punishments capable of preventing or fully resolving a dispute. Two examples illustrate how conflicts in South Asia have proven detrimental to SAARC.

The first involves Indian intervention in Sri Lanka from 1986-1990. The Indian military intervention to put down an insurgency by The Liberation Tigers of Tamil Eelam made Indo-Sri Lankan relations tense during these four years. Subsequently, the apprehension between India and Sri Lanka was considered a primary reason behind Sri Lanka’s “lukewarm” support for SAARC into economic and social spheres of its member states until relations improved with India.17

A second, more prominent example of a conflict derailing SAARC progress is the Indo-Pakistani conflict. Pakistan has demanded a resolution to its dispute with India over the Kashmir Valley before discussing trade relations with New Delhi. Pakistan has enforced this policy by violating WTO regulation for failing to confer Most Favored Nation (MFN) status on India.

India has recently attempted to improve its relationship with the rest of South Asia. Under the Gujral Doctrine established by former Indian Prime Minister I.K Gujral, India signed a 30-year water sharing treaty with Bangladesh and a trade and transit treaty with Nepal. India also joined a sub regional group within SAARC comprising of Bangladesh, Bhutan, Nepal and India.18 Despite political impediments to trade, value of goods smuggled from India to Pakistan via a third party generally totals 250-500 million per year. 19 If trade between the states was opened, Pakistan would receive cheaper imports due to lower transport costs and the absence of payments to a middleman. This implies that there is potential for lucrative trade between India and Pakistan. Moreover, if these two states, arguably the largest powers in SAARC, pushed for economic cooperation, it is likely that other states will follow their lead. Therefore, it is not surprising that the Indo-Pakistani dispute over Kashmir is considered a primary cause of SAARC’s impotence.20

Due to these conflicts, the desire for South Asian states to trade with one another has been limited. By squelching trade between South Asian states, the disagreements between India and its neighbors have limited the effectiveness of SAARC trading initiatives. The South Asian Preferential Trading Agreement (SAPTA) signed in December 1995 had SAARC countries reduce tariffs in certain economic areas to promote intra regional trade. The proposal was initially met with enthusiasm as India agreed to reduce tariffs in 106 of the 226 fields recommended by SAARC and Pakistan agreed to concessions in 35 fields. This statistic emphasizes a trend in SAARC— India seems gung ho about intra regional cooperation. In 1995, when SAPTA was being implemented, only 3 percent of all South Asian trade was conducted in the region.21 Six years later, the improvements seen in regional trade have been marginal. India’s trade within South Asia accounts for only 4 percent of its total global trade and Pakistan’s trade in the region accounts for merely 3 percent of its overall trade.22 Compared to other countries with similar proximities and income levels, intra regional trade among SAARC states is relatively small.23 Much of the trade that is conducted in South Asia is also considered symbolic and generally does not involve goods vital to the economies of the South Asian states.24 Moreover, some states still have high tariff and non-tariff barriers to trade, indicating that the spirit of free trade does not seem alive in SAARC.25 However, SAARC is trying to remedy this problem.

SAARC hopes that the establishment of a South Asian Free Trade Area (SAFTA) by January 1, 2006 will stimulate trade in the region. However, the agreement to establish this free trade zone will take 10 years of gradual tariff reduction.26 For a proposal that has already been delayed, it will take some genuine political cooperation for the tariff reduction process to run smoothly.27 Judging from the experience of ASEAN, an organization with a better track record in producing economic coordination among member states than SAARC, creating a free trade zone could become difficult. The ASEAN free trade agreement (AFTA) has been criticized for not producing substantial economic interdependence among the region. This lack of success results from distrust and protectionism among its member states.28 If SAFTA is implemented, its success will depend on the resolution of conflicts between South Asian states—something which seems unlikely in the future.

A Bi-lateral Alternative

To counter SAARC’s ineffectiveness, individual states have used bi-lateral agreements to advance their economic interests. Due to their conflicts, it is not surprising that trade between India and Pakistan has only occurred through the smuggling of goods by a third party, usually Dubai. However, Pakistan and Bangladesh maintained relatively lucrative trade relations with one another in the 1980’s. Approximately 60 percent of Bangladesh’s exports during this decade went to Pakistan.29 Bangladesh also saw an upswing in bi-lateral trade with India during the 1990’s. While the trade between India and Bangladesh was characterized by a significant trade gap, over $1 billion in goods a year went back and forth between these states. India also signed an agreement with Nepal in December of 1996 that allowed Nepal duty free access to the Indian market.30 Moreover, on April 1, 1995, India reduced customs on goods imported from Sri Lanka. Therefore, bi-lateral, not multi-lateral, agreements have facilitated much of the trade that does occur in South Asia.

The existence of these bi-lateral agreements is significant for three reasons. First, the increase of bi-lateral agreements in South Asia shows that states are not dependent on SAARC to achieve their economic objectives. Therefore, SAARC’s importance in the future will likely diminish in the eyes of its member states. Second, a focus on bi-lateral negotiations shifts attention away from the region and onto individual countries. In the future, states are more likely pursue bi-lateral agreements where they have to negotiate with only one country instead seeking multi-lateral deals, where they have to negotiate with seven countries. Therefore, states will lack an incentive to pursue their economic interests through SAARC. Third, the growth in bi-lateral trade agreements between South Asian states highlights the priority states are giving to their own self-interests at the expense regional economic cooperation. Thus, it seems as if economic regional cooperation is not a high priority for SAARC member states. So, if SAARC has not met the economic needs of its states, does it have a role in the future of South Asia?

Another Role for SAARC

SAARC does face some serious problems but could still play a useful role in South Asia. It is important to point out that SAARC does face some serious obstacles to success. The organization is facing a serious resource crunch and the SAARC countries have shown little willingness to increase their contributions to the association. Moreover, SAARC must battle the public perception it is more a figurehead of South Asian unity than an actual facilitator of regional cooperation. SAARC has been criticized by the public for only reaching agreements on the lowest level of cooperation among states instead of pushing for cooperation that would actually benefit South Asia. The SAARC conventions on drug trafficking and terrorism have also been criticized for not producing substantial results. Most of SAARC’s noteworthy achievements have only been found “on paper.”31 Thus, it does not become surprising when the British based Economist magazine ponders whether SAARC should be put “out of its misery.”32

Despite these obstacles, SAARC can still play an important communicative role in South Asia. It can serve as a forum for South Asian leaders to discuss security concerns in South Asia on a regular basis and as an outlet for South Asian countries to communicate with other regional economic blocks. While SAARC cannot force its member states to trade with one another, it does make them interact. It provides a neutral forum for leaders to talk and sets a consistent time frame for these meetings to occur. It does not force them to sign any agreements or commit to policies; it allows them simply to discuss matters of regional security. Given the poor communication between South Asian leaders, this is not an insignificant role. SAARC has already shown in the past that it is useful in promoting dialogue among South Asian leaders.

Informal talks between Indian and Pakistani Prime Ministers at the second SAARC summit in 1986 led to the diffusion of tension between the two countries on the issue of India’s Brasstacks exercise.33 In January 2004, conciliatory talks between India and Pakistan were sparked by an upcoming SAARC conference.34 A breakthrough between Indian and Pakistani diplomats actually occurred at the conference.35 While the dialogue has yet to produce tangible results, the experiences indicate that SAARC can help promote political cooperation and serve as a forum for communication among South Asian leaders. Since political conflicts are a primary cause of SAARC’s inability to foster cooperation among its members, serving as a forum to alleviate those problems could in turn aid efforts to improve economic integration in the future.

Conclusion

In essence, the growing movement of emphasis on economic development in foreign policy is changing the priorities of South Asian states. South Asian countries are emphasizing the importance of access to open markets and increasing foreign investment in their businesses. It seems likely then that economic growth and development will be central to the future of the South Asian state. However, whether growth and development occurs because of economic cooperation in the region is another question. Currently, trade between South Asian states remains relatively low when compared to other regional blocks. Moreover, political and economic ties between states rest on shaky foundations. Divisions among South Asian countries have made regional cooperation difficult and have lead states to pursue their economic goals bi-laterally. SAARC is still a valuable forum for political dialogue in South Asia, but its economic role in the region has been mitigated by conflict and tension among its member states. Until these conflicts are resolved to the point where South Asian states are willing to reduce barriers to trade, it seems as if the vision of an economic interdependent South Asia is more of a dream than reality.

Author byline—

ENDNOTES

1     SAARC homepage http://www.saarc-sec.org/main.php. SAARC has expanded its role to address significant issues impacting South Asia such as Agriculture, Biotech, Communication and Media, Energy, Environment, Human Resources, Poverty, Legal problems and Tourism.

2     Bhabani Gupta, “ India in the Twenty-First Century”, International Affairs vol 73, no2, (April 1997) p. 297

3     Ibid p. 302

4     “Every man for himself,” The Economist. Oct. 31, 2002 p. 14

5     Gupta, “ India”, p. 205

6     Howard Schaffer and Teresita Schaffer, “Better Neighbours? India and South Asian Regional Politics”, SAISReview, (Winter – Spring 1998) p. 120

7     Gupta p. 314

8     J N Dixit, External Affairs: Cross-Border Relations, ( New Delhi: Roli Books, 2003). p. 38

9     Kishore Dash, “The Political Economy of Regional Cooperation in South Asia”, Pacific Affairs vol 69, no 2 (Summer 1996) p. 196

10     , Thomas P Thornton, “Regional Organizations in Conflict Management”, Annals of the American Academy of Political and Social Science Vol 518, (Nov 1991), p. 135

11     Ibid p. 136. The countries of ASEAN are all relatively evenly matched in their geographic size, economic strength and military power. While there are disparities among ASEAN states in some of these areas, they are not nearly as drastic as those between India and other South Asian states.

12     Dash, “The Political Economy”, p. 192

13     Ananya Mukherjee Reed, “Regionalization in South Asia: Theory and Praxis”, Pacific Affairs, vol 70, no 2, (summer 1997) p. 246

14     Schaffer and Schaffer, “Better Neighbours”, p. 111

15     Schaffer and Schaffer, “Better Neighbours”, p. 111

16     Reed, “Regionalization”, p. 244

17     Dash, “Political Economy”, p. 201

18     Gupta, “ India”, p. 310

19     Sankar Ghosh and Somen Mukherji, Emerging South Asian Order: Hopes and Concerns, (Calcutta: Media South Asia, 1995), p. 197

20     “The Unmagnificent Seven,” The Economist Online, <http://www.economist.com/displaystory.cfm?story_id=954547 > ( Jan. 24, 2002).

21     , Ghosh and Mukherji, “Emerging South Asian Order”, p. 147

22     “The Unmagnificent Seven.”

23     Panagariya, Arvind, “ South Asia: Does Preferential Trade Liberalization make sense?”

http://www.columbia.edu/~ap2231/Policy%20Papers/Saarc-wb.pdf

24     “The Unmagnificent Seven”

25     Dash, “Political Economy”, p. 204

26    SAARC website, <http://www.saarc-sec.org/main.php?t=2.1.6>

27     According to Schaffer and Schaffer, SAFTA was supposed to come into existence in 2001. The Economistarticle, “The Unmagnificent Seven” also pointed out that the implementation of SAFTA has been rapidly delayed.

28     “More Effort Needed,” The Economist Online,

http://www.economist.com/displaystory.cfm?story_id=2968833> ( July 29, 2004), p. 25

29     Dash, “Political Economy”, p. 196

30     Dixit, “External Affairs”, p. 111

31     Dash, “Political Economy”, p. 188

32     “The Unmagnificent Seven”

33     Dash, “Political Economy”, p. 189

34     “Back to jaw-jaw,” The Economist Online,

< http://www.economist.com/displaystory.cfm?story_id=2335771> ( Jan 8, 2004)

35     “Giving peace a chance,” The Economist Online

<http://economist.com/displaystory.cfm?story_id=2423053> ( Feb. 15, 2004)

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Foreign direct investment in Nepal

Posted on 14 May 2012 by NepaliKuire

Foreign investment in a least developed country: the Nepalese experience

This article aims to contribute to the literature on the developmental role of foreign direct investment (FDI) through an examination of the Nepalese experience. Despite significant liberalization of the foreign investment regime and the introduction of attractive investment incentives, Nepal’s achievements, both in terms of the volume of FDI and its developmental impact, failed to match national expectations. Nepal obviously has intrinsic disadvantages arising from its geography and other typographical characteristics in attracting FDI. However, comparable international experience suggests that her lacklustre achievements as a host to foreign investors cannot be explained in terms of these factors alone. Policies that underpin the overall investment climate also seem to matter. Mere liberalization of the investment regime and the introduction of financial incentives are not substitutes for an all-encompassing effort to improve the investment climate.

Key words: foreign direct investment, liberalization, landlocked country, LDCs, Asia, Nepal

1. Introduction

The past two decades have witnessed a profound shift in the policy emphasis on foreign direct investment (FDI) in developing countries. In a significant departure from the scepticism about the developmental role of FDI, which pervaded policy thinking for over three decades during the post-war era, more and more countries have become increasingly receptive to FDI as an integral element of outward-oriented policy reform. Despite this notable policy shift, the literature on the role of FDI in developing countries still remains both sparse and skewed. The few existing studies have focused almost exclusively on the experience of the middle- and upper-middle income developing countries, in particular the high-performing countries in East Asia. Policy inferences coming from this literature are of limited value for late-comers, because the role of FD! varies across countries depending on their stage in the internationalization of the economy, the nature and timing of policy shifts as well as the initial conditions of the host country, such as the degree of industrial and entrepreneurial development. This article aims to redress this imbalance in the literature by examining the patterns of FDI in Nepal, following the market-oriented policy reforms initiated in the mid-1980s. (1) Nepal provides a particularly interesting case study of the subject, not only because of its least developed country (LDC) status, but also because of its geography, characterized by being landlocked and having a long open border with a large neighbour, India. (2)

The article is structured as follows. Section two provides an analytical account of the nature, determinants and developmental implications of FDI in late-comer countries in order to place the Nepalese experience in context. An overview of the foreign investment regime in Nepal is provided in section three. Section four examines trends and patterns of FDI during 1988-2001, while developmental implications of FD! are discussed in section five. The key findings are summarized in the concluding section.

2. Analytical context

FDI originates from the decision of a transnational corporation (TNC) to locate or relocate part of its activities in a selected host country. This decision is underpinned by the desire to exploit its specific advantages (in the form of technology, managerial expertise, marketing know-how, etc.). Although countries do offer financial incentives and various concessions to attract such investment, they are thought to be relevant to TNCs’ decision making only if the general business environment is conducive for making profit (Wells and Allen, 2001; Caves, 1996).

Assuming that a favourable investment environment exists, what are the characteristics that determine a country’s comparative advantage in international production? In answering this question, it is important to emphasize that FDI is not a homogeneous phenomenon, but a complicated and finely differentiated means of globalizing production. For the purpose of discussing factors influencing TNCs’ location decisions, it is important to distinguish three categories of foreign affiliates in terms of their operations in a host country. These are: producers largely engaged in serving the host-country market (market-seeking investors); firms involved in the extraction and processing of natural resources, both for selling in the host-country market and exporting (resource-seeking investors); and those engaged in production for the global market (efficiency-seeking investors).

When it comes to market-seeking investment in developing countries, the factors explaining the location decisions of TNCs are similar to those explaining their presence in industrialized countries. They depend primarily on the existence of production opportunities for meeting demand in the host country. Given the economy of scale considerations and relatively small markets in many developing countries, one of the key determinants of FDI in developing countries is the restrictions on international trade, which makes locating production in the host country the only available option for accessing its markets. Artificially high domestic prices under stringent trade protection usually ensure profits even if the domestic cost of production is higher than it would be under free trade. Under certain circumstances, foreign affiliates that are originally set up to serve local markets could subsequently develop competitive advantage and penetrate markets in other countries. But such cases are rare and limited predominantly, if not solely, to middle-income and upper-middle-income developing countries with sizeable host-country markets.

For a typical developing economy, labour-intensive, consumer goods manufacturing is generally considered to be the natural starting point in the process of export-led industrialization. (3) While the availability of cheap and trainable labour is a prerequisite for attracting export-oriented FDI, the availability of a wider array of complementary inputs, including operator, technical and managerial skills, suppliers of intermediate goods, and high-quality infrastructure, are also essential. Also, given the large initial fixed costs involved, TNCs would be reluctant to establish assembly plants in a country without having confidence in the policy continuity and political stability of that country. For these reasons, so far, only a limited number of developing countries, mostly the high-performing East Asian countries and more recently some transition economies in Eastern Europe, have been able to attract FDI in assembly operations. The so-called “life- cycle” investors who expand their production networks globally, largely on scale-economy and efficiency considerations, rarely find low-income countries attractive locations for investment.

Based on the above typology of FDI, what are the opportunities available for Nepal in attracting FDI? Nepal does not possess mineral resources to attract resource-seeking FDI. Her ability to attract market-seeking FDI is also limited given the size of the domestic market. Enticing market-seeking FDI through erecting tariff barriers is not considered an option, because of the general shift in overall development policy towards greater outward-orientation. In the area of export-oriented, efficiency-seeking FDI, Nepal is not an attractive location for assembly manufacturing for vertically integrated global industries. Therefore, Nepal’s opportunities for attracting FDI are basically limited to labour-intensive consumer goods production and tourism.

High transport costs arising from its unique geography is obviously a significant constraint faced by Nepal and put it at a disadvantage compared to many other low-wage countries in attracting export-oriented FDI. Apart from the long distance to Indian ports (the port of Calcutta is about 1,000 kilometres away by the shortest route), inefficiencies of the Indian railways and ports add to the cost of transport for potential exporters from Nepal. It is also alleged that shipments from Nepal are given low priorities at the highly congested Indian ports. (4) However, focusing on high transport costs per se can lead to misleading inferences for Nepal’s potential in labour-intensive export industries for two reasons. First, the relative cost advantage of Nepal arising from low wages (less than $20 per month for the average factory worker) may, in certain cases, outweigh the relative disadvantage arising from high costs of transport. Second, landlocked economies, such as Nepal, can choose to specialize in “low weight per unit value” products, provided, of course, the overall economic environment is conducive for the production for such products (Srinivasan, 1986). Moreover, it is important to note that adverse cost implications arising from landlessness can be minimized through suitable government policy in the areas of land and air transport, andcustoms administration (Bagchi, 1998).

3. Foreign investment regime and investment climate in Nepal

After pursuing an inward-looking development strategy for over three decades, Nepal embarked on outward-oriented policy reforms in the mid-1980s. The Industrial Policy and Industrial Enterprise Act, promulgated in 1987 (Government of Nepal, 1987), marked the beginning of Nepal’s attempt to attract FDI. The Act provided a legal framework for facilitating FDI in medium and large-scale ventures in every industry with the exception of environment and defence-related activities. The Act contained a new set of incentives that were similar to–or even more attractive than–those in other developing countries. For instance, full remittance of profits from FDI ventures in convertible currency was permitted and employment of foreign workers was allowed if domestic workers were not available. A five-year tax holiday was introduced for export-oriented projects.

The democratic government that came into power in 1990 re-emphasized the importance of FDI and technology transfer in the country’s development process. In 1991, the tax holiday period was extended to ten years for investments in national priority activities, which were defined to include industries producing goods that meet basic needs (such as food, clothing and housing and so forth), export promotion activities (where exports are 50% or more of total sales) and hotels and tourist projects. The Foreign Investment and Technology Transfer Act of 1992 opened up foreign investment in all industries except in defence, cigarettes, bidis and alcohol and, 100% foreign ownership was permitted. The development of hydropower was also opened up to foreign investment. The Act guaranteed 100% repatriation of equity, dividends and the payment of principal and interest on foreign loans in convertible currencies.

Under the Foreign Investment and Technology Transfer Act of 1992, the approval and licensing procedures were simplified with a view to approving investment applications within a stipulated time period of 30 days following the receipt of the application. A One-window Committee was set up at the Ministry of Industries to take charge of the provision of all institutional facilities and services (infrastructure-related and other) under one roof. As part of the FDI policy, the Government of Nepal has entered into investment protection agreements with France, Germany and the United Kingdom. Agreements for avoiding double taxation have been signed with India, Norway and Thailand. Regarding the settlement of foreign investment related disputes, the law has made explicit the provisions for arbitration within the framework of the United Nation’s Commission for International Law. The Foreign Investment and Technology Transfer Act of 1992 contained a ban on the entry of FDI into cottage industries and projects with fixed assets amounting to less than 20 million Nepalese rupees.

Recent changes in the foreign investment law include abolishing tax holidays (by the first amendment to the Foreign Investment and Technology Transfer Act in 1997) and the reduction of the corporate tax rate for domestic market-oriented manufacturing and services to 20%. Export-oriented ventures have the option of either paying corporate tax at the rate of 0.5% of export value (fob) or 8% of profits. A 5% tax was introduced on profits remitted by foreign firms in the 1999/2000 Budget. However, this new tax, introduced because of balance-of-payments exigencies, is at odds with the Government’s commitment to promote foreign investment. The key elements of the Nepalese FDI policy are compared with those of the other countries in South Asia in table 1.

It is evident that, in general, the Nepalese policy regime compares very favourably with other developing countries. However, it is important to note two peculiarities in the Nepalese regime. First, after the 1997 amendment to the Foreign Investment Act, Nepal does not offer tax holiday for foreign investment projects. Second, Nepal has not set up export processing zones (EPZs) as a means of promoting export-oriented FDI. The Nepalese authorities are of the view that there is little need for EPZs given the significant reduction of import tariffs in recent years and the existence of the wide-ranging import duty rebate scheme.

There is no doubt that Nepal has gone a long way in liberalizing its investment regime. However, very few reforms have taken place in factor markets, in particular the labour market. For example, under the Labour Act of 1992, firing a worker is extremely difficult and costly. Electricity distribution is still regulated by the State-own enterprises, namely, the Nepal Electricity Authority, which suffers from inefficiency and poor management. Despite having a considerable potential for producing hydroelectricity, the country suffers from chronic shortages of electricity. In the late 1990s, on average, almost half of the production capacity in manufacturing remained unutilized due to the shortage of electricity. While some progress has been made over the years in developing the transport networks, many parts of the country are still not connected with major cities. Also, there are very few flight connections between the capital, Kathmandu, and places of tourist attraction. The eruption of civil war in the mid-1990s has slowed down the pace of reforms (Sharma, 2006). Many foreign firms have ceased their operations or indefinitely postponed implementation of newly approved projects as the security situation deteriorated rapidly.

4. FDI: trends and patterns

During the period 1988-2001, the Foreign Investment Board approved a total of 721 projects. Total capital commitment of these projects amounted to $1.15 billion (65 billion Nepalese rupees) of which 26.3% came in the form of capital contributions by the foreign partners of the projects. It was envisaged that these investments would generate a total of 86,425 jobs (table 2). The number of foreign investment approvals showed a steady increase from 1988 to 1996, with the exception of 1994 when there was a temporary dip due to uncertainty in the political climate (with the formation of the short-lived Communist government). Since 1997, the pattern of foreign investment approvals has been erratic, with all years except 2000 recording a decline compared to the levels in the mid-1990.

Only about 37% of the FDI projects approved during the period 1988-2001 were actually implemented (table 2). While it is a universal pattern across all developing countries that a significant number of FDI projects never reach the implementation stage, the Nepalese realization rate is exceptionally low in comparison to other developing countries in Asia. For instance, the realization rates in Malaysia, Sri Lanka and Vietnam (for varying periods during the decades of the 1980s and the 1990s) are estimated at 80%, 75% and 70% (Athukorala and Menon, 1996; Athukorala and Rajapatirana, 2000; Kokko and Zejan, 1996).

As discussed earlier, Nepal now allows full foreign ownership with the exception of a few industries such as cigarettes, bidis and alcohol. Despite this openness, the share of foreign capital in total approved investments during the period 1988-2001 averaged a mere 26.3%, with the share in annual approvals varying in the range of 8% to 54%. Compared to the experience of other developing countries, the apparent inclination of foreign investors to settle for partial, mostly minority, ownership, perhaps, points to the unsettled nature of the investment environment in the country.

Table 3 places Nepal’s performance in attracting FDI in an international perspective. Among South Asian countries, Nepal’s performance, both in term of the volume and the trends in FDI inflows is superior only to Bhutan. As already noted, Nepal is relatively disadvantaged in attracting FDI because of being landlocked. But, even in comparison with other landlocked LDCs for which data are available, Nepal turns out to be a below-average performer. While it is not possible to draw firm inferences from a simple inter-country comparison, the data reported in the table do suggest that Nepal’s poor record in attracting FDI cannot be explained solely in terms of constraints arising from being landlocked.. While it is not possible to come up with hard empirical evidence, political instability, policy uncertainly and the slow pace of reform appear to have contributed to Nepal’s inability to attract FDI.

The geographic origin of FDI in Nepal is characterized by a clear developing-country bias (table 4). Among the developing-country investors, India has been by far the largest investor in Nepal. Of the total number of approved projects, 249 are of Indian origin. A large number of these firms are “quota-hoppers”. In the export-oriented garment industry, Indian firms set up production facilities in Nepal in order to circumvent quota restrictions imposed under the Multi-fibre Arrangement (MFA) on garment exports from India. Another major inducement for Indian investors has been the opportunities for profit-making created by Nepal’s low tariffs. Because of the successive tariff cuts from the late 1980s, tariffs on many imported intermediate products in Nepal are much lower than in India. This difference, combined with a virtual open border between the two countries, has made simple processing industries for a number of products (including vegetable ghee, copper wires and some cosmetics) geared to the Indian market highly profitable.

In many other countries in the region, investors from the newly industrializing economies have played a key role in the expansion of garment exports. However, these investors have completely ignored Nepal despite the opportunities it offers for accessing lucrative developed-country markets, circumventing the quota restrictions (Athukorala, 1995; Wells, 1994). (5)

A majority of the projects with capital participation from developed countries are small-scale projects with the participation of individual (rather than business) investors. None of the well-known TNCs from the developed countries appear in the approval list of the Nepalese investment authority. Moreover, FDI from developed countries are predominantly in the services sector.

Data on the sectoral distribution of approved projects are summarized in table 5. Manufacturing accounts for more than half of the approved projects and 65% of total planned investment. Among other sectors, the hotel and tourism industry attracted a large number of investments given the attractiveness of Nepal as a tourist destination. Although tourism has experienced a major setback in recent years because of the civil war, (6) this is certainly an area where Nepal has an intrinsic comparative advantage. Only two foreign firms have so far entered the hydroelectricity industry, in which Nepal has immense potential for output expansion through foreign capital participation. (7) The government monopoly in electricity distribution and the compulsion for private-sector electricity producers to supply to the national grid (owned and managed by the Nepalese Electricity Authority) is considered to be a major hurdle for FD! in this industry.

Despite the heavy emphasis placed on attracting FDI as a vehicle for export expansion, much of the realized projects are engaged in domestic market-oriented industries (table 6). Of the 270 operational projects, 116 (43 %) are in various service industries (mostly those relating to tourism). Among 154 firms engaged in manufacturing, only 27 (18%) are in export-oriented industries, with the balance of 127 (82%) producing primarily for the domestic market. As can be expected, export-oriented firms show a greater concentration in the Kathmandu valley compared to domestic market-oriented firms. None of the export-oriented firms are located in the Hilly and Mountain regions primarily due to the lack of efficient transport networks (table 6).

The bulk of export-oriented FDI projects are in the clothing industry (about 95%), attracted by the quotas system under the MFA. Perhaps because of the uncertain business climate, foreign firms in the export-oriented garment industry have largely focused on reaping easy, short-term gains in a quota-restricted market without making efforts to diversify into competitive non-quota markets. According to some tentative estimates based on interviews conducted with some key personnel in the business sector in 2001, the non-quota exports accounted for only about 10% of the total garment exports from Nepal (UNIDO, 2002). Quota-hopping foreign firms in the Nepalese clothing industry have already begun to face severe difficulties following the abolition of the MFA from January 2005. (8)

5. Development implications

A systematic analysis of the development implications of FDI in Nepal is not possible because of the paucity of data. The Annual Survey of Manufacturing Establishments, which is the main source of data for analyzing the performance of the manufacturing sector, does not provide enough data for cross-tabulation by ownership. The Foreign Investment Promotion Board has not so far undertaken any assessment of the operations of foreign investment projects. The purpose of this section is to make some tentative inferences by analyzing the limited available information in the context of the general literature on development implications of FDI in developing countries.

One of the most obvious contributions of FDI to economic development is improved productivity by bringing with it some firm-specific knowledge (in the form of technology, managerial expertise, marketing know-how etc.) that cannot be effectively leased or purchased on the market by host country firms. For instance, affiliates of TNCs–as part of the parent company’s global network–have excellent marketing networks, possess experience and expertise in the many complex facets of product development and international marketing, and are well placed to take advantage of inter-country differences in the cost of production. On these grounds, FDI is widely considered as an effective means of acquiring technology and marketing know-how. It may also allow new entrants to learn about export markets, stimulate competition with local firms, and provide training for workers. There is, however, a consensus in the literature that these various indirect beneficial effects (“spillover effects”) of FDI depend crucially on the nature of the trade regime of the host country (Bhagwati, 2004, Chapter 12; Balasubramaniyan et al., 1996; Athukorala and Chand, 2002). A country with an outward-oriented policy regime has the potential to reap greater benefit from FDI than a country whose policy regime has a bias in favour of import-substitution. This is because, in contrast to an import-substitution regime, an export-oriented regime generally encourages FDI in activities where the host country has a comparative advantage.

The heavy concentration of foreign firms in market-seeking activities in Nepal (table 6) suggests that national gains from FDI in productivity improvement and economic growth may have been limited. Production facilities set up to cater for the small domestic market tend to have high costs and are characterized by low productivity growth compared to those set up to produce for the global market in line with the country’s comparative advantage. As mentioned earlier, a systematic analysis of the productivity implications (and other spillover effects) of FDI in Nepal is not possible given the paucity of data for a sufficiently long period of time. However, available data suggest that total factor productivity growth of industries with greater presence of foreign affiliates (identified on the basis of the Foreign Investment Promotion Board approval list) are not significantly different from, and in most cases lower than, the average level of TFP growth for the entire manufacturing sector. (9) This finding is certainly consistent with the view that foreign investment drawn in by “easy profit” is unlikely to generate much benefit in the way of technological improvements.

During the period 1988-2001, the amount of total realized FDI expressed as a percentage of gross domestic capital formation was, on average, less than 1%. (10) The relative contribution of FDI projects to domestic employment has also been small. According to the official records of the Foreign Investment Promotion Board, total employment in realized FDI projects during the period 1988-2001 was 41,320, which amounted to a mere 0.06% of the increase in the total labour force in the country during the same period. (11) The data on the sectoral distribution of FDI projects in manufacturing points to a high concentration of projects in relatively more capital-intensive sectors, which receive relatively greater protection. (12) Based on data relating to investment approval, total investment per worker in FDI projects is around $14,000, which is extraordinarily high for a labour-abundant and capital-scarce country like Nepal. For example, in Malaysia, a country which is at a much advanced level of development with virtually full employment from the early 1990s, average investment per worker in foreign firms is as low as $18,000. This vast difference in the degree of capital intensity of production by foreign firms in the two countries can be explained in terms of the nature of the market-orientation of such production. As noted earlier, foreign firms in Nepal are largely involved in import-substitution activities whereas in Malaysia, they are heavily concentrated in export-oriented production. Import-substitution (market-seeking) FDI in developing countries, driven mostly by high import tariffs and other entry barriers rather than relative factor cost differentials, generally tend to be more capital intensive compared to efficiency-seeking (export-oriented) FDI (Bhagwati, 1991).

Finally, data on the spatial distribution of operational FDI projects suggest that the benefits of FDI are heavily concentrated in Kathmandu and the surrounding areas. Of the 270 operating projects, the Kathmandu Valley alone has attracted 148 projects (55% of the total) and 48% of total employment. In contrast, only 37 projects (14%) accounting for 14% of total employment are located in the Hilly and Mountain regions where about 50% of the country’s population live. An analysis of the employment generated by foreign affiliates across regions suggests that over 86% of jobs are created in the Kathmandu Valley and the Terai belt, both of which have the basic physical infrastructure and higher purchasing power than the rest of the country (table 7). These two regions have together attracted 233 operational FDI projects (86% of the total). These special patterns of FDI clearly point to the importance of transportation and other infrastructure facilities, and access to administrative services in determining investment location.

6. Conclusion

Nepal has made a promising start in implementing market-oriented reform and promoting FDI, but it has a long way to go in reaping the benefits from integration into the global economy through FDI. Under the new policy regime, foreign firms have played a role in carpets and garment exports, but their exports are largely motivated by the Generalized System of Preferences and MFA quotas rather than the country’s comparative advantage. A large numbers of foreign investment projects are also based on shaky foundations, motivated by import deflection opportunities created by vast tariff differentials between Nepal and India (the major investor in Nepal). The overwhelming majority of foreign firms are involved in import-substitution activities characterized by high capital intensity. Consequently, the contribution of FDI to employment generation has been negligible. It seems that FDI attracted to “easy profit” activities (import-substitution manufacturing as well as the quota-protected garment industry) has failed to make a significant contribution to productivity growth in the Nepalese manufacturing sector. The foreign firms are located in the Kathmandu Valley or in the Terai belt, while the geographic spread of the gains from foreign investment has been rather skewed. Most participation of foreign firms in tourism–an activity where Nepal has a huge potential–has not been much due to the lack of efficient transport networks and the civil war since 1995.

An obvious, but important, inference coming from our analysis is that trade liberalization and generous investment per se in the absence of basic pre-conditions cannot achieve anticipated developmental objectives. The provision of required supportive services, political stability, policy certainty and efficient administrative mechanism have an equally–perhaps even more–important role to play. Nepal obviously has disadvantages arising from its geography in attracting FDI. However, comparative international experience suggests that her lacklustre record as a host to foreign investors cannot be explained in terms of its geography alone. The overall investment climate does matter.

References

Abroad, M. (2005). “Developments in textiles and clothing: post ACT” (Geneva: International Textiles and Clothing Bureau), mimeo.

Athukorala, P. and J. Menon (1996). “Foreign direct investment and industrialization in Malaysia: exports, employment and spillovers”, Asian Economic Journal, 10(1), pp. 29-44.

Athukorala, P. and S. Chand (2000). “Trade orientation and productivity gains from international production: a study of overseas operations of United States transnational corporations“, Transnational Corporation, 9(2), pp. 1-30.

Athukorala, P. and S. Rajapatirana (2000). Liberalization and Industrial Transformation: Sri Lanka in International Perspective (Oxford and Delhi: Oxford University Press).

Bagchi, S. (1998). “The textiles and clothing sector in Nepal” (Geneva: UNCTAD), mimeo.

Bhagwati, Jagdish (1991). “Investing abroad”, in Douglas Irwin, ed., Political Economy and International Economics, Cambridge (Cambridge, MA: MIT Press), pp. 309-339.

Bhagwati, Jagdish N. (2004). In Defence of Globalization (Oxford: Oxford University Press).

Balasubramanyam, V.N. and M.A. Salisu and David Sapsford (1996). “Foreign direct investment and growth in EP and IS Countries”, Economic Journal, 106(434), pp. 92-105.

Caves, R. E. (1996), Multinational Enterprise and Economic Analysis (Cambridge: Cambridge University Press).

Government of Nepal (1987). Industrial Policy and Industrial Development Act (Kathmandu: Foreign Investment Promotion Division, Ministry of Industries).

Kokko, A. and M. Zejan (1996). “Planned and failed foreign direct investment in Viet Nam”, Asian Pacific Development Journal, 3(1), pp. 37-54.

Sharma, K. (2004). “The impact of policy reforms on labour productivity, price cost margin and total factor productivity: the Nepalese experience”, South Asia Economic Journal, 5(1), pp. 55-68.

Sharma, K. (2006). “The political economy of civil war in Nepal”, World Development, 34(7), pp. 1237-1253.

Srinivasan, T.N. (1986). “The cost and benefits of being a small, remote, island, landlocked or mini-State economy”, World Bank Research Observer, 1(2), pp. 197-202.

UNIDO (2002). Industrial Development Perspective Plan: Vision 220. Report prepared for the Government of Nepal.

UNCTAD (various years). World Investment Report (New York and Geneva: United Nations).

Wells, L. T. Jr. (1994). “Mobile exporters: new foreign investors in East Asia”, in Kenneth A. Froot, ed., Foreign Direct Investment (Chicago: University of Chicago Press), pp. 173-191.

Wells, L. T. Jr, and N. J. Allen (2001). “Using tax incentives to compete for foreign investment: are they worth the cost?’, Foreign Investment Advisory Service Occasional Paper, No. 15 (Washington, D.C.: International Finance Corporation and World Bank), pp. 1-67.

World Bank (1993). The East Asian Miracle (London: Oxford University Press).

(1) The time coverage of the study ends in 2001, because the escalation of the civil war has severely disrupted FDI inflows to Nepal in the subsequent years. Since then, most foreign investors have ceased their operations, as they became the target of a rebel group, known as the Maoists.

(2) Nepal is located between India and China. There is a road connection with China, but extensive trade contacts with or though that country are inhibited by the high costs and seasonal nature of road transport through the Himalayas. Thus, Nepal’s foreign trade is conducted either through India or by air.

(3) It is important to distinguish between two different categories of export-oriented production, namely traditional labour-intensive consumer goods (clothing, footwear, toys, sports goods etc.) and assembly processes within vertically integrated global production systems. Efficiency-seeking FDI tends to engage in the latter.

(4) According to some tentative estimates, the additional cost disadvantage faced by Nepalese exporters compared to their counterparts in countries in the region is around 7% of the fob value. Nepalese clothing exporters claim that their overall cost disadvantage compared to their competitors amounts to 20 to 25% (Bagchi, 1998).

(5) As a LDC, Nepal enjoys unlimited duty free access to garment markets in Canada and the EU. Exports to the United States from Nepal were subject to MFA quotas during the period under study, but less than a half of the annual quota entitlement was utilized throughout this period.

(6) The number of tourist arrivals declined from 422,000 in 1997 to 270,000 in 2002 and foreign exchange earnings from tourism dropped from $174 million (3% of GDP) to $68 million (1% of GDP) during the same period.

(7) Total hydropower generation potential in Nepal has been estimated at 83,000 MW and 50% of this is considered commercially viable. However, the current installed capacity is only 253 MW, and only 25% of Nepalese households have access to electricity. Intermittent interruption of power supply is a major constraint on manufacturing and other business activities.

(8) Following abolition of MFA quotas, clothing exports from Nepal to the United States contracted by a staggering 26% during January-September 2005 compared to the same period in 2004 (Ahmad, 2005, Table 1-A).

(9) Using Sharma (2004) data set and the model developed therein we tested if FDI has any impact on inter-industry variations in productivity growth by adding FDI variable proxied at the two-digit level of industry classification. No statistically significant evidence was found between FDI and productivity growth.

(10) This estimate is based on data obtained from UNCTAD, World Investment Report (various issues).

(11) Of the total jobs, 28,400 were in manufacturing (or 70% of the total), while the rest were in services.

(12) Such industries include beer, distilleries, soft drinks, chemical products, radio and TV and electric apparatus.

Prema-chandra Athukorala and Kishor Sharma*

* Prema-chandra Athukorala is at the Research School of Pacific and Asian Studies, Australian National University, email: premachandra.athukorala@anu.edu.au. Kishor Sharma is at the Faculty of Commerce, Charles Sturt University, email: ksharma@csu.edu.au. The authors thank the editor of this journal and three anonymous referees for useful comments and suggestions.

 

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Kusunda: Stone-basher circled by students

Posted on 14 May 2012 by NepaliKuire

Ah, anthropologists and linguists; poking the poor with sticks while they try to get on with bashing stones together. Still, fascinating story.

Nepal’s mystery language on the verge of extinction

Gyani Maiya Sen

Gyani Maiya Sen, a 75-year-old woman from western Nepal, can perhaps be forgiven for feeling that the weight of the world rests on her shoulders.

She is the only person still alive in Nepal who fluently speaks the Kusunda language. The unknown origins and mysterious sentence structures of Kusunda have long baffled linguists.

As such, she has become a star attraction for campaigners eager to preserve her dying tongue.

Madhav Prasad Pokharel, a professor of linguistics at Nepal’s Tribhuwan University, has spent a decade researching the vanishing Kusunda tribe.

Professor Pokharel describes Kusunda as a “language isolate”, not related to any common language of the world.

“There are about 20 language families in the world,” he said, “among them are the Indo-European, Sino-Tibetan and Austro-Asiatic group of languages.

“Kusunda stands out because it is not phonologically, morphologically, syntactically and lexically related to any other languages of the world.

He warns that if the Kusunda language becomes extinct, “a unique and important part of our human heritage will be lost forever”.

Even if some of the lofty intellectual arguments for preserving the Kusunda language are lost on Ms Sen, she is acutely aware of how its demise affects her personally.

“Fortunately I can also speak Nepali, but I feel very sad for not being able to speak my own language with people from my own community,” she said.

“Although there are still other people from the Kusunda tribe still alive, they neither understand nor speak the language.

“Other Kusunda people… can only speak a few Kusunda words, but can’t communicate [fully] in the language.”

Ms Sen fears there will be no-one to speak the Kusunda language after her death.

“The Kusunda language will die with me,” she reflects, while lamenting the failure of the government and academics to help transfer the language to the next generation.

Although no detailed figures are available, the Central Bureau of Statistics says that only about 100 Kusunda tribespeople remain – but only Ms Sen can speak the language fluently.

A few years ago, there were two other people – from a mid-western Nepalese village – who spoke the Kusunda language fluently.

They were Puni Thakuri and her daughter Kamala Khatri.

But since then Puni Thakuri has died and Kamala has left the country in search of a job.

Ms Sen – despite her age – still ekes out a living as a stone-crusher. But outside of the workplace she finds that she is increasingly in demand from linguistics students wanting to learn the Kusunda language with her help.

They are documenting it in a bid to keep this rare language alive.

Researchers have so far identified three vowels and 15 consonants in the Kusunda language.

The Kusunda tribe to which Ms Sen belongs is nomadic. As hunters and gatherers, they live in huts in the jungle and carry bows and arrows to hunt wild animals.

While the males of the tribe hunt, women and children stay at home and search for wild fruits.

The Kusunda – a short and sturdy people – refer to themselves by the word “myak” in their language. They kill monitor lizards (“pui”) and wild fowls (“tap”).

Linguists and tribal campaigners are now demanding that the government introduce specific programmes to uplift the Kusunda tribe and protect their language.

But no such policy is on the cards, at least in immediate future.

“We do not have any specific programme to preserve this language,” admitted Narayan Regmi, spokesperson of the Ministry of Culture.

The National Ethnographic Museum had meanwhile conducted a study on 10 different Nepalese ethnic groups including the Kusunda.

Its research has reached a grim conclusion. The entire Kusunda tribe is on the verge of disappearing along with its last fluent speaker in Nepal.

From the BBC.

Nepal’s most mysterious language might soon disappear

From here.

Kusunda is one of the most enigmatic languages on the planet. This tongue from western Nepal looks nothing like any other language, and its strange structure baffles linguists. And there’s only one person left in Nepal who speaks it.

Kusunda is an example of a language isolate, meaning a language with no known relative. Of course, this probably doesn’t mean the language developed in isolation – in practice, it means that any connections it might have with other languages are so ancient that its relatives have all either gone extinct or changed so much that any links are no longer detectable.

There are dozens, perhaps hundreds of such language isolates still spoken today, although most are on the verge of extinction. The language most famous for being an isolate is probably the Basque language spoken on the northern border of Spain and France. That said, the 650,000 Basque speakers are utterly dwarfed by the 78 million speakers of the world’s most vibrant language isolate: Korean.

As such, language isolate status is definitely not necessarily a death sentence, but things are looking very grim indeed for Kusunda. The native tongue of a tribe of hunter-gathers in western Nepal, Kusunda was barely known until the 1960s and it wasn’t until 2004 that linguists met Gyani Maya Sen, who is now the last fluent speaker of the language living in Nepal. It’s thought that there’s about six other fluent speakers of the language, but they have either left the country or their whereabouts are unknown.

BBC News has a great overview of the language’s current sad situation and the steps that would need to be taken to save at least the knowledge of Kusunda, if not the language itself. Whether it’s truly worth devoting extensive resources to saving dying languages is admittedly a tricky question that really deserves its own discussion. (I’d personally say it absolutely is worth it, but I can certainly see the counterarguments.) Either way, Kusunda is a language quite literally unlike any other on the planet, and its loss would represent a tragic reduction in the seemingly endless varieties of human expression and communication.

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Former French ambassador bravely says “don’t copy us”

Posted on 11 May 2012 by NepaliKuire

Very interesting piece in the Nepali Times by a former French ambassador: he says to the Maoists: don’t copy the French, the presidential system wont work here, it’s just be divisive.

Dangers of cohabitation

Now that the peace process is almost complete, the Constituent Assembly is about to start carrying out its main task of writing the new constitution.

Reading the Nepali press every day it appears that two main issues remain to be sorted out among the political parties in this difficult exercise which will affect the country for several decades to come: the form of governance and the nature of federalism.

Any constitution of any country must be adapted to suit the prevailing conditions. At the moment when they sit down to discuss the draft constitution, the members of the Constituent Assembly should keep in mind that Nepal is the oldest nation state in South Asia, and made up of more than 100 ethnic groups which have succeeded in living together throughout the long history of independence that the Nepali people are legitimately proud of. It is a model for many countries torn apart by ethno-separatism, but this model is fragile. The national unity that served Nepal so well, and took so long to build, can be destroyed in a moment.

The parties are trying to decide whether to go for a presidential system or keep the parliamentary one. The compromise is the so-called ‘French model’ in which the president is directly elected by the people and holds the bulk of executive power, appointing and dismissing the prime minister at will, and dissolving parliament if he wants. This is why the president in France is often referred to as a ‘republican monarch’.

The presidential form of governance has its pros and cons, but I am not sure it suits Nepal. In France a candidate for the presidency is simply French. In Nepal, any candidate besides being a Nepali citizen, will also belong to a particular ethnic group and a particular caste. The danger then is that electoral competition will oppose not only two or more men but also, willingly or unwillingly, two or more ethnic groups or castes.

Victory will then be the victory of one group and defeat for the others. If one wants to protect the unity of Nepal, the parliamentary form of governance seems to me a much better option. This is the system which was in force during the period of the constitutional monarchy from 1991 and it worked reasonably well. The only difference, now that the monarchy is abolished, lies in the election of a ceremonial president by parliament who embodies the unity of Nepal and the Nepalis in all their diversity.

The second point of contention is federalism, which in itself is a positive form of governance. It gives the people the possibility of finding local and better adapted solutions to the problems they are confronted with. It takes the administration much closer to the citizens when the central government is too often far away and tends to be oblivious of their daily needs.

Despite these benefits, however, there are difficulties. To be effective, federal states or provinces have to recruit good and skilled staff capable of running the day-to-day administration. Also defining federal units by ethnicity is very risky for Nepal, and can lead to splitting the country. A few ethnicities may be satisfied but many others, too small to get their own province, will resent the new administrative divisions as not responding to their needs and aspirations. The best form of federalism for Nepal should be based on economic criteria by regrouping regions where different ethnic groups could work together to lift their populations out of poverty in cooperation with neighbouring regions.

Michel Lummaux served as the ambassador of France to Nepal between 1996 and 2000. The views in this article are personal and do not necessarily reflect the French government’s position.

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Treaty findings and recommendations for Dalits

Posted on 11 May 2012 by NepaliKuire

Two good resources from IDSN for those interested in the treaty observations and recommendations regarding Dalits:

UN_TBOverview

UNTB_Overview1_Apr2010

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Slums face India/Brazil-esque evictions

Posted on 11 May 2012 by NepaliKuire

The old question of planners versus squatters.

NEPAL: Concern over the condition of the elderly, women and children rendered homeless by evictions

AHRC-STM-102-2012-01.JPG AHRC-STM-102-2012-02.JPG AHRC-STM-102-2012-03.JPG

The Asian Human Rights Commission condemns the excessive use of force and the lack of due process in the eviction of the community living in the squatter settlements in Thapathali, Kathmandu on the banks of the Bagmati River on 8 May 2012. Over 248 houses, including a school, were destroyed in the process. According to the information received, 994 persons, including 401 children below 15, have been affected by this eviction. This eviction is the first part of a government plan to clear the banks of the river from encroachment by squatters, for further details on the eviction process please seeNEPAL: Community threatened with eviction, no alternative housing offered or provided. Eviction of other squatter communities also residing on the river bank may follow. (PHOTO: People looking for their belongings in their destroyed houses on 9 May 2012 Thapathali, Kathmandu – source: Jin Ju)
More than 2000 police personnel from the Nepal police and the Armed Police Forces and three bulldozers were deployed in the area to conduct the eviction. Sources report that many families were not informed in advance that the eviction would take place on that day and that they were awoken at 5 am by the police asking them to gather their belongings and leave. The destruction of the houses lasted until 1 pm.

The AHRC deplores the violence with which the evictions were conducted. Police used rubber bullets and tear gas to control the community. Several civilians including the elderly, pregnant women and children were beaten, ill-treated or suffered injuries from the tear gas and rubber bullets. As of the information available on 9 May, 25 to 30 people had been injured from the beatings, including four who suffered serious head injuries. There are reports that women who wanted to get back inside their houses to save some of their belongings were beaten up by the police. The police prevented those injured from getting treatment until 4 pm when they were allowed to receive treatment at the Bir hospital. According to the police 31 people were taken into custody, which according to NGOs included several children. Women and children were released in the evening and the other arrested were released the following day.

Prior to the eviction, the government came under the scrutiny of the civil society for failing to take appropriate steps to identify those who were ‘genuine’ landless squatters. Neither was any research done to determine the number of children and elderly persons who would be affected by the relocation or to evaluate the socio-economical situation of the community. The government announced that it was ready to provide 15000 NPR as a housing allowance to those identified as genuinely landless and that it was getting ready to relocate them to Ichangunarayan area. Nevertheless, the first round of evictions was conducted before steps to provide such allowance or to organize for the relocation were taken and must therefore simply be classified as evictions. As a result, many found themselves without shelter and deprived of food and water. The community has lost valuable property as they were not given enough time to gather their belongings including cooking utensils, tools, clothes, citizenship papers etc. Some saw their income sources, a small shop, a vegetable cart and other essential items destroyed in the eviction.  The AHRC is further appalled to hear that a school run by an NGO in which 150 children were enrolled was among the first buildings to be destroyed.

The AHRC is concerned at the situation of children, the elderly and pregnant women who have been made to sleep outside for the past two nights. We are concerned that the eviction may lead to further violation of their rights, including their right to food, health, water and education as embodied by the destruction of the school.

On 16 March 2012 the AHRC issued an Urgent Appeal calling on the government to abide by the UN Basic principles and guidelines on development-based evictions and displacement; to see that the eviction would not result in any family being rendered homeless and to conduct a thorough assessment of the affected families’ socio-economic situation and specific needs beforehand. The appeal further urged the government to see that the police officers conducting the eviction would show restraint and moderation.

Although there is no domestic legal framework regulating forced evictions, Nepal is bound to respect international norms and standards as laid out in the UN basic principles mentioned above as party to the international covenant on economic social and cultural rights.  We wish in particular to recall that the UN Basic Principles mentioned above specifically mention that the evictions should not result in individuals being rendered homeless or vulnerable to violations of other human rights; such as the right to life with dignity and those rights upheld in Nepal’s Interim Constitution including right to health; right to education and right of the child. We therefore call on the government of Nepal to take immediate steps to provide shelter, food, water and access to health and education services to those affected by the eviction. We further urge it to suspend its move to conduct further evictions until an appropriate assessment of the impact of the eviction on the situation of the affected families, in accordance with international law1, is conducted and appropriate alternative housing arrangements are taken for the landless and vulnerable. The government is responsible for providing just compensation and sufficient alternative accommodation immediately and without discrimination.

In its plan to relocate the community to Ichangunarayan area, the government has further the responsibility to ensure that the relocation site will fulfill the criteria for adequate housing according to international human rights law, including services for attaining water and access to employment options, schools, and health-care facilities.

The UN principles further state that “Evictions shall not be carried out in a manner that violates the dignity and human rights to life and security of those affected. Any legal use of force must respect the principles of necessity and proportionality”.  This has clearly not been the case in Thapathali and the AHRC calls on the government to investigate into the allegations of excessive use of force by the security forces against the community; including elderly, women and children.

The AHRC further urges the government to develop a domestic legislative framework in line with its international obligations upholding due process in development related evictions.

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1  The UN Basic principles mandate that “Impact assessments must take into account the differential impacts of forced evictions on women, children, the elderly, and marginalized sectors of society. All such assessments should be based on the collection of disaggregated data, such that all differential impacts can be appropriately identified and addressed.”

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UNESCO review of community radio

Posted on 11 May 2012 by NepaliKuire

First ever review of the community radio world in Nepal. It only covers the Valley, but is still interesting. Read the full Community MHZ

Community MHZ

Due to the low literacy rate and lack of basic infrastructure, mainstream media reach only few people in the hilly and mountainous areas of Nepal. In these parts of the country, community radios play a particularly important role in disseminating information. They are the most effective media to enable people to participate in policy and decision-making processes, and to protect and promote the diversity of their cultural expressions. And they are in the frontline defending freedom of expression and right to information.

Through community radios, community members can voice their concerns and receive information that concerns them directly. Community radio stations can expose weak governance and corruption and encourage open dialogue and transparency of administration at local level. Many community radio stations have pinpointed failures in decision making, and questioned the use of public funds.

However, community radios function not only as watchdogs – they also provide entertainment during the long days of work and contribute to create solidarity among community members, Since the establishment of Radio Sagarmatha in 1997, the first community radio in South Asia, the number of community radio stations in Nepal’s has started to grow rapidly.

Today they are almost 200, showcasing an exceptional spirit of pioneerism and ambition in creating avenues for free flow of information.

With this thriving and vibrant radio landscape, Nepal’s community radio actors have lead the way for other South Asian countries.

However, the challenges for Nepal’s community radios has been the lack of legal framework and the lack of a clear definition of what community radios actually are, and how they differ from the privately or government owned radio stations. The Community Radio Performance Assessment System offers one of the first tools to address these and other challenges in a systematic way. They help define community radios and establish how community oriented they actually are. The indicators are a clear and practical tool for assessing community radios – both for the community radios themselves, as well as the external stakeholders promoting community radios.

Ever since the establishment of Radio Sagarmatha, community radios have been one of the priority areas for the UNESCO Office in Kathmandu. UNESCO has regularly supported projects that have catalyzed the growth of the sector by promoting replicable models and building the capacity of key organizational players. Therefore it is only natural that we now support the pilot project of the first application of the Community Radio Performance Assessment System. I am sure that this methodology will further strengthen Nepal’s community radios, and offer them a tool to grow, not only in numbers but also in terms of the quality of their work.

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Amnesty video on migrant workers

Posted on 9 May 2012 by NepaliKuire

A great play on the famous Nepali film Caravan by Eric Valli (usually called ‘Himalaya’):

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Update on third gender attempts to gain citizenship

Posted on 9 May 2012 by NepaliKuire

There’s a long way to go:

Dividing by Three: Nepal Recognizes a Third Gender

Badri Pun slept in a gravel courtyard in rural Nepal for more than a week. After the first two days, he stopped eating. By night, he huddled under wool blankets, clutching a folder full of papers, some of which made his life legal — his birth certificate, his motorcycle license, and his citizenship identification card — and one which made a new life possible — a 30-page, four-year-old court decision.

By day, he left the courtyard and entered the government building it encircled. He spent hours at the building shoving the documents in front of various government officials, insisting his ID papers were wrong. After 12 days of protesting, he won his case: Badri Pun was issued a new citizenship ID card, and it listed him as “third-gender.”

The Court’s decision was a stunning victory for the LGBTI (lesbian, gay, bisexual, transgender, and intersex) rights movement in Nepal, the formal movement just six years old. Its specific orders, however, have been slow to manifest. The Dec. 21, 2007 decision in Sunil B. Pant et al. v. the Government of Nepal ordered the government to scrap all discriminatory laws, form a committee to study same-sex marriage policy, and establish a third-gender category for gender-variant people. The piecemeal implementation of the third-gender category tells the story both of the relentless activism on the ground and of the politics of sexuality and gender rights in contemporary Nepal.

The third gender in Nepal is an identity-based category for people who do not identify themselves as either male or female. This may include people who want to perform or want to be presented as a gender that is different from the one that was assigned to them at birth, based on genitalia or other criteria. It can also include people who do not feel that the male or female gender roles that their culture dictates to them match their true social, sexual, or gender-role preference.

There are other countries that have third-gender policies, but none nearly as comprehensive as Nepal. India has used a third-gender category in several administrative capacities. In 2005 India’s third-gender citizens could start registering for passports as “eunuch,” denoted by an “E.” In 2009 an”E” designation was added to voter registration documents. Shortly after Nepal announced it would include a third category on its census, India added one. And in 2011 the Unique Identification Authority of India, administering a new government citizen ID number system, allowed “transgender” as a third-gender option. Australia and New Zealand both have “X” as an option, in addition to “M” or “F,” on passport applications. Bangladesh allows third-gender citizens to register to vote as “eunuchs.” Pakistan’s Supreme Court also ordered the government to issue third-gender ID cards, but three years later, not a single one has been issued.

In 2001 Sunil Pant (who would go on to petition the court) registered Nepal’s first LGBTI organization, the Blue Diamond Society (BDS). Most of the Blue Diamond Society’s initial members were transgender sex workers — considered male at birth, but performing a feminine gender role.

Transgender sex workers had for a long time been the target of widespread police violence, which the media eventually took notice of, especially when the BDS began to systematically document it. According to BDS archives, in 2003 major local media outlets ran 13 stories about abuse of LGBTI people in Nepal. A year later major international NGOs and media outlets would cover the arrests of 39 third-gender BDS members, pushing the movement into the spotlight.

In 2006, with the brutal 10-year communist revolution coming to an end in Nepal, Pant was invited to join a group of experts in Yogyakarta, Indonesia to discuss how international human rights standards relate to sexual orientation and gender identity. The result of these talks, the Yogyakarta Principles, inspired Pant to take legal action at home. “The conflict had just ended, and a new Nepal was promised,” Pant says, “so we decided we would try to use the court to make sure we were part of that new nation building.”

The court, at Pant’s urging, adopted the Yogyakarta Principles’ provision on gender identity: that the sole criterion for identifying as a gender is self-determination. The Court’s decision solidified the category in law — perhaps more strongly so than has ever been done before. Transgender rights movements elsewhere have found that having a non-male, non-female category could be helpful in securing rights.

After the court decision, the third gender began to appear in various administrative nodes of the government. The Nepal Election Commission almost immediately began allowing voters to register as third-gender, and many trekking permit applications added a third-gender category as well. The Ministry of Youth and Sports added third-gender to its National Youth Policy in 2010. And in perhaps the most sweeping implementation of the category, the 2011 federal census allowed citizens to self-identify as male, female, or third-gender.

Heralded as the world’s first national census to include a gender category other than male or female, the survey took place in two phases. The first was a household registry, where government officials visited every home in the country; and the second was a full census, which visited every eighth home. The forms used by the Central Bureau of Statistics (CBS) in the Household Registry phase allowed Nepali citizens to identify as male, female, or third-gender.

In theory, having the category on the household registry would give an official count of the number of people in the country who identify as third-gender — and place the third-gender community, at least partially, on the government’s radar. But the enumeration proved problematic. Many third-gender citizens had to fight to be recorded properly. Reports of discrimination and fraud surfaced, accusing enumerators of using pencils to record gender instead of the CBS-mandated blue ink.

Despite the Nepali Supreme Court having ruled in late 2007 that citizens were entitled to select their gender identity based on “self-feeling,” Pun remains one of only three people in Nepal officially neither male nor female. Although the LGBTI rights movement has made much progress, there were issues dealing with disclosure. Some people brave enough to publicly identify themselves as third-gender reported harassment from census enumerators when they asked to be listed as neither male nor female. Others were uncomfortable disclosing their identity when enumeration interviews took place with the entire family present.

Compounding these research complications, citizens were only allowed to register as male or female on the second census form, which asked over 50 questions on topics including religion, water source, and occupation. Two months later, a post-enumeration survey of approximately 10,000 homes — used to check the data — operated in a similar manner to the second census form. Regardless of whether people identified themselves as being third-gender, they were only able to identify as male or female in the household registry. Preliminary data published by the CBS revealed a zero count for third-gender citizens.

Shortly after the census, Pun took his third-gender ID to the Ministry of Foreign Affairs and applied for a passport. He was denied, the Ministry claimed, because they did not have any criteria for determining who was third-gender, and then again a second time because the Ministry said the new Machine Readable Passport (MRP) could not accommodate a third gender. Pun took the Ministry to court, since neither of the Ministry’s claims hold water. According to the courts, the only criterion for third-gender is self-identification, and international aviation standards have no gender restrictions.

Like men and women, third-gender people also identify with a range of sexual orientations. For example, one 24-year-old third-gender explains, “I am biologically male, but I am not a man. I do not desire women sexually. Men in my culture desire women sexually. Therefore I am third-gender.” He prefers male pronouns and says he dresses in male clothing about half the time (to avoid harassment) and female clothing the other half. He is married to a woman but lives secretly with his boyfriend.

When it comes to documentation, however, the logistics should not be too complicated. Passports provide a convenient and important case study. The International Civil Aviation Organization (ICAO) adopts standards and procedures for international travel documents. According to ICAO standards, four pieces of information need to be included on a passport: name, date of birth, nationality, and sex. ICAO regulations for MRPs say that a persons’ sex may be listed as unspecified. On the main section of the readable passport, sex can be listed as “M,” “F,” or “X” (for unspecified). In the MRP zone at the bottom of the page, it is indicated with “M,” “F,” or “<.”

Nepal’s Ministry of Foreign Affairs is past due in responding to the Supreme Court. A year ago, Pun could have applied for a passport as a female, which is his biological sex listed on his birth certificate and original citizenship ID card. But today, as a third-gender citizen, he has no choice but to wait for the Nepali bureaucracy to figure out how to acknowledge him. His colleague and friend, Bhumika Shrestha, who also identifies as third-gender, recently traveled to New York City to speak at a United Nations conference on gender equality. During a layover in Doha, she was pulled aside for special questioning. She presents herself as an elegant young woman, yet her ID and passport show a photo of a 16-year-old boy named Kailash, and she is listed as “Male.” The airline let her board the plane but not before forcing her to tell her life story.

Observers of Nepal’s LGBTI rights movement sometimes claim that the category was created in line with contemporary Nepali politics. Listing the third-gender as a comprehensive LGBTI category, they claim, means the movement can swell its numbers and gain clout — and eventually form a political party. Nepali-language media have referred intermittently to Pant as third-gender, despite his open identity as a gay man. Others place the identity category into gender-ambiguous cultural tropes such as hijras (who often categorize themselves as a third gender in other South Asian countries). With 103 ethnic groups officially registered in the country and less than half of its citizens identifying Nepali as their mother tongue, dozens of words linked with sexual and gender identities are associated with the third-gender category.

While the exact definition of third-gender might be disputed in Nepal, as a legal category it is clearly defined — it is for those who wish to identify themselves as neither male nor female.

Badri Pun’s story is just one illustration of the complexities of a society in transition. The constitution is in the final stages of drafting, and a new civil and criminal code will follow. The administrative measures that shape the quotidian transactions of citizenship are adjusting — some better than others — to accommodate a new category shaped both by international human rights standards and local culture. If the tenacity of the activism that began 11 years ago is any indication, the political life of this third category is only just beginning.

This piece was originally published by the World Policy Institute.

Follow Kyle Knight on Twitter: www.twitter.com/knightktm

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