REDRAFT CONSTITUTION 2015 AND CREATE A FRAMEWORK FOR ECONOMIC REVOLUTION

REDRAFT CONSTITUTION 2015 AND CREATE A FRAMEWORK FOR ECONOMIC REVOLUTION

Posted by The Himalayan Voice:

[Notwithstanding the above points of view, let us remind ourselves that we, as a Nation, have freely chosen to join the WTO in 2004 and are, thus, bound by our international treaty obligations. WTO requires of us to not just provide MFN treatment to foreign businesses but, so too, 'national treatment'.  WTO also protects our vulnerable status of being a 'yam between two boulders' by disallowing infringement of our transit rights. Indeed, after we signed the WTO treaty we began to think afresh towards engaging proactively with all our neighbours through such conceptual innovations as SAGQ/SASEC/BBIN, BIMSTEC and, lately, China, India and Nepal Trilateral Cooperation.]  

By Madhukar SJB Rana

Professor SAIM and Former Finance Minister

Political and social revolutions can be ushered in through violence or non violence. However, neither gains will be peaceful, and self sustaining, unless garnered and nourished by factors and forces of economics.

First and foremost, the long winded Preamble envisioning a "socialist state" must be expunged. For the simple reason that the Constitution must be neutral to any political ideology — capitalism, socialism, communism, pragmatism.

After all, it is the right of the political party in power, with or without a coalition government, to rule the country as per its election manifesto. And who knows what new political ideologies can appear in the 21st century as the world is :

a) battered by climate change and global warming that threatens the very existence of planet Earth;

b) threatened by unprecedented inequality of income and wealth where the so called 'sovereign individuals' own more assets and income than sovereign nation states calling for a new national and international economic structures and financial architecture for democratic governance;

c) undeniably facing a clash of civilisations and cultures where individuals, nations and regions seek their own identities.   

Furthermore, as a vision statement it is faulty. What is the sought after final destination envisaged by the phrase "socialist state"? This is unknown. Hence the phrase only specifies a journey which may be perfectly acceptable as mission statements of all manner socialist parties but quite inappropriate in the Constitution's preamble.

Notwithstanding the above points of view, let us remind ourselves that we, as a Nation, have freely chosen to join the WTO in 2004 and are, thus, bound by our international treaty obligations. WTO requires of us to not just provide MFN treatment to foreign businesses but, so too, 'national treatment'.  WTO also protects our vulnerable status of being a 'yam between two boulders' by disallowing infringement of our transit rights. Indeed, after we signed the WTO treaty we began to think afresh towards engaging proactively with all our neighbours through such conceptual innovations as SAGQ/SASEC/BBIN, BIMSTEC and, lately, China, India and Nepal Trilateral Cooperation.  

The reason why we joined the WTO is to be part and parcel of the globalisation process by opening our economy and society to the outside world inviting global technology, human and intellectual and financial capital; as well as having Nepalese workers to join the international labour market. And Nepalese businesses to trade and invest abroad and, hopefully, invent our very own MNCs in the process.

All these international economic goals calls for robust multilateral, regional and sub-regional economic diplomacy and passionate patriotism—not  narrow minded nationalism as imbibed so glaringly in the draft Constitution. It smacks of a geo-psychological inferiority complex in our political leadership forgetting that we are the 45th largest country amidst the 200 nations around the globe.

Inward looking nationalism is out of tune with the emerging new world order of the 21st century since it is going to be an international order built on a balance of power between regional blocs. This hypothesis will be soon tested as post Referendum Greece will not be exited by Germany and France from either the Euro or EU. Greece's civilisational contribution and geography are far too vital for the people of Europe as a whole, as well as US' interest and NATO.

It is humbly submitted that a new Nepal be built on the Market as the  5th Pillar of the new State. This needs to be duly recognised and enshrined in the Constitution. The market, as an institution, not only allows for poverty eradication, as historically proven, but guarantees economic freedom to all. Also, it gives due legal space, when appropriately regulated by the State to safeguard against all manner of anti competition behaviour, including protecting consumer sovereignty, rights and individual welfare though creation of Consumer Courts.

Socialists and Communists dislike Adam Smith, the Father of Modern Economics, conveniently forgetting that it was his intellectual contribution that ended feudalism in Europe by ushering in the Industrial Revolution in UK that later spread all over Europe and North America. They dislike the fact that it is not through the benevolence of the State and the political masters that we progress materially as a Nation; but actually do so by pursing our own self-interest in a spirit of free competition with freedom of entry and exit in compliance with the rue of law.

This is not to say that Adam Smith believed business people to be like angels. Very frequently he warns us of their tendency to avoid competition though collusion to extract maximum rent by controlling production, distribution and compromising on quality and standards. He also recognised that a business-dominated political system would be at the cost of public welfare since they would influence public policies and laws.

This is the rationale behind why we need a Competition Commission as a constitutionally chartered autonomous institution. And a Competition Act duly promulgated by the Parliament on which basis the Competition Commission is empowered to make judgement to protect the Market as a Fundamental Institution of Nepal.

Adam Smith does not argue for laissez faire. His free market is one where there is free competition in product, labour, land, capital or any other market. With the government limiting itself to enforcement of laws to protect competition and to strongly ensure rectification of all manner of inequality in bargaining power between labour, capital, land and other resources owners.

It is on the foundation of classical Smith that we now universally invoke Private Public Partnerships (3Ps) for optimal economic management in the wake of huge risks and uncertainties in the 21st century global world economic order. It is in this context that we argue here that there should now be room for People Private Public Partnerships (4Ps) in the management of our national economy. After all natural resources in Nepal are mostly owned by the local People.

It is often forgotten how intensely moral Adam Smith was. He was a pre eminent moral philosopher. Faced with the ill repute that 21st century financial capitalism has generated for itself, it may be time now for the State to promote the new concept of 'compassionate capitalism' where Moral Markets are promoted through sound and firm legal and judicial systems, as well as well as good corporate and entrepreneurial ethical behaviour.