I seem a little bit harsh on the Maoist party and its own leaders in my latest op-ed. I am not taking sides and won’t do it. This column is not political; it is based on what the data shows and what I think explains the tendency in trade deficit with India.
I avoid politics as my site is economics and economic policy. To become reasonable, I see YCL’s and the unions’ disruptive activities as only a problem for the commercial sector. I don’t caution what they do in other areas and in politics, but browbeating the investors and chasing away multinationals would do no good to the Nepalese economy. The commercial sector is bleeding, hence the high trade deficit, because of the militant activities in and around production sites, where production should happen, not destruction.
I am clarifying this because I have received several email messages saying that I have been especially biased against and harsh to the Maoists. Well, I am not. I’ve written articles helping the Maoists government’s economic policy and also have also criticized not only their’s, but also other party’s procedures. Recently, Maoist Chairman Pushpa Kamal Dahal laid out five agendas for talks with India. Two of these are related to trade. He wants trade deficit with India to be “corrected” and “prompt strategy” taken up to help Nepal gain from the growth of both giants economies between which she is ‘sandwiched’.
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By just how, was that a “satire” also? High trade deficit with India is not a new phenomenon in any way. It’s been increasing in line with our excessive reliance on the Indian economy. What is surprising these times is that the balance of trade – the monetary value of exports minus imports of output over a certain time period – with India has increased significantly (start to see the figures). Season was Rs 38 Total trade deficit with India in the first one fourth of the fiscal.9 billion, a 38.year 8 percent increase from the same period last.
Total exports to India decreased by 11.4 percent and total imports increased by 25.2 percent in the same period. Overall, total trade deficit is increasing rapidly because the Maoists intensified their insurgency at the start of this 10 years. The rate of increase of trade deficit has been especially high following the Maoists joined the federal government and started messing up with the commercial sector with needs that are inconsistent with today’s state of our overall economy. Rather than blaming India for increasing trade deficit, Dahal must do some soul-searching to understand to what degree his party has added to the demise of the production sector, export-oriented creation, and export potentials.
There is consensus among policymakers and analysts that the rising trade deficit is unsustainable. It needs to be rebalanced. Dahal directed his finger towards India and blamed her for increasing Nepal’s trade deficit indirectly. Either he does not comprehend what causes trade deficit and our inability to benefit from the booming economies of neighbors or he could be blaming India to arouse unnecessary nationalistic feeling to consolidate party and voter base.