The dangers of tarnishing the image of the government-

Army and Armed Police Force help clear rubble from the dilapidated public school in Northern Gorkha

The dangers of tarnishing the image of the government-

(Note- This article was written in the aftermath of the 2015 Earthquake.)

It is not surprising to be aggravated by the pervasive rhetoric that the “government [1] is completely inept. What is the government up to, when the country is razed to the ground?” At face-value this will undeniably seem true, although we ("the civil society") will need to "pull our socks up" on this one, and strive harder to probe into these prefabricated appraisals. Have we really understood the scale and nature of this calamity, given, both the ineptitude of the government for speedy redressal, and the extremely contorted topography of the “hilly” country, and difficult accessibility to these areas.

Given the difficulties that lie ahead in immediate future- incessant tremors, heavy monsoons, seemingly dysfunctional civil society, and a desperate state, merely criticizing the government at this juncture is a self-fulfilling recipe for further adversity.

Constructive criticisms and baseless insinuation are completely different things; and both will result in disparate outcomes; while one could either guide involved actors towards solution-driven actions, the other could hinder speedy recovery at this dire juncture of emergency.

Constructive criticism would entail exactly knowing where the government has wronged, and how it could be corrected. Baseless accusation would entail largely remaining in the disingenuous default mode of criticizing the government, without understanding how it functions, and other factors that determine its structural capacity to act.

“A fundamental dilemma in disaster response is the tension between the natural impulse to respond quickly and doing things right,” writes Elizabeth Ferris in an article explaining what went wrong in Haiti.[2] Certainly, the ad hoc relief efforts carried out by innumerable number of volunteers and non-government entities are commendable and seem to demonstrate that “natural impulse to respond quickly.” But once the dust settles down from the rubbles, it is plausible to assume that the volume of volunteers will plunge down, as the unaffected ones will resume with their normal lives; or to put it bluntly, they will move on. Now, who will be left to fend for their own survival? Here, doing “things right” will entail engaging local communities themselves in the rebuilding process, the very individuals that have either lost their entire source of livelihood, or even families. And very crucially ensuring that the government measures benefit the affected, the least the “civil society” can do. It will take years to build what was destroyed in seconds.

Constructive criticism versus baseless insinuations- When we refer to the government, who are we exactly talking about? Let’s break it down a little- Is it the bureaucracy, the 601 membered CA, the party in power, the judiciary, or other extensions of the state such as the armed forces et cetera?  At least we could find out who is and who is not in charge of what, before becoming decidedly against every action that the government takes.

The dangers of continually putting aspersions on the government will inevitably act as a double-edged sword. While, weakening the existing mechanism put in place to cope with the emergency at hand, it will also discourages individuals in it from putting up their best efforts, even when numerous of them have undergone personal tragedies themselves. There have been countless reports of army personnel continuing with rescue and relief, even as some of them have lost family and homes.

At this stage, it might be very constructive to recognize who the actors in this process of rehabilitation and rebuilding are, so that the entire process can be seen in a perspective, and we actually know whom to get hold of; rather than just pointing to an ambiguous figure of government.

Once this has been clearly figured out, there is a need to assess what the government is capable of doing, so other alternative measures can be put in place in time. Both the citizens as well as international communities present here in Nepal need to objectively discern this. This will entail clearly understanding what mechanism and protocols they are required to carry out during situations of emergency.

The very nature of government is its visibility, both at home and globally than other numerous entities; hence, it is possible to hold them accountable. In democracies, legitimacy of any government is directly derived from the people. When these very people recurrently demonstrate dismay at the government, along with the loss of its authority, it also loses the capacity to act when called for. As the “buck is finished being passed over”, having moved through all avenues, it inevitably ends in the hands of government.

Once, the state apparatus is weak, it is not implausible to assume that issues of crime and security will increase. Even though the Haitian government was weak before the earthquake struck, it lost even its due legitimacy with the incessant criticisms against it, both from the Haitians, as well as international communities. This can even lead to tearing up of the social fabric, when there is no legit force to ensure the very basic necessities- such as security of life. We should be really careful what we wish for at this juncture and in this matter, because the consequent result could lead to other uncalled-for complications. The abrupt breakdown of the state is the last thing we want, even as we are yet to get a grasp of the after effects of the earthquake.

Just complaining what the government is doing, and what it is not, does not help anyone. If the new pretext (one that of helplessness across actors with the devastating earthquake) does not open up avenues for collaboration, and further assistance of the government, then there never will be another one.

Certainly, the government’s capacity to perform has always been up for questioning, to make matters worse, we are faced with such a huge magnitude of problem. “The quake has completely damaged 10,790 government offices and buildings while 14,997 houses and buildings have suffered partial damages.”  Rampant landslides and inaccessibility of roads increase the odds of reaching to these regions, and make the work harder. It is not wholly the intent, but incompetence and inability to collaborate with the other parties of the state entities that could be inhibiting the aim of reaching to the neediest at the moment, and accelerated rebuilding in the immediate future.

Across the international borders, the government is the face of Nepal. As it already is, Nepal does not have a strong standing in the international community; and yes, this will really matters more in the coming days. I wonder if the Haitian government has a say in any international matter; I doubt if it has that luxury even on its own territory. The “face of Nepal” needs to look resilient, as it is not new that the vulnerabilities of weak countries like Nepal have been played time and again by “external” forces. In addition, it also discourages international communities from providing further support to the government.

Its role in the rebuilding phase will be most integral, as other entities neither have the manpower nor the resources to carry out work in large scale. It can already be observed that as the heat seem to have reduced; both the world as well as Nepalis are becoming desensitized to new events being reported from the ground, already having witnessed the horrors of devastation again and again.

The government already had existing mechanisms such as National Emergency Operation Centre (NEOC) and extended District Emergency Operation Centre (DEOC) in the districts that are supposed to connect the Secretariat at the center with the districts, during unforeseen events as these. I have personally been to government offices numerous times in the past 10 days, and seen how overwhelmed they are by the sheer load of work they are required to do in a day. I have myself, along with my colleagues, been part of an initiative through the central government, and have witnessed how they are willingly to entertain new ideas and also execute them, given the efficacy of the proposed scheme.

One thing is clear; our government is not inherently built to cope with national calamity such as this. But considering their pervasive reach across the country, they are best suited to deal with the situation than any other parties, especially in terms of rehabilitation and rebuilding of the dilapidated districts. Even more, when the international agencies are gone, it will automatically fall into the government’s responsibility to oversee and ensure that the lives of badly affected are brought to a state of normalcy.

Let us take our “myopic glasses” off for a while, and look at the government from a distance as a massive organization made up of fellow Nepalis. They are just not used to be assisted by “outsiders.” Capacitating government individuals is a prime task at the moment, which probably even is not plausible given their immediate engagement. But again, the homework is figuring out their existing level of competence, as a start. We might not be in a position to play the “us and them” game at this moment. I can’t stress enough, one need to be utmost clear if their's is a “ready-made” suspicion or if it is based on clear evidence.

The government’s task-

Let’s be clear about the scale of the problem we are faced with at the moment. Eight million people have been affected, with 1.4 million people are in need of food aid immediately.[3] Probably, the country as a whole has never faced such a predicament together before.

The willingness of many parties to help needs to be complimented by rigorous planning and strategic thinking to address the work at the center, which on the one hand is to immediately “dress the wounds” of the aggrieved, and on the other hand, and equally important, to rebuild Nepal to a resilient society. For the latter, channelizing the good intent and competence of millions of Nepalis- civilians and the government, as well as the international community which is working exceptionally hard to ameliorate the situation here is necessary. There is dire need for the international community currently here in Nepal to trust the government, and vice-versa. While the former understand ground realities well, the latter is equipped with technical expertise and resources.

It is a tricky question as to who will take the lead in this, but can we now see the entity that can accommodate all these parties together?

Last week, when the government announced that all funds from around the globe for relief and rebuilding would be deposited in the Prime Minister Disaster Relief Fund, it raised a lot of eyebrows. The government's rationale was it did not want such huge assistance to be immediate dispersed over a largely scattered ground parties. These funds will be crucial in the rebuilding phase. But again as expected, it did not communicate its intent well with the country.

There might not be a better time than this, given the urgency of the situation, to introduce new mechanism that will compel the state apparatus to be transparent and accountable. But there needs to be close vigilance of the activities it carries out, as with more power designated, the more streamlined its work need to become. Now, the "civil society" has assumed a critical role, I reckon. This is not a time for accusations, but for constructive criticisms. Recommendations to the government-

• Stay close to what people have to say.
• Communicate well what it is up to. It could initiate a mechanism to sincerely brief the country with how much help it has sent, along with the resources dispatched.
• Push for more transparency, to gain the confidence of its citizens. Show to public that it is ready to step up its transparency measures. Much help that is yet to come from abroad should not be deterred because of issues of accountability.
• It needs to be able to make use of the intellectual and technical expertise that Nepalese home and abroad are capable of providing.
• Take the international community on board, and work in close coordination.

Since, the public has access to the world through social media; continually projecting the government as the “bad guy” without proper evaluation and knowing the ground realities they are functioning in, it will only prove to be counter-productive.One thing is for sure, if Nepal is declared a failed state, it will be of no utility to anyone, whatsoever.

These opinions are open for discussion.

Please comment below or get back to me at nirnaya.bhatta@daayitwa.org

About me- I am a researcher in the Leadership Lab at Daayitwa Abhiyaan. As for millions of Nepalis, the "Great Earthquake" is a turning point in my life. I believe each one of us need to do our share, after having recognized it, for speedy recovery of this country and its beautiful people. It is time to be inspired, and to inspire.

Reference-

[1] In this write-up the government is referred to the entire administrative state apparatus.

[2] “Haiti Three Years On: Overpromised and Underdelivered,” < http://www.brookings.edu/blogs/up-front/posts/2013/01/10-haiti-ferris>

[3] http://www.bbc.com/news/world-asia-32492232

NEPAL - MERCY IN THE HANDS OF GEOGRAPHY?

“If you are coastal, you serve the world; if you are landlocked, you serve your neighbors,” contends Paul Colliers. (1) It is sensible to look at this excerpt in light of Nepal’s specific context, which is landlocked as well as poor in terms of natural resources (except inland water resources).

Nepal can be said to be molded by its geographical circumstance in almost entirety. How Nepal is perceived in the world as well as how Nepal conducts itself in international politics is largely determined by its geographical position. Relations between Nepal and its neighbors have been preoccupied mainly on trade, security and migration concerns; Nepal’s enclosed geography and its proximity to India and China being the main reason. For instance, Nepal’s two third of foreign trade is restricted with India (2).  A look at the Indian embargo of 1989 can be instrumental in understanding how Nepal’s enclosed geography is deterministic of its relations with the neighbors. “In the final analysis, the dispute underscored a central geopolitical reality: landlocked Nepal did not have the military, diplomatic, or economic clout to withstand an Indian blockade as long as the government in New Delhi was willing to risk international opprobrium and press its case against the kingdom.” (3)

A landlocked country is one which does not have any self-access to the seas because it is surrounded by external land from all sides. Even the UN has considered special provisions for landlocked developing countries due to this inherent spatial disadvantage. By and large, it is not too far stretched to say that Nepal’s economic wellbeing to a very large extent is contingent on the kind of  relations with its transit neighbors, mainly India. Nepal’s most basic needs come from and through India.

Of course, simply having direct access to sea is not a panacea for all economic predicaments. There are many countries that have access to sea but still are not very well off as expected. It is beyond doubt that landlocked countries are disadvantaged in terms of trade openness, but it also circumvents possibilities to learn from wider experiences of the world. India is the only country through which Nepal connects with the outer world (as the transit country); giving the former an upper hand in negotiations in terms of how can its trade routes be used.

The most important obstacle that a landlocked country faces is hindrance to trade openness. Lack of direct access to important international markets result in supplementary transit costs; hence, export and imports come at a dear price. Even if they might not be facing tariff barriers, exports or imports in or out of the country become expensive. For instance, “The success or failure of trade of landlocked developing countries is largely determined by the availability and cost of transit transport.” (4)

A good example is the tax rate on automobiles in Nepal. At 238 per cent, Nepal has one of the highest tax rates on automobiles (5). Similarly Nepal’s exports do not compete very well because its products become relatively expensive by the time it reaches the international market. This is determined not only by the exorbitantly expensive transport facilities within the borders of Nepal, but also India’s mediocre transportation infrastructure. The latter determining efficiency of transportation and subsequent costs, that moves goods from land to the seas. 

With most of the countries in the world reaping the benefits of globalization, the plight of landlocked countries (with some exceptions) seem pessimistic. It is not too far stretched also to claim that some of South East Asian countries had similar economic conditions in the post-war period as Nepal’s. But the former countries benefited by direct access of the seas; not ignoring the government policies and the liberalization process that resulted in their economic growth.

Trade has been the magic mantra for most of the countries to prosper. Once trade reaches a certain level of maturity, proficiency automatically develops. This is exhibited by the comparative advantage theory. For instance, induced by proper incentives, increased output of production leads to cost advantage on one hand and better quality goods on the other hand. This increases the competitive ability of the producer. To an extent, one has to face global competition to become globally competent. Nepal neither faces global competition, nor is it globally competitive. This has led to lack of incentives for the producer.

Landlocked countries usually are subject to the prevailing condition of the immediate coastal country. The spillover effect- “With each additional 1 percent that the neighbors grow raises their growth by 0.7 %”.(6) Paul Collier contends that being landlocked is one of the four traps that hinder likelihood of economic prosperity in a country via ripping the benefits of a globalized world economy. Moreover, Nepal and India have open borders which facilitate movement of tens of thousands of people from both sides to the border to travel to and fro; especially India provides millions of job opportunities that the Nepali people would have otherwise not received in the home country.

Due to poor transportation infrastructure, the Terai has not been able to supply food deficits in the hills; rather it has to export to India. The Treaty of Trade 1991 governs bilateral trade between Nepal and India which was further revised in 1999, with a treaty of transit. “These provide that: (i) India allows freedom of transit for Nepalese third-country trade across its territories, through routes mutually agreed upon; (ii) permission is granted for the movement of Nepalese trucks to and from the nearest railway stations to pick up transit cargo; (iii) traffic in transit is exempted from customs duty and all charges excluding transportation and service charges; and (iv) ware- housing/storage facilities are provided for goods awaiting customs clearance before transport to Nepal”. (7) Moreover, there is a recent amendment to the Protocol to the Treaty of Transit of 1999 which allows Nepal to re- export goods through India which can have third country origins. (8) But despite such concession- from India, Nepal has not been able to fully utilize the market access provided to it. This is mainly ascribed to Nepal’s poor export performance. Regardless of these facilities provided by trading partners, Nepal’s incapacitated supply constraints have rendered it pointless.

The question on why neighbor matters

It is suggested no matter how far or near a landlocked country is situated from the closest shore of the neighbor; the cost of exporting is usually extremely high. The coastal country’s expenditure on transport infrastructure determines the transport cost for a landlocked country. “If you are landlocked with poor transport links to the coast that are beyond your control, it is very difficult to integrate into global markets for any product that requires a lot of transport, so forger manufacturing- which to date has been the most reliable driver of rapid development”. (9) This means, if the coastal neighbor has extremely efficient transportation system, it is favorable for landlocked country’s exports.

A quick look at the trade provisions will be helpful in this context; and also how Nepal's economic fate is 'pegged' with India's. “This was to be achieved by levying an export duty that ensured that the landed price of imports from Nepal into India should not be less than the price of equivalent Indian manufacture.” “If the members of a customs union have different levels of development, there is a greater likelihood of gains going to the member country which is more advanced in economic development and far bigger in size and resource.”  “Further, there is also the fear of the emergence of economic dualism in that the advanced country with a head start in industrialization may dominate the less advanced member country in manufacturing and reduce it to the level of being a supplier of primary goods.”

The sovereignty of a dependent country is always a question that yields uncertain answers. Paul Collier claims, resource less landlocked countries which are very far off from transit coastlines should have ceased to exist in the first place, because it creates harsh dependency conditions for the landlocked country (10). For instance, former landlocked countries of Tibet and Sikkim seized to exist because of their particular landlocked landscape and history. While Tibet was annexed by China in 1959 and Sikkim’s integration into the Republic of India took place in 1975.

REFERENCES- 

(1) Colliers, Paul. The Bottom Billion p. 54

(2) <http://www.tepc.gov.np/tradestatistics/gl-01-trade-composition.php>

(3) <http://www.country-data.com/cgi-bin/query/r-9187.html>

(4) Chowdhury, A. and Erdenebileg, S. Geography against Development -A Case for Landlocked Developing Countries –preface 47

(5) "Duty on duties-The hefty taxes we pay for automobiles should be reflected in better roads and highways", <http://nepalitimes.com/news.php?id=18513>

(6) Colliers, the Bottom Billion, p- 57

(7) Main transit transport corridors around the world 101- Geography against Development

(8) “India, Nepal amend transit treaty”, http://www.ndtv.com/article/india/india-nepal-amend-transit-treaty-478037

(9) Colliers, P. (2007)-The Bottom Billion p. 55

(10) Ibid p. 57

The Post-American World: Fareed Zakaria

Every civilization is subject to ascendancy and decline. With the rise of the two great Asian countries, China and India, speculations are being made about the ‘next’ super powers, however its implications on the World politics is still in need of a well comprehension. Fareed Zakaria has put forth a very strong case why China and India will inevitably become global players, expedited by a relative decline of USA, towards a post-American World. While great changes give off much skepticism, the shift of power from the west to east may seem fictitious to many around the world. In such a scenario, this book maps the shift in balance of power in the global arena.

The title of the book sounds alarming initially, but to determine clearly if ‘Post-American‘ world is a harbinger of adversity to the global community is yet to be determined. Though there are many articles and books which talk about the decline of the US, Zakaria has successfully put this idea in a perspective that corroborates the truth and also puts aside false notions. Other similar books to refer on this topic are: Are we Rome? By Cullen Murphy; Why America Failed: The roots of imperial decline by Morris Berman; and Time to Start Thinking by Edward Luce.

What is The Post-American world?

In brief, post-American world means that the USA is not the only pivotal player like it was following the great wars till the beginning of the 21st century. For Zakharia, post-American world is “not about the decline of America but rather about the rise of everyone else”. Post American world symbolizes the relative rise of the others and but not absolute decline of the US. The book centers on how America rose to become the super power and the factors that led to its rise. The “rise of the rest” has never seemed so real till recently.

The “rest” also include non state actors, and shift of power from traditional bodies such as government units. The rise of the rest does put some constraints on the American influence; however, it still remains a single super-power at the politico-military level in the world. Economically, there is an assumption that if the pie expands everybody benefits, but politics is a zero sum game and one always gains at the cost of others.

The US has virtually been the global ‘police’ after the great wars; from ensuring free movement at seas to being the sole torch bearers of the current globalized paradigm. However, the dynamics of power is changing in recent years. The various instances that have challenged American hegemony explain the changes in the status quo. For instance, even countries like India have become very assertive, this can be seen from India’s reaction over the arrest of her diplomat Devyani Khobragade last December, and how intransigent it was in asking for an apology from the US government. Immanuel Wallerstein states that “despite its decline, the United States remains a giant, but a giant with clay feet”.

The dynamism of International Politics

Since Zakaria published this book in 2008, countless events have occurred world-wide. For example, Arab Spring swept across the Arab world of which the Syrian conflict is still continuing. The US signed a nuclear deal with Iran last year. Huge numbers of classified documents were flashed out by Edward Snowden in 2013. Since then, it has come out as a public knowledge on how the U.S. National Security Agency (NSA) has been strictly spying on the top political leadership of Germany, France, Mexico and Brazil among others (not to forget, on numerous citizens of these countries as well).

Recently, America averted from getting involved in Syria, may be because it wants to assuage its already sagging popularity around the world for being too interfering in domestic affairs. After the Iran deal, Saudi Arabia is looking at US with suspicion; that can probably explain the sudden increase in military expenditure of Saudi Arabia this year. It has taken over the Britain’s position making it the world's fourth largest defense spender in 2013.

A Non-Western World: “The Challenger and the Ally”

Britain was known as ‘the workshop of the world’ at the peak of its industrial revolution, which is now a title assumed by China. China’s tremendous increase in growth has lifted some 500 million people out of poverty, which is the greatest feat ever achieved by any country in history. China seems to understand well that path to power is “markets, not empires”. Early this year China surpassed US as world's largest trading nation.

But one should not only look at the brighter side of things, it is quiet essential to understand both ends of the story to get a balanced view of the actual reality. There is a general frenzy about the rise of China and its implications for the world, and particularly for the USA. But China’s sustained prosperity also depends on how it manages an ever expanding urban middle class, resentment among ethnic minorities, tensions with neighboring countries, stark economic inequality, and rural poverty.

Another obvious question is, how will assume its position in global system when it becomes the dominant player? Zakaria writes, “China’s awakening is reshaping the economic and political landscape, but it also being shaped by the world into which it is rising”. Likewise, Zack Beauchamp from Think Progress maintains, “China wants to play inside the existing global order’s rules, not change them”. China reaps the benefits of public goods provided by the global paradigm set up virtually by the United States, but does not want to get its hands dirty. It does want to change the current paradigm, because that would mean draining a lot of resources and efforts.

India

The author admits that “While China’s rise is already here and palpable, India’s is still more a tale of the future”. He has written- in some details- the strengths of the Indian economy, the society in general and the government setup. In contrast to Chinese prudence in governance, Indian democratic system of governance “makes for populism, pandering, and delays. But it also makes for long-term stability”. The US has always opposed a single hegemony dominating Europe or Asia.  Hence, it got into strategic partnership with India so that balance of power does not tilt solely towards China. This partnership can be seen in Indo-US nuclear deal signed by President Bush in 2008.  The fact that  the new powers are more strongly asserting their interests is the reality of the post-American world.

Conclusion

The US remains the superpower only in Politico-military front. But in other sectors like industrial, financial, educational, social, and cultural- the concentration is shifting and moving away from American dominance. There is a growing anxiety to US over the rise of China. Many scholars hold a common opinion  that as the relative power of China increases, it will try to bend the rules and institutions of International system to benefit itself, hence, there is a possibility that this will create animosity in international politics.

In one of Fareed Zakaria’s interviews he says, “We start living up to our ideals and not just proclaiming them. As power becomes diversified and diffuse, legitimacy becomes even more important because it is the only way to appeal to all the disparate actors on the world stage. Today, no solution, no matter how sensible, is sustainable if it is seen as illegitimate. Imposing it will not work if it is seen as the product of one country's power and preferences, no matter how powerful that country”.

There is an immediate need for US to embrace “a world with a diversity of voices and viewpoints”, rather than dictating its terms without much considerations.  Not just being the law maker, it also needs to abide by it so that others are encouraged to play by the rules too. “It is one thing to scare your enemies: another to terrify the rest of the world”, Fareed Zakaria gives very pragmatic suggestions to the US if it is to retain its position as the global leader. Very acutely Zakaria discerns that down in history American will be remembered as a country that globalized the world, but which “forgot to globalize itself”.

Take the lead- Nepal’s future has begun: By Anil Chitrakar

“The greatest mistake you can make in life is to be continually fearing you will make one”.
- Elbert Hubbard.

The book urges the readers to 'take the lead' in making 'clear yet difficult choices.'

The author's message is clear. He cautions the readers, “Those who have given up hope need not read any further”. There has always been an air of skepticism regarding Nepal's progress, probably in every household. Visionaries are almost always looked with distrust. The author sounds way too optimistic regarding the future of Nepal! But he also suggests is that not the need of the hour?

Anil Chitrakar's Take The Lead- Nepal's Future Has Begun is a candid portrayal of the reality of Nepal and it's people. The book convinces the reader that Nepal is not as unfortunate as many might want to believe. Countries in the south-east Asia that progressed only in the past 20-30 years started with literally almost nothing, the only difference is that they managed their resources fairly well. With the changed global scenario in the backdrop, he commends that Nepal should start celebrating 'independence day' because it has received an unprecedented opportunity, which is tremendous access to the world. This is a blow to the people who have always lamented over the fact that Nepal is a helpless landlocked country. “Shrinking of the world" is a golden opportunity for Nepal to make its presence felt in the world. Certainly it is not a question of just accessibility now.

It takes more than mere use of one’s perception to understand the true worth of anything, Chitrakar's understanding of Nepal transcends distant beyond a layman's acumen.  He gives an insight on what actually gives impetus to growth. Why is that we find so many different examples of individual excellence but collectively we have been  a failure? He explains the importance of team work and the intricate layers in operation to bind the entire arrangement together. He suggests that the only way out of poverty is doing business, and Nepal is yet realize this fact as a whole.

Strengthening Nepal from within-

The title of the book keeps reinforcing itself throughout, a constant reminder to the reader that the only panacea for all evils in Nepal is taking self-initiative. This could be effectively done by making more people shareholders rather than just stakeholders. He keeps pressing the basic fact that it is incentives that matter and if created rightly Nepali people are more than willing to work hard. The author demonstrates clearly that giving everyone a level playing field is the least that needs to be done towards overall development.

A lot of focus has been given in identifying strengths of Nepali people. He suggests that the dynamic Sherpa women entrepreneurs of Khumbu need to be featured in all management schools of the world. Well, it is cliché to say that ‘be the change you want to see in the world’, but isn't self-help most effective? He has explained well how Nepalis perceive themselves today is exactly how they will end up finding themselves in the coming years. There is a very strong relation between the choices we make and the consequences that follow.


He keeps urging the readers to 'think out of the box' because there is a widespread tendency of playing it safe in Nepal. In this ‘google’ epoch, you will probably find any information on Nepal you are looking for but this book assuredly will give you a smart perspective on it.

Dire need to amend general psyche of the Nepalese people.

Being positive is the only way to ameliorate Nepal's almost sad plight. There is an acute need to start having faith in fellow Nepali people. Amidst a noisy crowd of pessimists, the author tries to voice out an optimistic message to the people of Nepal. For instance, there is so much apprehension regarding the upcoming CA elections, the author suggests that people need to be positive about it. The entire book is an answer to the question if 'there is a way out of this mess that we have all helped to create”. The reason why Chitrakar leaves a lot of open ended questions is because there are certain integral questions that only oneself should be left to answer.

Biography-

Anil Chitrakar is a Social Entrepreneur. Social entrepreneurs are ingenious people who are widely recognized as society's change agents. He received the Ashoka fellowship, the Rolex Award and the Silicon Valley Tech Award for his work. His clarity on the state of affairs is probably because he is constant traveler and is involved in frequent interactions with people from all walks of life. Just in a small span of time, ‘Take The Lead- Nepal’s Future Has begun’ has become widely acclaimed.

Trilateral Cooperation:Nepal-India-China

                                                                                            

Trilateral Cooperation: Nepal-India-China

Abstract-

(Picture)Courtesy to ekantipur.com

The sovereignty of a dependent country is always in jeopardy. On diplomatic front, Nepal has hardly achieved anything significant. Keeping aside its current viability, trilateral cooperation could prove to be instrumental for Nepal if it is able to secure it's own national interest. The main difficultly is in coherently understanding what Nepal's national interest is. There needs to be concrete set of goals that Nepal needs to aim at through the Trilateral Cooperation with India and China. Otherwise, like it usually is, Nepal will not have any say in international platforms, even when it entails its own affairs. Nepal has to be able to discern properly what interests do India and China have in Nepal also, so it becomes a reliable partner for the growing economies too. Further, Nepal's foreign policy needs to be guided by the dictum 'there is no free lunch' when it comes to dealing with other countries, as each one of them are simply trying to secure their own national interest.

It is not recommended for Nepal to enter into such a cooperation if Nepal’s national interest is not possible to upheld. As concerns of India and China are substantial, naturally they will be more careful to enter into such a cooperation. Therefore Nepal needs to be able to anticipate their motives skilfully to safeguard its concerns. Nepal’s Diplomatic apparatus needs to be upgraded so that when such an opportunity arises, diplomats are able to fulfill their duty in the most calculative way possible.

A general backdrop-

It is not an exaggeration to say that Nepal's well being depends on the state of relations it has with its neighbors. The recent state visits of the Chinese Counselor and India's Minister for External Affairs clearly exemplify this reality. Further corroboration is provided by Nepal's history in which many of the important happenings have been influenced by the neighbors. Hence, again the idea of trilateral cooperation between India, China and Nepal has come to stand as an important way out for Nepal out of years of economic despondency and political skirmishes. It needs to be clearly defined what the nature of this cooperation is to be and how to systematically go about it to get the best from it. 

There is no free lunch-

The simple reason why Nepal needs cooperation of it's neighbors is that its daily functioning to a large extent depends on Indian supply of goods, and "good will." This cooperation needs to be a tool that will favor Nepal's national interest on one hand and also make sure its sovereignty is safeguarded. Nepal needs to understand that 'there is no free lunch’ when it comes to dealing with other countries, especially with the neighboring ones.

It needs to be explicitly understood if trilateral cooperation among these countries is possible keeping in mind the distinct contour of political realities in all the three nations. As the sole impetus in international relations for nations is guided by national interests, it is quintessential to figure out where convergence lie for all the three nations. For instance, Nepal's stability is in the interest of both the countries. The problematic thing is that both the neighbors have well-defined national interests and they pursue with authority, but there seems to be ambiguity in even setting of Nepal's national interest. For trilateral cooperation to bear fruits for Nepal, it needs to be certain what it wants out of it and how it will achieve it. Moreover, unlike what usually happens there needs to consistency of goals in the foreign policy of Nepal.

Realizing trilateral cooperation through crafty diplomacy-

Nepal could learn from other examples of trilateral cooperation, like the one among the US, Western Europe and Japan (1 )and the other one among China, Japan and South Korea (2). These examples of trilateral cooperation can be instrumental in understanding the efficacy of such co-operations in general, and also teach how to avoid mistakes that have already been made. The fact that even bi-lateral relations between nations tend to be complicated, trilateral cooperation will require an even more serious framework before it comes into play.

For instance, “It is too early to work on trilateral cooperation,” said Minister of External Affairs Salman Khurshid on the 22nd of April which corroborates the fact that there is a need for establishing a systematic frame work before seeing trilateral cooperation in operation. India is willing for bilateral cooperation with both Nepal and China separately but as for now dismisses the possibilities of trilateral cooperation. Beijing seems to be having a positive outlook towards it. It seems India still has not been able to forgive China for its support to Pakistan during the 1962 Indochina war.

There also seems to be a lot of skepticism regarding Trilateral Cooperation in as well as outside Nepal(3). For India to support it wholeheartedly, it needs to be made clear what is in it for them. There are scholars in Nepal who are floating the idea that Nepal could act as a facilitator of trade between the two giant economies, but the problem is, this will only increase the cost of doing business for the trading neighbors. With already existing borders between them in Natulla in Sikkim, Aksai Chin in Jammu and Kashmir, and in Arunanchal Pradesh the idea of being a trade facilitator for Nepal seems bleak. Involving Nepal will only mean a payment of extra tariffs and customs at the borders.

It is high time that Nepal take advantage of the fact that it lies in one of the most important geo-political positions in the world. But this also means that any action that it takes will have critical consequences as its neighbors have a lot at stake comparatively. Naturally, India and China will be shrewder while dealing, which will possibly affect Nepal's sovereignty in some ways. The two neighbors have set a target of $ 100 Billion trade by 2015(5), they are highly likely to be very cautious about every deal, and even more cautious when a third party is concerned. In the case of trilateral cooperation, the third party is a volatile and unpredictable Nepal.

It is not an easy task to exactly understand their interests. Though both are interested to see political stability in Nepal, it is not a easy task to exactly understand their intentions in Nepal. If it is possible to figure this out, It will be a easy task to deal with them. Nepal seems to be the odd one out in this trilateral cooperation. India and China are becoming significant nations in the international front. Both of them are growing exponentially. But the question is will Nepal be able to keep up with them in diplomatic front? Will Nepal be able to act shrewd and secure it's own stake? For things to favor Nepal, it needs to be well prepared with a credible framework.

Need for a precise framework-

It has been the most common rhetoric in the country that political stability is essential, but this fact cannot be underestimated. Like any rational actor the economic giants will look for certainty in the country in which they are getting engaged. It is natural that with the lack of a stable government, dialogues hardly yield anything beneficial. No matter which political party comes into power after the November elections, there needs to be a fixed set of agendas no matter how many different governments come and go.

With the help of Trilateral Cooperation, investments needs to be attracted to Nepal. Nepal has a comparative advantage in energy and a huge population of cheap labor relative to India and China. If conducive environment can be created for investment, such as flexible investment policies and establishment of rule of law, investment will surely give out good returns. Trilateral cooperation can be used to as a medium to meet more stake holders in all the three countries, especially the private sector as they are the one who are usually interested to invest in foreign lands.

Recommendations-

For Trilateral Cooperation to work properly there needs to be an increase in dialogues among the three countries so that it becomes clear what is to be expected from each other. Nepali political parties need to start speaking the same language while dealing with Indian or Chinese diplomats. The diplomats need to be made more reliable as they are the leading mediators representing a country. Ministry of Foreign Affairs could begin to prioritize trilateral cooperation so that when the opportunity arises diplomats will not be caught off guard.

With enormous economic transaction between the neighboring giants, it is plausible to think there are certain things that Nepal is kept unaware of; as many international norms are, resulting out of tacit agreement between powerful countries. As these nations have a lot at stake compared to Nepal, there may be a consensus between them on certain things which Nepal is not readily informed about. Nepal needs to be clever and understand in what ways these nations could dialogue and try to discern it.

Historically Nepal was a facilitator of trade for India and Tibet. If Nepal is to successfully bridge the gap between India and China, its role needs to be clearly defined. It seems everyone knows where the problem lies but there hardly seems to exist any strategic plan to work towards successful trilateral cooperation.

Common sense economics- A summary (with a little analysis)-

Common Sense Economics: What Everyone Should Know About Wealth and Prosperity- James Gwartney, Richard L. Stroup, Dwight R. Lee

A Summary (with a little analysis)- 

Genius ain't anything more than elegant common sense.
                                                                                                                  -Josh Billings 

This book reinforces nothing but what one faces everyday on the economic front. It is a must read to understand how the "science" of economics functions. It is observed that one tends to undermine things that generally governs the daily life. This book is a reminder that it is not a herculean task to be wise on the economic vanguard, all you got to have is a little common sense about economics.


Introduction- The purpose of the book

This book is designed for beginners, specialists in the subject of economics as well as policy makers who are responsible for bringing ‘actual’ concrete changes in the economy.
For policy makers, this book gives an insight of the ‘larger picture’ which entails political rules and policy.
It highlights how people’s ‘economic illiteracy’ in a Democratic society can result disastrous for the economy of the country.

This books aims at explaining why some nations prosper which usually depends on the common people’ understanding of good economic arrangements.
The link between good political choices and prosperity is highly interlinked. The wonders of understanding common economic principles are very often underestimated.

The importance of understanding how specified principles that govern developed countries can be replicated anywhere is explained in the book.
This book shows in what ways politics and economics are intertwined. The question of whether taxes hurt more than they benefit an economy is answered.

I

Ten key elements of Economics-

Incentives matter-

Firstly, let us make an endeavor to understand what incentive means literally. Incentive is a thing that motivates or encourages one to do something. The author stresses how human nature is intertwined with incentives. Regardless of whether a person is a materialist or an altruist, his/her actions are to a large extent influenced by incentives.

The very crux of why ‘incentive matter’ explains the reason why individuals, business houses and even governments behave the way they do. The basic economic principle of demand and supply reflects how individual incentives result is altering the entire working of the market. While understanding the market behavior one needs to keep in mind the role of ‘time’ and how it affects incentives of suppliers as well as buyers.

‘Incentives’ has a direct influence on political choices as well. The author links the similarity between an individual who goes out for shopping and the ones who are in a voting booth. In both the cases, their behavior is directly affected by incentives. They are guided by the motive of benefitting one way or the other. Incentives play an important role no matter what sort of government structure one has.

There is no such thing as a free lunch- 

There is a simple explanation for why there is no free lunch. Though it sounds stereotypical, it is quintessential to understand the fact that our planet’s resources are not infinitely abundant.  The constraints in availability of resources make it a must for everyone to earn their own living. This problem is created because even the producer incurs costs for various factors of production. The ‘reality of scarcity’ somehow makes it pertinent that someone has to bear the cost, which makes it compulsory for one to pay for what he/she is demanding.

Decisions are made at the margin-

Making a conscious decision is the manifestation of the entire thinking process. When one’s motive is clear, one takes decisions based upon it. A rational individual will always base decisions on pragmatic grounds. The reason why they are called marginal is because decisions are always based on calculation of either loss or profits in units. Something gets sacrificed at the cost of getting something else. It is necessary to strike a balance between what is viable and what is approachable. Marginal benefits needs to exceed marginal cost. Necessity governs people’s decisions. For instance, in a poverty stricken country more money is expected to be invested in basic necessities than recreational activities.

Trade promotes economic growth-

The benefits of trade are beyond argument. The main emphasis is that both the parties benefit mutually.
Trade facilitates various essential advantages. Firstly, it creates the utility of transferring the good to people who value them more from the people who value them less. We could take the example of medicine manufacturers and its consumers. The manufacturer does not use its produce by it ‘self, the very purpose of its establishment is to hand over them to sick patients. Trade creates utility for all the participants.
Secondly, trade makes specialization possible. This helps in production of goods in economies of scale and ultimately upgrades quality and efficiency. The law of comparative advantage makes it possible for one individual to enjoy different products at the most reasonable price. It is of not pragmatic to produce everything at a higher cost, trade helps in avoiding this problem.

Transaction cost are an obstacle to trade-

Some sort of specialists, often called as middlemen who facilitate trade help in reducing the transaction cost. These middlemen help in overcoming barriers of time and space. At a very nominal charge they deliver the producer’s goods to the consumers. Hence, they help in avoiding too much transaction cost.

Profits direct businesses activities that increase wealth-

Any given country has limited resources. More emphasis needs to be put on productive activities than less productive activities. These resources are determined by geography and their accessibility. Producers need to focus on producing goods that consumers value more. It is obvious that when consumers are willing to purchase something, they are also willing to pay as per the demand of the manufacturer. Otherwise, there would have been no incentive for any one of them, which will lead to a halt in progress.

People earn income by helping others-

Every individual who makes an income is helping other as well. It hardly matter what this individuals’ motive is. But he is providing service to others, and the consumers reciprocate by paying them something in return. High incomes are possible only when one creates utility based products that others benefit from.

The prerequisites for economic growth-

These prerequisites include engagement in trade, investment in technology (including human capital) and sound economic institutions. The evolution of progress can be traced through the development of the above factors. The more advanced these requisites become, the more likely an economy will progress. There is a very proportional relation between progress and the mentioned factors. The economic institutions also determine progress as they create proper grounds for sound economy. Free market is always necessary as it facilitates a platform for innovative ideas. This is very essential for entrepreneurship to flourish.

Role of the ‘Invisible Hand’-

As Adam Smith propounded the idea of ‘Invisible Hand’, he stressed that market prices directs buyers and sellers towards transactions that ultimately promotes general welfare. It is true that modern economy based on private property encourages self-interest but the ‘invisible hand’ of market prices promotes overall prosperity. The presence of market prices avoids the problem of central planning, which has proved to be inefficient after the collapse of the former Soviet Union. It guides the producer as well as the consumer in the best way possible. It is not possible for any individual or central planning authority to obtain information needed for millions of consumers and producers of myriad number of goods, but market prices contain this information that is the best guide for everyone in the market.

Shortsightedness is a major economic deficiency-

There is a tendency of people to ignore the long term consequences as well as the secondary effects of an action. This is highly prevalent in the political arena. The voters often try their best at maximizing the immediate benefits. The secondary effect of an action is not immediately visible. The question of government spending on generating jobs highlights this case. For instance if a government spends a billion rupees in employing 10,000 workers for a project and decides to fund this project by imposing taxes on general people, these taxes will reduce consumer spending and consequently leads to destroying jobs.
Secondary effects are a problem not just for government, but for individuals as well.

II

Seven major sources of economic progress-

Efficient Legal system- 

As explained above, it is an established fact that a country can only flourish with free trade, enhancement of industries and the existence of private property. Only an effective legal system can guarantee optimum utilization of these factors. Legal system helps in avoiding uncertainties and arbitration on the part of the players in the market. Property includes ownership of labor services and ideas as well as physical assets such as buildings and land. Private ownership not only helps in prosperity but also makes individuals responsible for their own action. Private ownership encourages wise stewardship, as one feels responsible towards one’s own property. As ‘self-interest’ is at stake, the owner tends to use his/her property for productive endeavors. Private ownership encourages usage of their property in a way that automatically benefits others. Usually private owners focus on conserving their resources for the long term, this leads to planning and consequently systematic growth. It is necessary to understand the incentives that private ownership operates with. When there is a scarcity of these resources, the prices usually soar up which leads to automatic conservation of these resources and also people are encouraged to find better alternatives then.
A legal system that protects private property provides foundation for capital formation and gains from trade which is the mainsprings of economic growth.

Competition- A driving force for pushing innovation and efficient use of resources-

In a free market, consumers tend to play an important role of choosing from the best available alternative. This creates competition for the producers who are compelled to make the best of what resources they have. Competition eradicates inefficient producers. It creates incentives for producers to develop better products, and that also in a lower cost. Complacency in the part of the producer is avoided. As Adam Smith puts ‘it is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner but from their regard to their own self-interest’. This clearly indicates that competition leads to mutual gain to everyone.

Too much regulatory policies that reduce trade also retard economic progress-

The tendency of imposing too many regulations on trade in many countries has resulted in disastrous results. This includes limiting entry of new firms in various businesses. Regulations that give priority to political authority over the rule of law and freedom of contract always undermine gains from trade. This creates the problem of corruption, red tape, and inefficiency. The other problem that rigid government regulations create is fixing of prices by themselves. When they set the price above the market price, consumers are discouraged to purchase them.

Allocating capital-

Allocation of capital into wealth creating projects is a sign of vibrant capital market. It is essential to have mechanisms capable of efficiently using the available resources for a country to realize its potential. Investment in capital needs to be consumption-oriented. The value of the additional output derived from the investment needs to exceed the cost of investment. The country needs to develop mechanisms that encourage saving which usually is used for investment. The country needs to invest its resources in productive endeavors. In the modern economy, the capital market plays an important role.
Private investors such as small business owners, corporate stockholders, and venture capitalist place funds at their own risk. On the contrary, when investment funds are allocated by the governments rather than by the market, an entirely different set of factors come into play. Rather than investing in projects that have more market return, political influence decide here. Former Soviet Union and other eastern European countries highlight the disastrous results. Here, when governments fix interest rates which are lower than the rate of inflation, the wealth of the people also fall. Hence, it leaves less incentive for saving. In countries where governments control capital movements, fix interest rates, and allocate capital on the basis of political rather than economic considerations, inefficiency will surely take over.

The need for monetary stability- 

As money is the main means of storing purchasing power for future use, instability in it will create confusion for both lenders as well as borrowers as it creates circumstances that discourage negotiations. Savings and investing will involve very high risks. Hence, gains from specialization, large scale production will be hindered because of the mistrust in the credibility of money. When too much money is supplied in comparison to the supply of goods and services, the value of money declines, and prices increase. This happens when governments print money or borrow too much from central banks in order to pay their bills. Usually the governments have a tendency to blame the greedy businesses, labor unions, big oil companies. This is just a fraud tactic to divert their actions. When there is too much inflation, people will spend less time producing and more time trying to protect their wealth.
Another major problem is that it undermines the credibility and confidence in the government. Hence, the government’s ability to take concrete actions also diminishes. This solely happens because the well being of common people is put in risk. Only when money supply is controlled the price stability can be maintained.

The role of tax-rates-

People are encouraged to produce more when they are allowed to keep more of what they earn. It will also discourage foreign investors from investing in the domestic market and encourage domestic investors to invest abroad. Another disadvantage of high rate of taxation is that people get encouraged to consume tax-deductible goods in place of non-deductible good against their preference as tax-deductible goods will be cheaper. In a nutshell, high tax rates reduce productivity activity, retard capital formation and promote wasteful use of resources.

The advantages of free trade-

The law of comparative advantage comes into play when a country engages in free trade. This means that a country will be selling goods and services that it can produce at a relatively low cost and buying those that would be costly to produce. In this way, when a country produces in bulk it enjoys from the economies of scale. It also is in an advantageous position as it can get a wide variety of goods at the cheapest price possible. International trade also promotes competition in domestic markets and allows the consumers to purchase a wider variety of goods at lower prices. Trade restraints such as tariffs, quotas, exchange rate controls on imports or exports tend to hinder complete advantage from international trade.

The claim that non-economists often argue that import restrictions create jobs is fallacious. The main concern is to generate goods and services that people value, and just creating job does not facilitate this. As free trade fosters competition, when people are allowed to engage in it the producers as well as consumers are benefited. As every country is advantaged over others in producing something or the other, free trade allows the most efficient mode of making the best of what is produced in all countries.

Conclusion- How much does institutions and policies matter?

There is a direct co-relation between prosperity on one hand and the way a country provides secure protection of privately owned property, evenhanded enforcement of contracts, and a stable monetary environment. Government needs to be the facilitator rather than the provider. The institutions and policies need to enhance the above mentioned factors for economic progress. When low income countries get the institutions and policies right, they are able to achieve exceedingly high growth rates and narrow their income gap with the high-income industrial nations. Countries like HongKong, Singapore, Taiwan, Ireland, Chile, Mauritius and Botswana illustrate this point. In the past decades all of these countries have made substantial moves toward economic freedom, and all of them have grown rapidly and achieve substantial increases in income levels and living standards. Without any doubt, if any country wants to strive towards prosperity it needs to provide greater economic freedom.

III

Economic progress and the role of government-

The government has been an integral part of every modern civilization. A good government always engages itself in protective and productive endeavors. It protects people’s lives, liberties and properties. And it produces goods that normally private producers cannot provide.
As the government has the monopoly on the use of legitimate force, it needs to protect the people’s efforts and the profits that it results in. Hence, people are encouraged to engage in productive endeavors. The nature of public goods and the way it is regulated makes it impossible for private businesses to produce them. This is why the government needs to take the responsibility to engage in producing goods that only it can produce compared to the private sectors. For example, building a damn is not feasible for private companies.

Government is not a corrective device-

The misconception that government is a corrective device is widespread. The government is just a medium through which people collectively make choices and carry out activities. Even a democratic government which is based on the will of the majority does not assure the best use of resources. They need to play the role of a facilitator rather than the provider.

The costs of government are not just taxes- 

Very frequently politicians fail to mention the entire expenditure they incur. Only taxes are mentioned which is only a partial cost incurred by the government. They tend to miss out on explaining about the ‘opportunity cost’. Three types of costs are incurred by the government. The first one is the loss of private sector output that could have been produced with the resources that are now employed producing the goods supplied by the government. The second cost is the resources expended in the collection of taxes and the enforcement of government mandates. And finally, the cost of price distortions resulting from taxes and borrowing. This creates a gap between what buyers pay and sellers receive. These other costs also need to be considered when analyzing the merits of government programs.

The need for constitutional rules to restrain advantages to special interest groups-

There is a tendency that democratically elected officials favor special interest groups at the expense of the general public. When the government policy is limited to its proper function, it contributes mightily to economic prosperity. We could take the case of a policy that will generate personal gains for the members of the specific groups at the expense of the broader interest of taxpayers or consumers. Hence, constitutional rules need to restrict misallocation of the resources.
Unless restrained by constitutional rules, legislators will run budget deficits and spend excessively-
Budget deficit emerges when government spending exceeds earnings. Then they issue interest earning bonds to finance their budget deficits. These bonds comprise the national debt. Constitutional restraints need to be introduced to prevent the government spending more than what they are willing to tax.

Economic growth is hindered when government is involved to help some people at the expense of others-

Individuals acquire wealth either by engaging in production or by plunder. Government needs to encourage productive activity and discourage plunder. Government in this case needs to act as a neutral force. When the effective law of the land makes it difficult to take away the property of others, few resources will flow into plunder. The quantity of resources directed towards lobbying, political campaigns, and the various forms of “favor-seeking” from the government is rampant in the modern world. The unfair transfer of wealth from tax-payers to well-organized groups and voting blocs has become the business of the modern politics.

Too much cost of income transfers makes it unfeasible-

The need to transfer income is widely recognized in the modern world. But the cost of income transfers is far greater than the net gain to the intended beneficiaries. This failure is explained by the common proposition: this transfer of income does not guarantee the well-being of the recipient in the long run. Moreover, it is a tedious task to identify the right beneficiaries. At times, people modify their behavior just to qualify for being a beneficiary. Apart from making people less productive, people are encouraged to make choices that are likely to make them more prone to adversity.

The unsuitability of central planning-

Market price has been established as being the most efficient medium to cater progress, and central planning contradicts this. Central planning hardly substitutes politics for market verdicts. Even when decisions are made by the general public, it needs to be ratified by legislators. Governments hardly involve in innovative endeavors. Innovative tasks are highly risky because of the unlikelihood of success. Moreover, it is guaranteed that when one is putting his/her own investment they will try to make the best decisions because of the stakes involved. Central planning is not feasible because, they tend to miss out on recognizing problems created by lack of accessibility. Moreover, in this dynamic world where things tend to change very often, the government is sure to look out and amend its plan as per required.

Competition is just as important in government as in markets-

Unlike in the private sector where performance can be monitored, there are no methods to identify performance of the personnel in the government sector. Hence, it is very essential for government enterprises to face competition. To make the best out of the government organizations, private firms should be permitted to compete on a level playing field with government agencies and enterprises. The government cannot act oppressive when citizens have the right to choose from whom to seek services. Competition among decentralized government units- state and local governments will also help promote economic progress.

Need of constitutional rules to bring political process and sound economics in harmony-

Only democratic elections will not ensure economic progress. The government needs to strive to set political rules that encourage self-interest of voters, politicians, and bureaucrats into harmony with economic progress. This makes it necessary for it to keep its role limited and neutral among various sub-groups of citizens.

Things to remember- 

Economic prosperity is only possible through private ownership, freedom of exchange, competitive markets, the rule of law, and monetary stability. After these prerequisites are present citizens will be able to “reap what they sow”, and consequently which will lead towards a prosperous economy.