Introduction
Nepal, a newly borne republic is currently in most difficult condition in terms of politics and economy making nationality weaker and republic doubtful. Peace Process which started after 12-points agreement between 7-parties alliance and Maoists was always doubtful as many questions have been rising in implementation of agreements. Due to this, economy which is result of foreign aid and remittances is also going downwards. As political parties especially Maoists think that they must capture each and every sector, nation is still unable to practice democracy and market economy properly. It is universal fact that market economy and democracy are supplementary to each other. But in absence of perfect democracy, market and public oriented institutions are being ineffective. As a result free access of poor people in business is still not in good condition. As poor people are always susceptible, to be used by extremists and communists against democracy so there requires large reforms in political methodology and institutions to make more access of poor people in market and to make them benefited by business. Great introduction
Political Analysis
Actually politics in Nepal is of amazing type. History says that politics is mainly done for gaining resources that are already present rather than for identifying possible new resources of opportunities. The nation started to walk towards democracy after people's movement in 1950.But due to problems in leaders and King, it was kidnapped by King in 1960 and autocratic system called `Panchayat` continued until 1990.But after 1995, country bounded to fight a civil war against the Maoist party. In 2006, Maoist was called to be landed in Peace Process. During the periods between 1995 and 2006, many lost their lives. But Maoist attacked especially cadres of different parties. As a result people believing in other ideology left rural areas. During the periods they gave bigger slogans against India and U.S.A. But their dual activity shows that they just want to get control over the nation either by threatening others or by attacking cadres of other parties. In fact this nation is in process of polarization where in one hand there will be parties calling themselves democrats and in other and Maoists who say that they won't accept diversification in political ideology in constitution to be written, in other hand. But in between ideological conflicts between these aspects, ordinary people are being suffered. The example of either of Maoist attack in Parliament or the different agendas submitted by 3-top Maoists leaders during their 4th extended meeting in Palungtar shows that writing new constitution is very doubtful. Because although Maoists leaders are not unified in terms of when to organize people's revolution against old system but they are unified to organize revolution. For that they have focused on strengthening YCL .In addition as they have included their armies in their meetings rejecting the orders of UNMIN.This symbolizes that Maoists still think their armies as weapon to capture nation. So such activities seem as obstacle for integration of armies. Either the attack on Himal media or the frequent attack on Rampur Agriculture campus by Maoists suggests that Nepal is still going downwards in terms of bringing democracy, free media etc., .As a result of conflict between the internal forces, country has been field for game of neighboring countries. As India tries to make Nepalese politics in their favor and similarly China is also increasing its appearance .So this nation has been buffer zone state between India and china as suggested by Charulata Hogg of Chatham House. Based on this we can say that politics is in severe condition. To break this, internal forces must come to one place. For that Maoists must wake up from their dream of People's Republic and other parties also accept their defeat in election. Excellent analysis, though the situation is unfortunate
Business Analysis
Actually business is defined as a difference between particular sets of regulations governing particular sets of arrangements and their environments. Institutional environment, with some properties of goods and contracting parties determines the structure and terms of markets arrangements (Dorward, 2001).As Nepal is a low income economy in world, market and business in Nepal are characterized by high transaction cost and risks, weak information flows and weak institutional environment .Thus characters with smaller resources either political or financial, are facing higher cost in accessing information and in enforcing property rights in markets. As a result these costs are inhibiting market development and also the access of poor people in market is not satisfactory. Due to this high cost, both the economic and technological development is reducing. In addition due to the high transaction cost in a market of lower economy like Nepal, market is being thin as majority of people in rural areas do not have access to the market and thus business condition of Nepal is just like `Low Level Equilibrium Trap`.]
Fig: institutions and Low Level Equilibrium Trap (Dorward et. al, 2003)
As a result of this low level equilibrium traps not many foreign investors are being attracted towards Nepalese business. But for this political deadlock is responsible very much.
Political Reform Priorities
As stated above Nepal needs large scale political reform for establishment and stabilization of democratic constitution. As we cannot get victory over other provided internal forces are segregated. So all parties must come to one place. I think the first and foremost thing to be done for establishment of democratic institutions is safe land of Maoist armies in society as different news of involvement of Maoist armies in different crime acts is reported. The only reason why People are poor both physically and mentally is because still none of parties have formally given commitment for improvement of living standards of poor people. Some have given but for popularity only. Parties calling themselves democrats must be serious as nation is near to Scandinavian countries where democrats became success to break growing communist by bringing different popular, poor and marginalized people oriented packages because studies show that Nepalese can no more sustain extortions and social insecurity created due to YCL.So if democratic parties being serious address problems of majorities and threats over nationality, future of democracy is good. good
Business Reform Priorities
Actually business in here is left with critical questions such as how institutional, technological, social and economic development can proceed through business and how different market stakeholders can promote development paths that will involve and benefit the poor as their population is still in majority and they are important for stabilization of democracy. So priorities should be given towards political economy of institutional change. North, 1990 have provided a background on effect of different ways of institutional transformation on economic development through business. Great reference Institutional change can be brought up by the responses of stronger groups or political consensus. In case of Nepal institutional change brought up on the effort of political consensus will be sustainable. In addition to considering process of institutional change, types of institutional change must be considered if Nepalese business and society is to climb out of the `Low Level Equilibrium Trap'. Community based organizations, micro-finance groups although are not parts of competitive market but can work well for the benefit of poor so these organizations must be promoted to check unrealistic demands on governments and also to prevent from facing serious problem of state failure caused due to market institution failure.
Niraj – this is an excellent essay. I enjoyed reading it.
Role of Business Community
Business communities are vital to establish democratic and market oriented institutions. In case of today`s condition of globalization role of business community is increased. Mainly they can work by
1) Providing financial assistance to the emerging institutions.
2) They can help institutions to bring packages in favor of poor people so that they can be involved in democracy and business,
3) They can advocate for liberalization, transparency and accountability in institutions by forming a forum. yes
4) They can organize different programs in co-ordination with civil society, media for liberalization and democracy in markets.
Conclusion
The first and foremost matter for the establishment of democratic and market-oriented institutions is political commitment by leaders. Due to instability and extreme nature of political parties, development of democracy and effect of market institution is not satisfactory. As business in Nepal is just like `Low Level Equilibrium Trap', poor people do not have still access to market and business and also foreign investors are not being attracted. Therefore for solution of this political commitment and implementation of commitment is needed for liberalization of the business institutions and also to increase CBOs and micro-finance institute in order to integrate poor and marginalized people into mainstream of democracy. Business communities can play a key role for proper development and effectiveness of such established institutes by making environments .Government should also help them to reduce unrealistic demands on Government in order to prevent from state failure caused by market imbalance.
References:
1) Dorward, A. and J. Kydd (2004) ‘The Malawi 2002 Food Crisis: The Rural Development Challenge’, Journal of Modern African Studies 42(3): 343–61.
2) Dorward, A., J. Kydd, J. A. Morrison and I. Urey (2004) ‘A Policy Agenda for Pro-Poor Agricultural Growth’, World Development 32(1): 73–89.
3) Dorward, A., N. Poole, J. A. Morrison, J. Kydd and I. Urey (2003) ‘Markets, Institutions and Technology: Missing Links in Livelihoods Analysis’, Development Policy Review 21(3): 319–32.
4) North, D. C. (1990) Institutions, Institutional Change and Economic Performance. Cambridge: Cambridge University Press
5)http://www.chathamhouse.org.uk/publications/twt/archive/view/-/id/2041/
6) http://blog.com.np/2008/12/21/maoist-the-party-of-prime-minister-attacks-himalmedia- the-newspaper-house/
7) http://hamropalo.com/nepal_news/12-students-injured-in-ycl-attack.html 8) 8) http://en.wikipedia.org/wiki/Politics_of_Nepal
