-Prativa Pokharel
No country in the world today is completely self-sufficient, or has completely embraced free trade policy. But economically prosperous countries are the ones that embrace open trade rather than protectionism. Many countries, including India and China, once pursued a policy of complete self-reliance and discouraged imports of foreign goods. These countries could only uplift their citizens from the poverty and became global economic power after opening-up their market to trade. Countries that opted to open their market have paved the way for economic progress and those that didn't are forced to live in poverty.
We don't need to spend a lot of time, energy and resources to make bread that can be easily bought and eaten for Rs.30 in the market. For instance, bread is not something that everyone can make in their home. Likewise, not every country has the competitive advantage to produce all goods and services they require. Each country has its strengths and weaknesses, which needs to be identified. It seems prudent and in everyone's interest to be able to gain financial advantages by buying other people's goods and services that cost us less amount rather than to produce the same product at a higher cost.
Self-reliance is catchy and is easily associated with the spirit of nationalism, as these sound altruistic and attract the masses. No matter how good the slogan of self-reliance sounds, if we can get a similar product at a cheaper price, we are naturally attracted to it. Today, nationalistic slogans like banning imports from all over the world are being raised in Nepal. But, if we avoid buying goods from other countries, will those countries then encourage their citizens to buy our products? They would, of course, obstruct our goods and services, which would inevitably rob the residents of both countries of the ability to choose and force them to pay a higher price which will take away the savings of the ordinary people.
From Nepal's point of view, the issue of discouraging the procurement of foreign goods and promoting the self-reliance strategy has taken precedence in our domestic affairs, in response to external interference. Nepal's greatest challenge is economic hardship. As long as our system keeps on weakening us, our strong neighbors will continuously interfere in our domestic affairs. Although Singapore, Korea and Switzerland are comparable to size and/or population to us, no one can meddle with them because they have established a situation of interdependence by implementing free trade.
Our leadership has always pursued a strategy to establish a self-reliant economy. However, we were unable to take advantage, amidst the political crisis and policies. Thus, by creating a situation of dependence on others and by establishing good policies aimed towards economic development, we could have made our neighbors dependent on us. Instead, we are busy begging with others for goods like salt, sugar, malarial medicines and so on.
If we could flourish our economy and be able to integrate with economies of other nations, we would not have to resort to sloganeering on nationalism and self-reliance. After all, whether it's a country or person, everyone neglects those who are weak and poor. We have enough proof that trade facilitates peace and is better than self-reliance. If we avoid the goods and services of other countries from entering our market, they will reciprocate by banning our products from entering their market, thus turning the relationship between the two countries sour. But if we ease exchange of goods and services with multiple countries then there would be a good relationship between those countries who trade with each other.
“When goods don’t cross borders, soldiers will” says French economist Fredrick Bastiat. Likewise, since India and Pakistan, or North and South Korea do not trade with each other, they always are ready for war with each other. While on the other hand, traditional enemy nations of Europe lost millions of their people due to the first and second world wars. For hundreds of years, they had fought to stretch their territories, but today they live in peace and harmony with each other in the European Union. This was possible only because they opened their borders to each other for trade. Nowadays, a single visa can allow tourists to travel to more than 20 countries without border barriers, which was possible only due to easing of trade. So, mutual trade and interrelationship between countries promote peace that can last permanently.
Therefore, we need to create a business friendly environment and allow market to function by eliminating policy of trade barriers instead of adopting the values of self-reliance by preventing imports. Our focus should be to identify our competitive advantage and produce goods, services and job opportunities within the country to make outer world rely on us and create interdependency.
Writer is Associate in Bikalpa-an Alternative
