There is no denying that a robust economic growth is possible only through capitalism and free market economy. The failure of China under Mao Zedong and success under Deng Xiaoping is an ideal example of that. If history is any guide, it is quite clear that only capitalist culture can ensure both freedom and prosperity of the public, not socialism or communism that Maoists still dream of.
There is another important factor – geography – that plays a vital role in determining a country’s economic growth. Last year, Paul Krugman received the Nobel Prize for Economics for his lifelong research on this subject.
Noted economist Jeffrey D Sachs found that nearly all landlocked countries in the world are poor, except for a handful in Western and Central Europe like Austria, the Czech Republic, Hungary, Slovakia and Switzerland, which are deeply integrated into the regional European market, and connected by low-cost transport.
His widely-acclaimed research found that development seems to be favored among the temperate-zone economies, especially the subset that (1) is in the Northern Hemisphere, (2) has avoided socialism and (3) refrained from war. On the other hand, tropical regions face hindrances in developing fast, probably because of higher disease burdens and limitations of agricultural productivity.
He further adds that coastal regions and regions linked to coasts by ocean-navigable waterways are strongly favored to develop fast when compared to the hinterlands. Landlocked economies may be particularly disadvantaged by their lack of access to the sea, even when they are no farther away than the interior parts of coastal economies, for at least three reasons: (1) cross-border migration of labor is more difficult than internal migration, (2) infrastructure development across national borders is much more difficult to arrange than similar investments within a country and (3) coastal economies may impose military or economic costs on interior landlocked countries.
Leading thinkers have pointed out that the four major areas in which geography plays an influencing role are transport costs, human health, agricultural productivity and ownership of natural resources.
Economists say high transportation costs inhibit the ability of landlocked countries to engage with the outside world to trade goods, exchange capital and borrow ideas. Sachs also points out the cost of diseases on economic development. Tropical regions are more prone to diseases which have a vital effect on economic growth. He even claims fertility is affected by geography. A country like ours is still largely dependent on monsoon rain.
Besides, the fate of nations is also determined by the presence or absence of natural resources. Kuwait, Saudi Arabia and Qatar are rich not because they are governed well but because they have oil. Botswana is a landlocked country but has diamond mines. A country’s neighbors also influence its growth. We can only blame god for not keeping us next to Finland or Canada. Though our neighbors are emerging powers, our instant neighbors are the impoverished Indian states of Bihar and Uttar Pradesh in the south and Tibet in the north.
All said, even though geography is intricately linked to economic performance, it is not everything. South Korea is rich whereas North Korea is not, despite both the countries sharing the same geography and climate. The government and the policies that it formulates also have an influence on the fate of a nation. Burma, a country with potential resources and access to sea and once a better-off country, now lags far behind in almost everything after being mishandled by the military junta. Thus, in spite of everything, leadership is also equally important as can be evidenced by the transformation of Singapore from a third-world country in the 1960’s to a twenty-first century economic powerhouse now, under the leadership of Lee Kuan Yew.
Instead of cribbing about their limitations, landlocked countries have to work around their constraints. In our case, we can convert our perceived geographical liability into an asset by promoting tourism across the country and investing heavily in hydro-electricity.
Even though the economic targets of the Maoists seem unrealistic when considering our place in the world map and resource constraints, the government cannot shy away from working on halving our illiteracy and infant mortality, bettering our roads, schools, hospitals, water supply, increasing life expectancy and improving the quality of life. As the two Asian giants on our North and South are well on course to becoming future superpowers, Nepal cannot afford to lag behind considering the civil war is over and those who promised miracles are now in power.
samyam.wagle@gmail.com
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