What has pushed China from poverty to the second largest economy in a span of few decades? The question merits some explanations if we are to learn any lessons from China’s rise. Most importantly, we need to learn to adopt and implement the economic policies and programs that like that of China for our own economic growth.
INVESTMENT IN EDUCATION
When Mao founded the New China, he devised policies to establish and develop mass education. Despite his aversion for imperialistic and feudalistic education system prevalent before the revolution, he knew that education was the single most important factor in lifting China out of poverty. He focused on popular education. Registration fees to enroll in colleges and universities were reduced or waived off altogether. Because of this, along with the wealthy elites, even the peasant-class had an access to university education.
What has pushed China from utter poverty to being the second largest economy in the world in a span of few decades?
While the concept of free education exists in the primary and secondary levels, the state of Nepali public education system is deplorable. There aren’t enough teachers, infrastructure is lacking, and public expenditure on education has hovered around three percentage of GDP in the last 30 years. On the contrary, the private education system in Nepal is flourishing and growing as an industry. This is a clear indication that the general public values quality education and are willing to pay any price for it. The questions then are: Does our government value its citizens’ education in the same line? Is our government willing and capable of providing free and quality education to all its citizens, even in the tertiary levels?
INVESTMENT IN TRADE
Despite good education and health policies, Mao’s people were still poor due to his emphasis on import substitution which is a deliberate effort to replace imports by promoting the emergence and expansion of domestic industries. It is done through protective tariffs and import quotas. When Prime Minister Baburam Bhattarai opted for Mustang ride, did he ever contemplate that he was favoring the wrong industry? We have no comparative advantage in producing automobiles. Our PM should be promoting Nepali shirts, leather shoes, and carpets—products that we can compete with in the global scale. He needs to learn from Mao’s folly.
If not all, Mao’ssuccessor, Deng Xiaoping, learnt lesson from Mao’s folly. Deng is universally known for saying: “It doesn’t matter whether the cat is black or white as long as it catches mice”. The cat in question was “economic policy”. Unlike Mao, Deng realized that China was under-achieving its potential by not engaging in worldwide trade. So, he opened up the Chinese economy after 1978, and embraced ‘capitalism’ albeit with some constraints. He encouraged household production responsibility system that enabled farmers to work less for the commune and more for themselves.
The State-Owned Enterprises (SOEs) improved their performance after he implemented a wage system that linked efforts with rewards. In the rural areas, nonfarm enterprises developed as significant contributors to increasing employment and rural per capita income. In order to show and prove that China was serious about its capitalist ambitions, four Special Economic Zones (SEZs) were created along the coast.
While it is true that Nepal has been following on similar footsteps, success has been elusive. We joined the World Trade Organization (WTO) on 23 April 2004 with hopes that liberalizing our markets and taking away the barriers against trade would help usher the nation to globalization along with the benefits touted by globalization experts. We are also a signatory of the South Asia Preferential Trade Agreement (SAPTA) and South Asia Free Trade Area (SAFTA).
However, we have not been able to substantially benefit from any of these agreements. Export of Nepal to the South Asian countries have not increased significantly. Textiles and primary commodities export of Nepal has suffered in recent years. Competition with countries like India and China—not to forget perennial power outage—has made Nepali manufacturing industries difficult to survive.
Recently, there have been attempts in trying to create Special Economic Zones (SEZs) in Nepal. However, that alone is not sufficient. Like the China of 30 years ago, most of our population is based in the rural areas. We are not going to develop until we take development and prosperity to the rural areas of Nepal. But no efforts to that effect seem to be made in Nepal. What we lack is a visionary leader like Deng Xiaoping who can talk, and, then, walk the talk.
INVESTMENT IN HEALTH
When we talk of “Chinese miracle” we must not forget its one child policy. Though Nepal has population problem, such policy is difficult to implement in Nepal for the simple reason that Nepali society is “democratic.” Therefore, any effort to slow the population growth in Nepal needs to come through well-laid out plans and policies. We have made tremendous progress in this front with various successful family planning programs.
In 1980, the immunization rate among Nepali children—between 12 and 23 months old—was around two percent for measles and eight percent for DPT. But with decades of tireless efforts by various agencies the number has been brought to over 80 percent, for both Measles and DPT, today. Going by this rate, soon, all newborns in Nepal will be vaccinated against Measles and DPT. The worrying fact, however, is that out of total spending on health, government’s share has always stayed below 30 percent for the last three decades.
We need to emulate Chinese policies and increase our social expenditures. With stagnating level of spending on health and education of women and children, who are the most vulnerable to poverty, poverty in Nepal will persist. The Chinese experience has shown that gains in health and education during Mao’s regime contributed to the gains in wealth during Deng Xiaoping’s regime. Evidently, healthy society, with proper policies in implementation, can turn wealthy.
Sadly, good health programs are not readily available to our rural populace. Rural health posts and hospitals do not have enough doctors, nurses and medicines. Therefore, our government needs to increase its spending on rural health programs. Also, Nepal needs to emulate the good practice of barefoot doctors from Mao’s rule. Mao had several individuals in villages and communities trained in basic healthcare. Since there weren’t enough doctors and nurses working in every single community in China, these barefoot doctors would provide invaluable first-aid and basic healthcare to the Chinese citizens. There is a lesson for Nepal to learn from this practice too.
The writer is Program Officer at The Asia Foundation
mukhanal@gmail.com
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