How was the work in Doha? “Work was good. I made about 25,000 rupees a month.” That was good money, I thought, because a truck driver cannot hope to earn as much in Nepal. And I also thought he would be back to Doha soon. But I was wrong. He wasn’t going back. “Four years in a foreign land is enough.”
He had saved about 500,000 rupees after paying family debt and paying for his family’s living. Now he wanted to stay in the country, be with his family, and do something on his own. What that would be, he wasn’t sure. But he was confident that he would be able to begin something to earn a living. “If I put in as many hours of hard work as I did in Doha, I think I can earn a decent living for my family.”
This brief conversation with Bikram changed the way I saw and valued foreign employment. Many of us see it just in terms of the amount of remittance that flows into the country. And that is what the elite values since it keeps the economy afloat and society from descending into outright chaos. But the 520 million rupees that Nepalis working abroad bring every day is not the complete story.
There is something more to it.
Unofficial figures suggest that over two million Nepalis are working abroad. All of them may not be as lucky as Bikram was to have found a job that pays a decent wage and be able to come home with a modest saving. But all of them will come home with some work experience. When people are used to a regular full time—even overtime—job for over several years, not just their lifestyle changes but so does their attitude toward work. They become habituated to work, and along with it come skills and competence. Just think how big a change this will be in a society that still prizes leisure and sees work as a burden of the ‘less-fortunate’ class. For unskilled and ‘reluctant’ workers, foreign employment works like a paid-training stint—they gain skills and also get paid for it. In this sense, over two million Nepalis are getting training abroad. Today they may be working for a foreign country, thus helping soar its Gross Domestic Product (GDP) figures. Tomorrow, given the right environment, they will be working here and boosting our own economy.
This is particularly important because capitalism has a mysterious way of rewarding industrious population (of a nation) and punishing the lazy lots. The lesson from natural resources-rich countries is particularly striking, for we also have enormous hydro potential, which we hope to exploit someday and dream of becoming rich just because of it. The correlation between the country’s natural resources and development is, however, little murkier, if not all too negative.
If we aim just to harness our hydro-power, export it and become rich, that’s not going to work. Harness hydro-power we must inviting foreign capital, but we must also generate capital from the royalty and reinvest it on medium-scale projects to generate power for internal consumption.
Think of the African countries rich either in oil or diamonds or some other minerals—Angola, Congo, Chad, Sere Leone, Nigeria, Zambia, and Zimbabwe. All of these countries are rich in some kind of natural resources but none of them are good models for development and many of them are economic disasters. Natural resources have actually been a curse for many of them—they have fought civil wars over it and ravaged economy and the society.
Political greed often leads to mismanagement of economies based on ‘extractive resources’. But that is not the only reason why countries rich in natural resources fail to manage their economy well or why natural resources fail to provide a platform for development and affluence. This is basically a question of how capitalism works.
Let’s take an example of a relatively affluent Saudi Arabia, the country with the world’s largest reserves of crude oil. Saudi Arabia has a per capita income of over 15,000 US dollars, thanks to millions of gallons of oil it extracts everyday. But the Saudi unemployment rate is as high as 25 percent and many of its citizens live on hand-out cash provided by the state. Isn’t it that the Saudis should have been able to mobilize the petro-dollars to spur development in other sectors so that it would have become a well-diversified, robust economy will near-full employment?
The excessive money from natural resources actually distorts the rest of the economy and strangles its development. When economy becomes awash with money from just one sector (oil or diamond or metals or minerals), the real exchange rate rises, so does inflation, interest rates and wage. The cumulative effect: Cost of production goes so high that every other domestic product becomes uncompetitive in foreign as well as domestic market.
It’s precisely for these reasons that many natural resources-rich economies have not been able to do well in the long run; sometimes they have been disasters from the word go.
Recent development role models, the Asian Tigers, became rich not because of their abundant natural resources but because of the hard work of their people and good management of the limited natural resources they have.
The story of Bikram Pun and many others like him is, therefore, important for our long-term development dream. If we aim just to harness our hydro-power, export it and become rich, that’s not going to work. Harness hydro-power we must inviting foreign capital, but we must also generate capital from the royalty and reinvest it on medium-scale projects to generate power for internal consumption.
We may earn some money by exporting our hydro-power but a better way to exploit it is to spur industrial growth supported by affordable and reliable power. With huge hydro potential, growing (and trained) workforce, and rising wages in India and China, we have enormous possibility of using affordable power and relatively cheap labor for our advantage. Are we ready for it?
ameetdhakal@gmail.com
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