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In a multiparty democracy, even if there are differences among the parties on other issues, let us establish the tradition of maintaining national consensus on foreign relations and foreign policy and always follow it. No one should make an open or opaque agreement with any foreign power against national interest for political parties, factions and private interests. In the context of a new Cold War (or Hot War?) unfolding with Asia at the center, Nepal should pay attention to its unique geo-strategic location. 

On one hand, we have to end the traditional dominance of some entity and maintain our complete independence/sovereignty/geographical integrity. On the other, we have to prevent our fall into the abyss. With regard to PM Pushpa Kamal Dahal’s visit to China, emphasis should be on implementation of previous agreements and quick construction of physical and other infrastructure that will connect Nepal with China’s vast market.

The author is a former prime minister

Quick facts

Born on 18 June 1954 in Gorkha

Went to Amarjyoti Janata High School, Gorkha

Graduated from Punjab University, Chandigarh, Post-grad from School of Planning and Architecture, New Delhi

PhD in Regional development planning from Jawaharlal Nehru University

Published doctoral thesis ‘The Nature of Underdevelopment and Regional Structure of Nepal: A Marxist Analysis’ in 2003

Husband of Hisila Yami

Father to Manushi Yami Bhattarai

I went to India in 1972 under the Colombo Plan scholarship to study architecture. Architecture is a fusion of science and art, which is also associated with the socio-economic factors of society. For instance, we often hear terms like ‘Architecture of Modern Nepal’ or ‘Architecture of Modern India’, where the process starts from a building, housing, urban area, regional area, and lastly the international area.

The intricacies of this developmental process intrigued me, compelling me to delve deeper into the subject. Consequently, I dedicated my efforts to researching why Nepal is still backward in development and analyzed the political-economic aspects of it. I then went on to publish my doctoral thesis on ‘The Nature of Underdevelopment and Regional Structure of Nepal: A Marxist Analysis’ in 2003.

We know that Nepal is underdeveloped, but this book offers an in-depth exploration of the regional aspects of this underdevelopment. The book primarily utilizes two key hypotheses—internal dynamics and external dynamics—which later helped to build the base of the Maoist revolution too.

Concerning the internal dynamics, our history reveals a prolonged period of centralized feudal monarchy spanning two centuries following its unification. In contrast, during the same era, Europe had already embarked on the path of industrialization and capitalism. Typically, societies follow a progression from tribalism to feudalism and then to capitalism as part of their economic development. However, Nepal, during the 18th century, found itself at a juncture where it should have transitioned towards capitalism but was still firmly entrenched in a feudal system.

Presently, the global trend is moving from advanced capitalism towards socialism, but Nepal has yet to fully establish a solid capitalist foundation. Therefore, Nepal’s status as an underdeveloped nation can be attributed to its prolonged history of centralized feudal governance.

Regarding the external dynamics, prior to the Sugauli Treaty, the developmental status of Nepal, India, and neighboring states exhibited considerable similarity. In fact, within South Asia, Nepal was notably ahead of its counterparts. However, following the Sugauli Treaty, Nepal began to undergo a shift towards political dependence, or I prefer saying semi-colonialism. During this period, India embarked on the path of industrial capitalism development, while Nepal remained primarily reliant on a limited number of small-scale cottage industries located in only specific regions of the country.

This disparity in economic development led to an unequal relation and exchange where Nepal became increasingly tied to the Indian economy.

With these internal and external dynamics, I divided this book into four parts—Agriculture, Industry, Trade, and Pattern of Urbanization—analyzing and concluding that without ending our central feudal system and restructuring our dominance-dependent relationship with India, Nepal can’t develop.

Traditionally, the common classification for the major components of an economy is agriculture, industry, and services. However, I view it as the primary, secondary, and tertiary sectors. Historically, economic development has typically followed a path from the primary to the secondary, and then to the tertiary sector. In our case, as a less developed economy, the primary sector holds a significant share. There is a noticeable gap in the secondary sector. For instance, in China, approximately 38 percent of their economy is linked to the secondary sector, while in our case, it barely reaches 12 percent and sometimes drops as low as five percent. It is now impossible for us to progress through these economic stages following the historical pattern.

Given our integration into the global economy, it is imperative that we shift our focus towards transitioning the labor force, which is predominantly engaged in agriculture, to the industry and service sectors. When there is an agriculture-based rural economy, the settlement pattern is always scattered. Unless we shift our labor, production, and economy to the secondary and tertiary sectors, it’s difficult to plan a settlement in a scientific way.

So, when we planned federalism, our aim was to bring economic development alongside fostering ethnic diversity. This regional restructuring was essential to facilitate a transformation in our economic landscape.

Numerous flaws exist in our present regional restructuring. Ideally, it should have been meticulously designed with the input of urban planners, following a systematic, scientific, and economic approach. However, our current local structure appears to be haphazardly assembled, primarily through the amalgamation of pre-existing feudal systems. It lacks a scientific basis for its restructuring.

The sole resolution lies in freeing the workforce currently confined to the primary sector, enabling their transition into the secondary and tertiary sectors. Only then can we enhance production and stimulate economic growth, ultimately breaking free from this predicament. Our emphasis should be on achieving double-digit economic growth over the course of two decades.

About him

Manushi Yami Bhattarai (Daughter)

Coming from humble origins, he is deeply rooted in his ideals for an egalitarian and just society free from poverty. His lifelong political struggle has always been driven by aspirations for Nepal’s development and prosperity. He displays an earnest scientific temperament in his thoughts and actions and has always had a keen interest in global phenomena, the latest developments in science, technology, and philosophy, and how they may affect Nepal’s political-economic transformation.

Yogeshwar Parajuli (Friend)

Bhattarai possesses remarkable intelligence and a profound understanding of various subjects, making his educational background a significant asset when it comes to his role as a politician. He exhibits a remarkable capacity to acquire new knowledge in line with his duties and is proactive in finding ways to put fresh ideas into action. During his tenure as prime minister, he assembled a team of experts with whom he regularly convened to address emerging challenges. Bhattarai has a consistent commitment to continuous learning and growth.

Laxmi Devkota (Colleague)

Baburam Bhattarai holds a strong belief in the power of science and technology. He is convinced that the progress of our world has been driven by advancements in these fields, and he advocates for Nepal to embrace a similar trajectory. He consistently adheres to his principles and actively seeks opportunities for learning. I greatly admire his modest lifestyle and his commitment to deep thinking. If only we could have harnessed all of his knowledge, Nepal might have experienced even greater development.

Nepal completed its democratic revolution quite late, at the fag end of the 20th century or the early 21st century. Such demo­cratic revolution was completed in Europe in the 19th century and in most other countries in the early 20th century. Because of this delay, we lagged behind the rest of the world by almost 250 years. Fortunately, we managed to more or less complete the revolution at the start of the 21st century. After the promulgation of the democratic republican constitution through the Constituent Assembly (CA), a new era has dawned in Nepal—an era of peace and prosperity.

Political parties are the articu­lators of people’s socio-economic needs and their aspirations. When the political agenda changes, the parties should either change their agenda and strategy as well, or reform themselves. Or they will lose their legitimacy. With this in mind, we founded the Naya Shakti Party. In my understanding, the Nepali Congress and the Nepal Communist Party were born out of the demo­cratic revolutionary needs of the mid-20th century. To that extent, they played a positive role in the country’s democratic process.

But now the agenda has shifted to socio-economic transformation. The question is whether the parties which played a lead role in the his­torical phase of political revolution can also play the same role in the course of the country’s socio-eco­nomic transformation. History has mixed examples. In some European countries where the democratic rev­olution has been completed or has deepened roots, the parties leading the post-revolutionary phase played a positive role in their country’s socio-economic transformation.

But in most third-world countries, the parties that led the political or democratic revolution have failed to deliver economic development. In Nepal’s case, the reason is that our political revolution dragged on for seven decades. It started in the 1950s but it compromised with the old establishment. Again, when there was political regression under the monarchy for 30 years, demo­cratic processes, values and institu­tions were destroyed.

 This is the time for our political leadership to wake up and deliver. I hope they do.

When multi-party democracy was restored in 1990, the parties again compromised with the monarchy in the making of the 1990 constitution. Then the Maoist revolution did away with the monarchy and ushered in a republic and a constituent assembly. But even the Maoist movement did not end in complete victory as it had to compromise with the old political parties (minus the monarchy now). So that way, Nepal’s democratic pro­cess was never deep-rooted. When revolutionary forces compromise with old establishment forces, they tend to be co-opted. This resulted in a hodgepodge of a transition system, which was a major hurdle for rapid economic development.

This is one reason why Nepal’s political parties have not been able to produce rapid socio-economic transformation. Another reason is geopolitical: our over-dependence on India and its non-cooperation on our development. Mismanagement of institutions, bad governance and rampant corruption are other rea­sons. Because of these factors, the political forces that took the lead in political revolution have not been able to deliver on the socio-eco­nomic front.

This has given rise to frustration among the youth, millions of whom have little choice but to go abroad for employment, and the country virtually runs on the remittance they send. Resentment is again rising in the society. So the political parties should remake themselves—trans­form themselves by learning from past and international experiences, and lead the country to peace and prosperity. Or new political forces will come forward and fill the vac­uum. We are now at the crossroads. Legally and formally, we have a two-third majority government and the country’s two biggest commu­nist parties are united. The unity appears strong and people have high expectations of them. But one year has passed, and they have not delivered. At the very least, they could have controlled corruption and strengthened law and order, even if they could not make radical economic progress.

As a result, resentment is grow­ing. I hope the ruling parties will introspect on their activities of the past one year and mend ways. If that does not happen, I see a seri­ous problem ahead, which will be exacerbated by the fast-changing geopolitical situation in the neigh­borhood. Both China and India are developing rapidly.

As they develop and get stronger economically, they will display a ten­dency to expand their market and encroach upon other territories. So Nepal is likely to be dragged by these two rising powers into their com­peting spheres of influence. Also, with rising contention between the US and China, Nepal is in danger of sliding into a vortex of a new conflict. There already are signs of a new cold war.

This is the time for our political leadership to wake up and deliver. I hope they do. But even if that does not happen, I am optimistic in that this is the era of democracy, of enlightenment, and of information technology, and that we cannot go backward. As such, I do not see any danger of political regression.

Again, if the political leader­ship fails to make a fundamental socio-economic transformation, the frustrated youth might again resort to another revolt. Before that happens, people like us who have played a role in this political change have to see the coming danger and reorganize politics in an alternative way, so that we can deliver on the socio-economic front.

The author is a former prime minister

What are the main barriers to Nepal’s prosperity? I enlist eight of them below.

False sense of security

The more the people of a country are action-oriented and can take risks, the faster that country devel­ops. But when it comes to Nepal, the country has only ever been thought of as a ‘safe sanctuary’ since the Homo sapiens first made their way here while expanding away from their base in North Afri­ca around 100,000 years ago. The people belonging to Indo-Europe­an, Tibet-Burmese and Austro-Dra­vidian language families who set­tled in Nepal were for thousands of years occupied with rudimentary agriculture, animal husbandry and hunting—and always cursing their wretched luck.

In the 14th and 15th centuries, when the Europeans were scouring the world in their ships in search of new markets and places, and were making various scientific discov­eries, we were in deep slumber, or busy listening to tales of sages meditating in caves. This is how we missed the road to prosperity.

Quirk of history

Industrial development is pos­sible only in centralized nation-states or federal-states. This is why it was important to unite the many small princely states in this region in the 18th century. This was some­thing that could have been done under the leadership of the Malla rulers of Kathmandu, the Sen rul­ers of Tarai-Madhes or the Khas rulers of the ‘22’ and ‘24’ princely states. Unluckily, the mission was carried out under the relatively weak and poor Khas ruler Prithvi Narayan Shah.

The need of the hour back then was to take the feudalistic society towards capitalism, which was exactly what was happening in Europe and America at the time. But in Nepal the Gorkhali rulers tried to further solidify the feudal order by distributing land to their near and dear ones. Had the unification cam­paign had been carried out under the Malla rulers of Kathmandu, the hub of trade and industry at the time, perhaps Nepali history would have taken a different turn.

‘Halal’ revolution

Industrial development has been possible in various countries only after the completion of the political revolution against authoritarian monarchies, so as to establish mul­tiparty democracy, rule of law and to restructure the state according­ly. But in Nepal, starting in 1950, all political revolutions and peo­ple’s movements have ended either in compromises or partial achieve­ments, in what may be called a ‘halal revolution’. In this revo­lution, the revolution­ary forces always enters into compromises with the ruling power. This in turn ensures that the old rulers remain in place and thus any change in state mechanism becomes cosmetic.

Fatalism and casteism

There can be no meaningful change or revolution unless there is first a revolution in how people think. In the 10,000 years of human civilization, only in the past 500 years has there been meaningful changes and developments in their lives. This change happened when they were able to shed their old superstitions and conservatism. The scientific revolution, the Enlighten­ment, the political revolution, and the industrial revolution, they all happened in Europe in the period between 16th to 18th centuries. Cru­cially, this followed the reformation of the church in the 15th century. But in Nepal we have to this day been unable to shed our unscien­tific and regressive supersti­tions, conservatism, fatalism and casteism, which are all being perpetuated in the name of religion. Fatalism and casteism have been especially harmful for Nepal’s prosperity.

Geopolitical trap

A country’s prosperity or decline largely depends on internal reasons. Nonethe­less the outside world cay play an important, and even decisive, role in a special period in a coun­try’s history. In Nepal’s case, the 1816 Sugauli Trea­ty dealt a body blow to the cottage industries that were in the process of developing into modern man­ufacturing industries. The small cottage industries of Nepal were in no position to compete against the big Indian indus­tries. Likewise, the Chinese Communist Revolution broke Nepal’s traditional trade relations with Tibet, further ham­pering its cottage industries. But while the country has been time and again affected by this geo­political trap, there has been no national consensus in Nepal on how to deal with it, and how to reduce our overreli­ance on India.

Wrong capital allocation

For an industrial revolution, it is vital that the primary capital from agricul­tural and industrial activities is accumu­lated and reinvest­ed in productive sectors. But in the history of Nepal, especially beginning with the Rana period, most of the capital that was accumulated from agricultural and industrial activities has been later invest­ed in unproductive consumer goods and in building big plac­es for the ruling elites.

Even in recent times most of our remittances are being spent on imported luxury goods. It is clear that the cap­ital worth billions of rupees in our banks and financial institutions is still caught up in unproduc­tive sectors. The control over state resources of crony capitalists, mid­dlemen of foreign companies and various cartels and syndicates has further exacerbated the problem.

Labor migration

The presence of a large and independent manpower is one of the prerequisites to industrial rev­olution. After the Sugauli Treaty, abled-bodied Nepalis started to enlist with foreign armies. Now a big chunk of our able-bodied men and women in rural areas are working abroad as migrant laborers. Instead of importing capital and export­ing goods, we export manpower in order to import capital. Nowhere in the world has this flawed model led to prosperity.

Neglect of science

One of the commonalities of the developed countries is their emphasis on science and tech­nology. Scientific quests and discoveries were at the heart of the first, second, third and now the fourth industrial rev­olution. But starting with the mysterious murder of Nepal’s first scientist, Gehendra Shumsher, there has been an almost criminal neglect in the establishment of research facilities and in emphasizing sci­ence and technology education. Our public education is in dire straits and our educated manpower is increasingly migrating. This is no road to prosperity.

What is needed right now is a serious national debate on all these issues. We don’t have the luxury of continuing to be an underdeveloped island amid an ocean of prosperity. As Bhupi Sherchan said: “Who can fall asleep in a hay field when logs are on fire all around?”