AI-powered political brass a must for Nepal
Economic challenges
Millions of people are leaving Nepal due to a bleak poor economic scenario resulting from a growing trade deficit brought on by excessive imports, inflation, and increased government spending on oil imports as well as other multidimensional factors affecting the economy. The conditions will degrade further if Nepal slips into the FATF (Financial Action Task Force) gray list making the country unable to issue USD. This will hamper our foreign trade, affecting our borrowing capacity at the international level. While analyzing macroeconomic data, in mid-Dec 2022, Nepal Rastra Bank reported that the year-on-year consumer price inflation was at 7.38 percent, and non-food and service inflation increased to 8.59 percent. Remittance inflows grew 23 percent to Rs 480.5bn during the review period, and the current account recorded a deficit of Rs 37.91bn. The gross foreign exchange reserves grew by 6.3 percent and the overall foreign exchange reserves in US dollars climbed three percent. Economist Bishwash Gauchan states that remittances account for 57 percent of total foreign exchange profits and that there are no urgent government plans to boost or diversify the reserves. He suggests fundamental reforms and the implementation of a medium-to-long-term plan within the next 5-10 years to address these issues. The pills for these ills, per Gauchan, are these: The business sector must put in greater effort in Nepal and the economy should shift away from a credit-centric one, toward investments in the productive sector. Foreign policy challenges The China-led security architecture known as the Global Security Initiative (GSI), a counterweight to NATO, is putting increasing pressure on Nepal to join the initiative. In this context, Nepali President mistakenly took part in the GSI summit. The government has not spelt out its stance on the GSI, though Chinese government websites have made mention of ‘Nepal’s agreement with the concept of the Global Development Initiative (GDI) and GSI in terms of her participation and study’. All this points to some serious confusion about the Chinese initiative. Secondly, Chinese economic assistance is explicitly on loan basis (more than two percent), which is higher in terms of cost compared to western multilateral institutions. Recently, the Chinese side announced that the Pokhara International Airport is the flagship project of BRI, leaving Nepal government authorities puzzled as the airport was never part of the BRI. Thirdly, due to Nepal’s increment toward Debt to GDP (around 41 percent), the government is under pressure to reduce its debt by lobbying for concessional loans with the Chinese side. The rise of India with her mounting intimacy with the US, the EU and Japan on a number of fronts, including trade, technology, and military means Nepal may come under pressure to join the group because of India’s comparative advantage over Nepal. Joining the Indo-Pacific Strategy (IPS) on non-strategic/non-military areas such as climate change, food security, trade and tech startups/unicorn may be an awesome idea as it may help to bolster Nepal’s development initiatives. Path ahead It is difficult to expect long-term policy changes and their implementation for development of Nepal, given the country's hyper-volatile political environment and unpredictable personalities, who come and go from positions as Prime Ministers or Ministers without having any prior education or experience in the relevant ministries. The hunger for power has now replaced all other political principles, leaving the nation in a precarious position amid geopolitical and technological growth (such as ML) in a world where Nepali leaders are uninformed. How will our new generation of lawmakers react to issues such as Cold War Season 2 (involving the US and China), which will seek to use Nepal as a proxy, AI & ML, Sino-Indian rivalry, and the world economic downturn. Here, some discussion related to ML in our newly formed parliament is appreciated, to begin with. Overall, ML has the potential to transform the area of Nepali politics by giving academics and political figures new resources for data analysis and scenario planning. ML may assist political players in better understanding the complex political and social phenomena and making more precise forecasts about upcoming political events, thanks to the availability of growing quantities of accessible data. Social media also played a key role in the election of personalities like Rabi Lamichhane and Gyanendra Shahi as lawmakers. The two lawmakers offer an example of how social media helps shape public opinion. At last, it is crucial for our foreign policy mandarins to successfully negotiate intricate connections we have with China, India, and the United States in light of the present political climate on the international stage. A continuous struggle between the US-led and Chinese-led development initiatives highlights the need for a sophisticated strategy in our interactions with the two powerful nations. Additionally, Nepal's geographic location presents a considerable barrier to commerce, since the population along its northern border with China (3.5m) is far lower than that along its southern border with India (UP and Bihar), which is home to more than 360m people. Because of this, it is crucial for those in leadership positions to be able to negotiate these difficult economic and foreign policy realities, provide a picture and implement it all within a span of 10-15 years. Let us hope for the best. The author is a PhD student of International Relations & Diplomacy at Tribhuvan University
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