September 23, 2008 Early this morning, I had my third interview with Maoist-second-in-command Dr. Baburam Bhattarai, the newly appointed Finance Minister of Nepal. Dr. Bhattarai’s first act in office was to introduce the national budget on September 19. This morning we spoke on several issues –tourism, Tibetan refugee deportation, crime against women, inflation – all of which have an impact on the stability of the world’s newest republic.
On Tourism
DUNHAM: Mr. Minister, if this new administration succeeds, history will remember it as the government that broke the chains of the old ways, returned peace to the land, and charted a completely new and innovative course toward Nepali prosperity in the 21st century. As the Minister of Finance you have a great deal to say as to the manner in which the government proceeds.
In the last two weeks I’ve talked to a variety of leading businessmen and what’s most surprised me is that, no matter what political affiliation they may be with, they seem to genuinely hope that you and the Maoist –led government succeed. They are saying, “Let’s wait and see and be patient and hope for the best.”
Patience may be a virtue, but in the political world, an administration cannot expect to enjoy public patience indefinitely. A year from now, you will need to be able to identify improvements that have been made in the financial sector. People will want to see at least the beginnings of a better life for them.
Your government’s plans are bold in meeting those challenges. But there are certain sectors within the Nepal business world that already show vigor – asking only to be left alone, at least for the time-being.
I’m thinking particularly of the tourist industry. Its leaders tell me that they are poised for a very robust October and November 2008, for instance. Foreigners will be pouring in and filling the hotels and seeking Nepal’s natural beauty like never before.
But…
One thing they are concerned about is the visa hike reportedly proposed. They’re saying, “Please not yet, Mr. Minister. Because of the shaky financial market and high oil prices, tourists are looking at all travel costs very closely. The visa hike would be a real turn-off for many tourists. Once we’ve got a full head of steam, then it’s a good time to raise the visa. Don’t cut us off at the ankles just when we have gotten back on our feet again.”
Here is one of those industries that you can hold up to the public a year from now and say, “See how tourism has improved since our administration?”
How do you respond to this and what discussions have you had with the leaders of the tourist industry about the raised visa cost and other industry-related concerns?
FINANCE MINISTER DR. BABARAM BHATTARAI: As you know, the Nepalese people have been going through exciting times these last few years – very exciting times in Nepalese history. The people have put their faith in us. We are in a newly formed government, only one month old. We have put forward the policies and programs and the new budget. There has been comparatively positive response to all of this.
As you know, our main task is peace and development. Peace and development are interlinked. Until and unless we have peace, we can’t have development. And until we have development, we can’t have sustainable peace. So that’s why we are focusing on development: to have sustainable peace. That’s why, in our budget and policies and programs of the government, we have prioritized certain sectors.
One is modernization of our agriculture sector. Our agriculture had been traditional, feudal and two-thirds of our labor force has been engaged in that. That’s why we want to modernize and commercialize agriculture: so that the majority of the labor force engaged –two-thirds – can switch over to non-agriculture jobs in the service sector jobs.
The other sectors we have focused on are tourism and hydropower. We will be focusing on these sectors in the coming days.
You have correctly pointed out that tourism is one of the kingpins of our development process. And for that, the situation is comparatively positive and favorable. With the coming of the tourist season, there is a lot of expectation for the success in this sector. To stimulate the economy, we are trying to develop plans to attract more tourists and to provide good tourism infrastructure.
As you asked, the visa should be a non-issue. I haven’t gone through visa charges. I’ve just learned this from you. If it is too high, then we can look into that.
But the main thing is we want to welcome tourists. Nepal is a very beautiful place and the tourism industry can be a very good contributing factor for our long-term development. Therefore, we don’t want to put up any such barriers, which would discourage the tourist arrivals. We will look into that.
On the possibility of re-settling Tibetan refugees: Send them to America?
DUNHAM: In order to achieve your fiscal goals, you must cut out the fat when and where you see unnecessary expenditure occurring. It seems to me that one way to reduce expenditure and win foreign hearts is to allow any Tibetans currently living in Nepal who want to, to be repatriated to American soil. The American government has made it clear that they would be willing to bring these Tibetans to the U.S, but have felt blocked and shut out by previous Nepali governments. Why not let those who want to go, go to American if invited? As it stands now, aren’t they a burden on the budget rather than an asset?
FINANCE MINISTER DR. BABURAM BHATTARAI: We will look into the Tibetan issue.
Since the new government has just formed since one month before, we haven’t had time to go into that. We will look into that. We don’t want them to make a burden on our economy. But in our budgetary allocation, and elsewhere, there is no allocation for Tibetan refugees. I think they have been surviving from other some other sources of income.
The Tibetan issue is slightly tricky, also. Since Nepal is sandwiched between the big countries, China and India, we have to balance our foreign policy very delicately. Keeping that in mind, we will try to solve this issue.
DUNHAM: Recently, 137 Tibetans were detained at the Tibetan Reception Center. It’s been predicted that at least half of them do not have the refugee certificate card. They will therefore be deported to India. When I spoke to the Home Minister a few days ago, he assured me that, in the future, they will continue to be deported to India, contrary to the rumor that they might be deported to China.
Couldn’t it also be possible that, if there are future deportees and the United States is willing to bring them to American soil, couldn’t the deportees just as easily be sent to America? Is that a possibility?
FINANCE MINISTER DR. BABURAM BHATTARAI: That…that we have to look into that. I would like to look into that further.
On crimes against women and the need for more policewomen
DUNHAM: In the past few weeks, I’ve been talking with a number of women in the police force. Out of 57,000 police officers only 2000 of them are women. But this small minority has made a real difference out there in the field in helping victims of domestic violence and sex trafficking. Women are essential in creating a trust between the victim and the police officer. Female victims need to be able to talk to other women.
The Women’s and Children’s Service Center, for example, is doing a terrific job even though they are extremely understaffed and financed to operate a successful operation. Reducing violence against women and curtailing sex-trafficking will be, over the long run, sound economic policy.
So what I’m saying is: Here’s a department that’s already working admirably but really needs help. Have you included in your budget significant monies to pay for an increase in the number of policewomen to specifically deal with women in crisis? And wouldn’t this increase in policewomen be a very cost-effective measure to take for the new government?
FINANCE MINISTER DR. BABURAM BHATTARAI: Yes, definitely, yes. I fully agree with that. If there are more women in the police, it will give a more human face to the police force. In general, it will send a good message to the public.
As far as crime against women goes, it’s very rampant in this society – sex-trafficking and all these things – domestic violence. To look into that also, if there are women officers in the police force, it will ease the whole situation. That’s why I fully agree with your assessment.
DUNHAM: You support the idea of increasing the women personel --?
FINANCE MINISTER DR. BABURAM BHATTARAI: Yes, definitely, definitely. In fact, our policy has been to increase the number of women in all sectors of the state, including the security forces. So, if not 50%, at least 33% should be the target. This has been the position of our party.
DUNHAM: And are you running up against any resistance from other parties to achieve that goal of increasing women in all sectors of the state?
FINANCE MINISTER DR. BABURAM BHATTARAI: Of course there will be resistance. Ours is a feudal society and this patrimonial culture is still here. Keeping that in mind, there will be resistance. Even then, we have to fight against that. And we are ready to fight against that.
On Inflation
DUNHAM: I see we’re running out of time. One more question, Mr. Minister. Businessmen in Kathmandu, at least the one’s I’ve talked to, say their biggest concern about the new budget is whether or not you will be able to control inflation. What measures are you prepared to take in order to curb inflation?
FINANCE MINISTER DR. BABURAM BHATTARAI: No, in spite of the people’s apprehensions, the budget is not inflationary. People think it is a very ambitious budget, but that is not so. Even if you go by the international norms and standards of macro-economic stability, it is within the bounds. We have not crossed that limit. We have very meticulously calculated it and I don’t think our budget will lead to inflation.
But the inflationary pressure is an international phenomenon. You see, we have a very open economy, an open border with India, so some of the inflation would be imported from outside Nepal. That would be very difficult for us to contain.
DUNHAM: That’s right.
FINANCE MINISTER DR. BABURAM BHATTARAI: But internally, we will revise policy. The best way to control inflation is to improve the supply side, you see? -- if you make good supply arrangements that can check inflation, and other measures also were working.
DUNHAM: When you talk about other outside forces… right now, America’s financial debacle seems to be spreading in every direction. It’s a mess. As Finance Minister, to what degree do you think the American problem will ripple into Nepal’s economic stability?
FINANCE MINISTER DR. BABURAM BHATTARAI: Actually, it has some impact. But it doesn’t have a very big impact because our economy is a very peripheral economy. We are at the far periphery of the global economy. In that sense, I don’t think there will be a very big impact, but it will have some impact. So we will work out measures, keeping this in mind.
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