The unofficial blockade has hampered our international trade, which has made us revisit our trade policies. To discuss issues related to this ongoing crisis, Liberty Group sat down on 27th December, 2015 at Gaia Restaurant and Coffee Shop, Thamel. The reading for this session was an article titled “Trade Over Politics” by Sarita Sapkota, published on 15th November 2015 in The Republica.
The takeaways for the members of the group were:
- Thanks to remittance, the economy is still alive despite the blockade.
- Price of any product contains a lot of information, for eg. how much the consumers value that product; acts as a signal to prospective suppliers to bring in their goods to the market. Price is a medium of communication between market and individuals.
- One of the major factors leading to the current crisis (in terms of international trade) is the government-to-government contractual relation between Nepal and India. Had this been private-sector-to-private-sector agreement, no single party would be in a position to cause this severe crisis to the other party. There would have always been options.
- Had we had other private companies in place of the NOC, this unofficial blockade would not have hampered trade to the scale that it has been, at present. If not road, these companies could have airlifted their commodities, as we have seen other private companies do it.
- The government’s role is to act as a facilitator- make policies that makes doing business easier; maintain the rule of law; come up with a reward and punishment system to encourage competition.
- Black markets exist when the cost of doing business through official channels is high. It is only a matter of what provision law has made, and not an indicator of whether or the not the act is wrong in itself.