De-dollarisation. Can the dollar survive it?

Last year, at the Valdai International Discussion Club meeting attended by hundreds of experts and politicians, Rasigan Maharajh asked Russian President Putin what a democratic alternative to the current international system of payments and settlements might be. Putin responded that the United States established the Bretton Woods system after World War II, which created international institutions in finance and international trade. However, this system has broken down because the US uses the dollar to fight for its political interests, undermining trust in reserve currencies.

Foreign countries are now questioning whether keeping foreign currency reserves in dollars is wise. Still, the US has created a robust system that supports these reserves, making it difficult to get out. Over five days in March 2023, three small- to midsize US banks failed. One can easily question now if it is safe to continue saving money in dollars.

The uncertainty of the global market has heightened the importance of having a diversified portfolio. Gold has traditionally been a haven for investors amidst economic turmoil. However, relying solely on gold is also not advisable.Instead, investors should consider forming a well-rounded portfolio combining traditional and alternative investments. Moreover, the recent developments in international trade and finance have brought about the topic of de-dollarisation.

De-dollarisation refers to reducing the dependence of a country's economy on the US dollar. This can be achieved by diversifying the currency reserves of a nation and promoting the use of alternative currencies.
De-dollarisation has been discussed in many countries worldwide due to the US dollar's dominance in global trade and finance.

De-dollarisation is necessary for many countries to reduce their vulnerability to economic shocks. The dollar's power in worldwide business and finance poses significant risks to governments, particularly those with currencies pegged to it. A sudden US dollar exchange rate fluctuation can severely affect a country's economy.

Every nation has learned a hard lesson from the SriLank and dollar turmoil. Diversifying currency reserves can help mitigate the risk of sudden economic shocks caused by US dollar exchange rate fluctuations.

Promoting alternative currencies can open up new markets and trade opportunities for countries that may have been limited by using the dollar. Iraq has already decided to abandon the US dollar, abold move. Countries like India and Bangladesh are exploring the possibility of using local currencies in their business. At the same time, Russia has billions of rupees in Indian banks due to international sanctions.
However, the situation arises not from a lack of goodwill but due to significant trade imbalances. BRICS countries can only partially liberate their currencies due to their heavy reliance on exports.

The problem is both India and China rely on theUS dollar for their exports, which are pegged to the US dollar. This raises an essential question for those who have savings in dollars. Is it safe to continue saving money in dollars? Would it be wise to contemplate investing in gold in these circumstances? In the case of Nepal, there may be better options than de-dollarisation. Nepal heavily depends on re-mittances from its citizens working overseas; a significant portion of those remittances are sent in US dollars. Additionally, the US dollar is widely accepted and used in international trade, making it a virtual currency for Nepal's economy.

India is looking to diversify and internationalise the Indian rupee. However, the rupee may dive deeply if it becomes a convertible currency. During his addresses at a community programmeorganised in Sydney, Australia Indian Prime Minister Modi talked about the impact of the UPI (United Payment Interface) and expressed hope that digital transactions would surpass cash and go global.

An agreement with UPI and all payment system providers and operators in Nepal will not only boost trade between the two countries but also make it easy to carry out cross-border transactions.
Instead of de-dollarisation, Nepal can explore innovative solutions for diversifying its currency reserves and promoting economic growth. One option could be to explore digital currencies, such as Bitcoin or other cryptocurrencies.

Cryptocurrencies can provide alternative payment solutions and encourage trade between countries without a single dominant money. Another option which many central banks, including the NRB, are currently working on is CBDC — Central Bank Digital Currency. CBDCs give central banks more oversight and control over currency supply and circulation. The government typically backs these currencies, and their value is pegged to a national currency. CBDCs are generally not decentralised, and digital forms of fiat currency are issued and controlled by central banks. In contrast, blockchain is a decentralised currency that records and secures digital transactions.

Many experts argue that there may be some benefits of the CBDC, but the drawback outweighs the benefits. Another option Nepal can explore is promoting its local currency, the Nepali rupee, in international trade. This can be achieved by offering incentives to businesses that conduct transactions in Nepali rupees or by promoting Nepali rupees as an alternative currency for remittances.
The global economic system must avoid being dominated by a single currency.

Diversifying currency reserves and promoting alternative currencies can reduce financial vulnerabilities and encourage economic growth. Despite de-dollarisation's challenges, it is a necessary step for many countries. Countries must reduce their vulnerabilities to economic shocks and promote financial stability and growth. The de-dollarisation process should, therefore, be done gradually.

Published: The Himalayan Times
Nepal's leading daily newspaper

Human trafficking

Several years ago, Rajesh Hamal, often called the "Maha Nayak", graced Finland with a visit. Proud and curious, he was surprised by the proliferation of Nepali restaurant owners in the country. But little did he know, behind the tantalising aroma of food, a sordid scheme was unfolding. Some restaurant owners had resorted to trafficking people from Nepal, forcibly subjecting them to modern-day slavery in harsh work environments without access to necessities like food, shelter or medical treatment.

Human trafficking is a nefarious industry with far-reaching implications. Nepal, in particular, has been grappling with the debilitating scourge of human trafficking for decades. Countless Nepalis fall victim to the clandestine horrors of labour exploitation and sex trafficking across and within the country's borders.

Human trafficking has appalling effects on victims - especially women and children - including physical, emotional and psychological harm. Sexual exploitation results in unimaginable traumas such as rape, violence, and abuse. Labour exploitation subjects them to physical and emotional abuse, long hours and sub-standard pay. Adversely impacting victims' lives is inhumane and has significant economic repercussions at both individual and national levels. It exacerbates the impoverished circumstances of trafficked persons, aggravates their struggle to reintegrate into society and hampers national productivity and economic growth.

 

In July 2019, a task force headed by Bal Krishna Panthi was initiated by the government under the coordination of KP Sharma Oli to inspect the registration process for Bhutanese refugees. But sadly, it didn't take long for a fraudulent gang to take advantage of the situation. Operating across various districts, they duped Nepalis by soliciting money in exchange for bogus registration as Bhutanese refugees with plans to transfer them to the United States. Their scheme attracted several gullible participants, who paid staggering amounts ranging from Rs 1 million to Rs 5 million.

It was discovered that the fraudsters added names to the report commissioned by the task force and distributed copies to their victims to gain their trust. It's distressing how some unscrupulous individuals' greed wreaked havoc upon the lives of others, trafficking them in the false hope of a better future.
 

In conclusion, human trafficking in Nepal disproportionately affects vulnerable groups. Despite the government and international organisations' interventions, more efforts are necessary to develop a sustainable solution to eradicate this horrendous crime.

Published: The Himalayan Times
Nepal's leading daily newspaper

Democratic breakdown

Remember the FIFA World Cup scene when Kylian Mbappe ignored French President Emmanuel Macron when he tried to console him after France's heartbreaking penalty shootout loss to Argentina? Now, the French President has decided to implement highly debatable and controversial retirement reforms to address millions of French citizens' issues.

However, there is mounting pressure as violent demonstrations have occurred. Hundreds of security forces were injured, thousands of people were arrested, King Charles III's visit to France was postponed, and thousands of fires were lit around Paris a few days ago.

Macron unilaterally increased the retirement age from 62 to 64 using special presidential powers, which has resulted in his citizens' dissatisfaction with his decisions. Macron is also criticised for being the "president of the rich". A democratic system created to avoid another revolution has ironically resulted in the formation of conditions that could lead to a violent uprising.

 

The current system is based on a capitalist model designed to benefit the wealthy and powerful.
This system has created a large gap between the rich and the poor. The wealthy have access to resources and opportunities that the poor need access to. This inequality has led to injustice and frustration among the lower classes, who feel they are not treated fairly. The lack of economic opportunity and the feeling of being left behind have caused many people to become disillusioned with the current democratic process and system.

Political demonstrations include marches, rallies, sit-ins, or protests happening worldwide, not just in our country. Some Western countries are tired of mass immigration, economic shocks, dirty elections, the Ukraine war, low wages, and what they see as unnecessary lockdown controls.

Democratic breakdown and decline occur when there is no direct participation of the people, and issues are brought up top-down. In a democracy, any controversial idea or topic must go through a referendum, a bottom-up process. Constitutional reform should occur through the people's referendum instead of by presidential powers or amending top-down constitutions.

If we, the people, are unhappy about our current political set-up, we should ask for a people's referendum, which would result in constitutional reform. For example, suppose Nepal wants a king as a part of a democratic government. In that case, the people should decide from the bottom up, not by presidential powers or amending the constitution (topdown).

While some democratic and political experts have criticised referendums for disguising populism, they should still be included in decision-making. However, dictators like Hitler and Mussolini have used referendums to hide oppressive policies as populism.

Using militarised troops against citizens without gaining public support is antithetical to democracy, as demonstrated by Macron's handling of the Gilets Jaunes or Yellow Vests protests.

Published: The Himalayan Times
Nepal's leading daily newspaper

Can Nepal benefit from a king?: Let the people decide

Many people oppose the idea of a king, believing it would be an exercise in oppression and a restriction of rights. People should decide if they want a king

After the statement released by former King Gyanendra Shah on Democracy Day, KP Sharma Oli said, "Gyandendra Ji is in a dilemma. In the last 240 years, kings and monarchy did nothing for the nation. Did they develop in comparison to the Scandinavian nations or other nations..."

Oli is right, Nepal was not like a Scandinavian nation back then, nor will it ever be. The development made by the monarchy when King Mahendra was in power can never be compared to the development these political parties have made in the last 30 years.

The nation's political parties, including the Maoist, CPN-UML and others, have done excellent work by looting the nation's treasury and robbing banks and financial institutions, beseeching in front of foreign powers and diplomats.

Thousands of widespread scandals, which the biased Nepali media will never write about since most of them are partly funded by these parties.

Nepal has been ruled by a hereditary monarchy for centuries, but with tremendous changes and upheavals in recent decades, the question of whether or not to keep the king is a source of debate. On the one hand, some people argue that a king provides much-needed stability, continuity and a sense of national identity to Nepal. They claim monarchy symbolises national unity and is a bridge between the country's past and present. Additionally, they say the monarchy has traditionally provided stability and continuity, allowing the government to maintain its cultural identity and traditions and unify the country despite ethnic, linguistic and religious differences.

 

On the other hand, many people believe that the king's power is no longer necessary and could even be damaging to the country's progress. No matter which side of the debate one falls on, the question as to whether the monarchy will benefit the country or not is complex and challenging.

Nevertheless, the decision will ultimately shape the nation's future, and all voices must be heard before reaching a conclusion.

Many people oppose the idea of a king in Nepal, believing it would be an exercise in oppression and a restriction of rights. However, the people of Nepal should decide if they wish to have a king and what form of government they desire.

The monarchy is a relic of a past era. Its continued existence is seen as a sign of inequality and subjugation of the less fortunate. But ultimately, the people should be the ones to decide what type of government will best represent their interests.

The debate over the necessity of a king in Nepal has been intensifying in recent years. The abolishment of the monarchy in 2008 and establishment of a secular and democratic republic resulted from a popular movement. Despite this, the presence of a royal figure has been integral to the government and politics of countries like Denmark, Sweden and the United Kingdom for centuries.

While the role of a king can signify power and prestige, it can also be beneficial in specific contexts. For example, a king's special forces may influence the nation's direction and shape the country's future.

As the discussion surrounding the need for a king in Nepal continues, it is crucial to consider the implications of such an appointment and its potential benefits to the country.

Recently I visited Denmark, a Nordic country, where I saw that the Queen was an important figure in the government. She was seen as an important figure in Danish society, and the Danish monarchy is one of the oldest in the world.

Queen Margrethe II (born 1940) has been Denmark's reigning monarch since 1972.She had the power to appoint government officials, sign legislation, and even declare war. She is also seen as the head of state and a symbol of national unity.

In Sweden, the King, Carl XVI Gustaf, had a similar role. Still, the focus was more on the economic and social aspects of the country.

In addition, he can appoint government officials and sign the legislation. In the United Kingdom, King Charles III was more focussed on the symbolic aspects of the country. He was seen as the head of state and was responsible for unifying the country and leading the nation in times of peace and prosperity.

The King can appoint government officials and sign the legislation.

These examples of kingship provide an interesting comparison to Nepal, which has a long history of the monarchy. Still, the current political system is a democratic republic. Nevertheless, many pundits and experts believe it was bought by the influence of the 12-point agreement signed in New Delhi.

Is it possible for Nepal to benefit from a monarchy? After all, the country has a deep-rooted history of kingship. Moreover, a monarch could bring a sense of national unity and economic and social stability.

Nepal is facing a tumultuous political climate, and it may be time to get back the king. Not only would the king provide strong leadership, but he could also act as a symbol of unification, reminding the people of their shared values and history.

Perhaps, the monarchy could help protect the nation's forests, resources and culture, providing fast economic growth and a development environment. Subsequently, the monarchy could bring stability and a greater sense of continuity while at the same time promoting democratic principles.

Ultimately, the monarchy may be the key to Nepal's success and a way to reaffirm its place in the world. The rule of the king in Nepal can bring many advantages to the country.

Nevertheless, collaborating with the current political parties would be a challenge.

Giving citizens a system of governance open to their input allows them to express their opinion and help determine their nation's future. Furthermore, this system enables the open exchange of thoughts and encourages people to participate in political activities.

Ultimately, it is up to the Nepalis to decide on the direction of their nation, independent of any external influence or agreements.

Published: The Himalayan Times
Nepal's leading daily newspaper

Türkiye-Syria quake

While visiting a family friend, one of my Turkish friends experienced an earthquake.
He said that it was a horrifying experience. He was in the middle of a conversation with his aunt when the ground started to shake, and the walls began to rattle. They all ran outside and watched as the buildings swayed back and forth. He said that it seemed to last forever.

After the shaking stopped, they hugged each other and thanked God for being safe. Turkey is no stranger to earthquakes, having experienced several significant earthquakes in the past. The most recent quake last week, however, was of magnitude 7.8 that struck the southern and central parts of the country while people were sleeping. Many have reported that the second 7.5-magnitude tremor was not an "aftershock". This earthquake has caused significant damage and loss of life - more than 22,000 people killed and many more injured.

I was horrified when I saw the videos of buildings collapsing in Turkey and Syria. It felt like a movie scene, with people running for their lives as these vast structures, some as tall as 12 stories, came crashing down.

The destruction is unimaginable, with roads destroyed and mountains of rubble everywhere. The quake experience stays in our hearts, ready to strike again with greater force. Memory looms with the potential to return. We suffered a similar fate in the 2015 Gorkha Earthquake, which had a magnitude of 7.8 and killed over 9,000 people. Yet, the destruction it caused was much more significant.

The Nepal earthquake occurred d in a mountainous region, while the recent earthquake in Turkey occurred in a more populated area. This means that the destruction caused by the quake is more widespread, with more people affected.

In the last decade, only two earthquakes have been as devastating in any given year. As a result, a "level four alert" has been declared to appeal for international aid by the Turkish government. WHO has cautioned that casualty figures could rise as rescue teams continue to search for survivors amidst the debris. In addition, the recent earthquake in Turkey may impact the country's economy (the Turkish lira going record low, the stock market falling, and infrastructure damages).

The people of South Turkey and Syria are in desperate need of help. Every second counts in the search for survivors. Everyone must act now to save lives and build a more substantial infrastructure to prevent this from happening again.

My Turkish friend described the quake as "the end of the world". He was familiar with seismic activity in the area, but this one was unlike anything he had ever experienced before. He said it was a terrifying experience and reminded him of how fragile life can be.

 

Published: The Himalayan Times
Nepal's leading daily newspaper

State of anomie

Prem Prasad Acharya, a businessman hailing from Illam District, took his own life last week by committing suicide in front of the Nepali Parliament.

Meanwhile, the Supreme Court's recent decision has rendered Rabi Lamichhane, chairperson of Rastriya Swatantra Party (RSP), stateless.

I watched a television interview of Swarnim Wagle. He emphasised one word when talking about the Prem Acharya case, that is, "anomie", which I feel fits very well in the current context of our nation. Anomie is a concept developed by French sociologist Emile Durkheim in his 1897 book "Suicide".
It is a condition in which society lacks or provides little or no moral guidance to individuals, resulting in fragmentation, a sense of isolation and alienation, a state of hopelessness.

 

Durkheim argued that anomie is caused by the breakdown of social norms and values in modern societies and can result in behaviours such as crime, suicide and a lack of social integration.

These incidents suggest that Nepal may become a state of anomie when the collective sense of purpose and belonging fades away, and the social norms governing behaviour and group cohesion erode.
This can occur when our government fails to provide its citizens with security, stability, equity, hope and social justice.

As a result, people may become discouraged and disenchanted with their government's policies, leading to a breakdown in trust and an erosion of social norms. In such a situation, individuals may become increasingly disinterested in the collective needs of their nation and instead focus solely on their self-interests. This may make individuals feel alienated and disconnected from their government, leading to a feeling of anomie.

We may ease and mitigate and not become a state of anomie by implementing policies that ensure a sense of belonging to its citizens. This can involve creating a sense of safety and security for its citizens, providing economic and educational opportunities, and fostering a sense of community by investing in civic engagement initiatives, such as providing public spaces for citizens to come together and share their ideas and volunteer opportunities.

Additionally, a nation must ensure that its citizens have equal access to resources and opportunities regardless of race, gender, or other societal constructs.

This lack of a collective ambition for our country could be combatted by strengthening social ties and a sense of shared values and norms. Traditional societies often rely on a sense of community and collective purpose to prevent anomie. Still, it cannot be accessible when there is no established system to do so.

 

Published: The Himalayan Times
Nepal's leading daily newspaper

Frequent plane crashes

On the 15th of January, on Maghe Sankranti, a passenger plane carrying 72 people crashed near the newly inaugurated Pokhara International Airport. I am not an aviation expert, but what I have heard from some informal witnesses' reports suggests that the pilot diverted the plane to the gorge to save a human settlement because of engine failure. When we think of the plane crash in 2023, it feels like it is a dark spot regarding technological advancements.

Nepal has a history of frequent plane crashes, with several factors contributing to the high rate of accidents. One of the other high-profile crashes occurred in March 2018, when a US-Bangla Airlines plane carrying 71 people crashed while attempting to land at Kathmandu's Tribhuvan International Airport. The crash, which killed 51 people, was found to be the result of pilot error and poor communication between the pilots and air traffic controller.

These incidents, along with several other crashes and near-misses in recent years, have raised serious concerns about the safety of air travel in Nepal. The country's small and poorly-maintained airports and lack of proper safety regulations and oversight have been identified as major contributing factors to the high number of crashes.

The government has taken steps to address these issues, including upgrading infrastructure at airports and implementing stricter safety regulations. However, many experts believe that more needs to be done to ensure the safety of air travellers in Nepal.

One major issue is the lack of proper aircraft maintenance; many crashes were caused by poor maintenance of the planes, and pilot error, often due to a lack of adequate training. In addition, many of the airlines in Nepal are small, and they often need more resources to maintain their aircraft correctly. This can lead to mechanical failures and equipment malfunctions.

One major factor is the challenging terrain in Nepal. This further exacerbates the problem of inadequate safety measures. Despite these challenges, it is essential to note that air travel is still the most efficient and reliable way to travel within Nepal, especially in the remote areas. But the government and the related authorities need to improve the safety measures and the airlines to avoid frequent plane crashes.
The government and the aviation industry must proactively address the safety issues in Nepal's air travel if it ever wants to get out of the EU air safety blacklist. By investing in better training, equipment and infrastructure, the government can help to ensure the safety of air travelers in Nepal and help prevent future plane crashes.

 

Published: The Himalayan Times
Nepal's leading daily newspaper