Neftalk Proceedings report

PROCEEDINGS REPORT

DEATH OF AN INDUSTRY: THE CULTURAL POLITICS OF GARMENT MANUFACTURING DURING THE MAOIST REVOLUTION 25 June 2018 Garment manufacturing can be singled out for its pivotal role in the economic development of many countries in different periods of world history. The global enactment of policies including the Multi-Fibre Arrangement (MFA), have given rise to a postcolonial landscape of industrial spectacle, which is inextricably intertwined with the webs of social transformation and political regime change.

In this context, Nepal Economic Forum organized a neftalk based on a book, “Death of an Industry: The Cultural Politics of Garment Manufacturing During the Maoist Revolution” that studies the relationship between turmoil of the garment industry and the People’s War in Nepal. It revisits how the expiry of MFA led to a major politico-economic reshuffling in Nepal. The neftalk “Death of an Industry: The Cultural Politics of Garment Manufacturing During the Maoist Revolution” was a moderated panel discussion, bringing together a diverse panel of speakers.

Speakers:  Diepak Elmer, the Deputy Head of Mission and Head of Cooperation, the Embassy of Switzerland in Nepal  Krishna Gyawali, former Secretary of the Government of Nepal  Mallika Shakya, Assistant Professor in the Department of Sociology at South Asian University, New Delhi  Sumana Shrestha, Founder of Bhuntu The session was moderated by Sujeev Shakya, Chairperson, Nepal Economic Forum.

DIEPAK ELMER Death of an Industry, to a large extent brings to light a story about development and the kind of development model a country chooses to consciously pursue. It’s a book that describes the failure of a certain set of orthodox policies that have been popularized by neo-classical economists. As has become the norm for development partner agencies today, we tend to treat industries from a very macroeconomic perspective. However, industries are not just abstract constructs that are determined by the invisible hands of the market, or supply and demand factors of productivity. There are contextual factors like local knowledge and social capital to which industries are deeply embedded.

If we look at the history, the countries today that have industrialized, when they were developing countries, used extensive industrial trade and technology policies that are apt with their social, cultural and political contexts.

The state nurtured the industries with a lot of support that later made those industries to become world leaders.

This historic fact defies the common account that industrialized countries developed with a lasseiz-faire policy.

This is the framework that has been explored by the book, Death of an Industry.

KRISHNA GYAWALI The book, Death of an Industry contains rich and rigorous academic discussion and delves into uncommon antithetical insights and uses anthro-economical examination techniques to study economic events. Moreover, the book successfully introduces an alternative approach to development based on cultural economics.

The book rightly highlights that apart from the internal failure of the government to prioritize garment industries of Nepal, externalities have equal role in the death of the industry. As soon as the Multi-Fibre Arrangement (MFA) expired in 2004, the industry was not able to think of an immediate strategy to handle the aftermath of the disruption thus leading to death of the industry. This is an important lesson for days ahead where Nepal needs to step out of its dependency on foreign assistance and generate its own policies based on informed decisions. There is a need to practically adapt theoretical concepts and contextualize it according to domestic needs.

In addition, it is of equal importance to not only take into account statistical values pertaining to the subject but also consider local experiences. Furthermore, extensive collaboration between government, beneficiaries and policy analyst is key to revive the market conditions of Nepal.

SUMANA SHRESTHA The garment industry of Nepal is no longer confined to statistical boundaries. Death of an Industry has been able to personify and revive the real story behind the fall of the garment industry in Nepal. It provides an understanding of the industry from an entrepreneur’s perspective, exposing layers of struggles people in the industry had to face.

It is appalling that even after a decade of flourishing of the garment and carpet industry in Nepal, they were not able to gain a competitive edge in the world market. They were unable to stand out as winners despite the fact that there were no barriers to trade in the market. It is equally intriguing to know that workers of the industry were refusing to take orders of their products for the fear of dismantling of the protectionist policies in the future. Exploring the industry with such cultural understanding of the subject can serve as a long term lesson for other industries in Nepal.

MALLIKA SHAKYA The book - Death of an Industry, was inspired by the paradoxes encountered while understanding the garment industry of Nepal. This journey is more relevant to the current times of Nepal where the country is going through a transition from turbulent times of civil war, constitution making processes, earthquake and other disasters into the world of ideas of development.

When the Multi-Fibre Arrangement collapsed in 2004, not only Nepal, but most of the garment industries of the developing countries around the world lost competitiveness and many people lost their jobs. Different government around the world handled this situation differently, but in Nepal, the government as well as the national media kept quiet on this particular narrative. A way to address the issue would have been to acknowledge that there has been a failure and either try to help the remaining factories which have not failed yet, or to launch social security schemes for people who have fallen off the edge. It is more about connecting the story of business competitiveness with national democracy; either overlapping the two or relying completely under market forces of demand and supply to find a relation. It’s not so much about Nepal’s per se but about understanding this globally hegemonic narratives about competitiveness and development. Hence, this book is relatively about deconstruction of these narratives and trying to understand what makes somebody give a particular explanation of failure and find ways of either exiting from that scenario or prescribing an economic resolution.

CONCLUDING REMARKS Sujeev Shakya, summed up the event by highlighting key take away from the discourse around Death of an Industry. They include the 3Cs: 

Competitiveness – The death of the garment industry in Nepal should be viewed from a qualitative dimension rather than just the quantitative economic aspect while taking into account the competitiveness of the industry.

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Cultural Dimension – The cultural aspect of a society plays a huge role in how industries move in the global competitiveness index

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Collaboration –Policy discourse based on collaborative effort is significant for any industry to mark its growth and sustainability in a changing market

Nepal Economic Forum is a not-for-profit organization initiated by beed and aimed at becoming Nepal’s premier private sector led economic policy and research institution. neftalk is a platform for policy discourse and discussion on pertinent economic issues

For more information visit our website: http://nepaleconomicforum.org/

ABOUT THE SPEAKERS DIEPAK ELMER Diepak Elmer is an experienced development professional and diplomat who has held several management positions with responsibilities for both field operations and diplomatic affairs. Throughout his career within the Swiss Agency for Development and Cooperation (SDC) of the Federal Department of Foreign Affairs of Switzerland and in the World Bank, he attained extensive knowledge and insights into the complexities of development processes, both from a headquarters and a field perspective.

KRISHNA GYAWALI Krishna Gyawali served Nepal's civil service in various positions in various institutions. He retired as Secretary of the Government of Nepal. Upon retirement in 2014, Krishna was appointed by the Government as the National Coordinator of Nepal for MCC (Millennium Challenge Corporation), a US government aid agency mandated to boost growth and reduce poverty in developing countries. Mr. Gyawali led preparatory work on large investments in energy and transport infrastructure between May 2015 and May 2016.

MALLIKA SHAKYA Mallika Shakya is assistant professor in the Department of Sociology at South Asian University, New Delhi. She studied development studies in University of Glasgow before doing a PhD in anthropology and development studies in London School of Economics and Political Science (LSE). She was a senior lecturer in the Department of Anthropology and Archaeology in University of Pretoria, South Africa for two years after holding a research position at the Queen Elizabeth House in University of Oxford. She worked for the World Bank’s International Trade Department between 2004-2012 during which she advised governments in East and South Asia, the Middle East, Eastern Europe and Africa on export competitiveness.

SUMANA SHRESTHA Sumana runs her tourism venture Bhuntu, runs an executive coaching and HR training program, and occasionally does management consulting to solve interesting problems. She sits on the board of Kasthamandap Purnanirman Samiti and leads the Project Management Office. She is passionate about entrepreneurship and human resource development. Formerly, she used to work for the Boston Consulting Group as a consultant, was a financial analyst at Citigroup. Sumana has MBA from MIT Sloan School of Management.