NEFTALK Dissecting Bordernomics proceedings report

DISSECTING BORDERNOMICS A futuristic perspective on borders as points of lifeline and facilitation of economy

Proceedings Report 10 March 2021

Introduction Nepal Economic Forum (NEF) worked on the report on ‘Dissecting Bordernomics’ by exploring the border regions of Rasuwagadhi and Kodari in the North, and Birgunj and Bhadrapur in the South. With a view that more discourses are required on the topic, a neftalk session was organized. This was the first virtual neftalk series conducted by NEF. The neftalk session ‘Dissecting Bordernomics: A futuristic perspective on borders as points of lifeline and facilitation of economy’, discussed a fresh perspective of looking at the borders as pillars and foundations of economic growth as well as building people-to-people relationships. The discussion focused around how the border areas can be developed as economic zones, which would lead to the upliftment of the livelihood of the people living in such border towns. The panelists provided a wide range of perspectives around what the border towns signified in the past, what the current state of these regions are, and how the border regions can be further developed as facilitators of growth through the lenses of academics, diplomats, and businesses.

Speakers: Aditya Todi Director, MC Group of Companies Apekshya Shah Senior Fellow at NEF, Technical Lead of Nepal and the World Namgya C. Khampa Deputy Chief of Mission, Embassy of India, Kathmandu

Moderated by: Sujeev Shakya Chair, Nepal Economic Forum

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Aditya Todi Director, MC Group of Companies Aditya started off by recounting two specific instances that made him realize the fluidity of identities that exists across borders. The first anecdote revolved around his childhood memory of visiting his maternal family in Birgunj during his summer breaks where his uncle would be using two cell phones - one with a Nepal Telecom (NTC) sim and another with an Airtel sim - back when cell phones were not a common occurrence. His uncle would use the phone with NTC sim when talking to someone from Nepal and the other phone when talking to someone from India. In another instance, when he visited the Jhulaghat border years back, he was fascinated to see a Newar shopkeeper speaking fluent Hindi on the Nepal side of the border while on the Indian side, Garhwali, Nepali, and Hindi languages were being spoken in one of the Garhwali weddings. He linked these experiences to illustrate the idea of identity being fluid to a certain extent among India-Nepal border towns, especially given the porosity of our borders.

Further, he opined that in the current context of globalization and particularly after the end of the Cold War, the world has become largely unipolar. This has attributed to successful partnerships that take place across borders, the most recent being the COVID-19 vaccine within the span of a year.

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By citing this example, he stressed that globalization was absolute and in the case of Nepal, having failed to leverage the second phase of globalization in the 1980s, there is a need to work towards gaining momentum to capitalize on this phenomenon. For this, moving away from the market of arbitrage towards the market of innovation in the border regions is most needed as it can facilitate border town businesses.

When these businesses become able to bring in innovative business models, they can further serve for the long haul.

He concluded the talk by emphasizing the need to understand people living across borders and maintaining harmony among these people as the economic prosperity of border towns ultimately depends on people-to-people relations.

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Apekshya Shah Senior Fellow at NEF, Technical Lead of Nepal and the World (NAW) Reflecting on the experience of spending her childhood in border towns, Apekshya Shah talked about the complexity of the borderland areas, the traditional and current view of border towns, and the ways Nepal can improve such areas.

She emphasized that the border town landscape is a unique phenomenon because the economic and social network is influenced by and solely dependent on the border. She believes that border towns not only facilitate economic affairs and livelihood but also help form social connections and interactions through friendships, work relations, and kinship which are attributes beyond the economic and livelihood issues.

Further, she cited that, traditionally, borders were viewed as places with security concerns and geopolitical and geographical issues, but with the onset of globalization and access to infrastructure and supply chain, they are becoming more functional. In line with this, she mentioned that the demarcation of borders, crossborder cooperation, and use of technology to monitor the movement of people and goods should be considered to manage external threats and improve borderland areas.

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She further talked about trade facilitation by providing an example of the struggles of traders of Humla.

Due to the disruption of the traditional trade route with Taklakot, known as Burang county, traders from Humla are required to come to Kathmandu, go through Kerung and then finally reach Taklakot. By highlighting this issue, she stressed that while there is a focus on making the border areas more integrated, there is also a risk of trans-boundary climate change as climate impact in one country will resonate in the other. She highlighted this issue by providing an example of the Southern border. With climate change, the irrigation problems on the Southern border and the issue of flooding in India can get more serious.

In conclusion, she claimed that in terms of policymaking for the border areas, the process should not be Kathmandu-centric and that the concerns of multiple stakeholders should be taken into consideration as they are the direct beneficiaries and have to face direct repercussions.

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Namgya C. Khampa Deputy Chief of Mission, Embassy of India, Kathmandu As an Indian Diplomat stationed in Kathmandu as well as a native of a border town across Nepal, Namgya C. Khampa focused on taking a futuristic approach on borders as enablers for growth and opportunity, particularly in the India-Nepal context.

She believes that borders can be looked at as an enabler or a conduit for the exchange of ideas, and an opportunity for multiplying growth and overlapping zones of prosperity and not only as a hard concept that is rooted in security and restrictions on movements of people or capital. Further, she illustrated how, over centuries, the openness of borders has been encouraging the development of a shared or similar cultural and civilizational attributes and has shaped the national and social fabric in both countries.

In terms of trade regimes, she touched upon how intertwined the economic ties of both countries are in trade, investment, or movement across the borders. Considering this, she mentioned that conversations on the development of cross-border economic zones have been going on at various stages. However, to facilitate that, she believes that there is a need to focus on two facets; first is regarding the facilitation of

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hard-wired connectivity through Integrated Check Posts (ICPs), and railways and transmission lines; second is by enabling regulatory frameworks that streamline easy access to such infrastructures and benefit the economy and people on both sides.

Furthermore, she stressed on the importance of digital connectivity on the borders and shared that there are few initiatives underway outside the government for this, which would hopefully mature over time.

However, she also hopes that bi-directional digital flows between Nepal and India could happen through bilateral cooperation in the FinTech sector. She mentioned that India has been investing extensively in power transmission lines in Nepal through lines of credit and grant assistance. Furthermore, the principal beneficiaries of India’s recent domestic guidelines on cross-border trade in power would be Nepal and Bangladesh. Lastly, she stated that the Government of India is committed to doing more and hopes to work with the Government of Nepal as a facilitator for the growth of people on both sides of the border.

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Sujeev Shakya Chair, Nepal Economic Forum Sujeev Shakya, the moderator of the session, centered the discussion on how borders can become points of lifeline and facilitation for the economy, which is a fresh perspective that is necessary to move ahead from the perception of border being points of control and in integrating with the global world.

He also delved into the future of border towns and the actions that can be undertaken to further improve the borderland areas.

He emphasized on the need to implement the recommendations that were agreed upon by the panelists to help the border towns flourish as economic hotspots and facilitators of growth for border citizens.

Key Highlights: Border facilitation and enforcement aspects are at the heart of the governments in both countries, India and Nepal. In order to facilitate growth in border regions, it is necessary for border town businesses to move away from the market of arbitrage towards the market of innovation.

More emphasis should be given to changing mindsets from traditional views and instead, putting people at the center of policy framing.

Facilitation of hard-wired connectivity through Integrated Check Posts, railways, and transmission lines along with regulatory frameworks that streamline easy access to such infrastructures is required to create growth opportunities for border citizens.