What Would A Maoist Nepali Economy Be Like?

John Child

Maoist leaders' speeches at the annual Chambers of Commerce meeting contained comforting commitments but plenty of radical rhetoric too.

The 41st annual meeting of the Federation of Nepalese Chambers of Commerce and Industries opened this week with speeches from the usual slate of ministers and business leaders, but the agenda also included time for Maoist supremo Prachanda and number-two Dr. Baburam Bhattarai. The Maoists sought to calm fears by repeating earlier assurances that they are not anti-capitalist, that they do not intend to confiscate private property, and that they will not prohibit foreign investment.

But the reassurances came with a hefty dose of rhetoric at odds with the promises. Prachanda said that economic progress depends on doing away with 'rents and commissions' to foreign 'compradors.' Rent is a term from classic economics: It is the difference between income generated and cost incurred - the profit - from putting an additional unit of capital or labor into use. To Communists though, rent is 'unearned profit': In both the Soviet Union and Mao's China, that meant all private profits.

The word comprador also predates Marx but took on new meaning in Communist economics. Originally a term for a Chinese agent working with foreign traders as a business intermediary, Marx and Mao used the word to describe those who serve and profit from imperialism. Imperialism in Lenin's definition is 'the highest form of capitalism,' that of multinational corporations and international capital movements. Prachanda and Bhattarai also railed against 'feudal and reactionary interests' and 'foreigners and their commission agents who waged jihad against us' and 'looted the nation's assets.' Perhaps the words rent and comprador are just more Communist jargon. But if the Maoists mean what they say, their vision of the Nepali economy is quite different from today's picture.

The Maoists want 'national capitalists' but not 'foreign agents.' Many of the country's major business houses are Indian-owned; most of the commercial banks are foreign-run joint partnerships. Many in the audience must have wondered if they would be considered compradors, benefiting from the global economy. The Maoists want foreign investment, but Bhattarai explicitly ruled out education, health, communications, and transportation. Maoist water minister Yami's blocking of the Melamchi deal suggests that foreign involvement in public works is out too.
The Maoists say they approve of private property, but they have also called for legal limits on how much of it anyone can own, in the name of land reform. Profit is OK, but not 'unfair' profit. Foreign money may be acceptable in some areas, but not foreigners or their agents. No commissions means no corruption around investments, say the Maoists.

In his speech, Prachanda said that foreigners waged 'media war' on his party after they refused to take the commission offered for letting the Melamchi deal go through. To dramatize a commitment to good government, Maoist ministers signed over all their personal property to the party and pledged to accumulate none during their tenure. Anti-smuggling efforts by the YCL too are part of the Maoists' stated clean-up campaign.

Reducing corruption and influence would certainly be good, but ongoing demands from the Maoists for 'donations' cost businesses as much as corruption does, and the lack of any accounting from the party for more than $15 million given to them by the government to support their troops in the cantonments doesn't bode well for transparency in a Maoist Nepal.
'We are still in the process of resolving political issues,' Prachanda told the business leaders. 'Therefore the country's modernization is a distant dream.' Those in his audience who took the rhetoric seriously may hope that Prachanda's dream remains far away, whether they consider themselves compradors or not.

Source: News Blaze, June 5, 2007