NEOLIBERALISM The supply side theory of economics-economic dynamics of urbanization, inter alias-ultimately brought the catastrophic Great Depression during the decades of 1930s in the capitalist countries (especially in the Unites States). To overcome from the devastating effects of this, the prolific economist J. M. Keynes launched demand driven theory of economics, where the topmost emphasis was given to state led policy in every facet of economic activities as opposed to the laissez-faire theory of Adam Smith. Over time, especially in post-Keynesian era, notion of welfare state maneuver to replace the previous one with the redistribution theory where the individual/ citizen has a right to get in return what they paid earlier to the state. Nevertheless, at the time of 1980s, emerging leader/policy maker from the USA (Ronald Reagan), UK (Margaret Thatcher ) and China (Deng Xiaoping) implemented liberalization (rolling back the frontiers of the state) concept with the opening of market-previously had a highhandedness of government-to private sector (domestic and/or foreign) by dismantling the licensing and protectionist approach and at the same time establish only regulating function of government (minimal government but maximum governance) in subsequent days. In this line, David Harvey offered origins, rise, and implications of neoliberal doctrine and its critical analysis via his book “A Brief History of Neoliberalism”. According to Harvey, neoliberalism means, in short, the financialization of everything (page 33). The Neoliberalism-a broader concept of liberalization-seen in the world’s level playing field: capital market/city, with the emergence of globalization after 1980s in addition to liberalizing individual entrepreneurial freedoms and skills within an institutional framework characterized by strong private property rights, free markets, and free trade. On the other side, Harvey offered the disillusion of entrepreneurial freedom, restoration of capital/power (For instance invasion in Iraq and speculative gain), burgeoning Ginni-coefficient as a negative aspect of it. Nevertheless, the momentous shifts towards the cosmopolitan (like New York, London, Parish, Tokyo, Shanghai) from metropolitan city could be the best example to clarify the identification of neoliberalism in the contemporary world. To further explain about the neoliberalism in context of Nepal, one of the least developed country (LDC) of the world, I would like to present a brief history of Nepal government economic policy. After the dawn of democracy in Nepal (in 1950), the neighboring and friendly countries like India, China, Russia (erstwhile USSR), and the Unites States of America (under Marshal Plan) had provided an assistance to establish a foundation for industrialization and commercialization (trade) in Nepal. Most importantly, the effect of liberalization lead by the UK and USA during the decade of 1980s seen in the forefront of Nepalese politics too which later caused to adopt the liberal economic policy by Girija ( Late Girija Prasad Koirala, Former Prime Minister of Nepal) Government after the success of the First People’s Movement in 1990. As a result, the government privatized most of the state owned enterprises (SOEs) according to the notion of neoliberalism so as to enhance the role of the private sector (Entrepreneur ism-positive outcome) and consequently, Nepal became a member of the WTO in 2004-which along with WB, IMF, G20 institutionalized the neoliberalism theory. However, it shows the negative outcome such as cartel, layoffs, capital flight (outward) and so on. As the City government is (was) more and more construed as an entrepreneurial rather than a social democratic or even managerial entity, inter-urban competition for investment capital transform(ed) government into urban governance through public–private partnerships (PPP) program same as David Osborne and Ted Gaebler mentioned in their book ‘Reinventing Government: How the Entrepreneurial Spirit is Transforming the Public Sector’ (1992). It would be relevant to mention one of the PPP program of Kathmandu i.e. Kathmandu Metropolitan City (KMC) hand over the Dharahara (renowned/ancient tower of Kathmandu city and previously owned by KMC) to the private sector for successful operation. Furthermore, Harvey, in his article “From Manegerialism to Entrepreneuriasilm: The Transformation in Urban Governance in Late Capitalism”, pours his insights into the process of city making that is both product and the condition of the social process of transformation (mainly a sense of fierce competition) in context of neoliberalism. The emergence of catalytic government (also community oriented, competitive and enterprising government) in the early 1990s pave the way for establishing the Principle (People)-Agent (government) theory from Master-Servant theory, Citizen Charter, New Public Management (currently, New Public Service), local governance, cost-benefit analysis, community/city(people-centric) development in the forefront of public service primarily to empower the people of country, in general and city dweller, in particular, as most of the city dweller participate in the entrepreneurial activity across the national boundaries or out of it-international/global. Besides, Harvey also offers four alternative strategies for urban governance: competition within the international division of labor, improvement in the urban region competitive position with respect to the spatial division of consumption, acquisition of key control and command function in high finance, coercive power and information, and redistribution of surpluses in accordance with countries governance system−Unitary or federal. It is said that ‘Everything has two sides; the good side and the bad side!’ and the same applies to the neoliberalism theory in today’s world system (though it covers an economic periphery of state/society/city, has also a significant influence in other political, social, cultural aspects). So, Paul Kivel tries to show this other side (of course bad one) of neoliberalism in his article “Social Service or Social Change? Who Benefits from your Work”with the lopsided fact of 20% Vs 80% of the world total population (approximately 7 Billion), where a majority group of society has been ruled by an elite group (ruling class) that left the society to be unjust and inequitable. Therefore, social service and/or social change (complementary to one another, yet can’t go together all the time) is needed to make our city/society just and equitable by ensuring a dignified life of every individual because our society no longer tolerate any kind of strikes or violence such as Occupy Wall Street Movement (2011); so hope no more movement at least! All in all, free flows of goods/service, capital, technology and human resources regardless of national boundaries happens to exist worldwide-due to the globalization which comes with the neoliberalism-that trigger to develop infrastructure (physical and non-physical) of any city of the world via international BID. So as one of the Chinese Company won the international BID (with low price) to construct the “Melamchi Drinking Water Project” of Kathmandu. However, Chinese company could not succeed to complete this project and gave a walkover in the middle of a project showing various unfavorable reasons. In such particular situation, local communities were not entitled to take action against, despite of their willingness, this company due to the selection of company through international BID. Besides this, Nepalese cities lack self-sustainability as the cities are developing upon the remittance [have almost ¼ of contribution to total Gross Domestic Product (GDP) of Nepal] receive from the export of Nepalese human labor (semi-skilled and unskilled) to most of the gulf countries (Qatar, United Arab Emirates, Kuwait, Saudi Arabia) in a number of nearly 1500 (data based on the Ministry of Labor and Employment, Nepal) daily. Therefore, it would be good to have a more positive outcome of neoliberalism instead of a bad one, which would only be possible if all the state, particularly developed, and intergovernmental organization (WB, IMF, WTO) pursue fair, equitable and just policy to develop urban through good governance.
Posted on: Thu, 17 Oct 2013 17:37:38 +0000
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