After the 1990 restoration of democracy, and at the cusp of a new millennium, globalisation arrived in Nepal with a bang. Call centres catering to international clients sprang up, travel and tourism boomed, Nepalis started migrating overseas for work, and made-in-Nepal carpets, garments and pashminas started being exported all over the world. Weavers, tailors and workers needed for the factories flocked to Kathmandu Valley, feeding its rapid urbanisation.
Nepal seemed to be living the prediction of Francis Fukuyama, who declared capitalism to be the end of history. It was also the end of geography.
But Fukuyama was proven wrong, the global economy was hit by multiple economic crises and recessions, and Nepal’s export market collapsed. In her book Death of an Industry, Mallika Shakya traces the history of the rise and fall of Nepal’s garment industry.
It all started in 1974 with the American Multi-Fiber Arrangement (MFA) which allocated quotas to garment imports from developing nations. Its actual intent was to protect its domestic industry, but it suited Nepal well and a garment manufacturing industry materialised almost overnight, becoming the country’s fourth-largest export at one point.
When the MFA finally lapsed in 2004, Nepal’s garment industry collapsed. Shakya takes issue with how this demise was considered natural, even inevitable, by the state, and how workers were left to fend for themselves. Most opted to migrate to the Persian Gulf, fuelling another industry.
‘The state felt well grounded, technically in its assertion that the industry collapsed because it could not compete in the global market. It was felt that if it was not good enough, it did not deserve to live, and the state felt legitimacy in ignoring the plight of millions employed by the industry,’ Shakya writes.
For Shakya, the garment saga epitomises ‘the hegemony of neoliberalism’, which became mainstream in Nepal in the 1980s with World Bank’s Structural Adjustment Program (SAP), and after 1990 with the free market principles.
An industry once made up of 1,200 firms now has only 50, and survives on orders that have no other takers. Apparel exports from China, India and Bangladesh flourished even after the MFA because cheap labour made them more competitive. Nepal’s products were up to 30% more expensive in comparison.
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