How to make money in an unequal world
Only a handful of people in the world have more wealth than the rest of humanity. The number of zeroes behind their net worth is mind boggling, but what is even more difficult to understand is how some people became so rich while others have nothing.
For example, every person in Kathmandu who has a few annas of land in Kathmandu is a rupee billionaire while ropanis and bighas of land in rural Nepal are not worth much. This is why many Valley residents feel they do not need to work like the rest of the world.
There are others who watch television, see images of North America and Europe and feel that the moment they get to these places, they will become as wealthy as the people on screen. They also do not feel they have to work till they cross the immigration desk at Kathmandu airport.
Many of us are aware of a time when we were able to buy one tola of gold when our salaries were Rs1000 a month. These days, if you make about Rs55,000 a month you can buy only one tola. If salaries were in gold, nothing would have changed. Twenty years ago, if you sold land and bought a vehicle, you now have no land and the vehicle is banned.
About 25 years ago we bought a piece of land near Bhaktapur and watched its ‘value’ go up. We recently sold it and got many folds in return. With the money we made, we went to buy more land and realised we could only buy half the area we had sold.
Unlike in rural Nepal where a subsistence way of life is an option, urban poverty is really bad here because only cash can get you what you need to survive – including water in a bottle. With the expansion of roads, which are regarded as the ultimate symbol of development, the traditional namlo has disappeared but are people better off and more wealthy? Mule train drivers have been replaced by truck drivers. What used to be a village where travelers spent the night are now only a few minutes or hours of drive in between and have lost their economic relevance.
Food and vegetables grown for local consumption are now out of reach of locals who have no cash. Remittance from overseas workers plays a crucial role in ensuring that families have cash to pay for their basic needs. In some parts of Nepal, tourism has helped add to the income stream.
Wealth creation becomes complex when we want to generate power from flowing rivers because it costs a lot of money up front and revenue does not come in for nearly a decade. There are market uncertainties which means you may not get the price you seek, or regulators who will not allow the power into the market because a particular country did not make the investment.
Some want to create wealth by making a watch using rocks from the top of Mt Everest for the dial. Religion and the fear of god seem to be a good means of wealth creation in the form of fees for rituals. Cold drinks, alcohol and processed food look like easy money makers as well. Nepal has a billionaire in the Forbes list who makes ready-to-eat noodles.
But most Nepalis, like billions others around the world, make a living buying low and selling high. Most get by with a salaried jagir or renting out floor space. Artists seem to do really well when it comes to value creation. They take a piece of rock or a sheet of copper and create a masterpiece that can fetch huge returns. It is however not easy to find buyers. Most wealthy countries make money by making and selling weapons, and preventing others from doing the same. They need wars to stay rich.
Some people in Nepal and the world are rich because they take resources such as trees, land, water, oil, minerals and people as a ‘free good’ and then monetise them. If you think wealth creation is complicated, wait till we discuss wealth distribution in the next installment.
Anil Chitrakar is President of Siddharthinc