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 2.8 billion people live on less than $2 a day.

 UN's Human Development Report: The income gap between the

richest 20% and poorest 20% in the world rose from 30:1 in 1960,
to 60:1 in 1990, & to 74:1 in 1999, and is projected to reach 100:1
in 2015.

 Development / Underdevelopment : a composite 'socio-spatial

process'
:Interrelation of Time and Space.

 Nepal : a member of the ' poorest of the poor club‘.

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 Two Principal epistemological camps.
(i) Anglo- Saxon school / neo- classicism/ neo- liberalism

- Empiricism/ Pragmatism : Underdevelopment as original state of

'backwardness’, as a result of natural historical & geographical
differentials, or like 'original sin'.

- development : economic 'growth' or 'modernisation'- 'modern/‘traditional’

dualism.

(ii) Marxist or Historical Materialist Approach.

- Materialist dialectics : 'unity of opposites', 'unity-struggle- transformation’,

‘transformation of quantity into quality', 'a development that proceeds in
spirals, not in a straight line', ‘a development by leaps, catastrophes &
revolutions’, ‘interdependence between all aspects of any phenomenon’
etc.
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- Historical Materialism: contradictions between 'material forces of
production' and ‘social relations of production' constitute the ‘prime
mover ' in the transition to higher mode of production; societies
develop through different mode of production.

- Neo- Marxist approach or Dependency Theory: drain of economic

surplus from 'periphery' to 'centre'.

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Development & Underdevelopment
-‘development' within a given social formation would be full realisation of
productive potentials of the society or transition to higher social formation;
'underdevelopment' would be the opposite condition of non-realisation of
full potential of development and/ or blockage to transition to higher
formations due to both endogenous & exogenous factors.

- Capitalism, and its highest stage imperialism, by its nature of incessant drive
towards expanded reproduction intervenes in the development process
elsewhere. But the impact would depend on mode of articulation with pre-
capitalist economy. i.e. mercantile, industrial or financial.

- No determinism or nihilism as regards the relative role of endogenous &

exogenous factors; in general ‘external causes become operative through
internal causes’.

- Degree of differentiation of social division of labour and the extent of

economic articulation can be taken as general indicators of higher mode of
production.

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Spatial Structure of Underdevelopment
- ‘nature' & 'society' in constant interaction with each other; 'production' as
'appropriation of nature within & through a certain form of society' ; territorial
'space' as' humanised' or 'historical' nature .

- ‘development' as a combined 'socio-spatial process'

- Spatial formation as the manifestation of and to a lesser degree a causal factor

in the particular social formation

- Articulation of territorial division of labour is manifested in the emergence of

'economic regions' to exploit advantage of geographic location & historical
accumulation [ eg. Kathmandu → Biratnagar →Birgunj etc.] ; greater
interactions among such 'region' in terms of flow of goods & services should
characterise higher spatial formations

- Inter-spatial disarticulation or non-development of territorial division of labour,

a feature of introverted pre- capitalist formation
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Historical Specificities
• Valleys of Nepal seats of very ancient people: about 70,000 yrs?

• Mongoloid stock (Kirat) from South-east, Caucasoid Stock (Khas) from north-
west, and Austro- Dravids from South, in Kathmandu valley around 1 st
millennium B.C.
-Kathmandu valley with excellent agro- climatic advantage for stabilized
agriculture & primitive entrepot trade, became citadel of early civilization

• Great influx from Southern plains after 11 th century; assimilation with tribal
communities; proto-class societies/ 'state-communal' formations

• Centralised state formation in 18th century

-Semi-colonial integration with British India after 1815-16
-Cumulative 'exogenous' dynamics
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• Exogenous dynamics: political dependency to economic dependency
-Politico-strategic motivation than economic depredation led to general
'fossilization‘

• Endogenous dynamics: centralized despotic state and hodge- podge social

formation from tribal communalism to ‘commercial feudalism’

- No historical upheavals or sharp breaks until Maoist-[People's War in

1996-2006

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General Differentiation of the Economy

• Low level of differentiation of economy marked by more than two-third of

labour force in agriculture sector.

• Discernible shift of both labour force & GDP away from agriculture to service
sector at the cost of industry sector, a sign of growing comprador and
bureaucratic capital.

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Stagnation of Agriculture
• Very low development of productive forces reflected in overwhelming
domination of traditional factors of production like land & human & animal
labour; low cropping intensity; low productivity; predominance of
subsistence (cereal) crops; steady decline in food surplus and now net
deficit;

: Only eastern Terai & Kathmandu Valley have some 'healthy' signs.

• Backward & retrograde relations of production reflected in extremely low &

declining average size of land-holding (0.68 hect)
: pre-ponderance of 'owner-cultivator' subsistence peasantry (84.6 %)

Pre-capitalist ground-rent realized through system of share-copping

: More 'feudalisation' away from central authority

 • Rampant disguised & under-employment; seasonal & relay migration 16–13
• Aggregate agrarian process: stagnation & retardation ; disarticulation with
other sectors.

• Marginally differentiated vast hinterland of Hill & Mountain, surrounded by

areas of 'extraverted development' along Terai, Inner Terai & Kathandu
Valley.

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Industrial Retardation

- 'direct appropriation of nature' vs 'indirect appropriation of nature'

-'domestic industry: 'artisan' & 'handicraft' production ['proto- industry'] to

'manufacture' & 'modern factory' industry,

-Historical decline after mass influx of factory made goods since the
beginning of 20th century ; No combination of capital formation, free labour
& domestic market

-Predominance of elementary processing agro- based & forest- based

industries & negligible share of production goods industries,

- Undissolved ties of industrial labour with agriculture production

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- premature monopolisation by few dominant groups

- External dependence for both technological & raw material inputs

- ; preemption of internal market by exogenous capital.

- 'extraverted' and 'disarticulated' industrial spatial structure.

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Proliferation of Circulation Capital

- Early entrepot trade between India & Tibet (China) via Nepal ["foreign trade
antedates domestic trade" ]

- Decline after Sugauli Treaty

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Unequal Exchange & Dependency

- Export of primary product (cardamom, pulses, tea, ginger, skin, herbs) &
import of finished products (machineries, motor, vehicles, chemicals &
drugs etc) lead to unequal exchange

- Trade imbalance & dependency ( with India )

[Export/Import : 5:1 to 1:8 ]

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Financial capital & foreign Debt

-Proliferation of banking & financial capital

: Centralisation in Kathmandu/ urban areas

: Mismatch of 'deposit' & 'credit'

-Tightening 'debt trap‘

: Debt/Export earning ratio > 600%

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Restructuration of Society & state
- Problems of development/ underdevelopment of Nepal both in social & spatial
dimensions are essentially problems of transition of pre-capitalist society
hybridized by endogenous & exogenous factors to higher social formation.

- Ten years of armed insurgency (PW) and other movements have shaken the
foundation of the old society & state.

- It is now time to:

• Restructure the state on FEDERAL basis.

• Develop the country as a VIBRANT BRIDGE BETWEEN INDIA AND

CHINA

• Embark on the path of INLCUSIVE DEVELOPMENT

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THANK YOU !

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