Eat Pray Nepal Blog: May 2013

Friday, May 24, 2013

Marc Faber visit to Nepal

-  NEPAL   - by Marc Faber

I have just spent a week in Nepal, following my own suggestion, which I made last year at Christmas, to visit
a new place at least once a year. Nepal is one of the world's most scenic countries - it is also one of the
world's poorest.

Entirely landlocked, Nepal is squeezed between India to the south, and Tibet (now China) to the north. Its GDP per capita is just US$240 - the third-lowest in Asia. The life expectancy of its population, 60 years, is among the lowest in the world (Botswana has the lowest at 36 years; Japan the highest at 81.5 years), and its literacy rate of just 42% is also one of the lowest in the world.

Nepal's capital city of Kathmandu offers many unusual and impressive cultural sites, which suggest some wealth in earlier times. Kathmandu also has some charm and a pleasant atmosphere. Rapid population growth over the last 100 years became a burden, as a growing number of people had to be supported by the same quantity of land, which, in the absence of industry and commerce, simply impoverished the country. In addition, while certainly poor, Nepal's population of 22 million distinguishes itself by having supplied the world with some of its toughest and most courageous warriors, who form the renowned Gurkha batallions of the British and Indian armies and guards, who are nowadays widely employed in the Middle East. (It is worthy of note that Nepal has never been colonized or conquered by any of its formidable neighbors.)

After spending a few days in Kathmandu, we flew to Pokhara, which is situated beneath the Annapurna and
Dhaulagiri mountain chains and, in clement weather, offers sensational views of the mountains. Unfortunately, we were only able to admire them from postcards and photos, because it rained solidly for the four days we stayed in the town. The continuous rain provided me, however, with the opportunity to read about Nepal and its history and also to think about the global economy and the financial markets.

While in Nepal, I had some very mixed feelings, altering between being depressed by the poverty of some of its farmers, who live in small and remote villages high in the mountains, without electricity or water supply in their homes (agriculture - predominantly rice and corn - makes up 40% of GDP, compared to 1.4% in the United States) and moments of high mood because of the friendly nature of the Nepalese, who seem to be quite content and happy even while being poor and conscious of the privileged lives most of us enjoy in the Western industrialized countries.

I also had some time to ponder on the future of Nepal and on a question I was recently asked by a reader, who wanted to know if the Asian stock markets would suffer should the U.S. stock market experience a serious correction or a crash in the next few months. This question prompted me to look at some very simple economic, financial, and social statistics in Asia, and to compare them to the rest of the world. My conclusion? The long-term favorable potential of the Asian region may remain intact even if the Western
economies were to weaken once again. In fact, a decoupling of the Asian stock markets from the performance of the U.S. is a distinct possibility.