By Sanjit Shrestha
The surge of the second wave of Covid-19 has resulted in prohibitory orders being imposed in several districts of the country, including the Kathmandu valley.
The imposition of prohibitory orders has meant a spate of temporary migration from Kathmandu, with migrants who come to Kathmandu for work, education and business purposes leaving for their hometowns.
As soon as people start leaving the capital city in hoards, so-called locals and elites of Kathmandu emerge in social media to shame the migrants citing disloyalty to the city during hard times.
Temporary residents of Kathmandu are also often blamed for causing pollution and congestion in the valley and how those factors will be eliminated after the outflow.
The migrants are deemed opportunists and selfish for leaving, and their integrity is questioned.
This shaming of migrants and terming their presence a burden on Kathmandu, however, reeks of elitism and discounts the dynamism that migrants bring to the city, though many who are critical have benefitted from the incomers.
An understanding of rural-urban linkages might elucidate further.
Benefits of agglomeration
Proximity can be an important factor for boosting productivity as it not only allows the reduction of transport costs but also confers benefits of clustering with increased access to financial, human and social capital.
As businesses and workers converge in a city to reap the rewards of agglomeration, they inevitably have to purchase or rent a place within the city to enjoy these benefits.
This increased demand for accommodation within the city drives the price of renting and purchasing real estate to monumental proportions and as Henry George (see Progress and Poverty) has stated that a large proportion of the benefits of agglomeration is enjoyed by landlords.
Since most landlords of the valley are the generational residents, they have accrued huge benefits from the migration either by selling their land or renting their houses.
The price of land or the cost of house rent in the valley isn’t high because of their superiority in product quality. It is not that investors have built houses in Kathmandu with greater architectural finesse that they should demand such high rents relative to other regions of the country.
The accentuated value of real state in Kathmandu is a result of a fortunate clustering that has happened in the region and is generated by all the people that have decided to live here.
Since the higher value is engendered because of high volume of transactions between people, locals and migrants all play a part and the primary beneficiaries have been landlords.
Thus, migrants in Kathmandu have massively enriched local residents here and allowed them to benefit from a public good as it is an externality of agglomeration.
The narrative of migrants ruining Kathmandu by those who claim ancestral heritage to the valley is hypocritical.
Rural development isn’t inevitable
It is important to contextualize internal migration through the urban bias of Nepal’s development and its inability to create linkages between urban and rural areas to facilitate rural development.
Rural development isn’t inevitable as was espoused by the neo-liberal doctrine because of trickle-down effects.
Rural and agriculture development needs institutional support and administrative linkages with the accessibility to markets, credit financing and new technologies. Education, health and public services for rural population are crucial elements in building the environment for rural growth.
Without a healthy rural-urban linkage, farmers will neither have the incentive nor the knowledge to transcend subsistence production and the people thus will be divested from economic prosperity that is transpiring in more urban areas.
As Todaro and Smith have pointed out (see Economic Development, Chapter 8) migration is a direct reflection of economic and social policy that impinge on the people’s real incomes.
The concentration of work opportunities, educational institutions and government offices in the capital city has caused imbalances in the rural-urban dynamics and created the problem of Urban Giantism, whereby urban areas are disproportionately over-populated.
People are driven into Kathmandu because of underdevelopment in the peripheral and rural regions. The expected higher wages in the valley is the route to middle-class economic status for most migrants.
If migrants don’t transfer funds that they have earned in Kathmandu to rural regions, then the rural economy suffers. There is no clear guarantee of transfer of funds from Kathmandu to other regions while the advantages to landlords are clear.
In this regard, Paul Collier (see The Future of Capitalism) mentions that the global GDP increases if a Sudanese doctor moves to Britain and works there as a taxi driver.
It is important to acknowledge that Kathmandu’s development and dynamism is a combined effort of permanent residents and migrants.
The benefits of migration are shared and the need to migrate emerges from imbalanced economic as well as social policies.
Shaming people for wanting to spend hard times in their hometowns is unacceptable.