Lucrative Disaster: Financialization, Accumulation and Postearthquake Reconstruction in Nepal

abstract

This article investigates long-term processes of financialization unfolding in the aftermath of the 2015 earthquakes in Nepal, engaging with literatures on financialization and political economy of disaster and development. The article probes the evolving financialized social relations in Nepal in the context of humanitarian relief and reconstruction, paying particular attention to processes through which wide-scale political economies enter into the daily lives of disaster victims and play key roles in transforming their economic practice and subjectivity. In the name of relief and reconstruction, foreign investment combined with urban surplus capital has circulated within Nepal as finance in rural, earthquake-affected areas—making the earthquakes a truly lucrative disaster. The article deploys a conjunctural approach to understanding disaster financialization as a multiscalar process constituted through geoeconomic logics, state–market complexes, and economic subjectivity. Each of these dimensions of disaster financialization is elaborated in separate sections of the article. We conclude by cautioning against both celebrations and outright rejections of finance as a viable and desirable modality for disaster reconstruction—calling instead for a more nuanced understanding of disaster financialization and its implications for affected populations.

Key words:

• earthquake
• reconstruction
• financialization
• Nepal
• disaster capitalism
• critical disaster studies

Acknowledgments

Parts of this article were presented at the 2017 American Association of Geographers Annual Meeting in Boston. We would like to thank the participants for providing valuable feedback. We would also like to thank Lauren Shykora, as well as three anonymous reviewers, for helpful comments and suggestions; in addition, we are grateful for the support and encouragement of journal Editor-in-Chief James Murphy. This research was partially supported by a Social Sciences and Humanities Research Council (SSHRC) Insight Grant (File Number 435-2014-1883).

Notes

¹ We warmly thank one referee for assisting us to articulate these points.

² The NPC of the government of Nepal prepared a Post Disaster Need Assessment report in June 2015 targeting international donors and investors. The report estimated that the total economic loss from the earthquakes was about US$7 billion and the reconstruction would require about US$6.6 billion.

³ Agreement between the government of Nepal and the government of India for the promotion and protection of investments. https://www.indembkathmandu.gov.in/docs/1539678190BIPPA-india-Nepal-21-oct-2011-ENG.pdf.

⁴ To be sure, India, the Soviet Union, China, and Western countries have operated as a sort of geopolitical triad in Nepal since the Cold War (Baral 2012; Paudel and Le Billon 2018; Sangroula 2019). Geopolitical maneuverings in the form of border disputes or diplomatic standoffs brokered through embassies have now given way to the geoeconomics of financing infrastructure development (Chand 2017). The World Bank’s recent attempts to reclaim a share of the market in Nepal’s reconstruction and infrastructure development could be seen as a deliberate, if futile, move to counter the expansion of the Asian Infrastructure Investment Bank.