Recently, I walked through New Road after nearly a decade. Much of what I saw was no different from what it was like 10 years ago -- unruly traffic, pedestrians jostling to navigate crowded sidewalks, trash piled up at curbside. Assorted shops catering to consumers’ every need -- from sweets to shoes, from computers to clothes. The only noticeable change was in the number of gold jewelry shops. They had multiplied manifold. They were bigger and swankier too.
This spurred a number of questions. What is the source of the new gold? Why is our society so obsessed with gold? How socially responsible is this obsession?
The Nepal Rastra Bank allows commercial banks to import up to 20 kilograms of gold per day (25 during festive seasons) as compared with an estimated market demand of over 40 kilograms per day. The deficit is met by smuggling. Frequent media reports of seizures of gold and arrests of smugglers attest to this.
Bam Dev Gautam, a senior leader of the Nepal Communist Party, allegedly masterminded gold smuggling from the Tribhuvan International Airport when he was the home minister over two decades ago. A report from the US ambassador to his government made public by Wikileaks read, “In 1997 when Gautam was home minister and deputy prime minister for seven months, he was implicated in using the government machinery to support a gold smuggling ring.” What Gautam allegedly started continues to this day.
A recent government investigation led by the Joint Secretary of the Ministry of Home Affairs found that around 3,800 kilograms of gold has been smuggled through Tribhuvan International Airport since 2015. The investigation concluded that a number of senior police officers were involved in the smuggling racket, but the investigation stopped short of implicating any politician. The popular belief is that smuggling to such an extent would not be possible without political complicity. The bureaucrats didn’t have the stomach to investigate their bosses.
Humankind’s obsession with gold goes back to the beginning of civilization. Traces of gold have been found in ancient Egyptian burial places. The Bible mentions gold, as do records of the Aztec and Mayan civilizations in South America. Every society has religious and cultural myths woven around gold.
Our society’s love for gold is built on its glorification in Hindu scriptures and the successful marketing of its investment potential. Hindu scriptures describe gods resplendent with gold jewelry to emphasize their power over mortal beings. Chittaranjan Pandey, writing in the New Business Age, quotes a fitting line from the Atharvaveda: “I adorn gold created or originated from the fire which bestows eternity. One who adorns it is liberated from the fear of untimely death.”
A touch of gold is enough to sanctify water. Menstruating women in some parts of Nepal, who are essentially treated as untouchables for four days, are cleansed by a sprinkling of gold-sanctified water at the end of the menstrual period. Gold is power. Gold is liberating. Gold is purifying. None of this makes sense, of course. They are all socially created myths.
A majority of people buy gold to assert their wealth and power. Vanity is their driver. Others buy it as a safe investment. Experts think they are misguided.
David Berman, a well-known investment reporter for the Globe and Mail, a Canadian national daily, argues, “I would say that anything of which 75 percent sits idly and expensively in bank vaults is, as a measure of value, only one step up from the Polynesian islands that attached value to certain well-known large rocks that were traded.”
John Wasik, a personal finance specialist who writes for Forbes Magazine, concurs. “Unlike a bond,” he writes, “the metal pays no interest. There is no dividend. It may not protect you against the worst forms of inflation. And there is no implicit guarantee that it will appreciate in value. If you invest in a basket of major stocks, although not guaranteed, you are likely to receive dividend payments. If you buy gold bullion or coins, this is not the case.”
A standard 18-karat gold wedding ring leaves behind about three dump trucks full of toxic waste consisting of mercury and cyanide. Anyone wearing a 40-gram gold chain is complicit in producing an average of six truckloads of waste, consuming around 54,000 liters of water (enough to meet the daily needs of 415 people in Nepal or India) and using enough electricity to power a large house for 10 days. Furthermore, gold mining causes land degradation, acid drainage, water pollution, air pollution and more.
Until recently India, one of the poorest countries in the world, was the world’s largest consumer of gold. That dubious distinction is now taken over by China -- also, in terms of per capita GDP, a developing country. But one only needs to look around and see new-rich Nepalis at Teej parties or at weddings, to conclude that Nepal is not far behind. Interestingly, the use of gold jewelry in industrialized countries has plummeted in recent years. Part of the reason is increased awareness of the environmental impact of gold production.
Unlike iron or copper, gold is not essential for manufacturing products required to maintain the quality of modern life. It is essentially useless, except for a small percentage used in electronic industries.
Our fascination with gold has provided fodder to smugglers and makes us complicit in environmental destruction and exploitation of the poor -- all to placate a bit of vanity and to pamper our narcissistic instincts.
When we buy gold we compromise our social responsibility. Time for some serious thinking, gold diggers.
Naresh Koirala is a geotechnical engineer residing in Vancouver, Canada. -- Ed.
(The Kathmandu Post/Asia News Network)