Planning in political void

Planning in political void

Nepal’s National Planning Commission (NPC) has just produced a framework document of a Three Year Development Plan (TYP 2013-16). The professional civil servants of NPC are to be commended for producing a very thoughtful and balanced document without the benefit of any clear political guidance as Nepal is currently run by an unelected interim government.

While the document lacks a bold vision and ambitious plans, it is also thankfully free of the hyperbolic empty promises that our political leaders make from time to time—such as turning Nepal into a Singapore or Switzerland of Asia, or regurgitating outdated ideological clichés as agragami (progressive) agenda.

At a National Development Council meeting, some participants questioned the necessity and utility of a paper plan produced by bureaucrats in a pre-election period, as it can be easily disowned by a future elected government. On the other hand, if we have a hung parliament and a messy, indecisive political stalemate after the election, as some analysts fear, the TYP could be a helpful stop-gap plan possibly sparing us from ad hoc political adventurism by unstable coalitions-of-convenience governments that might emerge from a potentially botched CA election.

Graduating from LDC

The TYP proclaims a long-term goal of upgrading Nepal from the status of a least developed country (LDC) to “developing” country by 2022. Towards that end, it reaffirms Nepal’s commitment to achieve the Millennium Development Goals, their successors-in-the-making post-2015 sustainable development goals, and to promote environment-friendly “Green Economy”.

While all these goals are desirable, a focus on achieving MDGs and SDGs with greater concern for equity, and practical measures to develop a “green economy” are clearly more important, since achievements of these goals will automatically help uplift Nepal from the status of an LDC. However, making graduation from LDCs a separate and prime objective might actually be counter-productive as it could prematurely deprive Nepal of some of the advantages of being classified as an LDC. This merits more careful consideration.

While “graduating from LDC” is an attractive slogan, it can lead to cynicism like the Panchayat-era mantra of reaching “the Asian standard of development” or the 1990s jingle of turning Nepal into Singapore.

Good governance

To achieve these long-term goals, the TYP enlists such worthy strategies as promoting inclusive and sustainable economic growth through expanded role of public, private and cooperative sectors; developing physical infrastructure; expanding outreach and quality of basic social services; and economic and social empowerment of particularly deprived communities and regions. All of these are important, but it is my view that the most important strategy,even to implement all other strategies, is good governance in public as well as private spheres.

“Good governance” is a broad concept within which ‘the rule of law’merits special attention in Nepal’s context of rampant lawlessness and impunity. In the absence of the rule of law, none of the worthy goals and strategies of TYP can be pursued effectively.
A great curse of Nepali politics in recent years has been how political parties claiming to be champions of the poor, the deprived and marginalized take laws into their own hands, and even glorify impunity as “kramabhangata” (wanton disruption of all existing laws and institutions considered remnants of a feudal era). But the main victims of the absence of rule of law are precisely the poor, the oppressed and the marginalized groups.

In an atmosphere of lawlessness, the rich and powerful always find ways to protect their interests. It is the poor and the powerless who suffer the worst consequences of lawlessness or poor enforcement of laws. Since Nepal is a party to many international conventions, it has adopted quite a few progressive laws that ban discriminatory practices and uphold internationally agreed human rights standards. But weak implementation of these laws and policies is the main reason for the persistence of historical inequity, exclusion and discrimination. Enacting more progressive laws or even a brand new national Constitution will not change this sad reality, if we do not develop a culture of citizens abiding by the rule of law.

Despite the good efforts of the high-level investment board and investor-friendly BIPPA agreements, it is the lack of rule of law that discourages foreign direct investment (FDI). Widespread corruption is a manifestation of poor rule of law. No country has had sustained prosperity if the absence of rule of law becomes a norm rather than an exception. Ensuring ‘good governance’ in this sense has to be the mother of all our pro-poor development strategies.

Green growth

A key strategy outlined in the TYP is promoting environment-friendly ‘green growth’ responsive to the challenges of climate change that is severely impacting Nepal, and the world. However, many of our priority development schemes, including those involving expansion of the road networks, industries, urban development and rural infrastructure are effectively contrary to our professed strategy of green growth.

Our effort to connect every far-flung VDC and ward with a road network—along with schools, health posts, and other service entities—is politically popular but is already destroying our pristine environment, and could have a negative impact on tourism. While a democratic society tries to provide basic services to all its people as close as possible to their domiciles, this must be balanced with a pragmatic policy of encouraging people to voluntarily resettle in areas with easier access to services, through non-coercive but attractive incentives.

Recently we have seen the whole district headquarters of Darchula swept away by floods. Many districts of Nepal have their headquarters in areas that are totally unsuited to be service centers for the people of surrounding villages, and have no potential for becoming environment-friendly municipalities. Nepal needs to adopt a policy of developing several hundred green growth hubs or townships with modern amenities, including spacious parks, playgrounds and side-walks that are people-friendly.
One would hope that as we move towards a new federal set-up, this issue would be a major consideration. Today Nepal’s political debate on federalism seems to be focused on our ancestral identity rather than on ensuring our children’s prosperity in a globalizing world. But the ultimate identity we all seek is that of prosperous Nepalis living in a just and prosperous country. For that, we need eco-friendly development that maximizes opportunities for people to pursue their well-being while minimizing the damage to our pristine but fragile environment.

Dismantling monopolies

The TYP framework paper acknowledges that out of Nepal’s 37 major state-owned corporations, 14 are loss-making. The most profitable one, Nepal Telecom, earns Rs 12 billion per year, channeling dividends of Rs 5 billion to the government coffers. The worst performing ones are Nepal Electricity Corporation (NEC) and Nepal Oil Corporation (NOC) which incur losses of Rs 6 and Rs 5 billion respectively, and depend on government subsidies for survival.
NEC and NOC are monopolies notorious for corruption and poor customer service. Why are these inefficient monopolies allowed to continue with generous state subsidy for so long? While acknowledging the problem, the TYP is timid in offering any solution.

The TYP clearly says that “government investment will be made in public corporations that only the state can or must operate…” But there is no convincing case made that NEC and NOC fall within these criteria. On the contrary, Nepal’s own experience and that of the rest of the world shows that monopolies and cartels are bad for the economy and poor at customer service, while competition is the foundation of a thriving, customer-friendly economy. It is long overdue that these perpetually loss-making monopoly corporations are subjected to competition for their own good and that of the Nepali economy and consumers.

Neglect of migrants

Remittance by three million Nepali migrant workers contributes more than 25 percent of the country’s GNP and has now become the backbone of Nepal’s rural economy. The TYP makes some perfunctory remarks about better management of remittances, but is short on specifics for enhancing the safety and security of these laborers who are often exploited and abused by their employers as well as by middle-men. Nor are there any concrete proposals for enhancing income-earning capacity of our mostly unskilled and low-skilled migrant laborers. This issue deserves greater priority, commensurate with its importance in Nepali economy, and the well-being of millions of Nepalis involved.

There are many sectors in which there is room for marginal improvement in the TYP, but we definitely need more bold measures in these four areas—good governance, green growth, dismantling of inefficient monopolies, and the well-being of our migrant laborers. These will have great multiplier benefits for Nepal’s long-term development.

Published on 2013-07-07 in Republica.