Seller of dreams
- The nation is keen to see Oli implement his plans to make the country self-reliant
Nov 19, 2015-
Ever since the unrest in the Tarai began and the consequent tightening of the border by India, a recurrent idea pronounced by ruling politicians and the opinion pages has been of self-reliance. It has given rise to parodies such as ‘cycle nationalism’, after Maoist leader Prachanda’s declaration that Nepalis would resort to muscle-powered forms of conveyance. But, the seriousness with which
Prime Minister KP Oli has taken the issue was conveyed during his recent address to the nation in which he repeated the term eight times and ‘dependency’ twice and the overall theme clearly indicated an aspiration for self-reliance.
Economists and development planners are better placed to advise the PM on how far that is at all possible and the steps required for this huge task. But any move towards self-reliance would require a huge investment of financial and political capital, requiring the political parties, the bureaucracy and donors to work together towards the single goal of some measure of self-reliance. The challenges are monumental. Let us consider in brief four of the areas mentioned by Oli: infrastructure, electricity, food sufficiency, and the remittance economy.
It is well-known that the main bottleneck for development projects moving so slowly is the way our public finance system is structured. Available information from the Ministry of Finance shows that spending in the three years 2011/12 to 2013/14 averaged out at 80 percent. This does not look that bad until one considers when the money was spent. In 2011/12, 73 percent of the expenditure had been telescoped in the last three months of the fiscal year and in 2012/13 that figure was 75 percent.
The fiscal year beginning with the onset of the monsoon affects the entire budgetary calendar and, as a result, allocations are released only towards the end. Such spending is most visible to the general public in the flurry of activity as the fiscal year comes to a close. This not only has an implication on the government’s capacity to spend but the rushed work is literally washed away by the rains every year.
Calls to amend the fiscal calendar have been made. Last year, the Finance Committee of the Legislature-Parliament emphasised the need to coincide the fiscal year with the Nepali calendar year. But, as usual, politics has taken over and that was the last we have heard about it.
The government has been called upon to declare an ‘energy emergency’, which sounds all very good. But such a measure will come at a cost if rushed through with a single aim in mind. The last time such an emergency was declared, the Electricity Act was amended to require only an initial environmental examination for projects less than 50 MW capacity as opposed to the more stringent environmental impact assessment. This time again, in the name of ‘facilitating’ the development of hydro-projects, there will certainly be attempts to bypass environmental regulations, which are not fully adhered to in any case. The adverse impact on the social and natural environment of such a step is hardly something to envisage even in the name of ‘self-reliance’.
In his address, Oli declared the end of load-shedding within a year and undermined his own apparent resolve. Energy experts have pooh-poohed such an eventuality but they have also called for some soul-searching on why Nepal’s electricity output is so abysmally low. There is no shortage of expert opinion on how the energy sector can be made more dynamic, including the immediate unbundling of the Nepal Electricity Authority into independent units handling generation, transmission and distribution, not to mention reducing the corruption endemic to the sector. But, it requires a political will no government has so far demonstrated.
Nepal is a net importer of food. But at the same time, large tracts of land are lying fallow both in the hills and the Tarai, largely due to the outmigration of the young.
This has in turn pushed up agricultural wages, which has come as a boon to the mainly Dalit population who have so far stayed behind. On the flipside, agriculture has become unprofitable. However,
the main threat to traditional agriculture seems to be the ubiquitous roads that have pushed into the most remote hinterlands of the country. Local produce just cannot compete with lorry-laden foodstuffs, and hence the tendency to avoid agriculture surplus—which cannot be sold.
Complete food self-sufficiency may be a chimera, but we can certainly reduce our import bill while also keeping the population back in the villages. With the same roads gradually bringing material comforts to their doorsteps, there is a bigger reason than before to stay on the land. This is where the government can step in with a well-planned agriculture-cum-horticulture extension programme to encourage less labour-intensive farming methods and the cultivation of cash crops with, most importantly, the government guaranteeing a market. Individual innovation can only go so far without institutional support from government agencies. The recommendation of a 2010 FAO document still rings true: “Government has considered agriculture
as a private sector initiative and funding
is not tuned to developmental goals. Due attention should be given in allocation
of public investment to the prioritised
That remittances have been keeping the Nepali economy afloat has become a truism by now. Remittances accounted for 22, 25 and 29 percent of national GDP in the years 2011, 2012 and 2013, respectively. The risk of relying so overtly on global markets to absorb Nepali labour was brought home during the financial crisis of 2007-8 when there was a 12 percent dip in Nepali migrant labourers going to countries other than India. Luckily, oil prices rebounded and the Gulf’s demand for labourers has continued to rise since. But if that should have served as a warning for our planners, we cannot see any evidence of it in government policy.
In keeping with the motif of self-reliance in his address, Oli declared boosting manufacturing and creating employment in the country as priorities. As my fellow columnist Jagannath Adhikari has noted elsewhere, the focus of our policies since the enactment of the Foreign Employment Act 1985 has been less on creating in-country jobs and more on sending the youth abroad. Subsequent policies such as liberalising the passport and foreign currency regime in the 1990s further boosted that tendency. Five-year plans have also viewed migrant labour as a means of promoting youth employment, and the government even came up with policies to send people abroad as a strategy to defuse the Maoist insurgency. After decades of encouragement in that direction, foreign employment per se or in the guise of foreign education has become a veritable rite de passage for young Nepalis. That is what the government is up against. Not as impossible as providing a 24-hour supply of electricity in a year but Herculean it certainly is.
The greater danger is that the focus on self-reliance will be taken to absurd lengths. One fresh example is the belief expressed by the new Tourism Minister, Ananda Pokharel, that Nepal Airlines Corporation does not need any foreign expertise for a turnaround. Believing something and the reality are two different things. An airline that cannot even do proper research before bringing in the Chinese planes only to realise that they were ill-suited to our conditions can hardly be trusted to manage its own affairs properly.
To resort to an adage a la Pokharel’s boss, actions speak louder than words, and the nation is watching.
Published: 19-11-2015 09:30