As the 13th General Convention of the Nepali Congress (NC) is practically at the doorstep, leaders and cadres are busy weighing their options—not only to secure their place amongst the topmost body within the party, but also to elect their president. However, it comes as an eye opener that none of the leaders have been able to rise through the factional politics of the NC in order to initiate ideological deliberations on political, economical and organisational policies the party is likely to adopt for the next four years.

The party has suffered a massive loss with the demise of its president and former Prime Minister Sushil Koirala. Even though the party as an organisation was said to be at its weakest when Koirala was at the helm for the past six years, he played a vital role in it. He emerged as the leader of the largest party in the second Constituent Assembly elections and subsequently promulgated the much-awaited statute. Amidst the turmoil, it is very necessary that the party now sticks together and takes this as an opportunity to reevaluate itself and bring out a clear vision for the NC as well as for the country.

Economic revolution

If there was another revolution that the country needed, it would be an economic one. From the abolishment of the Birta System in the 1950s to the liberalisation of the economy in the 1990s, the NC has always initiated policies that kept the prosperity of the people front and centre.

BP Koirala’s socialist democracy has been the official line of the NC. His economic structure was based on planned development, equality, social justice and

the well-being of the masses. He rightly believed that the development strategy of the country should be ground level oriented.

During the 1950s and later, hundreds of thousands of people migrated regularly to India. BP understood that the country did not have the financial capital to afford the latest technology and machinery—its capital was the people. “Our development starts when we mobilise the people,” Koirala said.

But in the early 1990s, the NC leadership and its key players pushed for a more liberal economic set-up. It was also the time when sweeping changes were taking place across the world. The country then adopted a market-led economy, bringing in investment-friendly policies and promoting entrepreneurship, to set the nation on a higher growth trajectory.

However, several quarters still decry how the NC has diverted from BP’s socialist path to adopt liberal reforms. Some claim that economic liberalisation saw growth but

also increased inequality and corruption.

All developing countries that look to ways of eradicating poverty with pro-market policies have faced similar accusations by people with varied ideologies and political preferences.

Liberalisation and socialism

Economic growth primarily depends on two underlying factors—savings and productivity of the investment. An example would be the sensational growth rates of East Asian economies when they had both high savings rate and phenomenal productivity. Countries such as Taiwan and South Korea provide ample evidence for this. These countries achieved high growth rates with a right mix of policies. They shifted workers from agriculture into labour-intensive manufacturing, which raised their wages steadily and reduced poverty massively.

In Nepal, where a large chunk of the population is still under poverty, labour is cheaply acquired. Under pro-growth policies such as investment-friendly environment, strong regulations, good governance and openness to trade, the country should be able to specialise in producing and exporting goods. This in turn should create more employment opportunities, increase wages, and ultimately reduce poverty.

Market-led economic policies that developing countries have adopted do not necessarily mean that ‘pro-poor’ policies are sidelined. Unless the economy grows, the government will not be able to collect resources to support pro-poor programmes of a socialist nature. Following the opening up of the market in Nepal, public revenue swelled from Rs12 billion annually in 1991 to around Rs300 billion at present. The government then allocated considerable funds for road access to all districts, free education up to the secondary level, health care, among others. Anti-poverty programmes were brought through various schemes. Cash incentives were introduced to encourage education and pension provisions were initiated.

However, development activities are bound to be urban centric during the initial phases. It is natural for the private sector to want to do business in developed areas. The rural areas were virtually inaccessible during the Maoist insurgency. The rebels thwarted any kind of development activities initiated at the ground level.

But the NC went for economic liberalisation and all major forces have more or less agreed in principle that rapid growth is the only way to eradicate poverty. By no means does liberalisation contradict socialism. Even though the term socialism is well accepted in Nepal because of the overwhelming presence of communist forces, political debates arise over the adoption of policies and programmes to implement

the idea.

BP’s socio-economic thinking of social equity and participatory development is still relevant. On the other hand, the policies adopted in the 1990s of augmenting capital and a free market are crucial for rapid growth. If the NC still has the zeal to initiate another form of revolution in terms of economic growth, the younger generation leaders should first convince the older generation ones to stop selling their propaganda that the initiatives taken in the 1990s or that a market-led economy is against BP’s principles.

Ghimire is a sub-editor with The Post