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VOL. 27, NO. 28, March 21, 2008 (Chaitra 08 2064 B.S.)
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Missing Debate
Even as parties have put forth federalism as a panacea to development ills, economists have called for larger debate on its viability
By SANJAYA DHAKAL
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Political activism: No debate on economy |
Almost all the major political parties have presented their election manifestoes for the forthcoming Constituent Assembly (CA) election.
And most of them have proposed federal structure in the 'new Nepal.'
The Maoists have gone ahead and even divided the country into eleven autonomous state committees and two sub committees on ethnic and geographic lines.
Nepali Congress (NC) and Unified Marxist Leninist (UML) have also backed the federal restructuring of the country. But they have not given any number of such state federal units.
Even parties like Rastriya Prajatantra Party (RPP) have favored federalism – amid the whipped up political fervor of new Nepal.
What has been blatantly missing in this whole episode is how the country's economy will be reshuffled to fit with their respective ideas on federalism.
Already a resource-scarce country, how Nepal will divide its resource among its federal units is anybody's guess.
None of the parties have clearly put forth the nature of relationship between the center and the federal units – much less their economic relationship.
There is a popular refrain among the parties that the elected Constituent Assembly (CA) will decide the issue. However, they have not thought it necessary to tell people what they have in mind regarding this crucial issue.
According to Professor Bishwambher Pyakuryal while the parties raised demands for federalism, they had not paid any attention towards the existing resources and how to use them under federal structure in future. He said that in the last fiscal year $125 million of revenue was generated from the center while only $12 m was generated from local level. He pointed at the imminent economic non-viability of federal units.
Adds economist Dr. Raghab Dhoj Pant, "This is the time for the parties to come forth with their ideas on how to divide the federal units and what their fiscal relations should be. They must make it clear before the election."
Apart from the issue of resource distribution, the country also needs to clearly decide how the natural resources will be exploited and how their benefits divided. The country will need to assess the issue of building big hydropower projects.
But even the Finance Minister has been publicly regretting the lack of debate on economic issues. "Economic issues must be brought to the center-stage of debate to usher in development and prosperity," he has been saying constantly.
The existing economic disparity has compelled most people to back the position that federalism will help end it. In fact, according to a recent study conducted by economist Dr. Shankar Sharma, there is still big disparity in growth rate between capital and rest of the country.
Even in the conflict-ridden period of last one decade, the capital valley witnessed a handsome two digit growth of over 10 percent. "But places like Biratnagar and Janakpur region wallowed in 2.5 percent growth as most industries including pashmina, carpet, garments and service sector like banks were concentrated in Kathmandu," said Dr. Sharma.
These facts certainly call for serious restructuring of economic regime. But whether outright federalism is its answer has not been debated too well.
"It is good to build on our own experience as a unitary state. It has always been a functioning system. There are some lessons learnt; and efforts could be made to reform it. Some interventions at the constitutional level to respond to some of our problems could be necessary. But most of the problems of devolution of power could be handled through an enhanced local self-government system," writes constitutional analyst Bipin Adhikari (SPOTLIGHT Mar 14).
Such healthy debates on the pros and cons of federalism – particularly economic federalism – would do well at a time when the nation is headed towards the CA polls.
