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| Kathmandu, Monday March 10, 2003 Falgun 26, 2059. |
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Disappointing
A month after the government-Maoist truce,
the Finance Ministry in its half yearly review of the budget has painted a rather gloomy
economic picture. It is understandable that the economic picture would not have been all
too bright because of the paralytic effect the armed Maoist insurgency was having on the
country and the economy. That the insurgency was able to bring many industrial ventures to
a virtual halt is evident from the Ministry’s budget review. The government revenue
has fallen but even more disturbing is the manner in which the country’s exports fell
and imports climbed. Nepalese exports to India have been hit hard by Indian policies
despite the Nepal-India Trade Treaty and the government’s inability or unwillingness
to deal firmly with the matter in the interest of Nepalese exporters. In addition, the
austerity drive announced by Finance Minister Dr Badri Prasad Shrestha to cut regular
government costs has not been effective perhaps because of the manner in which the
bureaucracy rather than the political leadership still dominates the actual implementation
of the decisions. The political will to cut costs also seems to be at fault and this
government, as all previous ones, continue to spend tax-payers’ money on unnecessary
areas.
But the most disappointing aspect of the
half-yearly review is the manner in which revenue collection, foreign aid and
developmental spending fell. All these have a direct bearing on the ability of any
government to effectively govern and deliver to the people the basic government services
needed by them. The Finance Minister, a well known Nepali economist himself, must realise
how critically important it is for the country to reverse the downslide of the economy
despite the difficulties that lie ahead. Political parties are there to find faults and
will continue to do so but this should not in any way prevent the government from focusing
on the urgent need to improve the economy. The January truce with the Maoists has provided
a hope for the economy in that there seems to be some improvement in some key areas like
industries and tourism, but to sustain them, peace and security are essential. This
explains why those directly involved with the country’s economy would want to see the
present truce leading to a permanent peaceful environment. But this is by no means enough.
As the Finance Minister had initially gauged, there is much unproductive and unnecessary
government spending, including over-staffing, which has to be ended. The government must
act immediately to set its own house in order so that any government that follows will
find it less difficult to brush aside pressures and abide by norms.
But the half-yearly review is also a warning to
all that the economy is still in a very weak and fragile state. The government’s
performance in this sector has been disappointing even when considered in the light of the
armed Maoist insurgency. The government must perform better and allow the private
sector even greater participation in the country’s development quest. |
