FEATURES NEWS THE RISING NEPAL (DAILY)

By Jal Singh

DEMOCRACY has taken firm roots in South Asia. Ninety-nine per cent of South Asian people live under democratic regimes. But there is little evidence on whether these democracies designate sovereignty to the people. There has also been a great deal of political instability created by hung parliaments and coalition governments. The result: on average, three elections have been held in the last five years alone. Voter turnout remains moderate, though it would be interesting to know whether these turnouts are increasing or decreasing. But for the time being, rising internal violence is sufficient to judge the declining faith of common people in the political system. South Asia has seen an increasing polarisation along sectarian, religious, ethnic and linguistic lines.

Weak institutions have reinforced political misgovernance in South Asia. Parliaments have often neglected their basic task... legislation for public welfare. In the last five years, an average of only 115 bills passed by a typical South Asian parliament. Only 20 per cent of these bills were related to the social sectors. While money and Mafia are a pervasive influence in the political process, education does not seem to play a role: only 40 per cent of the parliamentarians have a first degree. Another key feature of South Asia’s parliaments is the low representation of women. Women are grossly under-represented, with a mere seven per cent of the parliament seats held by women. Other institutions like judiciary and the civil service face similar weaknesses. The judicial system falls short of offering effective access to justice. The huge backlog of cases reduces the efficiency of judiciary and increases the cost of justice. As cases drag on courts, costs are multiplied. In South Asia, on average, one judge has to deal with more than 2,000 cases. Typically, every South Asian country has an average of 17 million cases pending in courts.

Economic Governance:

Many numbers on governance portray a diverse picture of the state of economic governance in South Asia. A few illustrations: the rate of inflation has nearly doubled in Bangladesh since 1995, though it has decreased in most South Asian countries. Similarly, unemployment is a more severe problem in Sri Lanka than other South Asian countries. Balance of payments problems are more severe in Pakistan and Nepal. Pakistan has also the most precarious external reserves position. South Asia’s trade-orientation has become more liberal, as indicated by reductions in tariff rates. But Bangladesh remains relatively less open with its highest mean tariff.

While the region has consistently run high budget deficits, some countries have been able to get this deficit considerably down. Sri Lanka, for one, has more than halved its ratio of budget deficit to GDP since 1980. South Asian governments are not outrageously high spenders, particularly compared to several Nordic countries.But, within South Asia, the governments of Bhutan and Maldives spend more than the rest. Government is more oversized in Sri Lanka than any other South Asian country. The direction of expenditures differs a great deal. Social services generally receive the lowest public expenditures. But here again, some countries do better than the rest and some do worse than the others. Maldives registers the highest per capita expenditure on health and education. In contrast, Pakistan has the lowest social sector expenditure (as a % of GDP) and the lowest expenditures on social security. While the priorities in educational spending are skewed for the region, Sri Lanka offers a successful example, when whereby 82 per cent of the educational budget is devoted to primary education. Similarly, Bangladesh is a better spender on technical and scientific education.

A large part of expenditures is misdirected to non-human development concerns. But Sri Lanka and Pakistan present a more worrying situation than the rest of South Asia. Per capita expenditures on defence and debt servicing in both countries are more than double the per capita expenditures on health and education. As a result, the ratio of military expenditures (as a per cent of combined health and education expenditures) is also the highest in both countries. Pakistan and Sri Lanka also present a more dismal profile of public debt. While the size of total public debt remains moderate in India, it has the highest level of domestic debt (51 per cent of GDP Among South Asian countries, Pakistan devotes the largest share of its national income to debt servicing. Sri Lanka is a big spender on subsidies, whereas development expenditures (as a per cent of total public expenditures) remain the highest in Bhutan.

South Asia collects a meagre sum by way of taxes. Sri Lanka and Maldives are notable exceptions here: the tax to GDP ratio in both countries is comparable to the average for developing countries. Tax collection is not only insufficient; it has also recorded a decline in many South Asian countries. The tax to GDP ratio in Pakistan and Sri Lanka, for instance, has declined in the last three years alone. South Asia depends a great deal on indirect taxes for revenue generation. Sri Lanka tops the list here, since its reliance on indirect taxes for revenue collect on the heaviest in South Asia.

It is better to hear from foreigners that Nepal. Is bad governed through the ‘not good leaders’. In the statement, Nishimizu, the Vice President of World Bank for South Asia has said, "to harness the strength, what the people need is the leadership of their government of leadership that gives vision, inspiration and hope; leadership that acts from conviction of that common purpose; and leadership whose consistency of words and actions earns the trust of the people overtime."

Some opined that Nishimizu might be well aware that Nepal has been practicing a liberal democratic system since 1990. Under the new constitution, Nepal has conducted three general elections and two local elections. The constitution has ensured checks on the power of executive, an independent judiciary to uphold the rule of law, protection of individual rights and liberties of expression, association belief and participation; effective guarantees against arbitrary arrest and police brutality; no censorship ; and minimal government control over the media.

In 1990, when the country was passing through an evolutionary process to democratize the existing political system, the international donor community demanded the introduction of a participatory system. Now the country has a transparent and democratic system, but the World Bank seems to be wanting strong leadership.

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