NATIONAL 4 - (Spotlight Weekly)

‘Support Of Donor Community Will Depend On Our Performance’

— RAM SHARAN MAHAT

Dr. RAM SHARAN MAHAT is a senior minister in the Deuba cabinet. Holding the all-important finance portfolio, Dr. Mahat played a crucial role in successfully organizing the recent Nepal Development Forum meetings in Kathmandu and Pokhara. He spoke at length with KESHAB POUDEL and SANJAYA DHAKAL on various political and financial issues confronting the country at his residence in Maharajgunj on Sunday morning. Excerpts:

The winter session of parliament starts today. How do you see the prospects of the ratification of the state of emergency?

I have no doubt that the state of emergency will be ratified. The government imposed the state of emergency and deployed security forces to fight the terrorists based on a broad consensus resulting from consultations with all political parties. Since the problem of terrorism persists, I think parliament will endorse the order and extend it for at least another three months.

But opposition parties say there are differences within the ruling party over the issue of ratification. What do you say?

The difference is not over the state of emergency. There may be differences of opinion as to whether the state of emergency has been fully effective or not. The debate is on the effectiveness of administration during the state of emergency and not over the state itself. The emphasis of those who have different opinions is that the administration must be more effective. They say that people in rural areas are still feeling insecure as security forces are confined to district headquarters.

The recent Nepal Development Forum meeting emphasized the need for political stability. Just a few days after the meeting, we are again witnessing instability in the ruling party. What effect will this have on the country's future?

It is true that the international community is worried about the state of governance in Nepal. The state of social indiscipline and quality of governance were among the concerns expressed by representatives of the donor community. But these problems are not Nepal-specific. If you had replaced the name of Nepal with that of any other developing country in the speeches of most donor representatives, there would have been no difference. In other words, the concerns they cited apply to all developing countries. However, this does not give us an excuse to be complacent. We really have to work hard to earn the confidence of the international community in order to receive core assistance. We have to work harder to improve our performance, to root out corruption, to improve our governance and to ensure political stability. In fact, political instability is of major concern to the international community, as we have frequent changes in governments and ministers, which affects the performance of the administration. We agree with donors that we have too much instability, which has affected the overall performance of our economy and the quality of our development efforts.

You have also expressed that over the past ten years, the country has made significant progress in such sectors as education and transportation. But some development partners seem to think otherwise, while others have expressed outright disillusionment. What do you say?

The cynicism and negativism that pervade our society has affected the thinking of the donor community as well. They are not immune from local thinking. But you cannot deny the reality when you deal with facts and figures. As I said, the progress of human development in Nepal is probably the best in South Asia in the last ten years. Similarly, we have made progress in laying down infrastructure, in establishing the foundation of civil society and in the sector of environment. But the fact remains that we could have done better. The quality of our development administration is not up to the mark. In fact, the quality has deteriorated at places. Because of these negative factors, people blame us.

Some members of donor community even raised questions about the quality of leadership. As a member of the ruling Nepali Congress, don't you think there is a possibility of bringing new leadership from the present system?

Of course, there is the possibility. But it takes time. Ultimately, a leader is chosen in a democratic process. You cannot force leadership [on the country]. I am sure time will improve the quality of leadership. If Nepal has to prosper in the 21st century, if it has to remain in the comity of nations with self-confidence, then, of course, we have to improve our quality. The leadership has to be totally people-oriented and development-minded.

Your party has chosen three leaders through general conventions in the last ten years. How do you find the overall process of choosing the Nepali Congress leadership?

The process is fully democratic and it cannot be blamed. This is the quality of people we have. You elect the people you have, you cannot import them. But I can say for sure that we have comparatively better leaders than in other parties.

Could you elaborate on the outcome of the NDF meeting?

I am satisfied with the results because we got what we wanted. We had asked for approximately half a billion dollars per annum because that was the estimated shortfall of the Tenth Plan. We did have difficulty in convincing the donor community. However, after we presented our papers, policy frameworks and other documents, they were happy with the quality of our presentation. But they had doubts about implementation. Ultimately the taste of the pudding lies in its eating. So, they said though they were ready to give us the amount we asked for, the actual support will depend on future performance.

For the first time you introduced a transparent process in developing Nepal's foreign aid policy and allowed civil society members to interact before going for final presentation. How did you find this experience?

We thought this is the best process and did this whole exercise. It meant a lot of work on our part, particularly the staff members at the Finance Ministry worked very hard for this. We also involved other ministries. We also showed to the international community that we have nothing to hide and did the whole exercise in a transparent manner. We invited Dr. Devendra Raj Pandey, a known critic of development assistance in Nepal, to give a speech in Pokhara. It shows the confidence on the part of the government.

While donors were more critical on the first day, their tone appeared to have mellowed as the NDF meeting came to end. What was the reason?

Well, they heard everything, found everything. They were convinced about our honesty, about our quality and about the correctness of our position. That was the reason why we could convince them.

The international community delivered only 30 percent of the total amount they had pledged during the last NDF meeting held in Paris two years ago. How can you say that same thing will not be repeated this time?

First, there is always discrepancy in the commitment and the actual disbursement of aid. It happens everywhere, not just in Nepal. Secondly, it depends on the effectiveness and quality of our administration. That is why the whole emphasis during the meeting was on action on the ground. Implementation was the watchword everybody repeated. There is delay in project implementation, there is delay in start-up. All this affects the actual disbursement. Look at Kali Gandaki project, it has been delayed by more than a year, which led to delay in disbursement as well. Likewise, the Surkhet-Jumla road construction was delayed due to security reasons. The same is true of the Melamchi project. These delays are because of problems that are inside and outside the control of the government. That is where we must make improvements. That is where the issue of performance comes up.

At a time when there is all-pervasive negativism and pessimism regarding the entire development process, you seem to have a lot of optimism. Why is that?

If I did not have optimism, I would not be here. The motivation to work is based on optimism for the future. This is the basis of my strength.

How do you find the overall evolution of the country's leadership over the last 12 years?

In democracy, leaders are chosen by the people through the electoral process. This is the beauty as well as the weakness of the democratic process. You cannot just pick up and thrust leaders on the people. Sometimes you have very powerful and charismatic leaders, but that is an accident of history. It does not happen always. That comes once in a while. Besides, democracy, by its very nature, is a very difficult process. Things cannot happen overnight. There are laws, rules, regulations and processes — because of which things tend to be delayed. You have to take that into account. It is also a consensus-building process. You have to satisfy various actors, various interest groups and manage conflicts. That is how you have to work if you want the democratic system. It is not necessarily the easiest system. But is still is the best system. Under dictatorship, you can implement things or force them through with the stick. We don't have that option in democracy.

Why is there so much disillusionment, then?

Disillusionment comes partly because of the feeling that we could have done better. Even I think that we could have done better. At the same time, if you compare our situation with other countries that are not democratic or where institutions are stronger or where the level of development is higher, then there could be disillusionment. But if you equate our situation with similar developing countries under a similar polity, under a similar level of development, then there will be not much room for pessimism.

A section of the population strongly argues that the growing disparity between rich and poor over the last ten years is the root cause of insurgency. What do you say?

I do not agree with that. Maybe that has fueled the insurgency. Because people are poor and unemployed, they find easy recruits in them. But I do not agree that the root cause of insurgency is this [economic] disparity after the restoration of democracy. These Maoists want to capture power, they are driving away local leaders, they are killing teachers. All this is an orchestrated move to create a leadership vacuum in which they can take over. It is a political movement, not a social or economic one. Nepal does not have a situation of serious social and economic conflict because people are generally very poor everywhere. There may be some people, like big landlords, who are exploiting others. The reason why the Maoists did not gain ground or get the people's support is precisely because all the people are very poor. The situation of serious economic conflict simply does not exist. Whatever support the Maoists are getting is because of the terror and intimidation tactics they employ. It is an attempt to capture power. When they contested the elections, they could not get more than few seats in parliament. Then they went underground. They had no hope of coming to power through the democratic process. That is why they changed tactics and launched terrorist activities.

What is your message to the donor community for the coming two years?

Well, we will show you by our performance.

The government extended the VDIS by one month. What has been the response during this extended period?

The response during the extended period was not very good. But the response picked up in the last few days. We still have a couple of days left and I hope things will pick up further. Earlier, there was some confusion resulting from statements attributed to functionaries of the Commission for Investigation of Abuse of Authority. Now things have been clarified, which will help the matter. Any confusion about the confidentiality we maintain on the VDIS has been fully dispelled. I believe the next few days will be very important for the success of this scheme.