National 4 (Spotlight Weekly)

“There Is No Alternative To Democratic Way”

— DR. RAM SHARAN MAHAT

At a time when politicians are often discredited for greed for power and money, former finance minister and central committee member of Nepali Congress Dr. RAM SHARAN MAHAT resigned from the post of powerful finance minister twice, citing ‘call of conscience’. Dr. Mahat’s last resignation was in protest against then prime minister Sher Bahadur Deuba’s decision to dissolve the House of Representatives. Mahat claims that from Nepal’s friendly countries to intellectuals, every one has positively viewed his performance in such key positions as finance and foreign minister as well as vice chairperson of National Planning Commission. One of the pioneers of Nepal’s liberal economic policies, Dr. Mahat emphasizes that he has been playing his role both in high official position and in politics with equal ease. He spoke to SPOTLIGHT on various issues. Excerpts:

Unlike in 1990, the political leaders heading the agitation don' t have a clean image. Do you sincerely believe that the agitation will bear similar fruits like that in 1990?

Please note that the objective of the movement is different from that of 1990 movement. The purpose of the 1990 movement was to overthrow a dictatorial party-less Panchayat system, which it did. The objective now is to restore the achievement of 1990 movement. In that sense, this movement has limited objective now. What we are trying now is to restore the constitution, which is the fundamental law of the land - in letter and spirit. The rule of law has been violated. We are trying to revive that. We have no doubt that we will achieve our goal. As for the image of the leaders, it is for the people to decide what do they think of their leaders. If some leaders are dishonest and lack integrity, the people will reject them. In the last few years under democracy, we have enacted various draconian anti-corruption laws in Nepal, which will take its own course. We are fighting now for democratic rights and values, not for individual leaders. We have experience from other parts of the world - how attempts have been made to subvert democracy in the name of corruption and bad governance. The problem of corruption and bad governance get worse without democracy. That is precisely the situation now. In fact, it is much worse.

Don' t you think it is high time that the younger generation took over the leadership in Nepali Congress?

Most of the leadership positions of Nepali Congress have already been taken over by younger generation. However, you must note that unlike other parties, Nepali Congress is an old party and some of its first generation leaders who fought against the Ranas are still politically active, and enjoy the confidence of the party rank and file, and the people. This is the unique feature of the Nepali Congress. It is only a question of time that these leaders will way make way for younger people. But you will appreciate the fact that in a democracy, leaders are not imposed - but elected and chosen by the concerned people. There are definite rules and regulations governing the leadership selection process. Young leaders who pass through these tests and enjoy the confidence of the party workers will no doubt get the opportunity to take over the leadership.

Would you agree that the nation is at the brink of precipice? Do you have any plans to resurrect it?

The nation is in a very bad shape. People are already talking of a failed state syndrome. The confrontation between the Maoists, political parties and the present regime is most unfortunate, and something we cannot afford - especially at a time when the whole world is marching towards progress, and prosperity. This will only ruin the country further. The Maoists have done a great disservice to the country by following the path of violence for an ideology, which has been rejected throughout the world. Many socio-economic and other issues raised by them can be settled through peaceful means. The country has been mired further after the ill-advised action of untimely dissolution of the House of Representatives and subsequent Royal takeover, which has pushed the country out of the constitutional track. I still see hope for the country's future. The fundamentals of the economy are still not bad, thanks to the strong base created by the efforts in the 1990s. The economy will revive, once peace is restored. The political solution can also emerge by strictly adhering to the rules of the game. There is no alternative to democratic way and implementation of the rulebook. In order to force the Maoists to negotiate in reasonable terms, all constitutional forces should be on one side within the framework of the constitution. The country can resurrect again, given the determination and strong commitment from all sides.

Two years ago, the NDF was held in Kathmandu under your active initiation. Looking back, what achievements were made by that meeting?

Yes, we initiated the NDF meeting in Nepal, something which used to be held in Paris before. I had the honor of presiding over the first meeting in Kathmandu and Pokhara. The achievements were manifold. First, there was support and commitment to various government-initiated reform measures, development policies and programs from all sides. The meeting also gave an opportunity for the donors to express their concerns and complaints, which we had to address. Secondly, the donors committed funds for our
program in the order of half a billion US dollars each year to meet our resource shortfall. Many of the donors promised us program and budgetary support assistance. The relatively easy resource situation, which the present government enjoys, is the result of the commitment made in the last NDF. Lastly, the previous NDF also involved all ministries and other stakeholders at all stages so that there was ownership to the reforms - something which was traditionally considered a territory of the Ministry of Finance and the Planning Commission alone.

You have also taken part in pre-consultation meeting of the forthcoming NDF. What do you think should be Nepal's focus at the NDF this time around?

Yes, I chaired two of the pre-consultation meetings. Basically, this NDF is trying to give continuation to our past policies and reform agenda, but at a different setting where not only the Maoist insurgency has intensified, but there is also a political vacuum resulting from wrong actions of the political leadership. As for the development and reform agenda, issues like poverty alleviation, rural empowerment, decentralization, financial sector reforms and public expenditure reforms will continue to be on the focus. I feel a big push should also be given to expand the country's infrastructure. The donors are also likely to raise the issue of conflict, democratic vacuum and human right issues very strongly.

How do you view the current exercise by the government of holding pre-consultation meeting by inviting different stakeholders?

This is a good exercise and in continuation of the tradition of the last NDF. But the problem is - in view of the country's political and security situation, much of it is likely to remain only an academic exercise.

Do you think there will be added prominence at the up coming NDF since it is going to be held at a time when the country is in grip of insurgency as well as deadlock?

In fact, this is a wrong time to hold the NDF. There is total political uncertainty, and nobody knows what will happen tomorrow. The hand-picked government does not represent the people and, therefore, cannot speak for the people. Political parties are boycotting to meet them. It is not necessary that the future representative governments will own up their commitments. However, the donor community thought that they would need this forum even to express their concerns and frank views on the situation. They requested the political parties to be associated with this exercise, as ultimately the parties represent the people and most reform measures were started by the Nepali Congress governments. We ultimately agreed to participate on conditions that the government ministers will not be present in any of the meetings we participate, and that there will be a separate meeting between the donors and the political parties during the main event when we will be giving our frank views. Even this situation is no longer valid as it has further deteriorated and it is getting more serious. In view of the escalating political problem day by day, and further uncertainty it would be worthwhile to postpone this meet. The whole situation will have to be reviewed afresh.

How do you assess the overall economic situation of the country? The current finance minister has frequently said that the fundamentals of the economy are strong. Do you agree?

Of course, the fundamentals are still not bad. This is what I have been saying all along. The BOP, inflation rate, budget deficit, foreign exchange reserve, industrial capacity, revenue situation, savings rate etc are still satisfactory. For this, it would have been appropriate, if the finance minister had complimented the contribution of the past policies. The fundamentals have not straightened up overnight. It takes years and years of efforts to build them. Despite the serious adverse impact from the insurgency on the country's economy for so many years, the fundamentals are still manageable - thanks to the sensible macro policies followed by our past governments.

What are major problems facing our economy at this juncture?

One set of problems such as lack of new investment because of poor investment climate, limited economic activities, poor exports, high transaction cost, lack of new development activities, decline in tourism, low capacity utilization etc is the result of the country's security problem due to Maoist insurgency. You will note that now there is practically no development activity taking place in the countryside because of this problem. The other set of problems, which are more fundamental are: poverty, unemployment, income and urban-rural disparities, low productivity.