5 Questions The Telegraph - Weekly (Nepal)

5 Q U E S T I O N S

There should be a room for the King in the overall balance for power, as a guide to good governance

Prof. Dr Mahendra Singh, T.U, Kirtipur

Professor Singh accomplished his doctoral degree in the discipline of Economics from Patna University, India with specialization in Monetary and Development. Currently he is the rector at the Tribhuvan University, Kirtipur.

Professor Singh has several books to his credit on Economics, Statistics and Mathematics. His research papers have duly been published in several national and international newspapers. He has written well above hundred feature articles in local dailies and weeklies.

Dr. Singh is also decorated with Gorkha Dakshin Bahu III, Dirgha Seva Padak T.U and various others.

The Telegraph weekly looking in our own digital library found Dr. Singh’s interview taken few years back, which remains still valid for the Nepali situation.

The results below: Chief editor

TGQ1: How do you characterize the status of Nepal’s economic development in general and economic growth in particular? What are the fundamental causes that impeded the take-off of Nepal’s economy?

Prof. Singh: After more than four decades of development efforts through planning, instead of talking about the promises of 21st century you are asking about the performance of Nepalese economy. Answer lies itself in your question. Over the last 40 years, Nepal’s development has shown both positive and negative trends. Agriculture now contributes only 42% of GDP, formerly its contribution was more than 70%. Some scholars consider it as modernization of the economy. Industrial sector contribution is about 10% in the national output. The contribution of service sector is encouraging. It is nearly 40%of GDP. Supply of electricity has increased and reached 13% of the total population. 12,000 kilometers of roads are giving services to the people round the year. 88% of the total children have now access to primary schools. Print media and electronic media are fast expanding. Kathmandu and other urban centers are now connected to e-mail and Internet. However, the balance sheet of the other side of the coin is a matter of great concern. Nepal is still ranked one of the poorest in the world. 42 % of the total population remain below the poverty line. They are economically handicapped and socially deprived. Some times we hear the news of suicide and deaths from starvation. It is most shocking. Annual growth rate of GDP is around 3%, it is declining. Even, we have negative growth in agriculture sector. Once regarded as a monarch of the Nepalese economy, Agriculture sector has now been relegated to the position of sunset sector. As a result, we are now importers of food grains. Even, unemployment is growing and is high. About 34.9% of the literate population are unemployed , price level is going rapidly out of control. According to one study, price level is increasing at the rate of 50% during current fiscal year. Revenue performance is stagnant. Fiscal deficit is around 6% of GDP. Structure of export is fragile. Nepal’s export now mainly depends on two items of carpet and readymade garments. Their future is quite uncertain. Debt burden is swelling. About 1/3 of the external borrowing is used to pay previous loans. Concerns are being raised that the country faces situation of catastrophic dimension.

So far as the second part of your question is concerned, take off is the period in which growth becomes normal condition of the society. But in Nepal, the growth rate has remained low through out our development experience. Growth rate has never crossed the benchmark of 5%, it has now come down to low rate of around 3%. The main cause is the negative growth in agricultural output, disappointing performance of industrial sector and fragility of the service sector and institutional framework, which can give take-off a going character are also very weak, corrupt and inefficient. There must be high saving for rejuvenating the Nepalese economy. They should be properly exploited and managed to bring about socio-economic improvement to any extent. Briefly for economic sovereignty and interdependence to go together let me quote what Prof. Amartya Sen has stated. "Globalization is an irresistible that has within it the potential for great good as well as harm. To be among its beneficiaries a country has to invest heavily in social capital for without such investment it would not create the skilled educated work force needed by the technology driven world.

TGQ.2 Many believe that Nepal’s development policies- from environment, NGOs to macroeconomics have been formulated by the donors with parliament watching hopelessly unable to confront it. How can we make our policies contextual to national needs and priorities and liberate our MPs and policy experts from being captive of outside guidance and strategies. What is your opinion about it? And how can Nepal recapture its economic sovereignty in an interdependent world and make it embed to social priorities of the people rather than making perpetual adjustment to individual hand of the market?

Prof. Singh: Experiences and skills of donors and INGOs used in the formulation of our development policies shouldn’t be considered harmful. My difference is with submission. We should welcome new ideas and influences but without losing what we value and what we have to preserve-our sovereignty and integrity.

With regard to the recapturing of the economic sovereignty, we know the fact that Nepal has rich bio-diversity. The country is endowed with scenic cultural heritage. We have some of the world’s most famous peaks, we have beautiful valley like Kathmandu and Pokhara. In terms of farm, fertility, forest and water resources, the Terai is the most potential region. All of these factors offer tremendous scope for rejuvenating the economy.

TGQ.3 Poverty and liberty are hostile enemies to each other. Given the majority of people living below poverty line and unable to exercise their sovereign choice, how can we be able to liberate our democracy from those who are making majority of the people poor, marginalized and deprived and, consequently, make the poor participant in the governance and development of the nation to which they are yet denied?

Prof. Singh: Democracy without economic liberty is meaningless and economic liberty without democracy is fruitless. Unfortunately in our country we are being deprived of both by paranoiac leaders of political parties and mediocre bureaucrats. If democracy has to be made functional, there should be a high level of awareness in the people. We have to find the way of making development succeed through injecting ethics in the economy.

TGQ.4 One of the watchwords of development strategy today is that people should have the "ownership" over the program and policies made for them. At the local level, there are various parallel efforts running by the government, the political parties and the NGO’s/INGO’s in the development field. Does not this condition polarize development on fractional partisan lines and make the whole efforts unsustainable? What is your reaction?

Prof. Singh: Here I agree with most of the scholars that ‘Development’ should be by the people not for or with the people. People may be poor and powerless but they are very wise as far as their common interest is concerned. State-led or market-led policies are not very much sensitive to the poor people. VDC, DDC, INGO and NGOs as explored by Prof. Amartya Sen, are the third way between the state and the market, which can uplift the life of the poor. They have indispensable role to play along with the market and the state. Of course, we must define ourselves how these organizations can operate to support our development policies. Regarding the programs offered by the political parties I am waiting how it is implemented. Till then just wait Mr.Upadhyaya.

TGQ.5 How do you anticipate the future of Nepal’s development? What strategies, for example, do you suggest?

Prof. Singh: On the basis of our past record in the area of development, I expect the continuation of conditions, which will push the economy from bad to worse. Economic hardship of the people in general and of the middle class in particular will aggravate beyond endurance. Survival and security would be the main agenda of the people in the period ahead.

As to the issue of what is to be done. I remember the famous maxim of John Robinson "Economic solution are political questions".

Firstly, politicians should know that democracy is not only an asset for them but also for the people. Anti corruption Act must be enacted and implemented effectively to avoid inevitable chaos in the country. Secondly, Multiparty system has been restored. This time it has come to stay and it must stay in the plural society like ours. However, the management of democracy by political parties during the past thirteen years has started breeding contempt and frustration against the system itself. I know that political parties dominate politics and decision making in a democracy. However, there should be a room for King also in the overall balance for power, as a guide to good governance. Thirdly, an overhaul of the total development policies appears to be pre-requisite to gain progress and prosperity at fast rate. In this context, I suggest a ‘Conference on Future of Nepalese Economy’. Such a meeting may be very useful in bringing about short-term and long-term solutions to the problems faced by Nepal. I am aware, however, many meetings and seminars have been held but in terms of achievement we have to admit that progress has been utterly lacking. Therefore, the proposed seminar should be broad based. Major participants should be high officials from international institutions, INGOs, NGOs, DDC, VDC farmers, influential officials members of different ethnic and regional areas along with political leaders of existing political parties, planners, intellectuals and members of business and banking areas plus from the media. Time has come when a new approach and fresh imagination are required for the future development of the country. Only it can lead us to the eventual solutions.