New Nepal government has a golden opportunity

Democracy and republicanism have not ended Nepal’s biggest problem—a fractured polity. Exactly a year has passed since Nepal’s Constituent Assembly (CA) declared Nepal a Republic. Over the past year, Nepal’s budding republic experienced several political highs and lows. It began with the abolition of the 250-year-old monarchy. The Maoists rose to power and then fell equally spectacularly. There was an emergence of strong regional forces in the Tarai, the sidelining of the mainstream political parties, rise of the demand for equal representation and autonomy by ethnic and marginalised groups, an upsurge in violent activities and, most importantly, increased politicking by foreign countries in Nepal’s affairs.

However, the climax was the tussle between the Unified Communist Party of Nepal-Maoist (UCPNM) party and the Nepalese Army over the issue of ‘civilian supremacy’. It led to the downfall of the Maoist government and changed the whole discourse on Nepal’s polity.

As of now, the first elected government led by the Maoists has collapsed and has been replaced by a new one headed by senior Communist Party of Nepal-Unified Marxist Leninist (CPN-UML) leader Madhav Kumar Nepal. With the support of 360 CA members from 22 different political parties, Madhav Nepal was elected unopposed as no other candidates filed nomination for the top post. The UML-led coalition easily obtained the magic number required to form a majority government in the 601 member- House.

However, the allegations and counter-allegations, symptoms of virtual and near-splits in political parties, moral posturing, allegation of buying CA parliamentarians and talk of foreign interference continues to be an issue of debate in the country. Moreover, the Maoists alleged that the new government was installed at the behest of foreign powers and have threatened to continue their protest in Parliament and on the street unless the President’s ‘unconstitutional’ move was rectified.

In the past, the coalition that made it possible for the Maoists to head the government under Pushpa Kamal Dahal, or Prachanda, was, at best, a group driven by short-term political interests and evident by serious splits within the coalition. The two main partners of the coalition, the CPN-UML and the Madhesi Janaadhikar Forum (MJF), had two equally divided camps. On the other hand, the Nepali Congress (NC), which had opted to sit in the Opposition, kept an eagle eye on the government’s functioning and did not loose opportunity to criticise it. Thus emerged give-and-take politics, which is a characteristic of parliamentary system where no outright majority exists.

The recent crisis emerged after Prachanda announced that he would sack the Army chief for disobeying the civilian government’s supremacy. The Maoists certainly had an axe to grind here. They wanted to dismiss the current Army chief, who was vehemently opposed to the integration of the 19,000 PLA combatants housed in UNMIN-monitored cantonments. The Maoists wanted to replace General Rutmangad Katuwal with another General who was pro-Maoist and possibly would have been more accommodative with their proposals.

The MJF, for their part, had tried to find a middle path and work out a consensus with other parties by offering two alternative proposals to resolve the crisis. The party proposed that a committee should be formed within the cabinet or a high-level committee consisting of all major parties in the parliament should be set up to study and report on the clarifications provided by the CoAS. At that point of time, all the other coalition partners had agreed to the proposal except the Maoists who were hell bent on removing the Army Chief and the reasons remain unclear.

The issue became more complicated after the President intervened and vetoed the PM’s order and reinstated the Army chief. Analysts believe and blame the Maoists for the foul play, but it is also true that both the UML and the MJF had earlier agreed to seek clarification and sack the Army chief if necessary for surpassing the orders of an elected government. Though Prachanda had consulted his coalition partners and obtained their support, the coalition partners had backtracked. The controversy got more impetus after the NC and a faction within the UML and MJF opposed to the Maoists’ style of functioning decided to go for the final step. However, whatever the reasons, the fact remains that Prachanda had to resign after one of its main coalition partner withdrew support over the Army chief controversy leaving it in a minority position.

In his address to the nation, the newly elected Madhav Kumar Nepal said that taking the peace process to its logical end and drafting the new Constitution within the stipulated time are the two most important tasks. Besides, he also committed to respect the past accords, take care of the country’s law and order situation, provide relief and reform packages to the people and adhere to the civilian supremacy that has held the attention after the Army Chief row came to the fore during the tenure of Prachanda, has been highlighted with the government. Going by his word, it appears that there is a ray of hope in the leadership of Madhav Nepal. However, the uncanny behaviour of the coalition, guided by vested interests, remains worrisome. At the moment, the majority government has laid stressed on the importance of a national consensus and this is a good indication. In fact, this is an immediate lesson learnt from the past government’s ouster in nine months where the Maoists took each and every decision unilaterally.

At this juncture, the trust among the political parties and within them is at the lowest. The NC and Maoists can hardly see eye to eye; the UML and the Maoists share some commonalities but their confidence in each other remains shattered. More importantly, the parties also suffer from internal problems—the UML and NC are all divided. The MJF have somehow managed to pull off from the brink of a split but the internal feud is fast gaining strength.

Therefore, with so many challenges and hurdles on the way, it will take strong resolve, determination, firmness and all support and cooperation from the other parties to see that the UML-led government delivers. Madhav Nepal headed government has several key tasks to perform, most important of them is to expedite the Constitution drafting process and take the peace process to its logical end. Apparently, it is the successful completion of the following tasks that will bring an end to the transitional period. More importantly, isolating the Maoists will also have grave consequences to the peace process. Therefore, it is the prime responsibility of Madhav Nepal to reach out to the Maoists and keep them engaged in the peace process.

Courtesy: The Pioneer

Nepal is main venue of anti-China activities

Chandra Prakash Gajurel

Polit Bureau Member, Nepal Communist Party-Maoist

TGQ1: The Chinese foreign minister recently said that China was ready to safeguard Nepal’s national sovereignty and territorial integrity. Is it that the country has been pushed to that level?

Gajurel: It is not so at the moment. Nevertheless, the Chinese Ambassadors and Ministers have been talking on that line since long. The Chinese have been saying since long that if there is any sort of attack on Nepal’s sovereignty and geographical integrity, China will be ever ready to support Nepal. China might have told so sensing that of late foreign interference, more so from the immediate neighbor, has increased in Nepal.

China perhaps told these things upon studying the Nepali scenario as it stood today.

From when such interferences began to your knowledge?

Gajurel: The unequal treaties that we have signed with immediate neighbor in itself tantamount to interference. But why this issue took a different dimension in these days is because only last Thursday, the parliament members raised the issue that at 54 different places Nepal’s lands have been encroached upon by the other side. We can call such acts as interference or even encroachment. Of the total 54 places where Nepalese lands have been illegally occupied, there are two such places wherein a sizeable chunk of our lands have been already amalgamated by the other side.

Well, what must be kept in mind is that there has been interference in Nepal’s politics from that side and it has also been seen that the other side pushes its instructions every now and then. Isn’t it?

TGQ2: Has the time already come to invite third country to resolve Nepal-India border dispute?

Gajurel: No! It is not that. The time has not come yet. We must resolve our issues bilaterally.

But your Home Minister recently sought the Chinese support to resolve the Kalapani land dispute with India?

Gajurel: We have felt that the Indian interests in Nepal have exponentially gone up in these days. We, however, don’t want to tease India in this regard and come up as a different sort of nationalists. This would not be logical. Neither we want to “use” India. But the time has come that we must put the entire Nepali perspective in a positive and forceful manner for the perusal of the Indian government.

TGQ3: Why it is that we always raise the issue of 1950 treaty but shelve the matter every time. What could be the reason?

Gajurel: This is a paradox. All happen to raise this issue but shelve it sine die.

At least, I could raise this issue at a New Delhi seminar recently. Many Indians told me that at least you put your things straight. To tell you frankly, the 1950 Treaty has become a “burden” for the Indian establishment as well. Neither it can abandon the treaty nor can it carry on with it.

The treaty is in itself a faulty one in that it has no provision of affecting a review on a timely basis. Either you scrap it or bear with it. This is the position.

When we talk of scrapping the treaty, India gets irritated. India maintains that how come Nepal got the strength to challenge the Indian establishment? The other side presumes that it should be China behind such Nepali strength?

Be that as it may, the treaty as such has already become a “heavy” burden both for Nepal and India to put it plainly.

TGQ4: Two of your ministers recently sneaked into the Chinese territory without informing the government. Doesn’t this event force one to raise questions as regards the motive of such a secret visit?

Gajurel: This is impossible. No ministers can do that. I too went to Lhasa but did not inform the party. I went to Lhasa without introducing myself to avoid making an issue out of the visit.

However, while crossing half of the bridge, one Chinese police officer recognized me and demanded certain documents. Luckily, the party unit too was present there which facilitated my easy entrance into Khasa.

But it was a case associated with the government ministers? Wasn’t it?

Gajurel: Why to make a mountain out of a mole? Has it been written any where that it would be a crime if one stepped into the Chinese land? It would have been a different matter if some high Chinese officials had arrived there and met with the Nepalese ministers. But it was not so then why to blow up the issue out of proportion?

TGQ5: There is the growing fear among the population that Nepal could turn up some time soon into Yugoslavia and Haiti if India, the US and China are allowed to play in Nepal?

Gajurel: If we talk of the recent days activities, Kathmandu has become the venue for initiating anti-Tibet activities. While China was busy with its Olympic games, each and every day there could be seen anti-China activities. The anti-China activities went to the extent that some enthusiasts even tried to climb the Nepali mountains wearing “Free-Tibet” vests.

The Dalai Lama lives in Dharmashala, India. However, there were no such protests against China in India. Now it has been an established fact that the Dalai men came down to Kathmandu and encouraged the anti-China protests during that time. It became evidently clear that some one tried to make Nepal their play ground.

If China senses a threat to its security, it will not remain as a mere onlooker. The talk of Yugoslavia is thus not in the talk for nothing.

2008-12-09 16:11:59
Source: Telegraphnepal.com.np

Madhesh as such doesn’t exist in Nepal

Raj Kumar Lekhi, General Secretary

Tharu Welfare Society, Nepal

Raj Kumar Lekhi is the leader of the Tharu community. He is concurrently the General Secretary of the Tharu Welfare Society.

Lekhi’s society and some other Tharu organizations in support of some indigenous political entities agitated for some good thirteen days and forced the government to bow down and sign an agreement which now, claims Lekhi, secured and ensured the rights of the Tharus community.

The Tharus appear to differ with the idea of declaring Nepal’s entire Tarai belt as One Madhesh.

Tharus claim that there is no such place or special territory in Nepal which could be taken as Madhesh.

Lekhi claims that with the signing of the 6 point agreement with the government of Nepal in favor of the Tharu rights, a historic achievement has been accomplished.

However, Lekhi’s detractors opine that he and Laxman Tharu betrayed the entire Tharus and signed the agreement with the government without taking into confidence the mood of the Tharu community.

Lekhi and Laxman rebuke such allegations.

The Sunrise Post dated March 21, 2009, printed interview with Lekhi. Thanks Sunrise.

Below the excerpts: Ed.

---

TGQ1: Your Tharu community waged a movement for long in the recent days against the recently promulgated government’s Ordinance which assimilates your community in the category of the Madhesis. What were the gains of the said movement? Some even say that your agreement with the government is likely not to be addressed by the government. Your comments please.

Lekhi: The genuine demands that we had been voicing since long has been well addressed by the fresh agreement between the Tharu community and the government. The present agreement with the government now fully recognizes the distinct Tharu identity, linguistic pattern, tradition, historical and cultural practices and above all the political rights of the Tharus.

To be candid, the clause 1 of the fresh agreement clearly sates that the government henceforth recognizes the separate identities of the people living in the hills and the indigenous population including those of the Tharus. In effect, these people have their own and distinct culture and traditions and thus their demands have now been fulfilled.

What has also been agreed upon that by affecting effecting certain amendments in the interim constitution which caused immense damage to annihilate our separate identities by such an amendment will be corrected through yet another amendment? This means that the interim constitution will now again be amended in order to ensure our unique identity that we possess in abundance.

Be it known to all that neither we are the followers of Madhesh nor we are Madhesis. We are at best entirely different from others and are Tharus.

Well! We don’t claim that all of our demands have been met with for all time to come. However, still, the historical movement that we have had in the recent weeks has some way or the other addressed some of our genuine concerns.

Neither a movement of the sort what we have had can address all of our issues and concerns.

What we have talked this time is that we were neither Madhesis nor the inhabitants of what is called Madhesh. We have just wanted to sound that we are Tharus who possess a distinct identity and that we be not assimilated into any other ethnic domain. We just wanted to establish our historical roots and cultural patterns that are definitely different than others.

The fresh agreement has provided a sort of slap to all those who wanted to incorporate the entire castes and ethnic tribes into one particular community. The Ordinance which had damaged our separate identity and Madhesised the entire belt remains now shattered.

Some demands are yet to be addressed.

TGQ2: So when the agreement you think will come into effect? Why not you the Tharus raised this issue when the Interim Constitution was amended? You could have raised your reservations then? Why was the delay? Your comments please.

Lekhi: Well! The Constituent Assembly will resume its proceedings by March 29, 2009. The government at time of signing of the agreement with us has assured that the demands of the Tharus will be brought to the attention of the CA upon completion of all the needed and the required procedures as is demanded. The onus now lay with the government for the fulfillment of the agreements that has already been agreed upon.

What remain yet to be seen is how the parties take this and how the government convinces the political parties. How the lobbying is carried out by the government in this regard will be equally important to watch in the days ahead.

Indeed we have had raised this issue the day the first amendment of the interim constitution included the word Madhesh as such, however, our protest in this regard went unheeded.

The tragedy has been that unless some dozen vehicles are not burnt and agitation not sponsored the government in Nepal does not listen to the issues and concerns of the people.

Thus we were forced to do the same what others have done in order to get their demands addressed. And we did it and thus got our demands met with by the government.

TGQ3: Why your community is aggressive towards the Madhesh? Recently we have learnt that you have agreed to allow the government to write Tarai and Madhesh together instead of what was Madhesh only in the past? Will you explain please1

Lekhi: Yes! Indeed there are Madhesis in Nepal. Even in Kathmandu you can notice the presence of Madhesis. Like wise they are also in Pokhara and in Tarai as well.

But there is no such territory in Nepal which could be taken as Madhesh. Neither Madhesh was yesterday nor it exists today and at best nor would it come into existence in the future as well.

If Delhi houses some one million Nepali citizens, will then that allow the Nepalese to constitute a mini Nepal right there? It can’t be made so. This applies here as well.

To tell you frankly, there is no word as such which is Tarai-Madhesh in our agreement that we have signed recently. Albeit that was the proposition of the government at time of the agreement. We haven’t accepted the word Tarai-Madhesh in the agreement.

TGQ4: The Madhesi community after a prolonged agitation had managed to incorporate the word Madhesh in the interim constitution after the first amendment. Will now the Madhesh parties will so easily accept the use of the word Tarai ?

Lekhi: We just wanted to establish the unique and the distinct identities of the Tharus, Muslim and other indigenous people. The Madhesis while raising the issues concerning ensuring of their own rights tried to intrude upon to the rights of the others sects, ethnicity and tribes. We objected to their efforts at minimizing our exclusive and genuine rights. We have rebuffed their design by waging the prolonged agitation recently.

Who say what and does what should be not of our concern.

TGQ5: The Tharu agitation has come to an end. During the agitation some other political groupings also extended their support to your agitation. Will such a support continue in the future as well? Tell us why your society is being dubbed as anti-Madhesh? Your remarks please.

Lekhi: Those who supported us have their own demands. How they do it, it is their way to decide.

Yes! The Tharus have various organizations and all have their own identity and functioning style. But when it comes to the crunch, we all become one and fight in a united manner.

The Tharu Welfare Society, let me tell you frankly, does not believe in the armed movement. We don’t extend our support to those who raise weapons. We adopt peaceful means.

Definitely not. We are not against any particular caste or for that mater a community. Our fight is just to guarantee the rights of the Tharu community which has been denied by the State so far.

This is a wrong calculation and thus I refute such allegations.

2009-03-25 09:08:22
Source: Telegraphnepal.com.np

The day of the generals

SHYAM K.C. While presenting his party's vision of a new constitution last week, the Maoist party chairman told a Constituent Assembly (CA) committee that his party was for multi-party democracy and that it was committed to generally accepted human rights norms. As if to illustrate the sincerity of their leaders' pledge, Maoist-aligned groups took out demonstrations in different parts of the city to protest against the Supreme Court order regarding the tenure extension of some senior army officers. Similar protests by the Maoists were reported on Thursday in Nepalgunj. (The Deputy Prime Minister and Finance Minister said that the judiciary and the army stood in the way of “democratisation”, obviously meaning that kangaroo courts and the Maoist-aligned army should replace the existing judiciary and the national army.)
The Maoist protestors must have been incensed by the court's audacity to overrule a decision taken by a government elected by the people. After all, can't a government elected by the people do what it deems fit or proper or right? In most cases, decisions free of corruption and emotional underpinnings will ensure that the rights of the people are safeguarded at all times, and that no government decision infringes on the rights of the citizens, whether such citizens are employed by the government, private firms or corporations.

Did the government break an established precedent when it refused to extend the term of office of six brigadiers?
Not long ago, when a long-term lease on a piece of land owned by Nepal Industrial Development Corporation (NIDC) and used by a five-star hotel as an approach road ran out, NIDC wanted to reclaim possession of the land and close the road. The Supreme Court was moved by aggrieved parties, and the court ruled that the approach road should continue to be used as usual. Did not NIDC that owned the land have any right? Why did the court rule against the legitimate owner of the land? (There is a similar case about a closed path and road to the east of Sundhara. The Employees Provident Fund took possession of the land, and those trying to protect the Sundhara area have yet to move the court to legally open up the closed footpath and road. Surely, if a property used as a road for 25 years can continue to be used as a road, then the path and road used by the common people for over 100 years deserves at least the same treatment, if not more.)
The Supreme Court has had the distinction of upholding the basic rights of the people who have to face the colossal giant called the government. This is true not only in the post-1990 period but also during the panchayat era when the government, probably dissatisfied with the political leanings of some of its employees, had served them notice terminating their service. Some of these notices were upheld, but in many cases where the termination was not in accordance with the prevailing laws, rules, regulations and precedents, the employees had come out victorious against the all-powerful government. If such things can happen during the iron rule of the panchayat era, is there any plausible reason as to why this cannot or should not happen in a liberal democracy led by the most liberal of liberals, the Maoists?
The Maoist-led government has faced a series of reverses at the apex court. A media report said that the court ruled against the government in as many as six different but major cases. This may be due to the fact, as the prime minister admitted while addressing the nation sometime ago, that the Maoists and their coalition partners were not as experienced in governing as some other parties, like the Nepali Congress. But it must not be forgotten that the apex in any country is the last hope of individual citizens against the wilful imposition of the powerful on the weaker sections of the populace.
An individual waging battle against a powerful government is unthinkable, but the apex court in a democratic country makes the unthinkable possible. The court is also the last resort for those in the military who believe that they have been wronged by the military or by the government. The army and police personnel also have individual rights like any of us. The apex court sees to it that the individual, no matter how weak, gets his or her justice and that the government, simply because it is rich (thanks to taxpayers' money) and powerful (thanks to the army and police and other security agencies) cannot do what it wants throwing all accepted democratic norms and practices to the winds.
In a democracy as opposed to monocracy (or even mob rule, if you will), decisions are not taken based on personal likes and dislikes nor out of personal grudges. But there are rulers who do so, and the one place where the victims can be protected against their whimsical decisions is a court of law. Whether true or not, reports have been in the air for some time that the defence minister and the army chief do not see eye to eye on many issues, and that the government decision not to extend the terms of office of six brigadiers stemmed from this decision. But if the government took the decision throwing precedents to the winds and on the basis of personal likes and dislikes of individuals, such a decision certainly made the day for the generals.

Posted on: 2009-03-29 22:53:48

The shortage economy

BY SUKHDEV SHAH

The phrase 'shortage economy' was coined during the 1980s to describe the extreme shortages of consumer goods in socialist economies of the Former Soviet Union (FSU) and Eastern Europe. After an initial good start in the 1950s and 1960s, centralized planning in these countries started to develop bottlenecks that hindered production, fostered emergence of unused capacity, and created shortages of consumer items of all sorts. Shortages became extreme during the 1980s, as reflected in the long queues for basic consumer goods such as clothing and food items, health and education supplies, and of smuggled foreign goods. The depth of shortages in these countries -- most notably in FSU countries -- was captured in the popular joke about low productivity of government workers: a typical worker in FSU countries spent more time standing in queues than working in the office!
Such shortages occurred partly because of central planning that could not sensibly plan for the production of thousands of items to match consumer demand, and partly it reflected government intentions to create shortages of consumer goods to increase saving.

Achieving parity between demand and supply is almost automatic in a market economy -- or capitalist enterprise system -- which does the equilibrating job by making use of the price signal that helps eliminate the shortage.
However, the centrally planned system does not trust the market and, instead, it tries to replace it with officially fixed production, to be sold at officially fixed prices. Of course, planners have to work with insufficient information to get at correct market-clearing prices, which is seldom achieved. This led to the shortage of some goods at the same time that unsold inventories of other items piled up. Consumers also had to wait for years to get a phone connection, find a living space, and purchase a car!
Nepal's case is different!
Nepal's economy is facing shortages of many items but consumer items are not one of them. Except for the occasional shortage of petroleum products -- most of the time for reasons beyond government control --supplies of most goods and services available from private shops and businesses are plentiful. Also, foreign goods and currencies are available on demand in the private market, without having to wait in long queues or go through the black market. Most likely, the socialist economies of Eastern Europe and FSU would have survived and even prospered had they ensured adequate supplies of consumer items at prices private producers and businesses found profitable.
However, Nepal's economy is being undermined by a different kind of shortage, generally not faced in ex-socialist economies. This is the shortage of public goods, comprising such basic items for day-to-day living -- drinking water, electricity, roads, bridges, sewer system, trash management, transport, health, education, public security, and clean environment, to name a few. Because of the nature of such public goods -- need for large investments, economy of scale, common accessibility (non-exclusiveness), inability or difficulty of collecting user charges, and their impact on overall quality of life -- they cannot be provided by private enterprises which, in large part, are motivated by earning a profit.
Given that the provision of public goods, in most part, is in the public domain, adequacy of their supplies, as well as quality of their delivery, reflect, more than anything else, the government's commitment -- or lack of it -- to serving public interest. If the government is unwilling or unable to carry out such functions, it can be considered a failure -- it even looses the right to govern, at least in a moral sense.
We all are aware of the scarcity of public goods faced by the Nepali population and abysmally poor quality of the ones that are provided -- electricity, drinking water, public hygiene, road transport, health and education and, most significant of all in the post-monarchy Nepal, poor law and order situation. Looking at the scarcity of public goods faced by the Kathmandu population -- electricity, drinking water, extreme level of pollution of air and waterways -- one can scarcely believe that the government exists here in any meaningful sense.
Shortages of life-sustaining public amenities have not occurred overnight; rather, this has evolved over years and decades -- through revolutions and regime changes. However, there is no record of serious efforts made by any government to foresee the crisis and prevent unabated deterioration of living conditions for valley residents, whose number is believed to have zoomed from just one million 30 years ago to over four million at this time. Electricity, water, and waste-disposal infrastructures that were created just for one million people have changed very little over many decades. Speaking more generally, almost total neglect of investment in key public sector amenities has been the single reason for rapid deterioration in the qualify of life for Valley residents and in most of the urban areas of the county. Of course, much of the countryside has remained untouched.

Plan priorities!
Nepal has adhered to the techniques of development planning now over half a century, backed by sizeable investment of government money and foreign aid resources. However, the impression one gets is that the core structure of the economy is unaffected, and remains overwhelmingly rural and subsistence-based. In many ways, it looks as though that the economy has followed its own natural course -- making use of traditional technology to sustain life at the very basic level for a growing population -- very much like Robert Malthus envisioned two centuries ago. The reason for this failure is simple -- the wrong plan priorities.
There is a misconception in countries regarding the government's responsibility for meeting people's basic needs -- that of gaas, baas, kapaash (food, shelter, clothing); in the context of India, prior to the upsurge of double-digit growth in the last decade, people wanted the government to simply meet their food needs: Bhookh lagi hai roti do; nahin to gaddi chhor do [we are hungry, give us food; if not, vacate the thrown.]!
Such demands or expectations from governments may be alright -- even desirable -- in heavily economies, where the government owns the means of production and has centralized decision-making. In these economies, most of incomes earned by workers and households came from wage employment, overwhelmingly from government jobs, which they spent on government-provided goods and services. Public facilities -- education, health, transport, electricity, water, and sanitation services -- were provided free of charge or at highly subsidized rates.
However, in free -- or largely free -- market economies, the government is not expected to meet all -- or even most -- of the economic needs of people, except in emergency situations occasioned by natural calamities. The market system in these countries -- although not perfect -- does a pretty remarkable job allocating resources to their best uses and setting prices at levels that clear the market. Government interventions in the market are generally ineffective, tend to create artificial shortages, and breeds corruption among government officials. As noted above in the context of the situation in the Kathmandu valley, despite the scarcity of many consumer items, their uncertain supply source, and absence of any centralized distribution network, most goods are available in the market and cases of sustained scarcity of any item seem quite rare.
This is only one part of the story though -- evidence that the market and, indirectly, the private sector are doing alright, even under difficult circumstances. This is not at all so in the provision of public goods and services, which is the core function and responsibility of government. Looking at the available evidence -- scarcity of water and electricity supplies; conditions of roads and bridges; lack of public sanitation and pollution control, absence of law and order -- it would be difficult to dispute the fact that they represent the extreme form of government failure. One can say that such failure underlay the poor quality of life for most population and contributes to a lack of public trust in the government.
Government planners then must narrow down the approach to planning to areas strictly in the public domain, and drop such high-flying ideals as comprehensive planning and all-rounded development of the country -- themes that have been repeated in each plan implemented since 1956! The narrowing of plan objectives will require the government to focus its investments only on a few critical areas. At the present time, such areas can be limited to the establishment of law and order, infrastructure development, and environmental protection -- strictly Adam Smith's-type prescription for limited Government.
From the list of infrastructure items, we can eliminate “mixed” items such as health and education that can better be handled by the private sector, which does indeed happen in the Kathmandu valley and in most urban areas of the country. We can also leave out agriculture and industry sectors from the list of government priorities, since private producers can use available resources and technology in a more efficient manner than when mandated by government dictat.
The above reasoning leaves only a few infrastructure items -- in addition to law and order and environmental protection -- that need to concern government planners. Looking at the present needs of society and assessing the strength of linkages to the rest of the economy, critical areas for planned development can be whittled down to no more a few -- electricity, transport, water supply and sanitation. These core development areas are clearly in public domain and, more importantly, they have strong linkages with the rest of the economy.
We can envisage -- taking just one example -- of a five-year water development plan targeted to supply drinking water to the entire population and irrigation water to all farming areas in the country. What miracles can this do to lift the country's productive potential and improve public health? Another five-year development plan devoted to power sector and roads development can perform similar miracles. Such focused development of our infrastructure -- along with environmental protection and an improved law and order situation -- will work as an elixir for our long-dormant economy and give credibility to the government's effort to alleviate poverty and improve living conditions at the grassroots.

(The writer is an economist based in Washington DC)

Posted on: 2009-04-01 00:08:24