Full Text of Annual Policies and Programmes for the Fiscal Year 2007/2008

The Rt. Honourable Speaker,1. I am pleased to have this opportunity to present the Policies and Programmes of the Government of Nepal for the Fiscal Year 2007/2008 to this august Legislature-Parliament in the capacity of the Prime Minister of the Coalition Government of the eight political parties.

2. Having accomplished such historic tasks as the brining to an end of over a decade long armed conflict, promulgating the Interim Constitution on the basis of negotiations and consensus and forming an Interim Government, today we are forging ahead for the election to the Constituent Assembly. On this occasion, first of all, I would like to offer my heartfelt tributes to all those martyrs, known and unknown, who attained martyrdom in the course of establishing Loktantra (democracy). Likewise, I wish speedy recovery to all those distinguished individuals who, having sustained injuries in this connection, are now recuperating.

3. I would also like to express the commitment that, while remaining active for the preservation of national independence, unity, integrity and dignity as well as for the promotion of the national interests and prestige, the Government shall move ahead with consensus on major national issues for the institutionalization of the universally accepted democratic values and ideals including competitive multiparty democratic system of governance, civil liberties, fundamental rights, human rights, press freedom and concept of the rule of law.

4. The Constituent Assembly polls slated for November this year is expected to make a major contribution to the institutional development of Loktantra (Democracy) that we attained by the sacrifice of the people through the historic people's movement and struggle. This election shall put an end to the old era and usher Nepal into a new beginning.

Mr. Speaker, 5. The law and order situation shall be improved significantly by way of resolving mutual differences of opinion on the basis of dialogues and negotiations. For conducting the Constituent Assembly election in a free, fair, and impartial manner, the peoples' right to cast their votes in a peaceful atmosphere, free from fear, shall be ensured. For the purpose, the commitments expressed in the understandings and agreements reached among the eight political parties shall be implemented. Violent and criminal activities shall be dealt with sternly. For the purpose of holding the Constituent Assembly election, a special work plan shall be prepared for consolidating the civil and police administrations and making them more effective.

6. Various governmental and non-governmental organizations, the civil society and the mass media shall be mobilized for the conduct of civil awareness programmes and for the protection of the right to information of all regions, genders, castes, creeds and ethnic and other community groups in connection with the Constituent Assembly election. The Election Commission shall be extended all necessary cooperation in this regard. The United Nations as well as other relevant national and international organizations shall be involved in the observation of the Constituent Assembly election.

7. A State Restructuring Commission shall be formed as soon as possible for the restructuring of the state along federal lines as per the spirit of the Interim Constitution. A task force of individuals including experts shall be formed for necessary homework for the proportional and inclusive participation of Mahesis, Dalits, indigenous communities, women, workers and peasants, the disabled and backward communities in all the organs of the state structure. A policy of making political appointments on the basis of inclusive participation shall be followed with immediate effect.

8. While implementing and complying with all agreements, accords and understandings, including the Comprehensive Peace Agreement, monitoring mechanisms shall be put in place at central and local levels for the institutionalization of sustainable peace and development

9. A relief programme shall be launched for the families of those killed and for those who sustained injuries or physical impairment as well as those displaced by the conflict and movement. A special programme for the reconstruction of the physical infrastructure and rehabilitation of those affected or displaced by the violent conflict shall be formulated and implemented with high priority, thereby creating an environment conducive for goodwill, unity, and reconciliation in the society.

Mr. Speaker10. As regards the building of a New Nepal, a common national perspective concerning the economic and social transformation of the country shall be prepared and implemented.

11. To lay the foundation of a prosperous, modern, federal, inclusive and just Nepal, a 3-year interim plan shall commence implementation from the coming fiscal year, taking stock of the recommendations of the National Development Council among others.

12. Agriculture sector is the backbone of rural economy; Agriculture is also the principal source of income of the rural people. It is not possible to improve the economic condition of the poor communities without the development of the agriculture sector. The agriculture sector shall, therefore, be commercialized and be made the main pillar of economic growth. Stress shall be given to the mobilization of capital and technology for the diversification and modernization of the agricultural products. Necessary adjustments shall be made in Agricultural Perspective Plan on the basis of the evaluation of its implementation status and subsequent arrangements be made for its effective implementation.

13. The role of the private sector in the economy shall be encouraged. The Foreign Investment Policy and the Industrial Policy shall be improved with a view to developing Nepal as a secure, attractive and investment-friendly destination. Likewise, timely improvements shall be made in the existing trade policy for developing the country's export trade as a pillar of economic growth. The concept of Special Economic Zones shall be implemented from the next fiscal year. A policy shall be followed to utilize the skill, capital and entrepreneurship of Non-Resident Nepalese (NRN) for nation building. A Small Enterprise Policy shall be formulated for the purpose of promoting small entrepreneurs. For the smooth supply of petroleum products, a price adjustment policy shall be followed and the supply situation shall be improved with the participation of the private sector. Work shall be initiated for the establishment of an Industrial Security Force for the maintenance of law and order in the industrial sector.

14. National interest should be paramount while mobilizing foreign aid. To speed up development activities, which contribute to the establishment of durable peace and meet the aspirations of the people, emphasis shall be laid on the mobilization of bilateral and multilateral assistance. A policy shall be followed for maintaining fiscal balance in the allocation of public expenditure.

15. While preserving the languages and indigenous cultures of all ethnic and other communities, a new cultural policy shall be implemented for managing the works relating to the protection and promotion of cultural traditions.

16. In order to develop Nepal into and attractive tourist destination, emphasis shall be laid on tourism infrastructure development, its diversification and promotional activities. Preliminary work shall be initiated for the development of a second international airport and other international airports of regional levels. The Nepal Airlines Corporation shall be operated in accordance with the policy of public-private partnership.

17. Necessary infrastructure shall be prepared for scientific land reform and management. Emphasis shall be given on the development of the cooperative sector. The programme for the rehabilitation of freed bonded labour shall continue. Special attention shall be paid to the economic and social advancement of agricultural labourers and the landless squatters, and a special programme shall be launched for the landless squatters.

18. Access to education shall be increased for children who have been deprived of school education. The role of local communities shall be further enhanced in the management of schools. Access of rural communities to technical education and vocational training shall be increased by collaborating with the NGOs and the private sector. In addition to rendering university education research oriented and competitive, sports programmes shall be incorporated right from the school level. Preliminary work shall be initiated for the establishment of a university related to agriculture and forestry.

19. The health sector shall be restructured on the basis of geography and population with a view to establishing primary health service as the fundamental rights of the people and making quality health service accessible to the common mass. To this end, a policy of gradual up-gradation of sub-health posts to health posts shall be adopted and some sub-health posts shall be converted into health posts during the coming fiscal year. Special programmes shall also be launched for free medical treatment to and health maintenance of the poor, helpless and marginalized groups throughout the country.

20. Necessary legal and policy reforms shall be introduced in the women, children and social welfare sectors. All kinds of social discriminations, including untouchability, based on religion, language, culture and caste shall be brought to an end. Special arrangements shall be made for the protection, promotion and development of all ethnic communities, religions, languages and cultures.21. Programmes designed for income generation, capacity enhancement and community infrastructure development shall be implemented through community mobilization aiming at those in abject poverty and those below poverty line from among the women, Dalits, Madhesis, indigenous communities and those from backward areas.

22. Emphasis shall be laid on the selection and implementation of new multipurpose projects with a view to utilizing, in the national interest, the abundant hydropower potential of the country. Rural electrification programme shall be expanded. For the development and expansion of the irrigated areas, continuity shall be given to the construction of large, medium and small irrigation projects as well as those based on new technology. Likewise, for providing year-round irrigation facilities by utilizing surface and ground water, necessary improvements and rehabilitation works shall be carried out in the irrigation systems. Participation of the local people shall be encouraged in the management of irrigation projects.

23. For the construction of physical infrastructure- the backbone of the economic development of the country-emphasis shall be laid on joint efforts of the Government, local bodies, consumer groups and the private sector. Five additional district headquarters, which have yet to be linked by road, shall be connected with the national highway network during the coming fiscal year. The construction and up-gradation of roads including the postal tracks and accessory roads in terai, the highways of mid-hills and the north-south highways shall be pursued with priority.

24. An integrated policy shall be implemented for the sustainable development and expansion of the drinking water and sanitation sector. For its timely completion, the implementation process of the Melamchi Water Supply Project shall proceed as early as possible.

Mr. Speaker25. A programme of establishing at least two public telephone booths in search in each village development committee shall be pursued by launching a special rural telecommunications expansion programme. For the development and expansion of telecommunications facilities, existing information highways (fibre optics lines) shall be fully utilized and initiatives shall be taken for the development of alternate information highways (fibre optic lines). The public broadcast and mass media, shall be made democratic, swift, reliable, professional and diversified and information and communication technology shall be developed and extended to the rural areas. Legal provisions shall be developed and extended to the rural areas. Legal provisions shall be made to ensure the right to information to the people.

26. Additional contribution shall be made to poverty reduction through sustainable management of the forest areas. For conserving bio-diversity and contributing to eco-tourism, various programmes such as community and leasehold forestry in the hilly areas and productive forestry in the terai and inner terai areas shall be launched.

27. Incorporation of environment, science and technology related issues in the national development process shall be consolidated. Information technology shall be utilized for the improvement of public sector service delivery.

28. For the consolidation of the labour and transport management, emphasis shall be given on legal and institutional reform and use of information technology. Attractive employment destinations shall be explored for the Nepalese workers and labour agreements shall be concluded with receiving countries for the protection of workers' interests. Provision of labour attaches shall be made gradually in countries where there are substantial numbers of Nepalese workers and the outreach and capacity of the Nepalese Embassies shall be enhanced in other countries. Social security programmes shall be launched in the benefit of the workers. The Government shall adopt the policy of conducting welfare programmes in the interest of the youths looking for foreign employment.

29. Necessary legal provisions shall be made in order to make arrangements for ensuring unhindered transport service along the East-West Highway and other national highways and not to allow any kind of obstruction to them.

30. Emphasis shall be given on building of infrastructure based on popular participation for resolving the problem of unemployment. The youths shall be encouraged to opt for self-employment and to engage in income generating activities through training, skill development and capacity enhancement. The coverage of the Poverty Alleviation Fund shall be expanded and additional opportunities shall be provided to the deprived families from the rural areas for income generation.

31. Special programmes shall be introduced for the development of and employment generation in the Far Western and Mid-Western Development Regions including the Karnali Area and the regions adjacent to them as well as the districts, which lag behind in respect of human development index.Mr. Speaker

32. Arrangements shall be made for running the Local Bodies on the basis of political consensus. In line with the democratic ideals, a policy of decentralization of authority, to the fullest extent possible, to the Local Bodies shall be pursued. In accordance with the norms of governance based on equity and inclusiveness, various employment and income generating programmes shall be launched for the empowerment of the acutely poor families, women, the deprived, the oppressed, Dalits, indigenous communities and ethnicities, Madhesis, the backward and marginalized and other communities residing in remote areas.

33. Punitive, preventive and promotional measures shall be adopted to make the country corruption-free and to make good governance felt. Efficiency of the Commission for the Investigation of Abuse of Authority and the Office of the Auditor General shall be enhanced.

34. The policy to respect the independence of judiciary, the rule of law and human rights shall be continued. The National Human Rights Commission shall be made more effective for the protection and promotion of human rights. Emphasis shall be given on the improvement of physical facilities for the courts.

35. The Civil Service shall be made more transparent, responsive, accountable and inclusive. Public servants shall be granted a salary increment. In order to develop the civil service as an attractive service by way of ensuring the opportunities of promotion and career development, timely improvements shall be made in the civil service laws. The Public Service Commission shall be strengthened and improvements shall be made in the examination system and evaluation methods.

36. To ensure smooth law and order situation and to make the police force capable and competent, the Nepal Police, the Armed Police Force and the National Intelligence Department shall be modernized and made well equipped.

37. A comprehensive work plan shall be formulated for the democratization of Nepali Army, an appropriate number, structure and inclusive national character shall be decided for it, and its personnel shall be trained with human rights values. At the same time, their involvement in the development and construction activities shall be increased.

38.Attention shall be paid to the appropriate management of cantonments housing the combatants of the Communist Party of Nepal (Maoist) and the work relating to their integration and rehabilitation shall proceed as per the recommendations of the special committee formed in accordance with the Interim Constitution.

39 A process forming a trust shall be initiated for the utilization of the properties of late King Birendra, late Queen Aishwarya and their family members in the interest of the nation. The task of nationalizing such properties as palaces, forests, parks, heritages of historical and archaeological importance etc. possessed by King Gyanendra in that capacity shall proceed with priority.

40. Diplomatic service shall be made more efficient for the effective implementation of Nepal's foreign policy, which is based on the ideals and values, enshrined in the United Nations Charter and the principles of non-alignment.

41. A policy attaching high priority to the friendship with neighbouring countries- India and China shall be pursued. Likewise, the national relations with other friendly countries shall be further deepened.

42. The Government believes that the Bhutanese refugees sheltering in the refugee camps in Eastern Nepal for more than one and a half decades now should be allowed to return to their homeland in a dignified manner and in an atmosphere free from fear. Without prejudice to their inherent right to return to their homeland, should they choose voluntarily the option of third country resettlement, the Government of Nepal shall follow a policy of accepting it as a provisional arrangement.

43. While expressing my confidence that the goodwill and cooperation of friendly countries, donor agencies and the international community for the success of the peace process, consolidation of democracy and the socio-economic development efforts of the country shall continue in future, I, on behalf of the people and the Government of Nepal, would like to thank all those who have been extending such cooperation.

Mr. Speaker44. Pursuing the culture of consensus and collaboration for resolving the differences through dialogue and negotiation is the present day reality. The Government is aware of this reality and remains effortful in meeting the demands of all kinds through dialogues. The government has appealed to everyone for putting an end to all kinds of violent acts and seeking solution to the problems at the negotiating table, and has kept the door open for dialogues. In spite of all this, violence still continues in certain parts of the country in the name of different groups. Such violent criminal activities shall not be tolerated and those responsible shall be dealt with sternly. The Government, once again, calls upon all concerned to take this seriously and seek solutions to problems through dialogues and negotiations. At the same time, for creating an environment favourable to holding the election to the Constituent Assembly, I, on behalf of the Government and on my own, make an earnest appeal to everyone not to organize any closures, transportation strikes, other strikes, lockouts, etc. that disrupt the law and order situation.

45. The best interests and prosperity of Nepal and he Nepali people depend on our unity and noble efforts. I believe the election to the Constituent Assembly shall not only resolve the manifold problems, but also does it consolidate people's power thus contributing to the framework for the creation of a new Nepal. Therefore, institutionalizing the democratic system of governance through the election to the Constituent Assembly, we all should be more active in creating an atmosphere for participation in the all-round development of the country by having mutual goodwill and understanding among all Nepalese people. I, therefore, sincerely appeal to all political parties and their sister organizations, journalists and media persons, the civil society, intellectuals, social workers, industrialists and businessmen, various occupational and professional organizations and all Nepalese sisters and brothers to contribute to the task of successfully holding the Constituent Assembly election by their positive and active participation.Jai Nepal !

Source: The Rising Nepal, July 5, 2007

Govt unveils policies, programmes : CA election high on agenda

KATHMANDU, July 4 - Prime Minister Girija Prasad Koirala on Wednesday presented the policy and programs of the government for the next fiscal year in the interim parliament, giving top priority to improving security required for Constituent Assembly Polls slated for November 22. Koirala, who heads the coalition that includes former rebels, said the state has given topmost priority to making the polls a success because it will end the old order and begin a new era.

Hinting that the king's days are numbered, the octogenarian leader told lawmakers that an event comes only once in an era and Nepal is going to witness that event soon. In his indirect reference to the monarch leaving the country Koirala said, "As Mahatma Gandhi said the British rulers will help Indian independence movement by feet, we are also coming close to something similar."

Koirala urged lawmakers not to expect too much from the upcoming budget. "It's rainy season, dashain festival will follow soon and election will be next, so there is no time for budget implementation but the supplementary budget to be presented later this year will offer something good to the people."

The prime minister also called upon lawmakers to be ready for drastic changes in the current socio-economic set up. "Only after socio-economic change can we feel the real revolution."

After finishing his remarks, Koirala asked his deputy in the cabinet, Peace and Reconstruction Minister Ram Chandra Poudel to read out the policy and programs of the government.

The policy document said the eight-party coalition government would take all major decisions through consensus and tackle the challenges collectively.

It said the government will give priority to dialogue as a means to settle all regional, ethnic and other social conflicts in order to create a peaceful atmosphere for polls. The government policy, however, warned of strong action to control violent and criminal activities. The policy document has also promised to enact legal provision to keep highways free from any kind of strike.

Referring to some violent activities continuing in the terai despite the government's earnest efforts to resolve the problems amicably, the document said, "Such violent criminal activities shall not be tolerated and those responsible shall be dealt with through stern action."

The government has promised to set up State Restructuring Commission as soon as possible and a separate taskforce for necessary homework for proportional share of all ethnic groups, women, madhesis, dalits and other backward sections in the state agencies.

The government also said it would implement the concept of special economic zones, revise foreign investment policy and take initiatives for setting up industrial security force to ensure safety of industrial investment and to promote export.

The policy paper also stated that the government would initiate the process of nationalizing late king Birendra's family assets and parks and reserves controlled by the Royal Palace.

Program & policy highlights

Security top priority

State restructuring commission to be formed

Taskforce for proportional share in state organs to all disadvantaged groups

Legal provisions to free movement on highways

Local bodies to be run through political consensus

Salary increment pledged for govt employees

Democratization of army and proper management of PLA cantonments

Source: The Kathmandu Post, July 4, 2007

Security Arrangement

The government is committed to strengthening the security arrangements with a view to creating a congenial environment for election to the constituent assembly. The determination expressed by the government comes at a time when serious concern is being raised from different quarters regarding the deteriorating law and order situation in Madhesh and other parts of the country. Needless to say, the security situation in the country has worsened due to the low intensity conflicts and contradictions surfacing in different parts of the country. Thanks to the negotiation between the state and the revolutionary party, the CPN-Maoists, the violent conflict that took a toll of around 13,000 lives during the last one decade has been resolved. The country has entered a new era of peace building and democratisation. The date announced for the election to the constituent assembly testifies to the fact that the political parties are working in concert to take the country towards a new era of peace, consensus and harmony through a series of succinct steps towards conflict transformation. However, the new liberal and democratic political environment has allowed for the rise of ethnocentric and regional tendencies as a result of which local and regional issues have overshadowed the subjects of overall national concern and development.

The tensions in Madhesh and other parts of the country have presented difficulties in terms of maintaining law and order for peace and harmony. The worrying part has been the indiscriminate killings and kidnappings carried out in random in the terai as a result of which the situation has become more abnormal and unusual. The economic activities in the terai have been disturbed, and the business community is facing threats and intimidation. The senseless resort to strikes and vandalism of property has created a difficult situation which might have negative repercussions in the process of holding the polls to a constituent assembly. As the government has decided to deal with the unrest in the Terai with a firm hand, the situation is expected to come under control and become normal in the days to come. Against this backdrop, it is necessary for the political parties and civil society organisations to cooperate with the government to handle the law and order situation in the Terai. It should be understood that if the situation is allowed to worsen further, it would be difficult to build a conducive environment for the polls to the constituent assembly.

Source: The Rising Nepal, July 4, 2007

A Historic Responsibility

Yuba Nath Lamsal

The date for the constituent assembly (CA) election has been finally announced. November 22 has been fixed for the historic occasion. Unless some unavoidable circumstances arise, people would vote to choose their representatives to write a new constitution. In other words, people, for the first time in the history of Nepal, would participate in the constitution making process, which is the best democratic process in the world.

Interim constitutionThe issue of constituent assembly election had been raised right after the 1951 political change that overthrew the century-old Rana family rule and ushered in a new era of multi-party democracy. The year 1951 not only introduced a democratic polity but also reinstated the King who had been ousted. Right after the political change, the reinstated king, Tribhuvan, in a message to the nation, had promised to hold the constituent assembly election to write a new constitution. In his message, King Tribhuvan, while proclaiming the interim constitution in 1951, had clearly stated that the interim constitution would be at work until the new constitution was written by the people's representatives through an election. However, this promise of holding the constituent assembly election slowly evaporated as the King in connivance with some political parties scuttled the political process. They, perhaps, thought that the constituent assembly election would not serve their interest. Instead of holding the constituent assembly election, the parliamentary election was held eight years after the political change in 1951. This move not only breached the promise made but also denied the people to participate in a democratic process of writing their constitution. It was the first mistake of the political parties and politicians not to push for the constituent assembly election and instead participate in the election held under the constitution given by the King.

The process of scuttling the constituent assembly election was the beginning of the conspiracy against the democratic system and people's rights. The 1959 constitution, on the basis of which the first general election was held, had made the King too powerful, which the King misused to dismiss the elected government headed by B. P. Koirala and ban the multi-party system and political parties. Had a constitution been framed by the constituent assembly, it might not have given absolute powers to the King. Thus, Nepal remained under the spectre of the King's authoritarian rule for more than 30 years under the partyless Panchayat regime.Even after the political change in 1990, the then political actors failed to visualise the situation clearly. The Nepali Congress (NC) and the United Left Front (ULF) that spearheaded the 1991 mass movement had reached a compromise with the King on three key principles. The tripartite agreement among the King, the Nepali Congress and the ULF had agreed on a constitutional monarchy, multi-party system and sovereignty of people. This put an end to the burgeoning mass uprising.

Accordingly, a constitution was written by the representatives of the Nepali Congress, ULF and the Palace, which was promulgated by the King. The parties that wrote the constitution described it as the best constitution in South Asia. The constitution did have some salient features, which must be appreciated. The constitution in principles accepted the sovereignty of the people for the first time in the history of Nepal. However, the fundamental flaw in the constitution was the process of its making. It was not the constitution of the people because there was no participation of the people drafting the constitution. During that period, there had been a demand from certain quarters, though feeble, for an election to a constituent assembly. However, this demand was scuttled by the Palace and the other principal political parties. Perhaps, it was the compulsion of the Nepali Congress and the ULF to opt for a quick way to promulgate the constitution as there had been repeated attempts from the Palace to sabotage the new political process. It should be mentioned here that the Palace had first constituted a constitution drafting committee without consultation with the Nepali Congress and ULF, but it was dissolved following strong opposition from the parties and the people.

Another event that needs to be mentioned here is that when the NC, ULF and King's representatives were giving a final touch to the draft of the constitution, the Palace prepared a parallel constitution, which had to be withdrawn after strong protests from the people, professional organisations and political parties. Thus, the Nepali Congress and the ULF had to opt for a quicker way to write the constitution and end the political transition. It was the necessity of the time.Thus, the debate and demand for a constituent assembly election remained unresolved, which resurfaced during Jana Andolan II. The constituent assembly election was the main agenda of the Maoists. Other political parties, namely the Nepali Congress and the CPN-UML, were a bit reluctant to go for the constituent assembly election as they were not sure of its outcome. Before the 12-point agreement reached between the Seven-Party Alliance (SPA)and the Maoists, the political equation was different. The King had imposed his absolute regime, summarily crushing the fundamental rights of the people and party activities. On the other hand, the Maoists were waging an armed insurgency. The seven political parties had been attacked from both sides. Despite that, the seven-political parties continued their agitation for democracy and human rights.

The situation and political equation changed after the seven-party alliance and the Maoists signed the 12-point agreement. This agreement is a watershed in Nepal's political development. Until then, the constituent assembly was the agenda of the Maoists alone. After the agreement, it became a national agenda as the seven political parties changed their earlier stance on the constituent assembly. At the same time, the Maoists agreed to suspend their armed offensive and join the peaceful democratic mainstream. On the basis of these two main principles, Jana Andolan II was launched, which was led by the SPA and backed by the Maoists. The people's movement eventually forced the King to bow down, restored democratic system and initiated a new political process in the country. Law and orderThus, the constituent assembly election is a national necessity, which must be held on schedule. We cannot and should not doubt over the intention of the government and the eight-party alliance in holding the election. But announcing the election date alone does not mean it will be held in time and in a free and fair manner. There are elements trying to sabotage this process. These elements must be checked, for which greater unity and solidarity of the eight parties and active mobilisation of the people are highly necessary. For a free, fair and peaceful election, law and order must be perfect. In the absence of security, people cannot exercise their voting rights freely. The present law and order situation is definitely not satisfactory. It must be improved, and the people need to be well informed and educated on the election process and its significance. Only then people can freely participate in the election process.

Source: The Rising Nepal, July 4, 2007

Why Institutional Reforms Count

Lok Nath Bhusal

Being a resource scarce economy, Nepal's future course of development critically hinges on the realisation of the commitments made in the Millennium Development Goals by the development partners. Drawn from the Millennium Declaration of September 2000, the MDGs are a groundbreaking international development agenda for the 21st century. With the aim of bringing peace, security and development to all people, especially people from the developing countries, the MDGs, having eight goals and 48 indicators, outline major development priorities to be achieved by 2015 by the UN member states.

Achievements and shortcomingsIndeed, on the part of developing economies like Nepal, achievement of the first seven goals - eradicating extreme poverty and hunger, achieving universal primary education, promoting gender equality and empowering women, reducing child mortality, improving maternal health, combatting HIV/AIDS, malaria and other diseases, and ensuring environmental sustainability - largely depend on the accomplishment of the eighth goal: developing a Global Partnership for Development. This is because in most of the developing economies, there is a wide gap between revenue and expenditure. Nepal's MDGs Progress Report 2005 states that external assistance totalling US$ 7.6 billion is necessary to meet the first seven goals. Obviously, increased focus on debt relief and development cooperation through more effective aid is crucial to financing development. Having said that, the present article outlines major achievements and shortcomings in the area of institutional reforms in Nepal essential to attract foreign aid. Nepal initiated the reform process in the early 90s in order to integrate its economy with the rest of the world. As a precondition for increased foreign assistance, Nepal's commitment to an open economy, good governance and poverty reduction are some of the major achievements. This is apparent from the objectives and strategies of the three successive plans following the 1990 political change. These plans have clearly allowed market-based economic growth, set poverty reduction as the single goal and unveiled a systematic arrangement to institute good governance.

Reduction, restructuring and rationalisation of import duties, elimination of most of the quantitative restrictions and import licensing requirements, interest rates deregulation, and introduction of full convertibility for current account transactions have been major reforms on the trade and financial fronts. Consequently, the unweighted average rate of protection has declined from 111 per cent in 1989 to 22 per cent in 1993, and to 14 per cent in 2002, clearly indicating a liberal economy. Furthermore, in terms of trade to GDP ratio, for 1984/85 it was 31.9 per cent whereas it was 50 per cent in 2003/04, suggesting Nepal to be the most open and trade dependant economy in South Asia. Likewise, a number of innovative approaches have been initiated to make the civil service responsive, efficient, accountable and inclusive to ensure good governance. Elimination of 7,334 vacant positions and putting a cap on recruiting class III and class IV non-gazetted staff have been carried out to right-sizing the bureaucracy.Likewise, institutional reforms in the central personnel agency, the Public Service Commission, Commission for the Investigation into Abuse of Authority (CIAA) and the National Vigilance Centre are underway to make the bureaucracy more efficient, accountable and corruption-free. Indeed, with the enactment of the Local Self-Governance Act 1999, Nepal has taken major strides towards decentralization and, thus, poverty reduction. As a result, the local bodies have improved their performance owing to their better preparedness with the periodic plans, technical capacity, operating systems and operational processes.

In order to upgrade the judicial capacity and resources for enhancing justice delivery, the judiciary has prepared a strategic plan to link it with the national planning process. The plan envisions a system of justice that is independent, competent, speedy, inexpensive, accessible, ethical and worthy of public trust. All these reforms are intended towards improving governance and, thus, making it more pro-poor. Eventually, these reform initiatives meet the basic conditions for global partnership for development.However, still a number of shortcomings in the realm of governance and economic and trade reforms still persist in creating a conducive environment for attracting more foreign aid. First, the sluggish progress in the piloted performance-based management system, owing to inadequate fulltime staff, poor management, funding and facilities in the change management units in the public institutions, has been a major setback to the reform process. Also, transfers, promotions and the distribution of other career development opportunities within the civil service have yet to be institutionalised. Second, in the past, the conflict has forced many VDC secretaries to abandon their posts, curtailing development activities, taking a toll of the decentralisation process. Also, despite the peace agreement, the local bodies have not been able to spend their development budget due to local level conflicts and lack of consensus.

Again, although theoretically politicians and bureaucrats seem to agree on greater decentralisation, in practice, the centre has always been reluctant to do away with its powers to carry out any meaningful decentralisation. Third, the lowly paid public servants and deteriorating ethics and integrity are major challenges to fighting rampant corruption.Essentially, judicial reforms and FDI inflow have a positive relationship. Additionally, on the economic fronts too, deregulation of state monopolies, privatisation and financial sector reforms have been disastrously slow. Again, our efforts at realising the notion that aid should promote trade have not materialised to the desired extent. Obviously, these shortcomings contain our potential for attracting more foreign resources.

Increased assistanceTo conclude, in an era of economic diplomacy, increased foreign assistance is extremely crucial for undertaking development activities in Nepal. Despite some achievements made in the economic and governance reforms for meeting the preconditions for such assistance, further deep-rooted reforms are required to benefit from foreign aid. Indeed, as part of a global development strategy, Nepal will be in a position to attract more aid and stride towards accelerated socio-economic development in the future. Broadly, such aid money should be spent on reconstruction, rehabilitation and infrastructure development, peace and meeting people's basic human rights, gender and social inclusion and better service delivery. Indeed, Nepal must work hard for better alignment of assistance strategies, increased budget support and harmonisation of assistance and procedures, and ultimately it must focus on better results.

Source: The Rising Nepal, July 4, 2007

Labour Accord

Nepal and the United Arab Emirates (UAE) have signed a deal to arrange and regulate exchange of workers with a view to ensuring that Nepalese labourers working in the UAE are protected and conferred with the rights that are universally granted to the workers employed outside their own countries. This is the first bilateral agreement of its kind which has been agreed upon and initialled between Nepal and the countries of the Gulf. Although a similar accord was said to have been signed with Qatar at the time of the Royal regime some one-and-a-half years ago, it is, according to the Minister of State for Labour and Transport Ramesh Datta Lekhak, the first accord that entrusts legal status to the Nepalese workers employed in any country outside Nepal. The bilateral agreement comes into effect soon, and the salient features of the deal makes the government of Nepal and the UAE accountable for safeguarding the rights of the Nepali labourers and maintaining salary standards and contracting compulsory health insurance for them. Moreover, the accord provides the Nepali workers rights and the legal status to fight against attempts to encroach upon their entitlements.

The most important part of the agreement has been that it seeks to prevent improper practices and deceptive tricks by the private manpower agencies that tend to exploit the workers by demanding exaggerated fees, while providing false information about their working conditions in the host country. According to Minister for Labour of the UAE, Dr. Ali Bin Abdulla Al Kabbi, the deal confirms the importance of the supply and recruitment of the Nepali labour force on a firm foundation in accordance with the laws and regulations in force in both the countries. The positive aspect of the agreement has been that it defines manpower as temporary workers intended to be employed for a specified period of time as per the work contracts and indicates the rights and obligations of the employees and employers. As has been mentioned by the authorities of both the countries, the accord constitutes a milestone in protecting the rights and entitlements of the Nepali workers. Since the trend of the Nepalese people going outside and working there has been consistently on the rise, Nepal should seek to agree upon and sign similar accords with other countries including Saudi Arabia, Malaysia and so on. What matters significantly is not so much the signing of the accords as their implementation in the real sense of the terms.

Source: The Rising Nepal, July 5, 2007

Priorities For The Upcoming Budget

Amrit P. Shrestha

The budget communicates information about the priorities of the government. Each act in the budgetary process is important, not only for taking a specific decision (so much for this, less for that), but for the information conveyed to others who will alter their activities accordingly. The closest analogy to budgeting in the political arena is pricing in the market place. Price is the major signal to which people adapt in choosing what to buy and sell, produce and consume, undertake or abandon. These signals communicate more about what is valued than any other economic decision. While concentrating on the budget, we should not be thought of as abandoning the awe-inspiring multi-year plan, rather as seizing one opportunity to focus on an area of significant potential advance over current practices. The budget has to focus on those segments that need to be brought on track, like infrastructure development, agriculture and the social sector

Strategies:Our economy has been pushed into a downward spiral. Neither are the government agencies in the process of activating the development programmes nor are the politicians concerned. The overall scenario is disappointing, whether we talk about physical infrastructure or social activities. Our journey has just started, and compared to our neighbours, it is in the preliminary stage of development. The upcoming budget must address all of the multi dimensional parameters of the economy which are causing concern - highway networks, rural connectivity by roads/communication, power, drinking water, agriculture, irrigation, watershed development, provision of quality seeds, access to health/education and poverty alleviation. Every finance minister plans ahead to avoid any problems in the future by anticipating them. He tries to obtain a more desirable future by working towards it at the moment. Attention must be diverted to the United Nations Millennium Development Goals, which could be a guideline for achieving our own goals.When there is growth, there will be more tax revenue. Growth-oriented budget benefits a section of the population, and growth is also a part of investment. When investment is taking place, there is nothing to suggest that growth will not take place. Policies that serve to distribute income more equitably must, therefore, become as important as those designed to accelerate growth. The road to economic prosperity, self-sustaining growth and national well being, in other words, has been impeded by lack of capital and industry than by the whole configuration of social factors responsible for it.

With every announcement that reduces our taxes, we are happy while we fall sullen when taxes go up. However, the finance minister must try to reduce inflation, keeping it at a moderate rate of 4-5 per cent. Taming inflation without dampening growth, more effective delivery of social services and putting fresh impetus in the economy are other priorities. And policies have to be designed in a manner to enhance investment to lay a robust foundation for growth, and make investment avenues more attractive.Customs and excise duty cuts are disinflationary. The reduction in customs duty on key inputs would reduce the manufacturing cost and facilitate exports. Cutting import duties on industrial intermediates and raw materials will be incentives for the manufacturing sectors. And it would be a strong support for increasing the tax to GDP ratio. Unfortunately, Nepal has not been able to push with VAT. The tax has not played a significant role in enhancing economic process. The overall strategies have not helped achieve those targets as envisaged in November 1997.The tax rate has been increased time and again for nothing, and this does not get reflected in real revenue mobilisation. So the finance minister has to pay serious heed to increasing the tax base rather than increasing the tax rate. International experience tells us that the gradual lowering of the tax rate is an effective tool in achieving the desired goals rather than increasing it. Meanwhile, WTO norms have to be kept in mind while granting direct subsidies on agriculture and farm products.

This is also the right time to rewrite tax laws aimed at: improving the capacity to mobilise more revenue; combatting tax evasion; making the tax administration more professional/strong /job-oriented, and improving compliance and economic activity. Tax evasion provisions should be more stringent with tougher penalties. Budget allocation for infrastructure development and expansion of the IT sector, promotion of the concept of an International Financial Centre, and adoption of the private-public partnership (PPP) model should be a part of the basic development process.ChangeOne must accept that the budget is not the main vehicle for bringing about changes. One also knows by experience that financial assistance through internal and external source is a strong instrument for initiating such changes. All must, therefore, think from a long-term perspective rather than weighing the immediate pros and cons.

Source: The Rising Nepal, July 5, 2007

Unspoken Voices

Narayan Prasad Wagle

The silent majority does not come to the streets, does not chant slogans or take up arms to have their demands fulfilled. They just remain silent though they are in the majority. Political groups, hooligans and warlords claim to represent them, but the silent majority is usually unheard of, exploited and misrepresented. This is what is happening in the ever-complicated political scene of Nepal. There is a visible difference between what the people actually want and what the various political groups are demanding and the strategies they are applying to get their demands met.

FederalismAlmost all the political parties have projected federalism as the chief demand of the people, and this was the agenda that fuelled the aggressive protests in the terai. But if we look at the other side of the coin, the reality is completely different. A study carried out by the Asia Foundation some months ago demonstrated that only a small portion of the population had any knowledge about what the constituent assembly stood for. From this, we can infer that an even smaller portion of the population understands what federalism stands for. Then how are we to believe that the people have blindly supported the demand for federalism without understanding it? Even if they did, is it meaningful? Similarly, republicanism or the retention of monarchy has been projected as the major issue of the people in the CA polls and is placed atop all other agenda. However, the silent majority has little interest on the hackneyed issue since they see no direct link between the issue of retaining or abolishing the monarchy and the serious concerns of their daily lives. Their inability to see a link between the issue of monarchy and the their daily lives is sometimes described by clever political leaders as lack of political consciousness and ignorance and, hence, they emphasise the need for an awareness campaign. But the silent majority does not accept this notion that underestimates them. Though they do not know much about republicanism, they do understand that republicanism per se will not ensure that they will not have to die for lack of food, housing or health care facilities. Also that it will not ensure an education that is free for their sons and daughters.

They also understand that republicanism per se will not put a stop to the exodus of cheap Nepalese labour into the global market. For them, the right to life, education and basic health care facilities is more important than republicanism, federalism and the like. Probably, the silent majority will be happier with the inclusion of the right to life, right to education, right to attainable standards of health and right to work. Both armed groups and agitators are using strategies and tactics that go against the will of the silent majority while claiming that they represent the people. As we have seen in the past, general strikes and shutdowns of schools and transportation have been common weapons of both the agitators and terrorists. It is as clear as broad daylight that the public is spiteful about the general strikes and shutdowns of schools and transportation. In fact, these coercive methods in the name of pressing the government to fulfil their demands are attacks against the lives and liberties of the people. Then, why do they cling to such methods like a leech and shamelessly speak a sheer lie that their cause enjoys great public support? The motive is clear: their interest contradicts with that of the general public, and they want to fulfil it by taking undue advantage of the silent nature of the general public. Nobody has the right to misrepresent the silent majority, frequently referred to as the people. Only in a peaceful process of democracy can the silent majority have their say in national politics, especially through the exercise of their franchise. It is by the votes of this section of the population that unexpected outcomes beyond the arithmetic of renowned analysts are brought about. Otherwise, whether it is in so-called fake democracy of the elite or armed politics, the needs and demands of the silent majority will be ignored, and, as a result, the whole society becomes unstable.

Understanding the peopleAs it is the silent majority that strongly adheres to the norms and values of the society, disregard for this common lot results in lawlessness, and justice of the jungle. But will our political leaders, who turn a deaf ear to the loudest cries, listen and understand the minds of the silent majority? The date for the Constituent Assembly polls has just been set. It is time they went to the hinterlands to interact with the people rather than be bogged down by the demands of the elite.

Source: The Rising Nepal, July 5, 2007

Action, action

Successive governments have formed too many commissions and committees to look into the long-ailing public corporations (PEs) and suggest measures for turning them into cost-effective or profitable ventures. But not much concrete action has been taken to that end. If all those reports were put together, they would fill many shelves. The latest report, an interim one, has come from the five-month-old Corporation Reform Suggestions Committee headed by former industry secretary Dr Bhola Chalise. Unsurprisingly, it has concluded that most of the PEs are in an unenviable state. It has categorised them as bad and very bad, and added that both the privatisation and reform process for the PEs have stalled. Therefore, it has recommended the formation of a corporation reform commission to adopt policy for reform. Though the existing privatisation committee has representation from the political parties and the private sector, little has come of it.

The justification for this commission and for reform, according to the report, comes from the belief that in the present fluid political atmosphere, full-scale privatisation cannot move forward. As the interim government represents eight parties with different views on how to pull the PEs out of red, a consensus on the PEs’ outright privatisation may indeed be difficult to achieve at this juncture. However, even the Maoists may not be averse to the idea of starting the process of selling the shares to the general public. The symptoms of the disease are more or less common to all PEs, and the disease was diagnosed long ago. What is really needed now is not more committees or commissions, but concrete remedial action to bring the ailing PEs back to health. In this context, the great majority of the corporations have no option but to privatise. The government and bureaucrats, who cannot run the ministries and departments properly, cannot be expected to run commercial, industrial or financial enterprises professionally.

In the past, many reform measures were announced to revitalise the PEs but none worked. It is therefore hard to believe that any new reform measure without changing their ownership structure will now be effective at turning the PEs around. One or two governments also sought to put vigour into the PEs by hiring their chief executives on performance contracts, but that came to almost nothing. Poor performance of the PEs has a lot to do with the failure to exact accountability. For instance, government bureaucrats who occupy important positions as chairmen or members of the boards of the PEs or members of recruitment committees are not held accountable for their performance there. There has not been a consensus among the political parties either on exactly what to do with the PEs. Any government that came to power lacked clear vision and willpower to introduce far-reaching reforms. It treated the PEs as employment mills. The interim government can no longer afford to waste time on commissions or reports. The need of the hour is action.

Source: The Himalayan Times, July 5, 2007

Federal structure: Administrative units on ethnic basis

Shailendra Kumar Upadhyay

Jawaharlal Nehru University professor S D Muni needs no introduction for Nepali intellectuals and politicians because of his long association with political developments in Nepal. Muni is a well-wisher of Nepal and an ardent believer in people’s power and democracy. He believes in the special nature of ties between Nepal and India. For these reasons his observations on current Nepali politics merit serious attention.

During his recent Nepal visit, Muni suggested that the Tarai problem be given due priority to prevent the disintegration of Nepal. The people of Tarai have been raising their voice against their marginalisation since the advent of democracy in 1950. In spite of Tarai’s contribution to Nepali economy, the state has not treated them in a fair manner. Just as a token of gesture some people from Tarai have been picked for high-level posts but not as a matter of their rights. This has been resented by the people of Tarai and particularly after the success of Jana Andolan II, and consciousness of Tarai people has increased manifold.The commitment made by the eight party alliance to restructure the state on a federal basis has been widely welcomed but the question of the basis of the formation of the new administrative units under a federal structure is yet to be answered. At the same time, the question of representation in the Constituent Assembly and future parliament remains a sensitive issue.

While there is a consensus among civil society members that the country’s future administrative units have to be decided, as far as possible, on ethnic and linguistic basis, the political leaders are still creating confusion about the issue. Even the chief government negotiator has publicly denounced formation of future administrative units on the basis of ethnicity and language. This not only diminishes the credibility of the negotiator but also raises severe doubts about government’s intention.The Tarai belt has four prominent language groups — Maithili, Bhojpuri, Awadhi and Tharu, with Hindi as their lingua franca. Now, it has to be agreed that only the people of Tarai have the right to opt for either a single Tarai unit as a new administrative entity or four units based on language.

Similarly the question of administrative units in the hills and mountains has to be left to the wishes of the people inhabiting those regions. Although most of the mountainous districts have mixed populations, a particular ethnic community makes for the dominant part of a particular district. Naturally these ethnic communities would prefer creation of administrative units on the basis of the prominence of a particular ethnic community although the rights and privileges of other minority groups would have to be protected too. But to say that since there is no majority of any ethnic community in any district there is no need for units on ethnic basis is like trying to sweep the problem under the carpet.The fact that culture grows out of a particular language. For the protection of a culture the language has to be protected is a universal truth. It has to be accepted that new administrative units will use their own language and common link language to facilitate the participation of commonfolk in socio-political activities and promotion of their culture. The right to protect one’s identity must be recognised as a fundamental right of the people. Either those opposed to formation of new administrative units have to submit a viable alternative or they should accede to the demands of the Tarai people.

If the government adopts a policy of suppression of the Tarai agitation through force, such measures will boomerang by helping the extremists who want to see the country disintegrate. The same armed forces that assured the King they would be able to quell the Maoist rebellion in six months might try to persuade the present regime that the Tarai agitation could be thwarted by martial means as well. The politicians need to keep this in mind and must open up the vista for mutual understanding.As long as the government does not show its readiness to create new administrative units on the basis of ethnicity and language and discuss the merits of proportional representation, no meaningful discussions can take place with the dissenters and the question of free and fair CA polls will remain in limbo.

For their part, the ministers must learn to hold their tongue on controversial matters which can only be solved through dialogue. They also need to show their readiness to respond to the demands of the people of Tarai, indigenous groups and ethnic communities, dalits and women. The age of imposition of one’s idea on others has passed. The new awareness among people of their legitimate rights and privileges must be respected. There is no alternative to dialogue and discussion. Use of force is undemocratic and will create bigger problems. Recognition of the sovereign right of people is the only way out of the present crisis.Upadhyay is ex-foreign minister

Source: The Himalayan Times, July 5, 2007