The ruling Nepal Communist Party (NCP) leaders have sabotaged this country’s future again. The new political turmoil will inflict a big economic cost and hold economic development back. The government had set a target of graduating from the list of least developed countries in 2022, and becoming a mid-income country by 2030. Both goals have become unachievable. The economy that was already suffering due to the pandemic has been pulled into further uncertainty with the parliament’s dissolution. We no longer have a conducive environment to be a vibrant economy by achieving double-digit growth over the course of the next decade.
The government formed on the back of a two-thirds parliamentary majority has failed to deliver on its electoral promises. People voted for prosperity and development that was projected as a byproduct of political stability. Although the link between political stability and economic development is unclear, people voted in the general elections to achieve both: or more specifically, to achieve prosperity by the way of political stability. This process has been halted and Nepal will now struggle to achieve economic sustainability and development.
The country has been trying to become a moderately developed country by following the prescription of development partners without working out whether the prescription actually made sense in our context. Even far-left political parties in Nepal seem willing to implement the Washington Consensus. Yet the country has been unable to make much progress in utilizing available resources. It is often forgotten that development is achieved based on effective implementation of policies and programs and not what model a country adopts.
One of the projections, especially after the promulgation of new constitution in 2015, was that Nepal would also join the league of Asian countries that have been progressing regardless of their political frameworks. But it is worth asking: In which area has Nepal progressed in the three years since the formation of the Oli government? As 2020 comes to a close and the world starts inoculating itself against Covid-19, Nepal has entered a new and needless political battle. No one is sure if federalism, considered a means for inclusive economic development, can be sustained. The new constitution that lays out the foundation for federal administrative system has been repeatedly undermined by the major political parties as well as the government. Against this backdrop, its institutionalization is up in the air.
The fundamental question is: Can Nepal overcome this chaos to continue on the path of economic development over the next one decade? Recent political mess complicates this journey. Even if the process continues, it will be tall order to achieve the anticipated double-digit growth that would have helped Nepal be a mid-income country by 2030. Setting up new goals will take time and by then it may be too late. The interest of our neighbors could shift elsewhere and Nepal could be left behind in the region.
What can we do to help the economy recover from the pandemic’s impact and the political chaos? The least Nepal can do at this time is to let the bureaucracy work unhindered to take forward the country’s economic agendas. Yet that too is unlikely as our bureaucracy and state apparatus are thoroughly politicized.
When Nepal emerges from this chaos, the dynamics of economic development would have vastly evolved in the post-covid world. One could argue that there would still a government in place to carry forward economic agendas. But then this government would be consumed by petty politics and have no time for vital economic issues and delivery. This missing focus on economic development in turn will imperil the country’s future.