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Finance Minister Bishnu Prasad Paudel is contributing to economic stagnancy. The price of this is being paid mostly by small and medium enterprises (SMEs). His focus is more on party politics rather than the economy, even though he has been successful in presenting himself as a private sector-friendly finance minister, at least when compared to his predecessor Yubraj Khatiwada. His political acumen perhaps helped him craft this image of an efficient finance minister, but that has hardly been the case. He has neglected the fact that government intervention and support in various sectors are most critical at this difficult time.

The government has reduced capital expenditure for fiscal 2020/21 by nine percent, the reduction attributed mostly to the Covid-19 pandemic-induced lockdown and restriction on businesses. Only 15 percent of total budget allocation for national pride projects has been spent in the fiscal’s first six months. These two examples indicate how little has been done so far and what a whole lot remains to be done in the current fiscal. But respective government agencies seem unconcerned, and this is where FM Poudel is missing the opportunity.

Poudel came to the position with no ambition for the economy. Probably, that is why less is expected of him. But history will not be kind to him when it assesses his contribution to steering the economy in these most challenging times. Since his appointment as finance minister in October 2020, he has been successful in boosting the capital market. As he completed his 100 days in the position, the share market soared, even as the productive sector struggled to recover from the pandemic.  

Unlike many of his predecessors, Paudel saw no value in presenting a complementary budget for the current fiscal. But that has led to confusion over possible government help for the hardest hit people and sectors. He has been saddled with a budget that was prepared by Khatiwada, who was not a favorite of the private sector during his stint as finance minister. The country is riveted on its uncertain political future and Paudel is thus being spared for not delivering on the economic front. This, in turn, will be in Paudel’s favor while his success as finance minister is assessed.

What he has achieved so far is negligible compared to the enormous task he has in his hands. For one, he needs to pump more money into productive sectors. But the budget’s mid-term review indicates public sector expenditure is going to remain dismal throughout the fiscal, hampering overall economic growth.

Poudel seems to be good at managing expectations of the private sector and development partners. But he has so far failed to come to the aid of job-seekers and businesses in need of easy access to finance in the pandemic-battered economy. Most of his time is going into managing the country’s political fiasco while his sole focus was supposed to be getting government agencies to maintain high public expenditure to keep the economy afloat in the midst of a looming crisis.

Although most of the economic indicators seem to be okay, there is a deep structural problem in our remittance-driven, consumption-led economy. This was the right time to address that problem in order to boost productive sectors and create more jobs. But as we head towards the end of this fiscal, the fear is that the economy could again re-enter the self-defeating remittance cycle.

Just as we do when talking about domestic politics, hyperboles are the order of the day when discussing international events. We talk of eroding democratic ideals the world over in an age of disinformation and creeping authoritarianism. As it gets harder to separate fact from fiction, people, we see, are plumping for nationalist autocrats who are experts at mining their attention. A newly-rich China is successfully exporting its illiberal ideals near and far. India, our closest friend and neighbor, is sliding towards sectarianism. What hope is there for Nepal, then, precariously lodged between the two?

So PM Oli runs roughshod over the democratic process and the new constitution, with covert support of the Indian establishment, according to some. (Earlier, it was China that was backing him.) Oli seemed to have cemented his hold on power by dissolving the sovereign parliament. The court, apparently, was already in his pockets. The constitution, meanwhile, was headed for a complete failure. Then came the Supreme Court verdict upending all his plans.    

An interesting aspect of the recent anti-Oli protests following his parliament dissolution were the symbols and slogans borrowed from abroad, most recently from Myanmar of all places. After the restoration of democracy in 1990, Nepal has been no stranger to mass anti-government protests. But the Burmese coming out on the streets against the all-powerful military rulers was a rare sight. Reminiscent of Nepal during the second Jana Andolan, Burmese civil servants have refused to work following the most recent military coup in the country as doctors have un-looped their stethoscopes and laborers have downed their tools.

Thailand is another case of an aging ruling establishment being out of step with the globe-trotting youths. Despite the country’s brutal lèse-majesté laws, millions have been protesting against the new monarch, a free-spending playboy who prefers to live in distant Germany. Coming back to India, the raucous democracy of over a billion souls has always been tough to tame. Nor are its civilizational democratic ideals easy to crush. The Modi era, as entrenched as it is, will pass, and sooner rather than later.    

China’s role in the spread of illiberalism can also be overblown. Most of its international relationships are strictly commercial, and not underpinned by any higher ideal. These ties can be sustained only so long as China can keep spending abroad lavishly. Even in Nepal, although we see some influence of Chinese money in our politics, we are far from being Hun Sen’s Cambodia.   

In fact, compared to other countries in the region, Nepal has always been a tolerant society, welcoming of outsiders. Perhaps a part of this owes to our variegated geography, which makes broad cooperation obligatory. In ancient times we acted as a bridge between two great civilizations, and we will continue to do so in greater or smaller capacity. Given our age-old coexistence of diverse faiths and beliefs, nor will it be easy to subdue our egalitarian sprit for any length of time.   

We have a vibrant civil society. New restrictions have been placed on sharing information online and on press freedom, and yet we continue to speak and engage openly. All kinds of innovative businesses are sprouting up, even amid the gloom of the Covid-19 epidemic. We now have motor roads connecting all districts and near ubiquitous access to mobile phones. Absolute poverty is in rapid decline, if only due to remittance. And because we are open by nature, we also continue to learn and adapt from events outside our borders. Our politics cannot but reflect the society we live in.

Three and half years ago, the road in front of the house I lived in at Sanepa, as well as the one next to the school my six-year-old son went to, were dug up for expansion. It was a frustrating experience. A peaceful residential colony with many schools for small children was turned into a dusty construction site for months, causing traffic snarls and sandstorms. It was dusty in the dry season and muddy after rains.

We raised voices, we questioned the authorities, and I even wrote about it in one of my columns then. Still, it did not come as a surprise when authorities said they had run out of budget midway, and the dug up road remained as they were for over a year.

It would of course be too much to expect a 50m stretch of road to be expanded in a day, and that another section would be dug up only after the previous stretch is completed. We do not have a culture of keeping people at the center of planning.

The new constitution, promulgated some years ago after decades of conflict, redefined the state-people relationship: from centralization to decentralization. But that has not changed how authorities treat people. They still behave like rulers, not like service-providers.

Federalism was supposed to shake up this status quo, but it did so only on paper. In reality, the bureaucracy is too obsessed with preserving its power, and is fighting hard to not let go of it. And our politicians are playing dirty games using this character of state mechanisms, and criminal businesses are reaping benefit using both of them.

Disgruntled by the state of our capital, and espying an opportunity to make an impact through the local bodies created after local elections, I jumped in when called by the mayor of my hometown to work as an advisor.

Three years later, at the heart of the town in Waling Municipality in Gandaki Province, the main residential area where around 5,000 live has become a battlefield. The municipality dug up a portion of the Siddhartha Highway that falls in this municipality for expansion two years ago and it hasn’t yet been worked upon due to lack of budget. Authorities in the Road Department have informed in unofficial conversations that the cabinet minister from the constituency, Padma Aryal, has warned them not to undertake any work on the roads that is not initiated by her. The mayor of the municipality, Dilip Pratap Khand, pushed ahead with this highway expansion project, clearly without enough resources at his disposal. The fact that the mayor is from Congress and the minister is from the ruling faction of the NCP has made it a political fight.

While local NCP leaders deny that the budget was withheld at the minister’s instruction and blame the mayor for initiating an insensitive road expansion without enough resources or a definite plan of action, the mayor’s supporters put the blame squarely back on the minister.

A short distance away, in a place called Bhalu Pahad in Putli Bazar Municipality, the Road Department initiated another expansion almost six months ago. It has come out in a local newspaper that the contractors involved were trying to make extra money by selling stones in Pokhara, which in turn is resulting in unnecessary delays in the busy highway, disrupting traffic-flow for five to six hours a day.

As is becoming clear, having a constitution promulgated by an elected assembly of the people is not enough to sort out the issues of governance. People are not at the center of our planning. When Waling residents question about the dusty roads, the mayor answers insensitively, “We have to learn to take pain to gain something”. Such irresponsible attitude has, in fact, been the hallmark of most of our political leaders across the spectrum.

The past three and half years were a steep learning curve for politicians, bureaucrats and people alike. It should have been a golden era of nation-building, development and progress. But looking at how the government, people, the media and the party systems conducted themselves in the years that followed the course the nation took has been disappointing, to say the least. We all learned the wrong tricks and fast.

The useless and senseless political tussles, indifference of the general public, especially the youth, and the haphazard character of our governing mechanisms are taking us to the edge of a cliff.

India’s Minister for External Affairs S. Jaishankar pitches for a realism-based Indian foreign policy in his new book, The India Way. The book dwells on India’s neighborhood, in depth, but it does not mention Nepal—not once. He writes of the need to revive SAARC in order to rekindle the spirit of regionalism in South Asia. Yet as that is currently not feasible because of an obtrusive Pakistan, he advocates for the promotion of alternate regional frameworks like BIMSTEC. 

Having previously served as India’s ambassador to both US and China as well as its foreign secretary, Jaishankar has had a ringside view of the power dynamics between the most important global actors today. He foresees more friction between these states as they increasingly turn inward. In this self-centered world order, India, he says, should abandon its traditional non-alignment for multi-alignment—ditch its old ideological hangovers in order to increase its options. 

He thinks India should play a non-reciprocal and more active role in South Asia and help regional connectivity. Separately, as a sitting foreign minister, he cannot be critical of the current Indian establishment or of other big international actors he has to deal with daily. Yet China’s rise, its greater sway in India’s immediate neighborhood, and China’s evergreen friendship with Pakistan clearly bother him. 

He wants to ditch the old ‘Dogmas of Delhi’ and forge ahead with a more pragmatic approach. Yet the fact is that Delhi’s dogmas continue to have great sway in South Asia. Ironically, in a perfect illustration of the southern neighbor’s big brother attitude, then Indian foreign secretary Jaishankar had come to Kathmandu in 2015 to lecture Nepali leaders on constitution-making. The dominant perception in New Delhi is still that South Asia is India’s inviolable backyard. 

Not that Jaishankar in unaware of the contradictions in India’s current foreign policy outlook, as he also flags in the book. But he says some contradictions are inevitable as India pursues a more realistic foreign policy. For instance, Prime Minister Modi is as comfortable jetting into Islamabad unannounced to greet Nawaz Sharif on his birthday as he is dropping bombs on Pakistani soil in retaliation for acts of terrorism.  

Of course, Jaishankar also entirely sidesteps the rise of Hindutwa and its impact on India’s foreign policy. Amit Shah’s alleged remarks about establishing BJP governments in Sri Lanka and Nepal aside, the BJP government in India does want to export Hindutwa to Nepal and reestablish the old Hindu state. Jaishankar also skips the rise of illiberalism in India and its direct or indirect export in the neighborhood. Oli for one is learning rather quickly from his nationalism-whipping, rule-bending Indian counterpart.  

There is also a clear hint that India will work closely with the US under the Indo-Pacific Strategy, as well as with the rest of the QUAD members, in what amounts to an unacknowledged admission of India’s limited capabilities to check Chinese designs in the region.  

Jaishankar is right that nationalism has gotten a boost in the post-covid world where everyone is more and more looking after their own interests. Therefore India too should not resist, he suggests, from baring its fangs in pursuit of a larger national interest. (Perhaps the blockade on Nepal was a part of the same game-plan.)

Wonderful that Jaishankar envisions a South Asia united by Indian non-reciprocity and connectivity initiatives. Yet there has always been a gulf between what India says and what it does. In fact, India’s problem with delivery is one reason the likes of Nepal, Sri Lanka, the Maldives and Bangladesh these days rely more on China to get things done. That perception of India being an unreliable friend will be tough to change.