Nepal is still among underdeveloped countries, characterized by high level of poverty, minimal economic growth, inequality and unemployment. The economy’s size is $26 billion while per capita income has reached $1,400. But 30 percent people are still under the line of poverty.
Over the past three decades economic growth has averaged under five percent. The increasing imports and declining exports has badly hampered our balance of payment. The class structure of the society is changing and the role of the middle class growing. Yet we have been unable to use this fact to draft our economic policies. In every area, we are more and more dependent on outsiders, especially India.
We have been unable to make electricity a base for national prosperity. With a history of over 100 years of hydropower, we have been able to generate only around 1,000 MW in this time. We still consider agriculture a foundation of our economy and yet its share in overall economy is steadily declining and agricultural imports are increasing. There is a fundamental contradiction here.
On the one hand, we say that agriculture is the foundation of our economy and on the other, we have been unable to rise above subsistence agriculture. The economy is completely dependent on foreign employment and remittance and the country is becoming a big hub for constant consumption. Corruption is increasing, as is evident in the country’s steady decline in the Corruption Perception Index, and the country is slowly going into the hands of crony capitalists.
To take the country out of this morass and to achieve the desired development and prosperity we first need a clear framework for national prosperity. What kind of prosperity are we aiming for? How can we get there? What are the main hurdles and conditions? We need clarity on these fronts. The main determinants of prosperity are infrastructure development, increase in industrial output and its judicious distribution, sustainable harnessing of resources, people’s emotional satisfaction, etc. Prosperity is basically economic development that makes people happy.
This happiness comes not just from an increase in incomes but also from quality education, health, and a betterment in a person’s lifestyle and social standing. Here it becomes relevant to discuss Naya Shakti party’s political and procedural course. Our ultimate goal is ‘developed socialism’, to achieve which we need ‘inclusive prosperity’. And in order to arrive at this kind of prosperity we believe there has to be ‘inclusive, proportional and participatory democracy’, which in turn calls for ‘sovereignty’ and ‘good governance’ and ‘high ethics’.
Governance is basically a way to run state affairs, and a system that is both answerable and within legal bounds. But how does the government get these rights and how does it exercise them? These are important questions. In a democracy, such rights can be earned and exercised only with mass approval.
According to American political scientist Francis Fukuyama, governance is the ability to draft and implement laws and to work in public interest, whether or not the government is democratic. This also determines whether there is good or bad governance. Hence, for there to be good governance, it is vital that all organs of the state are transparent and work according to democratic principles, and that all these organs are directly answerable to the people.
The quality of governance hinges on whether a government is ready to meet the expectations of the common folks rather than only work for a particular interest group. This is why democracy and good governance are related and help each other.
At the 2005 UN World Summit, world leaders recognized good governance as indispensable for economic growth, poverty reduction and sustainable development. Also, without good governance there can be no inclusiveness. Unless common people’s access to information is guaranteed by making them part of decision-making, Nepal will never be able to achieve the kind of prosperity it desires.
Good governance and prosperity are also closely linked. The reason Nepal has not been able to make rapid economic progress is largely due to lack of good governance. A government is an indispensable unit that has to maintain relations with market, citizens, public institutions, peoples’ representatives, civil society and private sector. The more these relations are cooperative and transparent, the higher the chances of prosperity. Yet these relations in Nepal have always been iffy.
This is why, no matter how much we discuss development and prosperity, unless we can work out its determinants and frameworks, there can never be real prosperity. When speaking about prosperity, we should at the same time address the questions of good governance, inclusiveness and sovereignty. It is our corrupt governing system that is the main impediment to prosperity. But how do we improve upon this system ?
The author is Naya Shakti central committee member and an economic analyst
