These days, two questions are so prominent regarding the socio economic development of Nepal. First, how can the good policies practiced by various successful countries be implemented to strengthen the internal economy? And second is why the development efforts failed to attract youth in the mainstream? To find the answers, we need to identify the way of achieving fruitful results according to the new generation’s desires. In the context, about the status of socio-economic development, currently, we can find three types of opinions.
The first view claims that the country has made significant progress from a socio-economic perspective. The second logic is negative that denies the first view. This logic did not see any adequate space for the future development of youth and the coming generation. The third view is mixed; and it compares the economic and social progress between past and present period and argues that some results have been achieved but it is not enough in comparison to other countries including neighbors; not enough as the demand and desire of the conscious people including new generation. This view is more realistic and fair since it shows the picture of yesterday's work, progress, and results as well as shortcomings and inadequacies of the past period. Therefore, to draw concrete conclusions, it will be better to divide Nepal’s development into different time periods.
Until 1956, the length of motorable roads in the urban areas of Nepal, basically in Kathmandu, Birgunj, and Biratnagar was 500 kilometers, out of that only half could be used throughout the year. There were two railways, Raxaul-Amlekhgunj and Jayanagar-Bijalpura, 130 kilometers long in aggregate. A ropeway of 67 kilometers was in operation from Bhimphedi to Kathmandu. There were two small canals named Chandranahar (Saptari) and Juddhanahar (Sarlahi) for irrigation purposes built by the government. Total hydro electricity generated was 3100 KW. In terms of health, there was Bir Hospital and Naradevi Ayurveda Hospital only. At that time, there were only four dozen high level educational institutions including Durbar High School and Trichandra College. The number of primary schools was near about four hundred. The literacy rate was below five percent.
Even until the mid-decade of 1963, the development of physical infrastructures was less than a dozen. At the national level, the Tribhuvan Highway, Arani Highway, Prithvi and Siddhartha Highways were in operation but Raxaul-Amleshgunj railway was already closed. There was no electricity except in cities such as Kathmandu, Birgunj, Biratnagar and Bhairahawa. Until the 1970s too, Indian land had to be used to reach many parts of Nepal. By 1990 too, the length of the road, irrigated area of land and power generation capacity were 7,000 kilometers, 493,000 hectares and 238 MW respectively. The total number of schools was 2,1826 and the health institutions reached 1,100. During this period, the literacy rate reached 30 percent and the average age reached 55 years.
By the middle of July 2024, the length of the road reached 36,000 kilometers, the area of irrigated land was registered to 1.6m hectares and the renewable energy (electricity) capacity had increased by 14 times and recorded to 3,336 MW. In terms of social infrastructure, the number of schools and health institutions are 35,447 and 8,746 respectively. Now, the literacy rate is 77 percent and the average life expectancy rate is 71 years. The number of people below the poverty line has decreased to 20 percent, which was 49 percent in 1990. However, this poverty rate is the highest among South Asian countries.
In this way, during the three and a half decades after 1990, in terms of numbers, Nepal has made significant progress in the areas of physical and social infrastructures but the achievement is not satisfactory in terms of quality and adequacy. Because of the total roads in terms of transportation, the percentage of black and gravel roads is 23 and 24 respectively; remaining is unpaved, which can only be used by vehicles for a few months. From a safety point of view too, the condition of the roads is poor. On the other hand, large vehicles carrying goods or passengers to Kathmandu from the eastern part of Chitwan have to travel an unnecessary distance of about 200 kilometers. The additional economic burden or cost created by this has adversely affected the competitiveness of the entire country and made daily life expensive. There is no significant progress in railways; ropeways are closed. Cable cars built by the private sector are used only for tourism purposes; those are not suitable for daily and business life. More than a dozen national pride and transformational projects are incomplete; the cost is increasing every year. Some projects that were supposed to be completed in five years have not been completed for 15 years, the initially estimated cost has not only doubled but also increased by six times. The achievements mentioned above, in comparison to today’s needs and standard of developed countries, it is clear that we are lagging behind. The per capita income in 1990 was $186, in 2024 this figure increased eightfold to $1517, but due to rapid depreciation of the Nepalese currency against the US dollar it could not strengthen the purchasing power of the people. In terms of region, the per capita income of Bagmati Province was $2,600, while that of Madhes Province was limited to $932, which is less than that of Karnali. This gap has increased dissatisfaction in people.
Comparing neighboring countries, according to the World Bank, Nepal’s per capita annual income is $1,500, while the average per capita income of South Asia is $2,700. The per capita income of the Maldives is almost nine times higher than Nepal’s income. Bhutan’s figure is $3,900, while India’s income is at the average level of South Asia. Bangladesh and Sri Lanka’s income is $2,600 and $4,500, respectively, Nepal is at the bottom. All these matters may have made the people frustrated.
Against this backdrop, in order to drive the economy in line with the existing consciousness of the society and to move it in the right direction, on the one hand, it is necessary to change the constitution radically and on the other hand, drastic change in governance, systems, processes and procedures keeping the goal of optimal use of resources through good governance and effective management. In fact, the constitution is expansionary, because it increases the cost of state operation and demands a lot of financial resources rather than yielding resources.
The issue of self-reliance should be taken in mind; because, the development of technology has dismantled the foundation of a self-reliance of the global economy. Nepal’s current economy is like a dependent one, it would be practical to make it interdependent; since currently, and building a self-reliant economy is just ideal thought where a country fulfills all the economic, social, and structural needs of its citizens through its own production and management without relying on foreign trade, aid, or investment.
In today’s era, the economy cannot be completely self-reliant. China, USA, Japan, and Singapore are also not completely self-reliant. It is practical for Nepal to think of becoming self-reliant in food and electricity sector-wise. So, it is the right time to be proactive to overcome internal contradictions, conflicts, and inefficiencies and work to establish strong interconnections between Nepal’s economy and the global economy. This needs a multifaceted effort.
