Key messages for rebuilding Nepal – from Lost in Transition

The pursuit of a prosperous and equitable society does not follow any fixed formula or linear progress. There are many trials and errors, ups and downs and pragmatic course corrections along the way. In an increasingly globalizing world, there are some tested and proven common economic policies and global norms of democracy, human rights and good governance that apply to all countries. These need to be judiciously applied while harnessing some unique comparative advantages of individual countries and communities.

In my book Lost in Transition: Rebuilding Nepal from the Maoist mayhem and mega earthquake, I offer some suggestions along these lines for overcoming the prolonged political transition and moving on to build a more prosperous and equitable society in Nepal. While efforts need to be made in many areas to satisfy the needs, aspirations and rights of people in different walks of life, I believe there are six catalytic interventions with the greatest positive multiplier effect for Nepal’s all-round development:

Six Catalytic interventions

  1. Hydropower – Harnessing Nepal’s abundant hydro-power has the greatest potential for uplifting all sectors of Nepal’s economy – energy, transport, industry, telecommunications, tourism, modernization of agriculture, better delivery of basic services; employment creation and environmental protection.
  1. 2. Manpower – Quality education and basic services – Healthy, educated, and skilled human resources are sine qua non for any society’s development. Quality basic and technical education can help Nepal harness a unique demographic dividend for development during the next three decades. Universal access to quality basic services must be pursued vigorously, using the UN-approved Sustainable Development Goals as a guide and harnessing creative public-private partnerships.  

  1. 3. Tourism – With the world’s highest mountains, beautiful flora and fauna, great biodiversity, rich cultural heritage and a tradition of warm hospitality, Nepal has the potential to become a prime tourist destination of the world. Our ambition must be to attract 10 million tourists – half of them Chinese and Indians – for mountaineering, trekking, adventure sports, yoga, spas and religious pilgrimage, especially among the world’s Hindus and Buddhists.

  1. 4. Migration for development – Foreign employment and remittances will continue to be an important life-line for the Nepali economy for at least another decade or more. Until we are able to generate large-scale employment by revving up our domestic economy, ensuring safer migration of more skilled labourers must command a high priority, as should incentives for more productive utilization of their remittances.

  1. 5. Regional growth poles and urban development – Nepal’s newly adopted federal system should be utilized to promote balanced regional development; experiment with better urban and spatial planning; foster healthy competition among provinces for rapid economic growth and social progress, with due regard to environmental protection. If handled wisely, federalism can be a blessing for development – if not everywhere, then in some states that can be shining example for others to emulate.

  1. 6. Flagship projects of national importance – Nepal’s size, topography, and location dictate that there should be some flagship projects of national importance that cut across boundaries of federal states and their parochial concerns. These would include some mega-projects, such as those identified by the National Investment Board  – e.g. major hydro-power projects of above 500MW; national highways and railroads; a second international airport and regional airports; special economic zones to attract foreign direct investment; disaster preparedness and response capacity involving better use of the Nepal Army and APF, etc.

There are many other areas of public service, social welfare, private enterprise, agriculture, community development, etc that any modern state must develop. But I see the above six areas as those with the most catalytic impact and multiplier effects for Nepal’s rapid national development.

Nepal’s great potential for rapid socio-economic development is, however, seriously thwarted by six major constraints and challenges. Unless Nepal can overcome these deep-rooted challenges, it will continue to under-perform in terms of development and remain an unstable and conflict-ridden country.

Six major pitfalls

  1. 1. Primacy of politics over economics – Nepal has been so engrossed with continuing political transition, and searching for the right political system for over six decades, that it has missed many opportunities for rapid economic development. For Nepal’s many Marxist-Leninist-Maoist thinkers who believe in the inevitability of a Communist utopia in the long run, after passing through the stages of feudalism, capitalism and socialism, all other systems are considered only transitional. But even liberal democrats vacillate in experiments with different fads of political systems and economic philosophy. As a result, Nepal ended up with a fusion of the worst elements of the two systems: crony capitalism instead of a more enlightened welfare capitalism, and party-based cartels and syndicates regulating public and private enterprises instead of democratically-functioning regulatory bodies. The consequence of this has been that bad politics always trumps over good economics; ordinary consumers suffer; competition, innovation and enterprise are stymied.
  1. 2. Focus on what divides us than what unites: To gain support from certain historically marginalized communities, Nepal’s Maoists and some ethnic and regional groups tend to harp on what divides Nepalis by caste, creed, gender, geography and economic status, than what unites us all – the common pursuit of equitable prosperity. Far from being progressive, this divisive rhetoric makes people look backwards, focusing on rectifying injustices of the past rather than building a brighter future. It fosters radicalism and militancy for retribution rather than building broad-based alliances that are essential for sustainable progress. The long delay in drafting Nepal’s new constitution and the violence and discord that erupted in the process, are directly linked to this divisive phenomenon. If cool heads do not prevail, institutionalization of federalism is likely to prolong Nepal’s political transition and further delay economic development and social progress.
  1. 3. Corruption and nepotism – Corruption and nepotism are not unique to Nepal. To some extent, we find them in all countries.  However, Nepal seems to have reached a new level of tolerance of these practices as acceptable norms rather than shameful exceptions. Officials in government as well as the private sector openly solicit and offer bribes as routine transactions. Those few who do not, are viewed as naïve and foolish. Those who acquire their wealth and positions through corruption and nepotism flaunt them publicly without any sense of guilt or embarrassment. Even Nepal’s powerful counter-corruption commission (CIAA) is alleged to be a hotbed of corruption. Constitutional, legal, political or administrative reforms alone are unlikely to change this, unless there is a profound ethical transformation and renaissance in the country.
  1. 4. Obscurantism of ultra-left and ultra-right – Nepal’s ultra-left and ultra-right forces thrive on conspiracy theories, seeing imaginary enemies, and spouting ultra-nationalist slogans to obstruct development projects, especially those funded with foreign investment. The main reason why Nepal’s massive hydro-power potential has not been harnessed for the development of the country is because of militant opposition, especially of radical leftist trade unions that tend to be instinctively anti-Indian. It does not help that from time to time India imposes trade and economic blockades against Nepal, and plays favours for or against different sets of politicians. But Nepal’s inability to curb militant trade union activism and win the trust of foreign, and even domestic investors, is a real impediment to rapid economic development.
  1. 5. Impunity and glorification of violence  – Historically there has been considerable structural violence in Nepali society against women and children; and abuse and exploitation of Dalits, Tharus and some other marginalized communities. However, in the name of countering such structural violence, the Maoists took glorification of revolutionary violence to new height claiming that we must destroy the old systems and institutions before we can build new ones. Destroying even democratic institutions, defying the rule of law, instituting kangaroo courts to settle scores, and administer physical punishment including elimination of their enemies, rivals and critics became part of their policy of kramabhangata.  The state security forces too retaliated in kind. Thus, massive violation of human rights and crimes against humanity perpetrated by both the Maoist and the state security forces have gone unpunished. The Truth and Reconciliation Commission has been made toothless.  Peaceful development is not possible where the rule of law is so flagrantly violated and impunity is condoned.
  1. 6. Cumulative impact of poor governance – Each one of the above five factors are serious impediments to development, but cumulatively they become a formidable challenge to overcome as one reinforces the other. The experience of most other countries that have achieved rapid economic growth and sustained social progress indicates that the most important factors for their success have been a combination of good governance, rule of law, political and social stability, under a broadly democratic framework. At present, Nepal is sorely lacking in many of these ingredients for success.

Despite these formidable constraints, I am very optimistic about Nepal’s development prospects in the medium to long run. I suspect that it will take another five to ten years for Nepal to reach a tipping point to overcome our obsession with political transition and really focus on economic prosperity, Two main reasons for this delay are the two new experiments we have introduced in the new constitution that will take time to be tested and revised before they become fully functional: a) federalism, and b) the likelihood of weak and unstable coalition governments because of proportional representation without any threshold for political parties to be represented in the parliament.

Here are my six reasons for optimism in the medium to long-term:

Rationale for optimism

  1. 1. Young Nepalis want results not promises – Having experienced all kinds of political experiments with rosy promises and catchy slogans but little to show in terms of practical results, the people of Nepal, especially the youth, are no longer satisfied with what most of Nepal’s existing political parties have to offer, but they have not found any alternatives to rally around. We have reached a tipping point where alternatives are bound to emerge – perhaps not in the form of traditional political parties – nor the so-called “New Force” touted by a tainted old politician – but as various social and entrepreneurial movements that will eventually lead to reshaping existing parties and creation of new ones. Several factors will influence this greatly – including increased exposure of Nepalis to forces of globalization because of massive labour migration; the communications revolution; and increased education and awareness of people, especially youth, and empowerment of women.
  1. 2. Democracy from below – We have not had local elections for almost two decades. Current national leaders came to prominence not based on performance and results at community level but because of their activism as student leaders and protestors against past regimes.  Some of them are simply descendants and relatives of past leaders. Had the Maoist insurgency not disrupted local elections, by now we would have had a whole new crop of leaders at the top with a track record of real accomplishments at the local level. We can expect the emergence of a new generation of leaders with result-oriented pragmatism replacing today’s ideologically-driven political honchos. Nepal will prosper not because of a single charismatic political leader or a benevolent dictator from the top, but because of thousands of pragmatic local leaders rising from villages and towns across the country.
  1. 3. Impact of globalization – Many Nepalis are now exposed to development trends around the world and are introducing innovative ways of tackling problems. We are already seeing examples of this in the private sector and in the NGO community in education, health care, e-commerce, etc. Currently, the most talented Nepalis are not interested in joining politics or government, but this is likely to change. We saw a glimpse of this after the 2015 earthquake in the spontaneous activism of Nepali youth from all over the world springing to help their suffering compatriots in many creative ways. I see this phenomenon expanding in other fields and helping to reshape Nepal’s economy, social services and ultimately politics as well.

  1. Women’s empowerment and youth awareness – After centuries of oppression and disempowerment, the girls and women of Nepal today are becoming increasingly better educated and aware of their rights. Many women-led organizations like the Mothers’ Clubs, the Female Community Health Volunteers, the Paralegal Women’s Groups, etc provide among the most enlightened leadership at the community level. Such female-led organizations tend to be less partisan than most male-led institutions. With the Constitutional provision of affirmative action ensuring significant women’s representation at all levels of the government, I believe we will begin to see the government being more responsive to citizens suffering, yearning and aspirations.

  1. 5. Goodwill of international community – Many donors complain that Nepal’s absorptive capacity for development assistance and investment is low, decision-making is slow and propensity for corruption is high. This is mainly because of the culture of sharing the spoils or political bhāgbandā and the undue influence of trade unions acting as cartels and syndicates thwarting innovation, competition and smooth project implementation. Nevertheless, Nepal is lucky to enjoy very strong friendship and support of many international development partners. In some areas, e.g. in reduction of maternal and child mortality, community forestry, etc Nepal has actually made commendable progress. If we can put our house in order, ensure greater efficiency and transparency, better rule of law and come up with some sensible, ambitious reconstruction and development plans, we can expect generous support and solidarity from the international community. The fact that Nepal is strategically located between two of the world’s largest and fastest growing economies, can also be harnessed for Nepal’s great benefit. 

  1. 6. Seeking identity in prosperity – In the past decade, identity politics, especially in the context of the federalisation of the country, has been politically destabilizing and economically counter-productive, especially to the historically marginalized communities themselves. The fact that parties advocating identity-based federalism lost badly in elections in what should be their strong-holds, shows that Nepali voters are more discerning and mature than some of their political leaders. Like people all over the world, what motivates Nepalis is the maximization of prosperity for themselves and their children. As pragmatism for prosperity displaces the divisiveness of identity politics, it will augur well for Nepal’s accelerated development.

Based on these considerations of a) Nepal’s great potential for development, b) the formidable challenges that are currently slowing down the country’s development, and c) the unfolding of the optimistic factors to overcome the challenges for accelerated development, I am confident of Nepal developing into a prosperous and egalitarian nation. By 2051 when Nepal celebrates the centennial of the arrival of democracy in 1951, I expect it to be an oasis of peace, one of the world’s premiere tourist destinations, whose citizens will make their presence felt in the world’s most influential A-list institutions as prominent academics, artists, businessmen, philanthropists, scientists, sports stars and other professionals.