Economic Realities and Confusing Politics of Nepal

An investment friendly environment is being created, which is likely to, unless polluted by political confusion and instability, bring in huge resources from India as well as other countries. Let us, therefore, not waste exceptionally too much time o

Sept. 26, 2014, 5:45 p.m. Published in Magazine Issue: Vol: 08 No. -8 September. 26- 2014 (Ashoj 10, 2071)

People are now becoming increasingly skeptical about the possibility of getting a new constitution on the promised date because the major political parties are again poles apart on the major issues that could not be resolved in the first Constituent Assembly(CA).Constitutional-Political Dialogue and Consensus Committee(CPDCC) chaired by Baburam Bhattarai could not resolve differences on the two contentious issues, system of governance and state restructuring, and submitted an incomplete report, sticking to CA calendar. Somewhat soft appearing political parties have now reverted back to their previous stance on system of governance and federalism. Notwithstanding some differences between them, NC and UML are jointly confronting UCPN Maoist whose leader Prachand has also managed Madhes-based parties to rally around him. The much talked about High Level Political Committee (HLPC) also could not be formed as the two parties in government could not agree to the proposal of main opposition party that it should be chaired by Prachanda without any provision of rotation and it should include representative of their current allies. This refusal by NC and UML seems to have offended Maoist leaders who now seem to have stuck to their stances of first CA over contentious issues. Since major parties are not showing signs of flexibility to resolve these issues that caused the sad demise of the first CA, people are utterly confused and disappointed. Another discouraging factor has been the cancellation, put off indefinitely, of the much talked about All Party Political Conference demanded by CPN- Maoist which boycotted the new CA elections and was left with no recognized platform to provide inputs to the constitution making process in a formal manner. The three major political parties had agreed to convene such a meet after much heated inter and intra-party debate for and against such a gathering. It is said that the CPN-Maoist and its affiliates decided to stay away from the meet after the three major parties rejected their demand for the settlement of all issues of the peace process, statute drafting and their queries related to national politics through this conference. The decision not to participate surprised top leaders(Koirala,Khanal and Prachanda) who were waiting in the pre-fixed conference room for CPN-Maoist leaders, after being assured by no less a person then Mohan Baidya earlier in the morning on Tuesday(September 16) that they would join the conference after holding the internal party meeting. Many of us were wrong in thinking that this meet would provide Baidya and his followers an opportunity to formally put before the concerned their views on the contents and substance of the new constitution. It may be noted that a day earlier Kamal Thapa, RPP-Nepal president, had announced their decision not to participate in the conference, terming it a meaningless gathering. Following more or less his line, Maoists led by Baidya a day later decided to boycott it, saying the gathering was just a publicity stunt orchestrated by the government. One would think Maoists would do well by officially registering their reservations in the meeting that PM Koirala worked hard to convene. In the midst of these kind of setbacks, however, confused commoners have found a ray of hope in the observations of CA members, mostly young ones, that parties will continue efforts to settle disputes and work on the constitution drafting simultaneously so that promulgation of the new constitution is possible by January 22, despite failure to meet the September 22 deadline to forge consensus, if contentious issues are resolved in the next three weeks. Following the deliberations of 151 CA members on the report presented by CPDCC, the CA gave it until September 30 to resolve the much disputed issues. Let us hope committee chairman Baburam Bhattari   succeeds this time in submitting within the extended time a complete report without any issue left to be further worked on. It is encouraging to find some political leaders still hopeful about preparation of the constitution by the deadline even when Legislature Parliament’s business have been obstructed since August 29 and UCPN-Maoist has threatened to take to streets over issues related to formation of HLPC.We have no choice but to be hopeful about the speedy resolution of different issues soon after, if no earlier, PM Koirala  returns home  from New York where he is scheduled to address the 69th session of the UN General Assembly.  Let us not forget that we have wasted lots of time quarreling over political issues, often ignoring the economy, and it is already too late for us to pay proper attention to our ailing economy because countries all over the world are trying to promote trade and investment between and amongst them even sidelining, albeit temporarily, differences of serious political nature. A simple fact may be mentioned that once a net exporter of rice, Nepal now is a huge importer of the main staple: in the11 months of last fiscal, we expended Rs. 13 billion on rice import. We have colossally failed, let us not forget, to take benefit even from the liberal economic policies and the consequential impressive economic growth of India and China, let alone from other powerful economies of the world.

Prime Minister of India is visiting neighboring countries offering them assistance and is also visiting as well as welcoming leaders of major economies of the world. Recently, he visited Japan, third largest economy, and received President Xi of China, second largest economy in the world.Modi concentrated basically on economic agenda and succeeded in garnering Japanese assistance in trade facilitation and investment in infrastructure development. He implicitly sided with Japan in its dispute with China over islands in East China Sea but remained far from doing anything to form a new anti-China axis because he knew they (Modi and Abe) were closely watched from across the Sea and did not want currently not-so-pleasant relations between India and China to further sour just before Xi’s visit to India. Xi’s recent visit was successful from political as well as economic angel because Modi succeeded in securing from his guest assurance to work towards resolving border issues and also Chinese investment in infrastructure development. Modi realistically expected substantial investment from China with an economy four times larger than the Indian economy of 2 trillion dollars. Bilateral trade, at 70 billion dollar per annum, was also discussed and China was urged to correct the trade gap currently in favor of China by about 40 billion dollars. The conclusion observers can safely derive is that India and China will walk on the trade and investment path while simultaneously trying to tackle the border issues. Sporadic incidents of incursions will not check the trade and investment that is likely to be accelerated by the two giants of Asia in days to come. The speed is not likely to decelerate even if Modi expresses words of sympathy to leaders of some Southeast Asian countries currently in serious dispute with China over islands in South China Sea.

Nepal’s politicians have to learn how world leaders are giving top priority to economic development because they know this is the only way to ensure wellbeing of a nation and that of its citizen. This has to be felt and practiced. The recent signing of Power Trade Agreement (PTA) between India and Nepal and the signing of the Project Development Agreement (PDA) between Investment Board of Nepal and GMR Energy of India for the construction of our biggest hydro project (900 mw Upper Karnali) is a very positive development.Further, Nepal-India meeting on Pancheswar has taken place for the first time in a decade and progress towards finalization of the statute of Pancheswar Development Authority is commendable. These recent developments under the new leadership in India suggest that India now not only promises but delivers too. The PTA and PDA cleared by Nepal government has sent a  message to the world that Nepal’s huge hydro power sector is open for global investment with India standing ready to buy the power generated. An investment friendly environment is being created, which is likely to, unless polluted by political confusion and instability, bring in huge resources from India as well as other countries. Let us, therefore, not waste exceptionally too much time over resolution of contentious issues and prepare ourselves to take resort to other legitimate ways such as voting in the Parliament and referendum to settle issues. Looks like CPDCC chairman Bhattai will have no choice but to recommend one of the two options (voting in the legislative body or referendum) for the settlement if the contentious issues are not resolved even in the extended deadline. Moreover, prominent leaders of major parties, most noticeably Mr. Nepal of UML, were heard airing views well before the new CA  commenced its work that any issue left unresolved even after one year of exercise would be put to refrendum.This has to be adhered to because we cannot let politics kill our sick economy. Leaders elsewhere practice politics not to weaken but to strengthen their economies.

Dr. Tilak Rawal

Dr. Tilak Rawal

Dr. Rawal is former governor of NRB.

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