Looking at Oli- led Government

Looks like Oli is getting some time simply because the nation wants him to be replaced by someone with a clear cut agenda to solve the burning problems without wasting time so that political stability and economic prosperity could be achieved in Nepa

July 7, 2016, 5:45 p.m. Published in Magazine Issue: Vol.09,No. 24, July 08,2016, Ashad 24,2073)

Although it would be unjust to look critically into the performance of this six- months old government, the difficult situation that Nepal is in today, both politically and economically, does not let anyone wait for any auspicious moment to talk about the performance of this dispensation that was expected to deliver the goods in an accelerated manner. There were challenges and hurdles created by the devastating earthquake and the blockade, but these problems at the same time created immense opportunities for well-intentioned agencies and people to galvanize the ailing economy, soliciting external and internal support and cooperation. In fact when coalition partners and Prime Minister himself has expressed dissatisfaction over the slow pace progress in certain areas, there is no harm in making a bias less assessment of the work of government on different fronts in the last couple of months. Unfortunately, the government has failed both on the economic and political front.

people are getting increasingly skeptical about the implementation of the new constitution because no positive move towards this direction has been taken after the Nepali-Congress initiated amendment to it, four months after its promulgation, ensuring proportional inclusion for backward communities in state bodies and increasing the number of constituencies in Tarai.Very frustrated, leaders of the Federal Alliance that includes agitating United Democratic Madhesi Front, are planning a fresh movement, expected to focus not just on Madhes,accusing the government of remaining indifferent to their demand. People do not want the recurrence of the unpleasant mishaps of the past at a time when they have begun to feel a bit relieved even in the midst of lack of drinking water, electricity and soaring prices of essentials. People want a decision on the constitution (rewrite, nullify or implement it with or without amendments) soon, but the government have no answer and looks action less on this front. Even speeches of our Prime Minister, often filled with jokes, have ceased entertaining common people.

Idea floated by the current dispensation about formation of a national government, including the major opposition party, is difficult to materialize because Nepali Congress has ruled out the possibility of installing a government without a strong and effective opposition. Further, recommendations related to the appointment of Supreme Court Justices and ambassadors to about two dozen countries have further widened the gap between the two major parties. Since the number one party has publicly criticized the government, accusing it of unilaterally taking decision on long –pending  sensitive issues, it is unlikely that PM Oli and his party will get the hoped cooperation from NC.Nobody knows when the parliamentary hearing of these recommended personalities will commence. It is very unlikely that the two major parties (NC and UML) will be seen sharing power in the near future because stalwart of NC have realized that Oli’s action and words often head towards opposite direction.

The earthquake of last year caused immense loss to the nation and required concrete action of the government to provide relief to the affected people and start rehabilitation and reconstruction work, which could activate the damaged economy.Indeed,many of us were tempted to believe that a quick-started reconstruction and rehabilitation work would lead to an increase in internal demand for both food items and construction materials and generate lots of employment opportunities for workers with different kinds of skills.Programmes launched to increase production of food items, which is possible in a few months’ time, together with attempts at enhancing production of construction materials would have done a lot good to the economy. With this optimistic thought at the back of our head, we concluded that the economy would not do as bad as apprehended by many. However, the earthquake related work moved at such a frustrating pace that it did not take us long to observe that those at the helm of affairs should be happy if the economy does not contract in Fiscal 2072\73.Lots of time was spent in the creation of National Reconstruction Authority and appointment of its executive head. It is disheartening that even the current government led by Oli could not push allied activities fast. Government is not only action less in rehabilitation works, it is reported to be naïve about number of nongovernmental organizations, both national and international, operating in districts like Gorkha,the epicenter of 7.8 magnitude earthquake, and their handling of relief and rehabilitation works. Our government observed the first anniversary of the deadly earthquake, paying tribute to the dead and initiating construction works at different affected sites by dignitaries including President and the Prime Minister. The Authority also announced that it had expedited the process of signing agreement with victims in the11 worst affected areas for distributing Rs.200, 000 grant per household from April 25.It is, however, uncertain when the victims would get the amount as most of them do not have the mandatory accounts at the three banks appointed by the Authority. It is a pity that earthquake-victims have already braved one monsoon and a winter and not many believe that the victims will have a relatively durable roof to keep their heads under before the rainy season starts again. The feeling that the current dispensation has failed to accomplish any thankful task related to the earthquake is growing very fast amongst people.

Multilateral agencies such as The International Monetary Fund took some time in agreeing with our observations that Nepal’s economy would grow disappointingly(0.5 percent), the lowest in 14 years after 2001\02 when GDP was around 0.1 percent. Multilateral as well as domestic agencies have differed in their estimates of growth, but the recent figure (0.77percent) of Central Bureau of Statistics looks reliable and even those fearing a contraction would not be unhappy with this estimate. Needless to say that output of goods and services were affected by trade disruptions, unfavorable monsoon and shortage of fertilizers. Further, post quake reconstruction works, which was expected to push up demand as stated earlier, have been frustratingly momentum less. Even after completion of one year, Nepal government is not in a position to show any worth mentioning work initiated and accomplished on this front. Let us agree that supply-related problems obstructed rehabilitation works for some time, but what cannot be understood is the reality that things have not moved meaningfully even months after lifting of the five-month long blockade. This lackluster performance has frustrated donors who generously pledged 4.1 billion dollars to carry out the much needed activities after the earthquake. Against this backdrop, it is difficult to say whether the pledging will be actualized into disbursement. At a recent all-party meeting called by the Prime Minister, leaders of various parties came down heavily on the government for failing to initiate meaningful dialogue with the agitating parties and delaying reconstruction works.NC President Deuba expressed his unhappiness over the performance of the Authority and was skeptical that the victims would have shelters before monsoon. He also mentioned that his party would not accept government’s policy and programme without pre-budget discussion, clearly hinting that the way ahead was not smooth and easy for Oli who has instructed bureaucrats to spend 80 percent of the allocated capital expenditure in the remaining period of this fiscal, probably to arrest the deteriorating trend in the economy.

It is encouraging that our PM seems worried about the disappointing state of the economy as is shown by low level of capital expenditure (RS.40.5 billion out of Rs.208.87 apportioned), failure in supply management of essentials, high level of cost-push inflation, declining merchandise exports(down by 24.9 percent in eight months) and an apprehended contraction in the economy. There is no harm at all in directing the concerned to accelerate disbursement of capital expenditure but care should be taken to see that it is not misused because the expenses incurred in a rush at the end of the year have not been productive in the past.Therefore,instead of rushing, expenses should be done selectively, ensuring capital productivity.Oli, with commendable communication skills, could also give tight reply to his critics by citing the case of positive balance of payment, ever increasing remittances, satisfactory revenue collection and positive fiscal balance, which in normal times shows fiscal responsibility and fiscal sustainability. It may be noted that remittances inflow reached Rs.427 billion (29.4 percent of gdp) and balance of payment remained surplus by Rs.158 billion in the eight months of current Fiscal. These items, however, may not suffice for Oli to continue to lead the government for long because he has come under scathing attack not only by NC and Madhes-centric parties but by the coalition partners including UCPN Maoist. One should not be surprised if Prachanda suddenly decides to withdraw from the government, compelling Deuva  to cooperate with him to dislodge Oli and form a new government, which could be led by either Maoist or NC.In such a situation Oli-led government will be deprived of the opportunity of presenting the budget on the agreed upon date of May 28.It may be recalled that after long inter-party discussions, the major political parties agreed on a timeline on the presentation and discussion of government’s annual budget and policy and programs, and on holding pre-budget discussions in the budget session commencing on May 3,2016.Normally,it looks like the government, which is just six months old should be given a few more months to perform the annual rituals of unveiling and passing the budget, but increasing number of people have begun to feel that there is no sense in letting this action less dispensation continue in office.NC lawmakers have urged the leadership to make a move to change the government and so is the request of Maoist politicians to Prachanda to withdraw the support extended. Even top leaders of UML have publicly expressed their annoyance over the performance of this government and style of functioning of Oli who also heads their party. Looks like Oli is getting some time simply because the nation wants him to be replaced by someone with a clear cut agenda to solve the burning problems without wasting time so that political stability and economic prosperity could be achieved in Nepal graded  very low economically among the 29 Developing and Emerging Asian countries and ranked third most corrupt country in South Asia and fifteenth globally.Deuba and Prachanda may kindly note that people have had enough of cost free entertainment and have no more appetite for it. May be they are rehearsing and doing some solid homework so that they could perform and look little different from Oli who many thought was a man of action before being tested.



Dr. Tilak Rawal

Dr. Rawal is former governor of NRB.

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