The National Planning Commission (NPC)—the apex planning body of the country—is currently busy preparing the Approach Paper of the third Interim Development Plan (IDP) of Nepal which, one hopes, will be based on the ground reality of the country’s economic, socio-political, and environmental challenges and opportunities. It is also expected that the NPC learns hard lessons from the experiences of the last two plans and makes the implementation strategy more streamlined and result-oriented. [break]
The long-term strategy of the 2nd Interim Development Plan (2010-13) was to put Nepal’s development trajectory on a faster and inclusive growth path to graduate from the LDC rank to a developing country (DC) status by 2030 and in the process transform Nepal into a prosperous, peaceful and equal society. While the plan, vision and goals were laudable, the pace and quality of implementation have been dismal. The current government has reportedly brought forward the target of getting Nepal to the DC status by 2022 itself—undoubtedly a tall order.
ballgroup.com
This target can only be achieved if there is strong political will and commitment among all political parties and implementation is greatly improved. Besides, achieving such a long-term goal needs durable peace and stable government and above all, reliable commitment on the part of political parties and their affiliates not to call strikes and shut downs, which have dealt body blows to the struggling Nepali economy. The macro-economic situation is getting grimmer day by day with continuous high inflation, huge gaps in balance of payments, and painfully slow pace of economic growth due to well known causes.
Therefore, the country urgently needs to pick up its pace of growth, but it also needs to be mindful that the growth is inclusive and sustainable. How to achieve this? The first and perhaps the most important step will be to develop a visionary Sustainable Economic Development agenda that can enable Nepal to leap-frog its current pace of economic growth. As attaining a minimum 5 percent annual growth is critical for Nepal, this agenda should be the top priority of the government besides the national election. The country is hoping that this will be reflected in the next three-year interim plan of Nepal.
Challenges ahead
Developing a periodic plan with lofty goals may be an easy task for the NPC but achieving the same will be very difficult, especially when the country is mired in perpetual political uncertainty and an environment of chaos, poor governance and general hopelessness. Preparation of a periodic plan is an opportunity to reflect, take stock of the progress made in past plans, identify the strengths that can be leveraged, and the constraints and barriers that may block progress, and on this basis develop a new development agenda. The NPC faces a huge challenge in developing such a strategy for the next Plan. The magnitude of the challenge can be gauged by looking at the poor achievement of the 2nd Plan that had aimed, among other things, to reduce poverty level to 21 percent along with achieving equitable, balanced, inclusive, employment oriented development.
However, the achievement has been sub-par with the official figure of population below poverty line (BPL) standing at 25.16 percent and the difference between the Far Western and Eastern development region being a whopping 26.17 points (45.61 percent v/s 21.44 percent), indicating a huge regional imbalance. Although between 2004 and 2009, a yearly average of 2 percent population climbed out of the poverty line, whether this growth is sustainable is questionable since more than 58 percent of households are currently drawing remittance money for their daily expenditures. Therefore, the next Plan must develop truly revolutionary and innovative growth strategies so that economic growth is not only fast but also inclusive, efficient and sustainable.
Basic requirements
Learning from other countries, first and foremost Nepal needs visionary, strong-willed and innovative political leadership which can guide a futuristic development vision, commensurate actions and good governance. Focused but coordinated planning, budgeting, resource mobilization, and long-term investment in social infrastructure including knowledge management and institutional strengthening has to be done in consultation with a pool of highly motivated and talented policymakers, technocrats and professionals. The policy challenge for the NPC is how to break the logjam in the Nepali economy and revive investment climate as quickly as possible by tackling policy implementation constraints. For the long term, the third Plan must identify the comparative advantage of Nepali economy and build competitive advantage for desired outcomes. Some of the points it might want to consider in developing such an agenda are as follows:
• First, the Plan strategy must be firmly grounded in good understanding of the complexities of Nepal’s development challenges while considering the regional and global economic scenarios and complexities. Since both our neighbors are fast growing economies, Nepal should carefully identify development pathways that can benefit from the growth of India and China.
• Agriculture and natural resources sectors remain the mainstay of Nepali economy and are critical components for inclusive growth. Therefore, how public-private-civil society actions are synchronized in drawing up policies, programs and actions to trigger growth in agriculture production, agro-forestry product-based small and micro enterprises (SMEs) that can replace imported consumer goods, and in making agriculture more profitable would decide whether or not the Plan can yield inclusive growth.
• In order to tackle growing unemployment, especially those of educated youths, the outlay of the Plan has to increase in almost all sectors but more importantly in streamlining and removing implementation bottlenecks and policy barriers. This will call for improving the institutional and technical capacities of government organs together with reforms in the quality of governance.
• The message from the High Level UN Panel on Post-2015 Development Agenda is to “integrate the development and environment agendas in order to design a new, sustainable pathway for humanity that is fair, equitable and exists within planetary boundaries…” Nepal has to plan its development pathways based on the post-2015 development paradigm.
• Mobilizing both internal and external cooperation, collaboration, and knowledge sharing will be the key to sustainable development. This should start from the current planning process by providing a framework for different stakeholders to work together and achieve broader consensus on key issues and move forward collectively.
• Nepal will have immense potential as an early adopter of Green Economy tools and practices, considering its rich endowment of natural resources. It can expect technical and financial assistance form development partners to implement green growth strategies and low carbon economic pathways. In fact, by investing more in green sectors it will ensure sustainability of its development.
Nepal has a golden opportunity to achieve fast, inclusive, and sustainable growth by investing more in green sectors since they employ the maximum number of poor and marginalized people and groups. This can generate a huge number of green jobs and help achieve food, water, energy and ecological security for the people and reduce their poverty, thus generating triple dividends. It can reduce poverty, adapt to climate change and mitigate green house gases thus strengthening the three pillars—economic, environmental, and social—of sustainable development.
The author, a PhD in Forestry from Michigan State University, is a member of Nepal’s Climate Change Council
karki.madhav@gmail.com