Political instability, energy crisis, lack of physical infrastructures like roads and transport as well as scarcity of sufficient capital have stood as obstacles in the path of economic prosperity. [break]
The first government formed after the downfall of the thirty-years long Panchayat regime in 1990 pursued a policy of economic liberalization, which not only eased the economy of the country but also transformed the society´s perspective of practicing liberal values and norms.
The advent of economic liberalization not only increased basic services and facilities and attracted foreign investment but it ushered a way for development of communication sector and establishment of multinational companies.
The policy of economic liberalization also expanded the purview of economic productivity and enhanced the flow of investment.
The growth of service, business and industrial sector too had opportunity to flourish. The sad demise of the Constituent Assembly (CA) last year without promulgating a constitution coupled with prolonged transition have added uncertainty to the already sluggish economic growth.
Insecurity, much-aggravated industrial atmosphere, transport obstacles, strikes and closures and labour unrest stand as barriers in the path to Republic Nepal´s economic progress.
The next Constituent Assembly has no alternative to gradually institutionalizing the accomplishments of the republic while it must also shoulder the responsibility of expanding the plans and programs for economic progress.
It also has to be more liberal in devising policies aimed at economic prosperity with special emphasis on economic growth.
The private sector achieved notable progress in the education sector following the political changes of 1990. This resulted in increased national capacity of production of technical manpower.
Likewise, involvement of the private and community sector in the expansion of health services has freed Nepalis from the compulsion of going to India even for minor treatment.
Continuity of the economic liberalization policy in republican Nepal has produced a significant group of entrepreneurs and businesspersons who are now successful in higher education and health service, bank and financial institutions, remittance service, tourism industry, communications, real estate, commercial poultry, fisheries and livestock farming, organized retail trade and hydropower production.
This has been recognized not only in the domestic sector but also by the international community.However, given the situation whereby the per capita income of a general Nepali is yet to cross 600 US dollars and 25 per cent of the population still reeling under the line of absolute poverty, the major agenda in a democratic or republican form of governance should be to guarantee social security of these people by ensuring their right to food, shelter and clothing.
With very minimum resources at its disposal, the government is finding hard and challenging to assume this duty. Nevertheless, poverty decreased to 25 per cent from 41 per cent thanks to the significant rise in remittance income in republic Nepal.
Inflation in the current fiscal year at 10 per cent, the first in the past 50 years and the state of unemployment at 45 per cent is a testimony of the reality that the country´s economy is not heading towards a positive direction.
Failure to check inflation that has a direct and more severe impact on the living standards of the poor people has now made it difficult even for the middle class to guarantee two square meals a day. There is a rise in tendency of industries closing down rather than opening.
Nevertheless, as the saying goes that every black cloud has a silver lining, one can still expect a spur in industrial and business activities sooner than later.
It is well known that the country´s economy today is dependent on the remittance sent by more than three million Nepali migrant workers in foreign employment and the customs revenue raised by the government in the import of goods and services.
Remittance money too is consumed more by the household concerned, with little contribution to capital formation and investment, thereby lesser chances of increasing employment opportunities and decreasing poverty.
Neighboring China´s per capita income was below 100 US dollars some 35 years ago but it is now 5,500 US dollars while the per capita income of socialist India has reached 1,500 US dollars after following a liberal economic policy for more than two decades.
Nepal can benefit a lot from China, which has established itself as the world´s second largest economy and from India, which has become a model of rising economy.
However, lack of political commitment, investment-friendly environment, energy and physical infrastructure is taking our economy ahead only in snail´s pace.
The Nepali people have waged more than six movements in the past 63 years to draft a constitution of their own and with an expectation to take the country´s economy towards prosperity.
However, our eco-politics is yet to be liberated from outside dependency. To make the country economically self-reliant, the diligent Nepalis should develop entrepreneurship as well as self-employment and employment
Opportunities inside the country, and for this, public-private partnership is inevitable.Realizing this need, the Government too has given it top priority to win accolades from the private sector and the commitment to work together ahead. Already carrying a burden of huge debt, we have no choice now than to work towards development of skills and entrepreneurship.
Agriculture, tourism, industry and hydropower are the major basis of our country´s economic prosperity and of them, hydropower is one that we can develop the quickest.
However, political stability is the first condition for the development of this sector. Political parties do have their respective ideologies and differences too, but there needs to be a minimum understanding on common issues of economic development, which would help build atmosphere conducive to investment and building trust.
Increasing import and decreasing export has weakened our economy. Economic growth rate to come down to three per cent from six per cent some time in the past is a matter of concern. So, export-oriented industries should get the first priority. Also, the service-oriented business can help excel the country´s economy.
In the last fiscal year 2069-70 BS, we imported petroleum products alone worth Rs. 97 billion and this amount is rising every year.
If we could invest this huge amount spent in petroleum products in small and medium scale hydropower projects, we would not only reduce the power outage but also run cottage and small industries that could uplift the country´s economy.
Increasing investment is the first and mandatory need for increasing economic production. But for that the development budget should be increased by five times as compared to the present.
Identifying the major areas of economic production and increasing investments with special attention to areas that enhance productivity and to infrastructure development would ultimately facilitate reaching the fruits of republic to the general public at large.
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