Planning for development

Published On: May 1, 2019 01:25 AM NPT By: Kedar Neupane


Nepal’s development plan is built around theme of ‘Prosperous Nepal, Happy Nepali.’ This vision should be elaborated with specific measurable indicators

Last March one event related to the preparation of long-term periodic development plan for Nepal was discussed at the Development Council chaired by Prime Minister K P Sharma Oli. Earlier to that, Nepal Policy Institute (NPI), together with some Nepali diaspora scholars, had organized an interaction program in Bangkok with Vice-Chair of National Planning Commission (NPC) and senior government officials. Nepal Policy Institute shared challenges in development planning process which affected timely completion of plans. NPI had drawn NPC’s and government’s attention on major drawbacks hindering delivering targets under the plans.

The present development strategies are broad and ambitious and the long-term plan envisages traditional pathway, lacks concrete proposals addressing concerns affecting robust monitoring and timely implementation for achieving the set goals. Clearly, government needs to do more and strengthen institutional capability, and adopt effective mechanisms stimulating efficiency in all sectors. 

The imperative of remittances for prosperity needs a thoughtful consideration in planning process and recognition of contribution made by migrant workers in nation-building process. It is a fact that remittance is the mainstay of foreign currency income and employment of millions of working populations and sustainability of Nepal’s economy will remain heavily dependent on foreign employment of migrant workers for a long time. 

Foreign employment and poverty level are closely associated with remittance which has sustained livelihoods of hundreds of thousands of Nepali families. Their saving rate is reportedly around 30 percent which is generally set-aside for acquiring fixed capital assets and other unforeseen needs.  Given this, expectation of mobilization of funds for development purposes from remittances is unrealistic. Nepal needs heavy doses of foreign direct capital injections from all available sources. 

Development Plan, under preparation, estimates very high-income growth from US$ 1,500 in 2019 to US $ 4,100 in 2029 to US$ 12,500 by 2043. This is unrealistic for this level of growth requires an annual growth rate of 14 percent, not 10 percent. Based on the past performance delivery, low capital investment, unabated corruption, fiscal mismanagement and poor implementation capacity of the government entities achieving this target could be just a dream.
 

Policy Dilemma
The development plan is reportedly being built around populist theme of “Prosperous Nepal, Happy Nepali”. What is ‘happiness’? How to measure this objectively? For centuries, “happiness” has been a controversial subject for both philosophers and economists.

From ancient Greek philosopher Epicurus (300 BC) to modern economist John Stuart Mill, scholars have explained happiness as life science philosophy which refers to a balance of bodily sensations between feel good factor and pain and sufferings. Modern philosophers think the goal is to attain a happy and peaceful life characterized by absence of pain and fear. Thus “happiness” is nothing beyond physical sensations for it is a psychological pleasure devoid of physical pain and sufferings. This philosophy may have influenced Bhutan’s unsuccessful definition of gross domestic happiness without subscribing to higher standards of living.

Marxists generally view happiness as a state of being or living through hard work and sweat. To others, the concept of happiness could be a mere reflection of worldview and outlook on life. Most of us would, however, agree that happiness is human life’s greatest joy through experiences. Given this difference, modern economists are still in search of an equilibrium equation beyond Gross Domestic Production (or GDP) to appreciate the real calculus in “happiness” measure. As we know GDP only reflects amounts of goods and services an economy produces, this does not reflect the general wellbeing and living standards which is the function of overall economic development. 

So, what is the happiness Nepal’s development plan envisages? If this vision is about happy Nepali in a prosperous Nepal then it should be elaborated with specific measurable indicators for the level of ‘prosperity’ and ‘happiness’ future development plan expects to deliver. Otherwise, this may mean a mere rhetoric and a populist nationalist theme devoid of pragmatism. 

The other myth is about continuing with national pride projects to justify high economic value of investments. Past and current performance on such projects have been marred by escalating costs, poor monitoring, implementation delays and faltering fiscal management contributing to corruption. This raises serious question about national pride projects, their economic value and sustainability. Simply put, state-run pride projects are not contributing to economic sustainability. Instead, it has become national liability, draining treasury and marshalling corruption.

The world is confronted with the emergence of new knowledge economy and dynamism of socio-economic transformation. This has impacted daily life of a person which is changing work habits, culture, ethics, choices, social views, including economic preferences and political thinking impacting future course of humanity and integrity of sovereign nation states. This scenario will spare no one and no economy can remain isolated for we are already interconnected globally.

Development planners must embrace these developments and chart new ways of articulating flexible plans, managing economy and doing businesses before any major disruption in global economic trends and political discourse ensuring that no one economy is left behind as a result of impending fourth Industrial Revolution.

Setting the goal
The past performance of development plans indicates that there are structural challenges requiring rebuilding, monitoring and implementation mechanisms, robust resource management and allocation for timely completion of programs. No matter how glorious project may appear, without timely completion there would be no better outcomes of development plans.

Consideration should be given to program ownership to single entity with full responsibility and authority for implementation with external monitoring mechanism. Authority should include resource allocation and utilization and be held accountable. Failing to deliver outputs should be sanctioned without mercy.

Nepal is facing a serious challenge with increasing food imports from India. This could easily become a national economic security threat given that our memory is still fresh with the recent experience when citizens faced shortages and price escalations emanating from border blockade. This concern should be the primary consideration of the development planners. Against this backdrop, Nepal Policy Institute had recommended following pragmatic policy considerations to National Planning Commission during the Bangkok interaction program. 

First, get pro-actively engaged in foreign relations with economic power houses like China, India, ASEAN, EU, Japan, Korea, the UK and the USA, and enhance economic cooperation, and create a peaceful environment and favorable conditions for national economic development.

Second, NPC should explore new opportunities for strategic economic collaborations with dominant economies of the world for greater access of Nepali niche products in world market and create best opportunities for investment and develop world class physical infrastructure to reduce transport costs.

Third, Nepal should develop a market-based economy, stabilize macro-economy and create conducive political environment to infuse acceleration in socio-economic development. Besides, improving productivity, efficiency and competitiveness of economy should be a consideration.

Fourth, Nepal should implement effective anti-corruption measures and improve quality of education, human resource and scientific and technological capability. It is equally important to invest in sustainable, curative and preventative health care system closely linked with United Nations Sustainable Development Goals for economic development and strive for social advancement, equality and improving people’s living standard and quality of life. Nepal should also develop strategies on managing climate change effects, prepare capabilities to deal with natural disasters, enhance management of natural resources and environment protection. As important, Nepal should ensure effectiveness of public administration and good governance.

The author, President of We for Nepal, is a former UNHCR international official. He is also the Advisor to NRNA Switzerland
Neupanek1950@gmail.com


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