Prime Minister KP Oli heading for the rostrum to speak in parliament on Sunday. Photo: Dinesh Gole/Republica
KATHMANDU, Jan 7: Prime Minister Khadga Prasad Oli has either excluded key information of the country’s economy or has manipulated several related information in his speech in the parliament on Sunday.
Briefing the parliament about the government’s progress, the PM missed to talk about the rising trade deficit and declining foreign direct investments. These two are the major concerns for the country, which the two-third majority government, in its budget speech, had vowed to improve to achieve higher growth for national prosperity.
Oli did not give any detail about increasing trade deficit except for an isolated mention, though the trade deficit has hit the economy badly and the country’s production sector has remained perpetually frail.
Rising import has hit the balance of payment (BoP) of the country. The trade deficit further widened to Rs 454.48 billion in the first four months ending in Mid-November of the current fiscal year, and the export-import ratio has slid down to 6.1 percent in the review period from 7.4 percent in the corresponding period last fiscal year, according to the Current Macroeconomic and Financial Situation of Nepal unveiled by Nepal Rastra Bank (NRB) two weeks ago.
Oli has stated that the trade deficit has increased by only 1.5 percentage points in the first three months of the current fiscal year. But this point remains unclear.
Inflow of Foreign Direct Investment (FDI) has also dwindled by more than 50 percent in the first four months despite tall claims by the government about improving the FDI flow in the country by clearing legal and policy hassles.
The FDI flow has come down to Rs 4.95 billion from Rs 10.17 billion in the corresponding period last fiscal year.
PM Oli has completely missed this information in his speech, but a remark that came abruptly in his speech stated that the number of foreign investment projects has increased by 25 percent. However, the 14-page-long speech document lacked the specific number of those projects.
Leaving out key information of the economy and listing of the government’s progress in the speech without giving details are manipulation of information, opposition party leaders have said.
The text of Oli’s speech has highlighted seven indicators of progress: revenue collection, capital expenditure, economic growth, export-import ratio, balance of payments, implementation of flagship programs, and employment and national pride projects. Among them, at least two indicators – export-import ratio and balance of payments – cannot be termed progress as they are in the negative.
According to the NRB’s report of first four months of the current fiscal year, the overall BOP remained at a deficit of Rs 57.33 billion compared to a surplus of Rs 2.40 billion in the same period previous year. The export-import ratio slid down to 6.1 percent in the review period from 7.4 corresponding period. This means country’s export is deteriorating but Oli has tried to come clean by only pointing out some positive indicators in the import.
“Import of industrial goods and construction material has increased by 40.6 percent and this has hit the balance of payment. But this is a positive indicator for the country’s production and development,” reads an excerpt of the speech.
The prime minister has claimed that 8 percent growth is achievable as even the International Monetary Fund has projected the growth to be above 6.5 percent. Growth projection by an international organization was never higher than 5 percent in the past.
“Revenue collection growth of 32 percent in the first five months compared to the corresponding period last year, and no need of internal borrowing till this date are the other positive indicators for the economy,” said Oli.
Progress in the capital expenditure also remained minimal despite the government promises of delivering higher growth and employment. The capital expenditure remained at Rs 26.01 billion which was Rs 17.86 billion a year ago in the first four months. The statistics till Sunday show only 15 percent progress in the total capital spending plan of Rs 313 billion, although half the time of the current fiscal year has already elapsed.
The overall work in the national pride projects is below satisfactory but Oli has hailed the progress of several projects including Upper Tamakoshi, Babai Irrigation Project, Bheri Babai Diversion Project, Gautam Buddha International Airport, and Pokhara International Airport among others. Despite Oli’ s instruction to expedite final works in the Upper Tamakoshi project during his trip to Dolakha in April last year, laying of pipes in the tunnel by an Indian contractor for electro mechanical works has failed to move forward. Oli has stated that the project has made progress by 97.5 percent, but he has not stated the progress figure when he assumed office.
Commenting on Oli’s presentation, Gagan Thapa, a leader of the main opposition party Nepali Congress, said the information presented by the PM was similar to the White Paper presented by Finance Minister Yuba Raj Khatiwada in March last year few days after assuming the post.
“The White Paper had tweaked economic information to fit Khatiwada’s approach to show the economy in a bad shape, and Oli has now done the same,” Thapa told Republica. “Oli has manipulated information in his speech. He has also tried to threaten his critics about the procurement of project war room in his office.”
Thapa further explained: “Oli remains silent why the outflow of migrant workers to Malaysia has not yet started but claims that the remittance collection has grown due to administrative reforms.”
PM Oli has stated that the number of migrant workers has declined by 41 percent but the remittance inflow has increased by 36 percent.
Thapa said Oli has claimed progress in operating the country’s own ships, but his speech lacked any detail about it. The opposition party picketed rostrum of the parliament after the PM declined to face question from the opposition leaders.