So, when analyzing this budget, two questions come to mind. First, are we spending in the right places? And second, does it look like we will be able to spend the money?
Although attitudes toward monarchy have shifted, attitudes toward the East-West Highway, built by King Mahendra, have not changed much.
Building roads creates jobs. Indeed, there are few investments that create jobs so quickly. This is why the stimulus packages of any country spend so much on infrastructure. The hope is that building and improving infrastructure will absorb the unemployed. Roads also make accountability easier – either the road is there or it isn’t. The quality of the road also becomes apparent over time, to anyone using it. Roads circulate capital when the road is being built and it facilitates the further circulation of capital after they are built. Ideas and people also circulate. Roads improve physical access to hospitals, schools and financial institutions such as banks. Infrastructure, and roads in particular, is inter-generational. What we build now lasts well into our children’s lifetimes. It forms a basis of development and crosses political boundaries. Every single national plan, every single budget and every single election manifesto – regardless of the political party – mentions the importance of roads. For example, although attitudes toward monarchy have shifted, attitude towards the East-West Highway, built by King Mahendra, have not changed much. Overall, roads can engage all actors over time.
Does Nepal need roads? This is a realistic question only to those who live in the cities. Urban dwellers tend to feel that they have too many roads, too much traffic, too many banks, too many shopping malls and too many hospitals to choose from. But few people who live outside cities share this dilemma. It cannot be denied that roads immediately improve access to healthcare, education and capital. Land value increases and goods become cheaper. These symptoms start to remove the causes of underdevelopment. Of course, there are numerous downsides to roads and they do not always lead to development. But development without roads is impossible. Therefore, those who refuse to accept the least common denominator of development – infrastructure – can rightly be asked whether they are actually concerned with development or with something else. So, yes, Nepal needs roads.
Historically, Nepal’s experience has been that spending on roads is easy when the work is being done domestically by the army. The experience has also been that the private sector can help to build roads but the goal of the private sector, by definition, is profit first. So, at some point, a road is not profitable and a private firm will not bid, even though it is essential for the country’s infrastructure strategy. Secondly, the “private sector” usually means foreign firms who may have their own national obligations. Just as important as job creation is job allocation. That is, jobs have to be created for Nepali people, not for people brought in from another country. Having the work done domestically ensures immediate jobs for Nepalis. Spending through the army is the surest way to ensure spending as well. In this regard, deciding not to wait many more years for private sector involvement in the Kathmandu-Nijgad section shows admirable commitment and willingness to learn from past experiences. As long as the government continues to pay careful attention to who will get the new jobs and who will allocate the new jobs, the spending problem will also be solved.
Economic growth cannot be achieved through jargons but justice. The heart of development is not macroeconomic policies, microeconomic models, liberalization, protectionism, balance of payments and all that. These ideas come up later, to describe progress that has already happened. The theories that we hear now are like the words a climber uses to describe the view from a mountaintop. No matter how charming the words, it wasn’t the words that got the climber to the top; it was his/her legs and his/her heart. The heart of development beats through trust in our collective ability to think for ourselves, learn for ourselves, make our own mistakes and discover our own successes. And the true test of development is an improvement in the quality of life of citizens. This budget, after many years of waiting, has pushed our country along that path. Despite its flaws, it represents a small step away from cut-and-paste ideology and contains admirable strides towards realistic and pragmatic policies. After all, development is not a magic conjured up by a few high priests who repeat mantras filled with erudite nonsense. Development is hard, focused work based on common sense with a dose of courage (the results of which should be accessible to everyone). Roads are an excellent start.
The budget has successfully laid out a set of measurable and concrete programs for roads, which mark the starting point for development. Should this aspect of the budget fail to be implemented, the rest of us will share as much responsibility as the government. Indeed, the stark clarity of the budget on infrastructure priorities is a test for us all. The challenge of setting clear goals is that if we should fail to follow through, the failure will be stark. Nevertheless, through both success and failure, it is important to remember that we are in it together. With its emphasis on consensus, this is a budget that begins to inspire that solidarity. There are many weaknesses but focusing on specific roads is by far a unique strength. Roads are essential to development; infrastructure creates jobs and we need both development and jobs right now. This is a ‘road budget’ at a time when many countries are relying on infrastructure spending to create jobs. In this sense, our timing could not have been better.
(Writer is a PhD candidate in Economic Development and Planning at MIT.)
pokharelatul@gmail.com
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