Economic prosperity with social justice is possible only if there is a stable and visionary government with a progressive stance and dynamic governance

After years of struggle against Rana rule, Nepal embarked on democratic transformation process in the 1950s. But the infant democracy didn’t last long and was subdued by autocratic monarchial rule that lasted till 1990. These political developments created a state that is highly centralized, a society that is less-plural and an economy that is fragile. Economic prosperity remained a far-cry. As a result a number of violent and non-violent struggles were launched and came to an end in 2008. The country then entered into a federal democratic system and, finally Nepal got its constitution through elected Constituent Assembly in 2015.

Despite few shortcomings, the constitution has set-up the ground for creating a just and prosperous Nepal. Federalism, if implemented as per its essence, can be one such means to get an inclusive development for which Nepal has been striving.

Since Nepal has completed political struggle and achieved political transformation, now is the time to work for the transformation of economy and tackle social issues. After the recent elections, Nepal has got a stable government. This government has an opportunity to create a conducive political environment for rapid socio-economic transformation.

Where we stand 
Nepal has made progress in poverty reduction and human development in the last two decades. Absolute poverty has declined by one percentage point each year and Human Development Index (HDI) has improved by one basis point per year.  Yet, absolute poverty still stands at 21.6 percent, the highest in South Asia, and the country is at the bottom in middle human development status.  As per 2015 UNDP report, Nepal’s rank in HDI is 144 out of 188 countries. Nepal’s per capita income of 2017 is US$ 862. Nepal stands in 197th rank among 217 countries in per capita GDP, according to 2018 World Bank report. Life expectancy of a Nepali is 70 while expected years of schooling and mean years of schooling are respectively 12.2 years and 4.1 years.  Nepal stands at 118th position in life expectancy, 121st position in expected years of schooling and 168th position in mean years of schooling among the record of 188 countries of the world.  
In Multidimensional Poverty Index (MPI), Nepal stands at 52nd position with MPI value of 0.116. We are in 115th position on gender inequality index. We stand at 176th position in Environmental Performance Index.   
Socio-economic status of Nepalis varies according to the region. Nepal Human Development Report 2014 showed that per capita income of Bajhang district in Far-West is almost one sixth of Kathmandu. 

Per capita income and HDI of seven provinces of Nepal shows high disparities. Per capita income is better in Provinces 1, 3 and 4, while it is quite less in other provinces. Only two provinces have HDI value more than 0.5. Provinces 6, 7 and 2 have quite low HDI values. Further the rural-urban HDI gap is also as high as 19 percent. MPI estimates of provinces shows that Province 2 and Province 6 have higher level of multidimensional poverty.

Economic prosperity can be achieved through increasing production of goods and services. For this we need development of economic infrastructures like transport and energy, human resources, modernization of agriculture, massive industrialization, improvement in the quality of service sector and substantive use of modern technology. It requires high capital investment. 

People require jobs, food, education, energy, health care, water and sanitation. It can be achieved through inclusive development by means of fair distributive justice among different class, nationalities, gender, caste and social groups.

According to John Rawls, Professor at Harvard University, two conditions must be met to create a just society in which basic human needs are met, unnecessary stress is reduced, the competence of each person is maximized, and threats to well-being are minimized. He says that each person should have equal rights to the most extensive liberties consistent with other people enjoying the same liberties. Social justice should ensure fair equality of opportunity, and the least-advantaged members of the society must benefit from it.

Besides, ultimate measure of prosperity is the quality of life and inner happiness of the individual. In modern times, it is common to face various forms of stress, exhaustion and problems. An increasing number of people are suffering mental and chronic ailments due to unhealthy lifestyle. In this context, measures of removing mental stress and promoting spirituality could be important. It increases the inner strength and supports the mental health of an individual. Generally people see economic prosperity and social justice as contradictory. In truth, they are complementary.

Low productivity along with inflation, huge trade deficit, high rate of poverty and high inequality and very low rate of employment contribute to erosion of economy. It is because much of the shares of means of production which is meant for effective modernization of our economy are concentrated in the hands of wealthy few. This is an obvious example of poverty amidst plenty in Nepal.

A large number of young educated people are jobless. It shows inefficiency of our planning strategies. Unemployment must be wiped out from our society so that economic development becomes a reality. For it to happen, sufficient employment-oriented development projects which are meant to tap the potential of skilled workforce are a must. Until the great mass of people feel responsibility for each other’s welfare, social justice can never be attained and economic prosperity cannot be achieved. Economic development should be an outcome of collaborative efforts of people belonging to various layers of society. A society ensuring social justice that will provide opportunities for individuals to develop their potentialities and facilitates overall personality development without considering their class or economic status, gender, religion or caste or region of residence is a must for overall prosperity. Economic prosperity with social justice is possible only if there is a stable and visionary government with a progressive agenda and dynamic governance.

Our policy should be such that restricts amassing of wealth and the means of production by a few. Social justice and economic development are therefore complementary to create socio-economic prosperity. To achieve this, the state has to regulate market in a manner that will not unjustly favor certain groups.  Production of public goods could be taken under a shared partnership between the public and the private sectors in order to distribute benefits fairly and promote equitable economic growth. 

The state also has to take up the responsibility of providing equal access to services such as health, and education, since the private sectors often fails to provide such services. 

The state has to be able to provide social protection to groups that have been historically excluded and marginalized, so that all citizens have an equal opportunity to fulfill their aspirations.

Prospects ahead 
Our constitution, legal provisions as well as international commitments made by Nepal favor inclusive development with adequate social justice measures. Nepal is recognized as multi-national, multi-lingual, multi-cultural and regionally diverse country by the constitution. It ends all discriminations relating to class, caste, region, language, religion and gender including all forms of untouchability. The principles of unity in diversity, social and cultural solidarity, tolerance and harmonious attitudes and a determination to create an egalitarian society on the basis of the principles of proportional inclusion and participation and equitable economy, prosperity and social justice are enshrined in the preamble of the constitution itself. 

Rights of women, dalits, janajatis, Madhesis, Tharus, minority groups, persons with disability, marginalized groups, Muslims, backward classes, gender and sexual minority groups, youths, peasants, workers, the oppressed and the citizens of backward regions, and economically poor Khas Arya are guaranteed through principle of proportional representation. Principle of inclusion applies in terms of formation of Council of Ministers, appointment of Nepali ambassadors and entry to government services. Thirty three percent representation of women in the federal Parliament has been guaranteed. Apart from this, Nepal also has signed a number of international commitments on nondiscrimination, gender equality, and social justice. Most development partners have adopted gender equality and social inclusion as crosscutting issues in their programs while implementing infrastructure developmental projects. More recently, development partners have formed a Social Inclusion Action Group to share knowledge and experience and to influence policy development at the national level. Despite this, much is to be done to implement these constitutional provisions and international commitments.

Achieving the goal 
To achieve the goal of prosperity with social justice and inclusive development we need to adopt a multi-pronged strategy. The foremost strategic goal should be to achieve a rapid economic growth. Low level of productivity undermines meaningful structural economic transformation. 

We need to maintain growth rate of double digits for the coming two decades. For this sufficient investment should be made in priority sectors such as infrastructures like roads, airports and railways, modernization of agricultural sector, tourism development and service sector, human capital development and urban economic centers among others. 

Social inequality has persisted for a long time in Nepal. Historically, structural barriers such as caste and untouchability have excluded and discriminated against certain groups in society.  Such structural barriers have limited their access to equal rights and equal economic opportunities.  Gender inequality is also prevalent. In order to overcome these challenges, social inclusion has to be at the forefront of the national development agenda. Proper laws and policy need to be formulated and implemented to address this issue as soon as possible.

Impunity and rampant corruption has fuelled public disenchantment with Nepal’s democratic political parties. State organs are also often perceived to be inefficient and unapproachable. We need an accountable, ethical and transparent government.

As a landlocked country Nepal has had to always rely on one of its two powerful neighbors—India or China. Foreign influences other than the two neighbors also have influenced Nepali politics as Nepal has had to heavily rely on foreign aid for its social and economic development. Heavy economic dependency with India needs to be checked judiciously.

In order for Nepal to project its sovereignty, it has to have a balanced foreign policy that maintains an equal relationship with all the countries it interacts with. Nepal could be developed as a bridge between the two large economies. This would not only foster trade growth and economic ties but also help build a political stability in the region.

Ever since the dawn of democracy, Nepali state has often been tagged as a “crony capitalist state”.  Most political parties that emerged after the 1950s have all promoted some form of socialism, but scenario is opposite at the moment. In a free-market economy, the government acts as a neutral regulator.  In a crony capitalist state, political parties, big business and bureaucracy form a nexus and thrive on systematic corruption. Political parties and big businesses go hand in hand in awarding big contracts and bending regulations in order to unfairly extract benefits from the state and the market, all the while stamping out competition. 

This system promotes unequal distribution of opportunities and benefits of the state, and consequently enriches those in power. To address this issue the government has to regulate market in a manner that will not unjustly favor certain groups.  It should ensure the distribution of the benefits and resources equitably to its citizens. It should respect each individual to foster his or her potentially in its fullest form and promote genuine participatory democracy. Such approach would take the country into progressive socialism based on democracy as envisioned in the constitution. Only this could ensure economic prosperity and social justice, as both neo-liberalism and state socialism are in deep crisis all over the world.

We have all the prerequisites for achieving socio-economic transformation through rapid economic development and social justice. It requires will power and strong commitment from the government. Nepal can become a developing country by 2022, reach medium level income country status by 2030 and graduate to a high income developed country by 2040. All that we need is a commitment for this cause. 

(Edited excerpts of speech delivered by the author at ‘Conference on Public Policy and Governance in South Asia: Towards Justice and Prosperity’ on June 28)

The author is Former Prime Minister of Nepal  

 
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