KATHMANDU, May 3: Two major political parties-Nepali Congress and CPN UML-- have unveiled their election manifestos for the local elections, and most of the promises made in those documents are unrealistic. The targets of high per capita income, double-digit economic growth, and generation of up to 15,000 MW hydropower in 10 years are far from achievable because these are not backed by concrete plans and identification of the 'engine of growth' that will drive economic activity.
Experts question targets for economic growth, per capita income and power generation
Both parties aim at double-digit growth, something which Nepal has never achieved. The average growth rate over the last 10 years remains below 4 percent. Economists cast doubts on the projected growth rates because the parties have not identified any engines of growth. Such robust growth is unachievable under a normal situation.
KATHMANDU, May 3: Two major political parties-Nepali Congress and CPN UML-- have unveiled their election manifestos for the local elections, and most of the promises made in those documents are unrealistic. The targets of high per capita income, double-digit economic growth, and generation of up to 15,000 MW hydropower in 10 years are far from achievable because these are not backed by concrete plans and identification of the 'engine of growth' that will drive economic activity.
The average Nepali will earn US $ 5,000 or over Rs 515,000 per annum within 10 years as per current purchasing power, according to the UML poll manifesto. The target is over six times the Rs 90, 521, projected per capita income for this fiscal year.
Average growth rate in per capita income from 2006 to 2016 was only 10 percent. Per capita income should increase by 19 percent every year to reach the UML manifesto target.
The Nepali Congress in its election manifesto only sets out a target of achieving middle-income country status. It has not specified any target figure. Incomes range from US $ 1,026 to 4,035 (Rs 105,678 to 415,000 based on Tuesday's exchange rates) for lower middle-income countries and US $ 4,036 to 12,475 in the upper middle-income category.
Both parties aim at double-digit growth, something which Nepal has never achieved. The average growth rate over the last 10 years remains below 4 percent. Economists cast doubts on the projected growth rates because the parties have not identified any engines of growth. Such robust growth is unachievable under a normal situation.
Economist Posh Raj Pandey said that only a sustained growth rate of 7 to 8 percent over seven to eight years can double the per capita income.
Economist Shankar Sharma said both the targets are not realistic as they have not specified how to bring about such robust growth. “Concentration on a certain sector such as in Bhutan and Laos has achieved growth by generating electricity and exporting it to the neighbors,” added Sharma.
Basudeb Guha-Khasnobis, senior economic advisor for the Kathmandu-based office of the United Nations Development Programme, said that achieving per capita income of US $ 5,000 would require an annual growth rate of 15 percentage or more. Nepal's recent growth history does not support that possibility. He further said, “There may be a possibility of achieving the high rates but this requires a sea-change in the way the political economy functions and the identification of one or two engines of growth.” said Khasnobis, adding that his views are his own and not that of UNDP.
A long-term development perspective called Envisioning Nepal 2030 has targeted achieving US $ 3,000 per capita income by 2030 and Nepal aims to graduate from the least-developed country status, achieving $1,242 per capita by 2022.
Nepali Congress has targeted the generation of 15,000 MW in 10 years while CPN-UML has announced a target of 10,000 MW. These targets are also ambitious and if achieved electricity generation will increase multifold. The country's installed energy capacity is below 900 MW at present.
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