Making the right noises

A month since its formation, and four months after the election, the government has finally outlined its objectives for constitution-writing and governance. While the agenda set by the government seems impressive, it is naturally not likely that most of the objectives will be met.

Some of the key points are in the Common Minimum Programme (CMP) only because it would be wrong for them to not be there. For instance, the government has stated that it will look to end load-shedding in three years. Other ambitious targets have been mentioned, which will also likely not be achieved anytime soon.

However, the setting of the agenda for the government is still a start, and that is good news. These may only be baby steps, but for a country with no functioning government for more than a year now, these are steps in the right direction.

The government aims to get the constitution drafted within a year and to announce dates to local elections at the earliest. While the former is essential, this column believes time and resources should not be wasted on local elections at the moment. It is a question of priority. In order to conduct local elections, the government must get other stakeholders on board, and this will be a time-consuming exercise. This column does not believe the government has the bandwidth to take on the challenges of constitution writing and the conducting of local elections simultaneously.

Nepal will be better served if the government, for the moment, solely focused on getting all stakeholders on board for the new constitution. There are enough challenges as it is, and there is no need to welcome another set. Moreover, the expenditure on the elections may prove to be wasteful because we do not know what form of state or governance the new constitution is going to give us. Local elections should be made to wait until after the constitution is ready.

That notwithstanding, some of the other aspects of the CMP are particularly encouraging. This is the first time a Nepalese government has laid out a code of conduct for its own ministers – one that aims to make governance smooth. The government has also undertaken to reduce wasteful government expenditure and to adopt a zero tolerance policy towards corruption. Whether this happens or not is another matter, but at least there is an acknowledgement of what is going wrong and what the electorate is unhappy about. The government is saying it wants to be more accountable to the public, and in a country where the lack of accountability has been frustrating, this is at least heartening.

One of the things the government wants to do, for instance, is to curb unnecessary domestic and foreign visits by ministers, bureaucrats and other government officials. This is another good step taken by the government, for it at least shows that the cabinet understands the rationale for austerity and the benefits it brings.

These are minor and fairly obvious aspirations of any government, some would argue. But in the context of Nepal, where there has been an absolute breakdown of trust in government over the last five years, these statements are a breath of fresh air. Sure, the CMP is over-ambitious. But ambition stems from desire, and the desire to improve can be no bad thing.

(This appeared as a column in The Himalayan Times on 23 March 2014).

Let aid do more

Nepal has long been an ‘aid favourite’, receiving interest (and financial commitments) from a plethora of international agencies and donor countries. In a matter of just 3 years between fiscal year 2010-2011 and fiscal year 2013-2014, Nepal received aid commitments of $5.46 billion from a total of 73 donors, of which $3.41 billion has been disbursed for 742 projects across 50 sectors.

These numbers are quite staggering, particularly considering that for most of this period, Nepal has either had an unstable government or no government at all. While there is no denying that Nepal requires significant external assistance to bolster its economy, it is important to ask where this money has been going, especially at a time of near-paralysis of government.

A look below the surface is quite revealing, for the choice of sectors that have received funding indicates the dilemma donors have been facing in Nepal. The sector that has received the greatest amount of disbursements is education, followed by local development and health. These are followed by road transportation and electricity, arguably more important sectors. That electricity and road transport have received less assistance than education and health illustrates the challenges donors face in funding projects that require extensive state participation and a stable political environment.

In Nepal’s context, the priority areas for fostering economic growth and development must be the power sector, followed by transport infrastructure. Not only do these two sectors have a more significant direct impact on economic growth, but their follow-on development effects are also greater than that of other sectors.

This is not to suggest that donors have got it wrong. In fact, it only suggests how poor successive Nepalese administrations have been in creating conditions conducive for the development of the electricity, road and other infrastructure sub-sectors. Donors are still putting money to work in Nepal, but largely in sectors that see less direct government involvement. Essentially, these are sectors in which it is easier for donor commitments to have greater impact.

This shift in focus started happening at the turn of the century when political instability in Nepal peaked with the heightening of tensions with the Maoists. While the proportion of funding for social sectors vis-à-vis hard infrastructure has dropped somewhat, the focus is still squarely on the former.

It is a unique predicament donors find themselves in as their hands are tied due to the political environment in the country. On the one hand, they are criticised for taking the easy way out and not doing enough to support infrastructure development. On the other, when they occasionally do try and push for reforms that can make it easier for them to commit to projects in these sectors, they are accused of trying to push their agenda and impose on governance. It is a lose-lose situation.

If they try and seek accountability through the disbursement of loans instead of grants, they are accused of burdening a poor country with further debt obligations. If, on the other hand, they provide grants instead of loans, questions relating to accountability are raised.

Our new government needs to address this issue soon, for greater donor involvement in the infrastructure sector will be a natural catalyst for the private sector to boost its participation in this sector too. For too long now, aid agencies have been blamed for misplaced focus. It would be good to remember that charity begins at home.  

(This appeared as a column in The Himalayan Times on 9 March 2014).