News from Qatar about the appalling situation of Nepali migrant workers has made every single Nepali feel ashamed, despondent and nervous. Remittance makes up around 25 percent of the total gross domestic product (GDP) of the country. Nepali youth are forced to leave the country just to find a means of putting bread on the table.
The country is poor. Who is responsible for not letting us prosper—politicians, party cadres, general public, or some specific individuals? [break]
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We are poor because we don’t have efficient institutions. We don’t have institutions because we never put enough effort to develop them. We were never taught how important it is to have effective and efficient institutions for prosperity.
The number of Nepali youth flying to the Middle East for jobs increased significantly after the Maoist insurgency crippled the country’s productive sector. Political parties, the institutions that are supposed to institutionalize the country’s path of development, failed to carry out their jobs.
Frequent changes of governments, violent attacks on already established social, political and economic institutions, and half-hearted democratic practices under royal orders impeded the forces we needed to strengthen our institutional development.
The tragic fate of Nepali youth in Qatar is just a manifestation of the country’s pathetic situation. There are no strong institutions where these young Nepalis can ask for compensation for what they lost. There is no place for people to seek justice. The entire bureaucracy, judicial system, political mechanism and civil society function inside the fists of a few ‘power brokers’.
Public enterprises, which only incur losses to the government, are the best examples of our inefficiency. We have been complaining about them ever since we started privatization in 1990. But we never took any actions to correct the course of inefficiency.
There are a total of 37 public enterprises in Nepal, a good number to keep thousands of people employed if run properly. Seven of them are in the manufacturing sector, six in the trading sector, seven in the service sector, five in the social sector, nine in financial sector, and three in other non-categorized sectors.
The total operation cost of the PEs was Rs 185.8 billion during the fiscal year 2011/12, which is 22.34 percent higher than the total operation cost of the previous year. The then government formed a separate entity, Public Enterprises Directorate Board (PRDB) in December 2011 to look after the operational and policy issues of all the PEs.
Unfortunately, so far no substantial action has been taken to increase the efficiency and productivity of PEs. The entity has been incapable of stopping the PEs from misusing their resources by distributing “bonuses” to the workers. Every day there is some news or the other about corruption in the PEs.
Nepal Oil Corporation (NOC) and Nepal Electricity Authority (NEA), which are suffering huge losses, have not improved their performances even after PRDB came into existence. The government gave a loan of Rs 6.6 billion to the PEs during the fiscal year 2011/12, which is 2.1 percent of the government’s total expenditure. Similarly, the government wrote off an accumulated loss of Rs 27 billion in the same fiscal year. This particular case shows how irresponsibly we have run our mechanisms for years.
The different ministries and executing agencies under them do not follow institutional practices when they implement projects and programs. The National Planning Commission (NPC), which formulates plans for the country’s long-term development goals, works in isolation.
We have to learn from other countries that have institutionalized their development process. For instance, South Africa, which won its independence in 1994 (four years after the restoration of democracy in Nepal), has achieved a higher level of economic growth than Nepal. Its per capita income is more than ten times that of Nepal.
We achieved record high economic growth rate in fiscal year 1993/94 after opening up our economy. The institutionalization of democracy was happening at a steady pace. Then the rebels started attacking democratic institutions and processes. Development activities at local levels came to a complete halt due to the attacks. The democratic values budding in our society were nipped.
Political leaders from mainstream political parties, mainly NC and CPN-UML, focused on accumulating wealth for their personal betterment. Development process and people’s aspiration were dismissed largely due to the Maoist’s attacks on people and institutions and the mainstream political parties’ apathy to public welfare.
We wasted more than two decades without working on a foundation for the nation’s development path. Forever uncertain political situation, constantly fighting political actors, and unresponsive bureaucracy became our identity. We never realized the value of having strong institutions; in that our orientation was faulty. Rather, we were compelled to rely on some powerful individuals. We spent the last two decades dismissing what we had instead of working to achieve what we wanted to have.
We did not focus on maintaining accountability and transparency, two other requirements from institutional development. We were not given a chance to question the wrongs and appreciate the rights. Politically manipulated social and economic debates made us intellectually bankrupt. Even now, much of our society lacks independent critical thinking. Power hungry political cadres limit themselves to worshipping high-ranking leaders for personal benefit.
At this critical time, we are repeating the fault lines that India adopted during Nehruvian period, which led India to an almost dead-end before 1990. One, pumping money into a massive, inefficient public sector; hence making investments unproductive and causing a capital-output ratio and two, pampering organized labor to the point of extremely low productivity.
We have to understand that institutions are the major driving forces of any society. The process of nation building and formation of different organs is the road to achieving development and ensuring its sustainability. Scholars Daron Acemoglu and James Robinson have demonstrated how institutions are the determining factors for prosperity of any country in their book Why Nations Fail. Most developed countries have strong institutions, which help them fight corrupt political actors, bureaucrats and wrong-doers.
History, culture and geography of the society and country are always secondary for development if strong democratic institutions are established in the country. Nepal has been repeatedly failing not because we are in a resource-crunch, but because we do not work on developing our institutions. There is a fundamental need for institutionalizing our means and mechanisms.
The author is a graduate
student at Tsinghua University in Beijing, China.
Views are personal
bhoju.poudel1@gmail.com
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