It is not surprising, then, that the ascent of Dr Baburam Bhattarai – a man of acclaimed intelligence and integrity – to the post of prime minister has inspired hopes of a new chapter turning in Nepali politics. Yet, he too faces big challenges ahead. Nepali Congress and CPN-UML sit in opposition and there are already signs of rifts in his government.
Thus, we have to be realistic in our assessment of what Bhattarai can and cannot do. This is especially true in regards to economic and development issues, which, upon becoming PM, he rightly said must temporarily take a backseat to politics. Let’s be clear: Bhattarai cannot give us double-digit growth overnight, and he cannot erase the legacy of poor economic policies, at least not in this term.
What he can do, however, is to begin retooling the architecture of policymaking so that economic policies are smarter and more effective. This will require that the government adopt certain principles of good governance as discussed below.
When Nehru became PM of independent India, he immediately set upon a massive state-led industrialization campaign, famously declaring large dams the “temples of modern India.” Today, any sober assessment of that campaign would rule it a failure. We should, accordingly, focus on modest and specific goals. For example: Micro-dams instead of mega-dams. Bhattarai’s goal of achieving 20 percent growth in 10 years is a little worrying from this point of view.
The Maoists are big on ideology. In a way, this is admirable because it suggests commitment to something more serious than self-interest. Yet, it’s unwise—even arrogant—to presume that all development problems are anticipated, and solutions contained, in a little red book. The new government should be willing to take development one step at a time, and to reconsider its approach at every step.
The government must play a central role in the development process, but must be aware of the threat that its own shortcomings pose to that process.
Every development issue has many stakeholders – civil society, local communities, the private sector, etc. – which bring unique capabilities to the table. The government should leverage these capabilities by engaging with these stakeholders to optimize development solutions.
While we can’t expect Bhattarai to solve all of our development-related problems, he can lead us in the right direction. This means disciplining government such that it is active but not disruptive, non-ideological, and sets modest goals that reflect grassroots level concerns.
Development policy works only if the government stays committed to it. Too often, we have seen the governments undertake ambitious initiatives that lose steam mid-way through. To prevent this, the new government should ensure that policies are directed by genuinely interested officials, and that these officials aren’t thwarted by bureaucracy or vested interests. More generally, the incentives should be right: Good work is rewarded, and bad work punished.
These principles have paid off in various sectors already. Nepal’s acclaimed Community Forestry Program is a case in point. The program, which empowers local communities to manage and conserve forests, has significantly improved the welfare of those communities and expanded forest coverage. Today, about one-third of the population participates in the program and manages a quarter of the country’s forests.
Coffee production is another good example. The government realized early on that coffee is largely grown by small farmers who would struggle to meet global standards. So, it worked with industry associations and NGOs to help farmers gain global certification. Clearly, there is much work to be done, but this is a step in the right direction.
There are many priority areas in which these principles should be brought to bear. Agricultural productivity has fallen, threatening famine in various districts and resulting in food price volatility. An important reason why there is a lack of R&D is Nepal was untouched by the Green Revolution that swept across South Asia in the 70’s and its once promising agriculture research farms are now basically non-functional.
Healthcare, too, is in shambles. Most people don’t have adequate healthcare: Private hospitals are well-equipped but expensive, government hospitals are accessible but ill-equipped. The situation is made worse by the absence of a generalized insurance scheme. This calls for a massive investment in public health facilities and a reworking of incentive to induce young doctors to work in the countryside. Support could also be given to alternative modes of healthcare delivery, such as community-run hospitals, which are promising but resource-strapped.
With regard to tourism, we have got our priorities wrong. There was no sense in declaring 2011 a year of tourism without first developing basic infrastructures and making Nepal a more tourist-friendly place: Strikes and power shortages don’t make tourists feel welcome.
While we can’t expect Bhattarai to solve all of our development-related problems, he can lead us in the right direction. This means disciplining government such that it is active but not disruptive, non-ideological, and sets modest goals that reflect grassroots level concerns.
This is a tall order, but Bhattarai is the right man for the job, as he demonstrated during his stint as finance minister. However, he will need political and intellectual support. Will he get such support? Now, that is the million-dollar question.
The writer is the Executive Director of the Institute for Integrated Development Studies (IIDS)
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