29 July - 4 August 2016 #819

22 governments in 26 years

The economic cost to Nepal of decades of political disarray
Manish Jha


By staying in a country we accept the policies of its government and the system of the state. Our national identity means that this state system has also accepted us as citizens of the country.

A government is a system by which a state or community is controlled, but a citizen of a country may sometimes be uncertain about what to expect from the state when its government, policy and logic of existence are not clear.

In 1990, the Nepali people hoped that, with democracy, the country was headed towards socio-economic development. Krishna Prasad Bhattarai became prime minister of a transitional government to draft a new constitution and organise elections. The GDP growth rate of Nepal was 6.3 per cent. A new political system and the hope of rule of law meant that investments flowed in and the market and state processes functioned smoothly.

Under Bhattarai’s leadership we got Nepal’s fifth constitution, and the 1992 elections were clean, with a high turnout. By the time Girija Prasad Koirala became prime minister, Nepal’s economic growth rate was 4.6 per cent, and when he stepped down two years later, it was down to 2.9 per cent.

He introduced new economic and investment policies that started showing positive results, but infighting within the Nepali Congress forced him out. Midterm elections and political confusion created disturbances in economic growth.

It was not easy for UML Prime Minister Manmohan Adhikari to carry on with the same pace of economic growth. But Koirala’s investment policies and Adhikari’s socialist principles created a good balance, and economic growth spurted to 7.6 per cent. Today, lots of Nepalis still believe that 1992 to 1994 was the golden era of Nepal’s economic development. Media liberalisation, easing foreign employment, and social benefits for senior citizens marked a major turning point in Nepal’s economy.

Then it was the turn of the NC’s Sher Bahadur Deuba, but soon the country was mired in the Maoist conflict. The GDP growth rate plummeted to 2.7 per cent, a big loss for a developing nation.

After Deuba, the prime ministership was akin to a game of musical chairs: Lokendra Bahadur Chanda, Surya Bahadur Thapa, Girija Prasad Koirala, Krishna Prasad Bhattarai, and back again to Deuba. The conflict ended, and so did the monarchy. Comrade Prachanda came down from the mountains to be sworn in as elected Prime Minister Pushpa Kamal Dahal in 2008. It took a while for him to understand how a government functioned. Unable to give up his militant ways, he failed miserably and the economy suffered even more than before.

After he resigned in 2009, it was the turn of the UML’s Madhav Kumar Nepal. One might say that Nepal tried to reform the bureaucracy, but he was in office for too short a time to complete it. Jhalnath Khanal then had a brief stint, before being replaced by Baburam Bhattarai, who made a lot of populist moves, but the country suffered the consequences of making too many compromises in the distribution of ministry portfolios to smaller parties.The only thing people today remember about Baburam Bhattarai’s tenure is that he started widening Kathmandu’s roads.

Chief Justice Khil Raj Regmi was appointed prime minister just to conduct elections. He streamlined the administration and the 2013 elections went well. Sushil Koirala of the Nepali Congress replaced Regmi, and he pushed through with the Constitution, but that was about all he did. Koirala may have been honest, but the economy stagnated and took a direct hit from the earthquake of April 2015.

Koirala stepped down, as agreed, to make way for KP Oli, and the country was immediately embroiled in bloody protests in the Madhes followed by a debilitating blockade which had a dramatic impact on the economy.

That, in a nutshell, is the story of Nepal from 1990 to 2016. Politics has been the biggest hindrance to Nepal’s economic growth. We have been through several coalition governments, which have proven to be an inefficient model. Our political leaders are incapable of teamwork in the national interest — the most important ingredient required for the economic growth and development of a nation.

Manish Jha is co-founder and general manager of FACTS Nepal. @manishjhanepal

Read also:

Life in pictures

1951, 1960, 1972, 1980, 1990, 2001, Editorial

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