Now and thenImagine how much more progress Nepal would have made if war, corruption and poor governance did not set us back
A Himal Khabar article last week set off a heated debate. Titled ‘Was Nepal better before?’, it showed that despite all the problems of the past four decades, the country had made remarkable socio-economic progress.
But in Nepal’s polarised polity, monarchists argued that the country's present ills can be traced to the failure of multi-party democracy since 1990. Mainstream politicians, on the other hand, seemed relieved that things are not as bad as they look.
Rabindra Mishra of the RPP tweeted: ‘Improvement at the speed of a turtle is only development for a society that is used to the velocity of a turtle. Development should be viewed holistically. Not just on the basis of some indicators.'
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Mishra's party is for restoring the monarchy to ensure national unity, stability and development. Former king Gyanendra himself recently said that the country had made great progress during the 30 year Panchayat System, and Nepal could restore its past glory.
But there were many others who argued that the partyless Panchayat was feudal and held the country back. Former Maoist ideologue Baburam Bhattarai posted: ‘Was Nepal better back then? Of course not, and it is better now. But it can be better still, and must be made better. Let us be future-oriented, not past-oriented.’
A critical look at the past 50 years of development in Nepal tells a mixed story. In 1991, one in every two Nepalis was living below the poverty line. It is down to 15.1%.
The Multidimensional Poverty Index (MDPI) based on health, education and quality of life also shows dramatic improvements. MDPI decreased significantly from 59% in 2006 to 17.4% in 2019.
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The Panchayat System was scrapped in 1990 after the People’s Movement, and the country replaced its absolute monarchy with a constitutional one. The Maoist conflict lasted from 1996-2006, and Nepal’s 240-year-old monarchy was abolished by the elected Constituent Assembly in 2008.
Plotting Nepal’s development indicators on a timeline shows dramatic progress, but correlation does not mean causation.
Average life-expectancy could have gone up even if Nepal had retained a constitutional monarchy. And Kathmandu’s rampant urbanisation and air pollution would probably be as bad if we still had a king.
Per capita GDP was stagnant during the Panchayat, but started climbing in 1990, and by the time Nepal became a republic in 2008 it went up steeply. Since this was mainly driven by remittances, it would most likely have continued on that trajectory whatever system Nepal adopted after 1990.
Per capita income is not an indicator of socio-economic equity, but it is a general measure of the average wealth of citizens. Nepal’s per capita income was $50 in 1960, when the world average was $459. Neighbouring India was at $83 and China was slightly higher at $89.
In 1990, Nepal’s per capita climbed to $185, and it has now reached $1,399. What is noteworthy here is that the rate of income growth was very slow in the years before democracy during the Panchayat with an increase of just $94 (at constant 2015 rates) between 1960-90.
“The argument that Nepal was better in the past is untrue,” says former Rastra Bank economist Keshav Acharya. “Nepal is behind many other countries for sure, but we have also seen progress in infrastructure, health, education, human development, communication, perhaps just not in public administration.”
But, he adds: “The administration did not exploit people back in the Panchayat days, corruption was not as rampant. The opposite is true now with bureaucracy and political leaders apathetic to the people’s needs, widespread laxity and wrongdoing.”
Indeed, even though family incomes in Nepal were lower in the second half of the past century, their needs were much less and most people lived in rural areas and were self-sufficient in food.
However, Nepal’s progress in infrastructure was slow during the Panchayat. Although Nepal was the second country in Asia to install a hydroelectric plant in 1911 during the Rana regime, by the end of the Panchayat in 1990, Nepal was only generating 227MW.
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It actually took the Electricity Act of 1992 and the advent of domestic and foreign investment in hydropower for generation to take off. Installed capacity has now increased to 2,700MW, and another 3,000MW worth of projects are under construction.
Access to drinking water and sanitation has similarly improved. Only 6% of Nepali had access to drinking water in 1960 which increased to 36% in the next three decades. But it has now reached 95%, even though only a quarter of them have access to quality drinking water.
The defining factors in measuring progress of any country is average life-expectancy, maternal and child health. In some ways, Nepal achieved dramatic gains in reducing maternal, child and infant mortality rates while significantly improving its immunisation, even though the progress has stalled in the last decade or so.
The infant mortality rate is down to 21 per 1,000 births today from nearly 200 in 1960. Maternal mortality is also down from 239 per 100,000 deliveries, down from 850 as recently as 1990.
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This represents one of the steepest declines in maternal-child mortality of most countries in the world, and is a direct result of improvement in female literacy, better road access for institutional delivery and the work of Female Community Health Workers.
In 1971, only 14 out of 100 people in Nepal were literate. In 1990 this was up to 40% and now it is 76%. In 1990, the primary school enrolment rate was 76%, now it is at 97%. But the quality of instruction and the disparity between public and private schools is more prominent than ever before.
Back in 1990, there was only one hospital bed for every 9,146 Nepalis. Today, the ratio has improved to 1,821 – even though access and affordability of quality care are still issues. In fact, out-of-pocket medical bills are pushing even middle class Nepalis into poverty.
Nepal’s Human Development Index (HDI) last year was 0.602, up from 0.399 in 1990. HDI takes into account several developmental factors including life expectancy, literacy, per capita and quality of life.
Increasing the representation of women, Dalits and other communities in socio-political leadership granted by the 2015 Constitution is another sign of socio-economic development in Nepal. Women make up 33% of the MPs and most of the deputy mayors across the country are female, even though many were proportionally elected or represent the quota system. Much needs to be done to achieve inclusion that reflects the true diversity of the country.
One could argue that much of this progress would have happened regardless of which governing system was in place. Some consider the current progress to be a natural result of changes in the global economy and politics, technological advancement and contemporary changes. Economic and political analyst Dipak Gyawali thinks that the reason for the improvement in areas such as education, health and poverty is not the change in the system, but the remittances sent by Nepalis abroad.
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“There has been improvement in various sectors due to remittances, which have reached a quarter of the GDP, but political parties have created a false narrative that the improvement is due to the multiparty system,” says Gyawali, who served as Water Resource Minister in 2005.
Even so, the contribution of an open society and an open market brought about by democracy cannot be ignored. Foreign employment itself became accessible following the restoration of democracy. During the Panchayat period, passports were difficult for ordinary citizens to get.
“During the Panchayat period, those who studied abroad used to return to the country. Now the youth have no faith and hope for the country, it seems that only the youth who cannot go abroad live in Nepal,” says Gyawali.
Economist Acharya blames it on self-centeredness of Nepal’s political leadership, saying that the feckless lack of accountability have led the public to believe that there has been no improvement whatsoever in the country, thus giving rise to populist politicians.
He adds: “It is not that nothing is happening, but it appears to the public as if the future is hopeless because leaders are not accountable to the people."
Statistics confirm that Nepal has made progress, but the pace of economic development has been much slower than in the neighbourhood. Nepal’s per capita income in 1960 was $50 while in then-East Pakistan it was US$85. Today, Bangladesh’s per capita income has reached $2,458. India is at $2,257. And China has outperformed all others from a mere $89 in 1960 to $12,556 today.
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