Private sector looks for profit that country can’t afford
KATHMANDU, JUL 30 -
The National Planning Commission plays an integral role in exploring and allocating resources for economic development and monitoring and evaluating development plans, policies and programmes across the country. Politically appointed by the Maoist party as Vice Chairman of the body, Deependra Bahadur Kshetry, has been in office since 2011. He’s a punctual man and has created a ‘clean’ image for himself from his days at Nepal Rastra Bank. As a leftist economist, Kshetry is critical of neo-liberal policies and sees the need to develop the country’s agricultural sector. In conversation with the Post’s Bidushi Dhungel, he spoke about the relevance of the National Planning Commission, the private sector, foreign aid and unemployment in the country. Excerpts:
The National Planning Com-mission has been around since the 1950s. But some claim the body to be a failure in terms of its delivery, resulting in its relevance declining. What do you think?
In a developing country like ours, if we cannot move in planned way, we cannot achieve targeted development. Neoliberals think that resources find their way to places where there is profit automatically, but that’s not the case. That’s why the relevance of the commission exists. In fact, in times of political transition, it is more relevant.
Do you find that the Commission is at times politically marginalised from important policy formation?
The problem is that NPC is not governed by national laws and there may be some drawbacks to that. But because it runs on its own strategy, it’s not marginalised as far as concrete work is concerned. For instance, we take the bottom-up approach to planning. We give priority to demands which come from the grassroots. This system brings issues to us before
going to the Finance ministry to find funds so most of the time we remain involved. But because the Commission functions under the government’s demands and needs, sometimes it seems as though there is some form of marginalisation taking place.
One major aspect of the Commission’s work has been the initiation of National Priority Projects. Where did the idea come from?
Resources are always limited whereas the aspirations of the people are unlimited. To find some balance between these two juxtaposing ideas, the National Priority Projects came into being. The idea is to distribute resources according to national priority and need. For example if there are areas which are economically capable and we can build roads to link them to cities, then we can gain maximum benefit from it immediately.
Why has there been such a delay in implementing these priority projects?
The Commission develops plans, but implementing them is difficult. Political instability is the biggest problem. Because of it, even the budget is delayed. Look at what’s happening this year-we have to work with only one-third of the full budget.
The country is largely dep-endent on agriculture for livelihood and yet there seem to be no National Priority Projects with a focus on agricultural development. Why is agriculture neglected in these projects?
Since the political changes that came in 1990, neo- liberal economic policies advocated by neoliberals have been in place which emphasise the importance of international trade, export, industrialisation and privatisation, but neglect agriculture. Also because the return in agriculture is not high and there isn’t a good network of agricultural infrastructure in place, the sector has been neglected somewhat. Even if there is production, you need roads to get the goods to the markets. That’s why infrastructure development has been the focus. However, the current PM is determined to prioritise the agricultural sector. PM has suggested doubling the budget in the agricultural sector and planning the budget accordingly. If we prioritise agriculture, we can create employment in the rural areas as well.
It’s not just agriculture which is neglected. The priority projects are focused on urban areas where only a fraction of the population resides, even though the majority of people live in rural Nepal.
It just looks like that’s the case looking at it from Kathmandu. In fact, more than 83 percent of the people reside in rural Nepal and undermining that population is impossible. Under the Ministry for Local Development, we can talk about the development of rural roads, agricultural roads and irrigation projects, which are all outside the cities. You might be aware of that the government sends both with and without conditions a minimum of Rs 3,000,000 to every village development committee yearly as an incentive budget for marginalised groups, to build roads and drinking water taps etc.
Are these resources properly utilised?
In the absence of locally-elected bodies, it’s hard to trace the entire budget and there may be some problems of corruption which arise.
Every year between 300,000 to 400,000 people come into to labour force and due to the lack of employment opportunities, many find work abroad. Why hasn’t the government brought mass-scale projects to generate employment, particularly in rural areas?
Unemployment is a real national
problem, and although officially there is only two percent unemployment in the country, really the figure is more like 36 percent. We are disguising the problem. To begin to address this problem, the current PM’s initiation of the youth self-employment fund when he was finance minister, was a good start. But when the government changed, the project wasn’t given as much focus and instead the money was allocated more for ‘small farmers’. As PM, Baburam Bhattarai took up the issue with the finance Minister and it is to be resumed again after some good homework has been done. But there have been attempts to defame this initiation calling it ‘lok priya’.
Another pilot programme in Karnali area was to guarantee 100 days of work for every family in the region. There were some problems claiming that only 13 days of work were allocated to some, but still the government had submitted a law to the CA to make this 100-day employment mandatory across the country. Unfortunately, the CA dissolved. Still, the government has been thinking about bringing this to effect through an ordinance. The problem is that some may accuse the government of being people-friendly in the time of elections.
One school of thought argues that the private sector, if allowed to flourish, will generate employment to meet the country’s demands. Do you agree?
I disagree. It is said that the private sector can do everything, but in a condition of limited resources it’s particularly untrue. Let me cite an example of gold import. Though the government allowed the private sector to import gold, not a single person dared to import it for one and half years. Even now, the private sector has a lot of freedom, but where has it shown leadership or headway? The businesses are usually family-run.
Further, if you look at projects the Investment Board has thought of (around 40-50), no private sector company has come forward to implement them. I am sad to say that the history of our private sector has a feudal base and there is a tendency to take feudal wealth and turn it into entrepreneurial enterprise. But the private sector looks for a large chunk of profit which our country can’t afford and that’s why they haven’t come forward. They make demands from the government in terms of facilities, but ask to be allowed to run on their own at the same time. If the private sector and government can move forward hand in glove, development will take place quicker.
As an aid-dependant country, what are the positive aspects of receiving foreign aid?
We are not an aid-dependent country as a whole. Around 60 percent of our development budget comes from foreign aid, but not the rest. Aid tends to make international ties healthy, brings in resources to a resource-scant place, and brings in new technologies. But at the same time, if we could manage on our own, we wouldn’t have to ask for others’ help.
Is it possible for Nepal to be self-dependant?
Not immediately. I was just a t a meeting about taxes today. This year, we collected taxes that amounted to 22 percent more than what our target for the year was. This is good growth. If we can take the people into confidence and collect taxes properly, it will be possible in the future.
Posted on: 2012-07-30 08:19