Economic Transformation is the key

Economic Transformation is the Key!

Nepal needs an economic revolution. Current government has rightly made economic revolution as one of its central goal. But so did past governments. Past experience is a good testimony for Nepal that mere political rhetoric and paper planning is not enough. Where previous governments missed opportunity to realize their goal was on action! This is not to say that they did not work; instead this is to say that the ferocity that was needed in actions to change Nepal was just not enough. Its consequence was Maoists-led political upheaval and eventual collapse of monarchy from Nepal. This political change occurred in a huge cost – nearly 15,000 deaths and billions of dollars of economic loss. Nepal is sure to suffer with this trauma for several years to come.

There is no benefit however in pondering about the great loss Nepalese have made during this time period. We need to move on as citizen and make some informed changes that will change the fundamental structure of our society. The first and foremost is economic change. This is the key for sustainable peace. That is, to prevent another future rebellion activity and protect the country from human and economic loss, living standard of the people must be changed. Common people, as the historical trend shows, do not really care about who rules the government. What they care is how adequately they can provide health, education, and security (financial as well as safety) to their families. No political ideology makes any real difference on people’s perception if people are provided with an environment to live a quality life.

Budget 2008/2009 does make some good campaigns for economic change. There however are two aspects that government needs to be reminded about to materialize such campaigns. First is about the enforcement of policies/plans. It is perhaps the most important for this government to make sure that the outlined policies are effectively implemented. With a crisis of effective organization structure and service delivery mechanism, current government surely faces a huge challenge on effective actions. How resources are flowed from center to regions and how efficiently these resources are used will play critical role in attaining financial revolution. Second, how government promotes economic growth in the country will make a significant implication towards the economic change. While it is too early to make any comment, it generally appears that country is not quite aggressive on growth as it is for rural development. Rural development is important, and must be a key goal in a country like Nepal where 80% of people live. But what is also important to understand is that a large number of rural populations will eventually migrate in urban areas. In fact, by 2030, nearly 40% of rural population is projected to be in urban areas. This suggests that “growth” should not be a side-tracked project. Instead, growth oriented policies must go hand in hand (may be more aggressively) than the subsistence-oriented policies.

Building efficient service delivery and effective growth policies therefore are the most important steps for Nepal’s economic transformation. These two steps can significantly change the way economic system functions in Nepal. Various strategies can be adopted to realize these two steps. We invite readers of this blog to discuss on the possible ways to about achieving these two steps in the best possible ways.