Nepali Times
Economic Sense
A dubious high



TALK IS CHEAP: Speaker Subash Nembang, Prime Minister Girija Prasad Koirala and Vice Chairman of the National Planning Commission Jagadish Pokhrel release the NPC\'s three year concept paper on peace, poverty alleviation, and rehabilitation on Monday.

Another fortnight, another flurry of announcements. In Kathmandu, it's party time for planners. There are workshops and seminars galore, the ultimate high for our cut-and-paste thinkers.

The National Planning Commission unveiled its three-year planning approach paper, the Minister for Physical Planning and Works announced her 20-year perspective in a vision document. At the National Development Council it was same old same old with the usual suspects mouthing the usual platitudes. The Finance Ministry is making noises about making ends meet in the coming fiscal year.

We have been always good at talking in the present continuous-just look at the proclamations of the monarchs over the last 250 years, Rana-era documents, Panchayat plans, the post-1990 whatevers. It's all more of the same, bagsful of wishes. At least the consultants keep their careers going.

Jagadish Pokhrel, the current vice-chair of the Planning Commission, is going to be a frustrated man. For all his novel planning, he has no control over implementation, and in three years' time, things will look very different.

To allow a market economy to run efficiently, we need to retool the planning process. The annual budgets never dovetail with the five-year plans and, when the commission's targets fall by the wayside, there is no mechanism to analyse what went wrong. It's obvious that if the economy is going to develop in any holistic way, planning and execution need to be the mandate of the same agency.

The Beed generally proposes this: a Ministry of Finance and Economic Development that would take over the tasks of a number of ministries as well as the planning commission.

In line ministries we need people who understand how to use the resources available, and harness new ones, to implement plans. The government is all gung ho about increasing pay and not cutting security personnel. The wage bill is going to rise meteorically. These civil servants and security personnel will also have to be paid pensions in the years to come. Militant unions and local politicking are deterring private investors. One wonders where the surplus needed for development work will come from. We need two things and we need them fast. First, a government that understands finance, business, and industry. Second, a government with the guts to do what is needed, no matter how unpopular.

It's a telling sign of what the Beed must regretfully call stupidity that no minister wants to raise the price of petroleum products to reduce losses, but that everyone has somehow agreed that it is a good idea to borrow from all sorts of funds, even employee savings. For all the grand plans we have, we need a combination of these two elements. A government that cannot sensibly manage the Valley's water supply, or face head-on the licensing issue for hydropower projects cannot negotiate with India on water rights or projects. It all makes one fearful of the kind of legislation we are to get on complex finance instruments.

One thing is clear-when you make planners also responsible for implementation, or line agencies also responsible for planning, you finally have a level of accountability. Without this, all we can look forward to is becoming the country with the highest per capita planning documents.

(11 JAN 2013 - 17 JAN 2013)