Nepalis and their economy are innately resilient. Even when the
earthquakes of 2015 devastated parts of the country, our GDP growth rate did not nosedive. It took a bigger blow, the
Blockade, to grind it to a halt in 2016. This year, we have rebounded to a healthy growth of 7%, thanks to a shrunk base, good monsoons, steady electricity supply, and normalisation of trade. Our focus now should be to remain on a high growth path of at least 7%, year after year. This will double the size of our economy in 10 years and make us a vibrant, enterprise-friendly, middle income nation by 2030.
Read also:
White swans, Editorial
Taking politics out of economy, Om Astha Rai
The priority now should be on job-creating economic change, propelled by large investments in infrastructure. Energy and connectivity can unleash potentials in manufacturing,
tourism and agriculture. There are about six major irrigation projects, like Sikta and Babai, which when completed will be like having a good monsoon every year. Sustained rise in agricultural productivity will form a durable basis of high and inclusive growth for decades to come.
After the
first phase of the local elections, governments are being formed in the grassroots with great enthusiasm. The 2017 Budget has made a transformative departure by transferring hundreds of billions of rupees to local government coffers.
Like an Englishman’s home is his castle, parts of Singha Durbar will now be located in every Nepali village. This will redress our deficits in governance, public service provisioning and lacklustre rural growth. This is, however, conditional on local governments being functional. While the urban municipalities are better equipped, villages will need to be guided. Transitional handholding cannot be paternalistic because each local government is sovereign.
Implementation of federalism frees bodies like the National Planning Commission to take the long view, and focus on big ticket items of attracting large investment. This begins with Vision 2030 that articulates the sources of long-term prosperity. Foreign Direct Investment (
FDI), eased by new laws, simplified procedures and proactive outreach to global brands will loom large as a priority. Going forward, we must nurture the following five D's to form our tailwind of progress:
Distance: Our proximity to two of the world’s fastest-growing economies, and half the world living within five hours of flying distance, is a huge resource. With links forged with China’s B&R Initiative and India’s drive to connect its Gangetic hinterlands, we can negate our 20th century handicap posed by landlockedness. With lower costs of engagement, we can be part of international production networks, specialising in components where we have an edge.
Demography: Our greatest strength is our people, half of whom are aged below 22. After 2028
we will become an ageing society and after 2054, an aged one. We have a narrow window left to reap the
demographic dividend, and to make up for two slow decades.
Democracy: There is no better way to govern a heterogeneous society like ours. But we need to revamp the way we celebrate and leverage democracy: it is not just about periodic elections, it has to evolve into a culture of rules-based governance that aggregates and responds to our diverse preferences. Without checks, federalism could go horribly wrong, shifting Kathmandu's problems to local units and amplifying them.
Digitisation: Our old model of trade and production is obsolete, and we need to catch up by leapfrogging into the digital age of fragmented production across integrated economies. There is an advantage inherent in backwardness: 25 years ago, there were 71,560 phones in the entire country, today Nepalis carry 28 million cell phones.
Diaspora: Our diaspora is coming of age. They need to be courted as the first investors. They must be our emissaries for greater trade, investment and tourism, stronger socio-cultural ties and firmer academic exchange and transfer of knowhow.
Swarnim Waglé is a member of the National Planning Commission.
Read also:
Bleak economic report
22 governments in 26 years, Manish Jha
Miles to go, promises to keep, Elvin L Shrestha
Stability for growth