Excerpts of an interview with economist, Prof Biswombher Pyakuryal.
Which way do you think the country's economy is heading?
The economy is in the state of collapse. Whether in terms of national savings or revenue generation, all trends are negative. People are not in a position to pay taxes and there is no credible source of funding available except foreign aid. But in the present circumstances the donor agencies are least likely to increase their aid. As we lose our capacity to pay back, they will not provide us even loans. Most of the industries are in dire straits. Our exports have declined by 25 percent. In such a situation we can't manage our economy by even printing more money.
So, who is to blame for this?
We have been trying to justify our position referring to the post 11 September developments in the US. In fact, our economic fundamentals are weak. Our macro-economic policies were good that led to the growth of up to 10 percent in the urban centers only. This shows that the policy of economic liberalisation has had impact on limited areas only. So, our country's economic structure has collapsed due to internal as well as external factors.
You said the donors are still willing to help.
The country's economy is in such a state that it can't even finance development expenditure. Whatever development projects have been identified, we cannot implement them in more than two-thirds of the country. Donor agencies are still awaiting to see if there is a political resolution to the problems. If the political parties, the Maoists and the king fail to find a forward-looking way out, then the donor agencies might just give up on us.
How do you see on-going privatisation program?
Privatisation in itself is not bad. But in our case it has been used as a political tool. That is why it has turned out the way it has. The government should have invested the proceeds of privatisation of state-owned enterprises into the social sector. But I don't know where all that money has gone. We really have to ask questions about the honesty of the government.
Looks like things are hopeless, can the country's economy be managed?
The foremost priority is for the Maoists, palace and political parties to find a political way out through dialogue so that peace is restored. If that happens we can see a turnaround in the economy within one year.