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Nepal Monitor: The National Online Journal

Planning Nepal: Face-to-Face with Realism

To eliminate political interventions, and externalities in the country’s development efforts, the National Planning Commission must be transformed into a constitutional body, argues RABINDRA SHAKYA, a former member-secretary of that body


Perhaps there is no more an appropriate time to talk about planning than now when the country, with all the political chaos and pervasive pessimism, seems to plead for a stable organization and a future vision of our national life.

But we need optimism to plan, not negativity. We need planners. They are the ones who are mostly idealistic, even amid gloom and doom. Planners are mostly optimistic. A pessimist cannot become a good planner and make promises good for the people and the country. A planner looks at the distant vision where he sees silver lining which other people fail to see.

Visions of better life for the masses have guided planners of this country since the early days of planning in the mid-fifties. The trend continues since then.

The collective vision of the planners – the community of optimists – has, however, assumed the status of a myth, to be passed on to the future generations.

A boy born in 1956 when the country began the nation’s planning initiative is now a 50-year-old matured person. He or she is still waiting to see and experience positive changes in his/her life as a result of planning exercises being undertaken in the country. But this simply did not happen.

Reasons are too many but few of them can be mentioned. Development never remained at the top of the political agenda of the subsequent governments that came into power. Dissention among the political parties and within the members of the political parties, division and reunification of political parties mostly inspired by anything but a commitment to the country’s development proved to be the order of the day. Deeper party and personal interests remained major factors that characterized the political, economic and administrative decisions.

Policy instability is another factor, caused by frequent changes in the government. Policies changed quite often. Policies of the governments as reflected in their annual budget statements are geared towards immediate needs rather than as steps towards meeting the periodic development goals, or the long-term development needs of the country. Problems of poverty are massive but the policy response does not match its myriad dimensions.

The already weak implementation is further intensified largely by uncalled for institutional changes, such as creating new ministries and institutions and merging these again for reasons not entirely established and clear. Poor implementation is also apparent in the frequent revision of civil service act and regulations, to the detriment of globally-acclaimed practice based on merit principle, and the lack of effective monitoring and evaluation in place to encourage the best performers and to penalize the underperformer. The massive politicization of the bureaucratic machinery at all levels has also contributed to the devaluation of the basic principles of civil service such as integrity, honesty, neutrality and, above all, professionalism.

Planning institutions and their potentialities have yet to be exploited for accelerating the implementation process. The troubling fact is that, for years, the National Development Council, National Development Action Committee and Ministry-level Development Action Committee meetings were not even held regularly. There is discrepancy between jobs created and the demand for jobs. But the lack of human resource planning at the national level deprives the government with any factual basis to create job opportunities in the economy. The exodus of Nepali youth abroad in search of gainful employment opportunities has taken place in the absence of employment planning that has become so important. The damage done is far-reaching and would probably require decades of consistent efforts to bring these issues back on track.

The country’s premier planning institution is being manned by a group of people with little or no experience in planning. They have not been able to provide intellectual and practical leadership to the country’s 90,000-strong bureaucrats who are supposed to carry out implementation of the programs and projects of the National Planning Commission (NPC).

The planning commission, above all, is expected to inspire, guide and motivate officials and people and instill in them a feeling that the future that the planners hope to build is within their reach and within their life time. But ordinary people’s lives are marked by deeper frustrations and agony. They are little convinced that the country’s planned development efforts have brought any positive change in their lives.

For instance, an ordinary Nepali now living under the poverty-line may recall that at his birth, only a few decades ago, his life span hovered around 40 years. But now the same person has a reason to worry just because of the improvement in his lifespan, by almost 21 more years. The fact of the matter is a 21-year longer life means an additional two decades of painful living, a life of deprivation. In recent years, due to the ongoing conflict and political uncertainties, an average citizen’s life has become even more painful. The monotonous and sad story continues.

Following the recent political changes, a new stage has once again been set with the coming into office of the new group of people in the planning commission. As in the past, they will portray a positive picture of our future. They will advise the political leadership and inspire and guide the bureaucracy. They will maintain that people have a future and that they can make a difference to the life of the majority of the citizens. So far so good.

But the crux of the problem is not the lack of idealism or a vision or even planning. We don’t need to debate whether development is desirable. The crucial point of debate is how is the development to be achieved and when and with what instruments. Polarization of concepts, mostly donor-driven, from pro-poor economic growth to broader based and sustainable economic growth, cast the issues in a simple way that glosses over the complexity of life today.

The pro-poor economic growth demands concentration of development activities in areas inhabited by the poor and the broad-based and sustainable economic growth puts this substantial proportion of 31 percent of the poor always at the disadvantageous position. At least this has been the saga of the development of this country. Inequalities and mal distribution of income and consumption persists with erosion in the values such as honesty, perseverance, and commitment, etc.— the fabrics of a virtuous society. Such a trend is likely to continue. Political redundancy has affected all sectors of the economy, from grassroots institutions to the national-level institutions, including professional communities such as teachers, students, and even the business communities. The impact is all-pervasive.

Planners have remained a bunch of helpless people watching dismal developments in economic, social and political fields. They are also aware of the effects of externalities on the policies that they help to design and implement. Powerful source of externalities include frequent changes in the political leadership (that they are expected to work with), frequent policy changes, and lack of resources to implement what they identify to be the vitally important programs for the development of the country.

Another major externality is India. The southern neighbor continues to be the biggest trading partner and more than 60 percent of the total trade takes place with that country. Trade deficit with India continuous to be around 55 percent of the total international trade deficit. The substantial value of informal trade taking place all along Indo-Nepal border likewise deprives the economy with substantial revenue.

Nepal’s development policies may be homegrown but the prospects of their implementation massively depend upon external inputs. Be it the inflow of remittances, or the policies directed towards maintaining price stability, or the emerging demand for Nepali labor or exchange rate stability. These are all determined by factors where the impact of externality continues to remain deep.

Wise economic research is necessary to gauge the impact of externalities on the movement and behavior of the Nepali economy. Far reaching impact studies of these external factors continue to remain an area of significant economic study and research which at the end can show that the very notion of externalities is at the heart of major development problems.

The need is to monitor those externalities. Right now, little prospects exist to control and manage such externalities. But Nepal could, and should, be able to manage those forces that emerge from internal sources, if not external.

The central planning agency or the NPC has always remained more of a political instrument than as a competent advisor to the government in power. It has not been able to work as the think tank of the nation, competent and capable to provide independent and professional suggestions to the government on development and economic affairs. That situation persists. The current NPC is involved in the formulation of an interim three year development plan prior to the formulation of the eleventh plan. This implies that present planning commission is very much an interim planning commission, with no responsibility (or a political mandate) to talk and discuss about programs and projects of far-reaching implications, extending beyond the period of three years.

One cannot hope to eliminate entirely the impact of external forces in the process of development, particularly in the context of globalization. But we should make efforts to eliminate instability arising out of internal factors. One way to ensure policy consistency and stability would be to ensure stability at the central planning agency. To do that, we need to keep it independent of political influences. It must be manned by independent, knowledgeable, experienced and professional members. Today, when the nation is talking about the restructuring of the political and economic structure, and the interim constitution is being framed up, we must consider making NPC a constitutional body. Keeping itself beyond the reach of undesirable political influences, the NPC must develop its own act, procedures and processes to guide and operate.

If we believe that development is both urgent and necessary for political, social and economic stability, an apolitical national planning body is desirable on its own merit. A body such as this, which is similar to other constitutional bodies such as Public Service Commission, can work independent of political influences, provide stability to economic and development policies, assure the continuation of development activities despite changes in the political regime. Such a body, composed of competent, experienced, and professional Nepalis working within the country and abroad, can give continuity and credence to the policies and programs that they help to design and implement. Such a provision either in the Constitution, or one defined by an act, will give a signal to those interested in Nepal’s development that the New Nepal is a serious business when it comes to matters of development. Development cannot continue to remain a political agenda, with little or no space to translate the agenda into action.

There is the need for a constitutional provision of the National Planning Commission, including regional development approach. That would certainly contribute to the process of realizing citizens’ dreams for a better life and a better future, with prospects to find lasting solutions to the insurgency problem as well. In that regard, growth axes planning that came to the forefront in 1970s with the division of the entire country into four and then later on, into five development regions, still remains relevant.

The rigorous pursuance of the growth concept has the potentiality to address many of the economic ills that the country is suffering from such as unequal distribution of income and assets, lack of equal opportunities, the discrepancy among development regions in terms of distribution of development benefits. This can continue to remain a viable approach to development where the paternalistic attitude of the center is replaced by one of those that allow local people to shape their own destiny, to be realized by their own efforts.

Planners should be able to practice planning independently. We should give them a chance to live up to the expectations of citizens. They must be able to do their share to create responsible, effective and competent institutions destined to effect the pace and pattern of development with their own independent and responsible visions. That may help people to regain their trust and faith on the planning process of the country. In that way, idealism could meet realism, or least it can be face-to-face with realism.

The author, formerly Senior Economic Advisor to the Ministry of Finance and Member-Secretary of the National Planning Commission, is an independent consultant on economic and development issues. He holds a Ph.D. in Economics. A career planner, he can be reached at rkshakya2003@yahoo.com


Posted by Editor on September 28, 2006 2:11 PM