Good Governance for Economic Growth and Development in Nepal Himalaya

Aug 7th, 2014 | By | Category: Nepal

The official bilateral visit after 17 years of gap by the Indian Prime minister Narendra Modi and, especially, his address to the Nepalese parliament has further brought into discussions, debates and discourses in Nepalese politics/societies from smaller teashops to the bigger institutions whether Nepal has to promptly realize the importance of economic growth and development and act accordingly or cluster to the political turn-over for shorter position and power. No doubt does the 2-Day Modi Visit to Nepal make a clear message that this is the time to make economic and development revolution for Nepal with the existing resources available within-no more application or mimicry of any kind of development model; be them Western or Latin American or Chinese or Indian or any kind; rather the Home-made model of Nepal Himalaya itself for its economic growth and development, basically strengthening hydro and tourism as the engine of the modern economy. However, there seem blurred visibility of economic growth and development in developing/least developed countries like Nepal unless good governance is practiced, and thereby creating an environment for domestic investment, Foreign Direct Investment (FDI), trade and Overseas Development Assistance (ODA) in boosting economic activities in Nepal Himalaya. 

With the end of WW II, there emerges an international assistance system to assist developing nations based on the agreement made in Breton Woods conference in 1944 which further led to a Washington Consensus in late 70s (Williamson, 1990). Marshal Plan as the first and foremost foreign aid has made a remarkable success in building infrastructures in Europe. With this, a number of multi/bilateral donor agencies have made greater ODA transfer in various forms to developing nations in Africa and Asia. Most of them seem to have massive failures. However, the success stories of Mini Dragons (South Korea, Taiwan, Hong Kong and Singapore) have developed newer insight- that is good governance put in priority can play major role for economic growth and development in developing/least developed countries. As a matter of fact, this is to cite that good governance as the primary concern for structural adjustment program in 80s has been largely carried in disbursing aid to developing nations (Sachs, 2005). 

Looking at the situation of economic growth and development in South Korea and Taiwan, some scholars state that both of these countries have gone through authoritarian regime for longer period of time (Fritz and Rocha Menocal, 2007:536). If this is to check more minutely to the circumstances of these countries, good governance can be traced in matters like rule of law, foreign direct investment, minimal corruption and developmental ethics in most of the regimes after 1950s. Late President Park, for an instance, has had coup for political power and seems to be authoritarian in the eyes of the people; however all his activities after the presidential election looks as if he has tried his best to maintain rule of law, minimal corruption and environment for re/investment for economic activities. This is amazing that GDP of South Korea has dramatically increased up to 8-10% even in his successor s authoritarian regime. It shows that good governance is not always obtained in democratic practices. Sometimes, even autocratic and authoritarian regimes maintain good governance with the commitment and good leadership to economic growth and development. 

Similarly, there are a number of countries like Chile, Cuba, Costa Rica, Brazil and Argentina in Latin America which have gone through communist, socialist and democratic regimes later in the years. However, all of them have maintained good governance to the fruition of economic growth and development. The environment for domestic investment, FDI, trade and ODA disbursement in the presence of consensus, rule of law, less corruption history and conflicts within or outside. As a matter of fact, all of these countries have turned to be upper-middle income countries which once had agrarian economy. The other corner of the globe China, India, Vietnam and Bangladesh have the same stories to tell where the state has played the greatest role for development (Evans, 1995). All of them have in one way or the other undergone communist, socialist and democratic system; however all of them have massively maintained rule of law, less corruption, inter/ intra conflicts among political parties, leadership and commitment for economic growth and development. 

The major concern is of Africa where massive foreign aid has been a failure, rather promoting corruption in the country (Moyo, 2009). Moreover, nepotism and despotism in the bureaucracy, unfair election, minimal rule of law, massive inter/ intra conflicts, poor leadership and lack of commitment in the leaders which have resulted poor economic activities and development in the continent. Looking at this situation, International Monetary Fund (IMF), World Bank (WB) and other Official Economic Cooperation Development and Development Assistance Committee (OECD/DAC) have asked the continent good governance as the pre-condition for their support. The structural adjustment program in 1980s is not other than the multiple failures of ODA in the continent; however it could not pave its way out (Fritz and Rocha Menocal, 2007: 540). In this line, this is not bad to assume that aid is no more working in Africa; instead fair trade can be apt in boosting the economies of these countries (Moyo, 2009) However, a couple of countries like Ghana, Botswana, Uganda and Mozambique are making significant progress in the midst of confusions and frustrations. This is not other than good leadership, commitment, rule of law, consensus among political parties and people and fair elections. 

Sandwiched between China and India, Nepal Himalaya is away from infrastructures of development, lack of democratic practices, leading to lack of economic growth and development. Traditional agriculture, geographical complexities, and a complex portion of non-ethnic communities have got higher percentage of immigration to plains and overseas for their economic activities (Sharma, 1997). Till the date most of the people still hang down the South, mostly India, Middle East and Europe in pursuit of employment and other economic activities. As a result, the communities have long been practicing poor governance, traditional/indigenous knowledge, cultural values and social mores in operating their everyday life which cannot create an environment for domestic investment, FDI, ODA in boosting the economies of the country in the present context. 

Flashed back, the earliest form of Rana Regime has absolutely nothing to do with the people and the state itself. Personal capital accumulation, high corruption rate, luxurious life styles, shift of power from one to the other in their circles, no sense of promoting any kind of infrastructures, and discouragement in investment and economic growth. From any of the angles, the time was not in favor of the public that founded the worst life in terms of democracy, human rights and economic prosperity (Joshi and Rose, 1966:551). The first and the foremost rhetoric was that they were unlikely to promote democratic values and infrastructures of development, primarily education. A few schools were opened for their children, not for the public, thinking that it could be the major factor to overturn their regime in the long run. As a matter of fact, they carried out the basic tools like oppression, suppression and even bloodsheds in times of needs so as to make the societies live with no more voices for human rights, economic growth and development. 

All the way down to Monarchial regime, government policies during the period including school education, for an instance, have promoted nation and nationalism as parameters of civilization development while other oppressed and suppressed were regarded minimal, submissive and primitive by nature (Hachhethu, 1990:178). Development programs largely subdued by so-called elites have stigmatized the disadvantaged and unwanted nationals in a number of ways. Moreover, the regional and local development projects, plans and policies of the nationals made have further displaced them and fostered greater disparity in Nepalese society. Besides, marginalized groups have not been encouraged in bringing them to mainstream economic activities. 

After the success of People’s Mass Movement I (1990), the politics-led plans and policies, development practices and approaches of the past have marginalized indigenous and tribal groups. The first Eight five “year- plan (1992-97) developed by democratic government elected through popular elections following the restoration of democracy in 1990 could not officially acknowledge the existence of suppressed portion of humanity until 1997 (Srivastava, 2008:5). Therefore, the plans and projects brought into practice before were very impractical and unscientific to these groups. The Nepal government initiated plan for the ethnic groups only in the Ninth Plan (1997-2002) even if the plan got introduced in 1956 for the first time in Nepal (Srivastava, 2008:8). It is obvious that the plan made lacked quantitative and qualitative targets as per thought. Similarly, the four-pillar poverty reduction strategy, social inclusion and good governance are the targets made in the Tenth Plan 2002-07 (Srivastava, 2008:10). But because of civil unrest between the government and the Maoists initiating in 1996, the royal takeover in 2005, instable governments time and again, there appears no more improvement as expected in socio-economic, political and developmental phenomena in the country. 

Even if democracy was restored in 1990, the constitution got failed in drafting absolute constitution and thereby respecting the identity of ethnic nationals, marginalized groups of people, women, children and Madhesi people at large. In the name of addressing the rights of these people, Maoists seem to have had insurgency for ten years, demanding newer constitution which could truly be the inclusion of those displaced and disadvantaged portion of the people by the state. This insight has further led to a decade long Maoists insurgency in the country and finally making people involved in People’s Mass Movement (PMM) II (2006) for Federal Democratic Country along with eliminating all the structures of Monarchial regime in the country and thereby establishing people’s regime forever. However, Ethnic and Madhes Uprisings in restructuring the state have further led to failure of the first round of Constitution Assembly (CA) a couple of years back ( Hachhethu, 2007). 

What has been seen is that mostly African and Asian developing/underdeveloped countries with multi/bilateral foreign aid in the form of cash have further pushed them back in terms of economic growth and development. The emerging writer/economist Dambisa Moyo in her book (Dead Aid: 2009) writes aid is no more working in Africa, rather it has created dependency on the donors, whereas professor/economist William Easterly opines in his book (The White Man’s Burden: 2006) that these people are to be taught how to fish rather than providing them the fishing nets . In the same line the latest bilateral aid 1 billion dollar cash by Indian government is unlikely to do good for hydro and infrastructural development in the present context of Nepal where nepotism and despotism, unfair election, lack of leadership quality, lack of commitment in leaders, lack of rule of law, instable governments time and again, and inter/intra conflicts among major political parties are rampant. 

Examining the situation Nepal has gone through, this is more likely to cite that a good governance has massively lacked all the way down in promoting investment, trade, FDI and the utilization of foreign multi/bilateral aid, whether it is non concessional, in the form of cash. This scenario, if continues further, is likely to push Nepal years and years back in matters of economic growth and infrastructural development. The authoritarian or democratic regimes Nepal has made through have failed in creating an environment for reinvestment, trade, use of foreign aid, and the proper utilization of existing natural resources, primarily water, medicinal herbs and all the elements of tourism. This is not other than poor governance from the inception to all the way now and that projects the country is on the way to the verge of failure and thereby minimal economic growth and development in Nepal Himalaya. 



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