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Fifteenth Fiver Year Plan: Reality Check

Issue April 2019

Fifteenth Fiver Year Plan: Reality Check

Siddhi B Ranjitkar


National Development Council has passed the concept paper of the Fifteenth Periodic Plan on April 4, 2019. It has set the target of achieving about 10 percent economic growth per year making per capita income US$1,400 after five years against the US$5,000 the ruling party’s election manifesto committed. At least National Planning Commission has completed its rituals to prepare the periodic plan, and the National Development Council endorsed it again ritually. Let us see whether the economic growth it has envisaged would be met and make the dream of Prime Minister Oli to make “Nepal Prosperous and Happy Nepali” a reality. The fifteenth plan has defined what is happiness, too.


All the economic experts including the cabinet ministers believed and said that the economic target the Fifteenth Five Year Plan has set was ambitious, which is a diplomatic word to say impossible. So, everybody knows that the target NPC has set has been quite high for Nepal to achieve with the current infrastructures not only the physical ones such as roads, electricity and water but also the administrative and political ones such as the disciplined bureaucrats, the rule of law, the strong and independent judiciary, and the last but not least the independent and vibrant media.


If folks have not missed the media reports the frustrations the ministers including the prime minister have expressed recently are serious ones. The finance minister has said that he could not convince other fellow ministers of the need for making the best and fast use of the capital budget. So, the capital budget mainly allocated to the physical infrastructures has not been used as much as it should have been to develop the infrastructures fast. Another minister is the minister for industry that has said that the secretary to the ministry has not been doing what he wants him to do. The prime minister as usual has said that the opposition has not cooperated with him and his administration to achieve the economic growth target.


Everybody must have read in newspapers or watched on TVs the Judicial Council’s recommendations for appointing justices to the vacant positions at the Supreme Court has caused an uproar in the media. Everybody has said that the appointment to the Supreme Court needed to be unbiased, and the appointees needed to be the most deserving ones not the favorites of somebody or of any political party to keep the independence, prestige and impartial performances of the apex court.


NPC has set the target of the annual agricultural growth rate at more than five percent per year for the period of the periodic plan. The growth of agriculture could be made increasing the agricultural land and increasing the supply of water means to increase the irrigated land or using the modern technology. Both are not available for easily achieving the target NPC has set for the agricultural growth. So, the target must be ambitious. The technology made available would be commercially applicable only when farmers would have sufficient land, which has been restricted due to the provision for the land ceiling made in the Land Reform Act. Simply distributing a few tractors to farmers would not make the growth of agriculture sufficient to achieve the target. The disease of providing chemical fertilizers only after the planting or sowing seasons has plagued even today.


The country has not much virgin land left for plowing. Even the plowed land in the hills has been abandoned because the foreign jobs are more lucrative than plowing the rocky land for growing corn or millet, which are low value crops and good enough for sustaining the life if enough land is available for growing sufficient food crops. The Oli administration has been encouraging the youths to go for the foreign jobs easing the process for getting to the jobs, and remit foreign currencies as much as possible to pay for the import of even the potatoes not to mention the polished and fine rice.


Currently, only 25 percent of the agricultural land has the water supply for irrigation. Without irrigation, whether the land could grow crops and meet the agricultural growth NPC has set is a valid question. Certainly not because nice filed which has the potential to grow three crops could produce a single crop in absence of irrigation. If the irrigation systems were to build, and would make the water available to the farmers to increase the agricultural products then only the agricultural growth target would make a sense. However, the current Oli administration has not been so serious to launch and complete the capital projects, as already mentioned the ministers have not been interested to do so. Surely, they must be waiting for the monsoon rains to launch construction projects. Then, they could make fortunes at the cost of the nation. The majority or stable government ministers have no intention to change this hereditary habit.


Like it or not NPC has done its rituals, the prime minister has seen the dream of making “Prosperous Nepal and Happy Nepali”. A good chance is there that the dream of the prime minister would remain as a dream. So, the prime minister could dream on, and his devotees or party cadres might anticipate his dream comes true but the reality would be hardly any drastic economic growth is going to happen as NPC has designed and prophesized at least in the agricultural and the industrial sector the highest ambitious growth without considering the infrastructures required for such an achievement.


The fifth plan has set the target of the industrial growth at more than 17 percent. Some experts have said that only a few countries five or seven have achieve such an unprecedented industrial growth. One is China, even China had not achieved such a high industrial growth, and currently Vietnam has been doing. They have questioned whether the Oli administration could replicate what China had done in the 1980s, and 1990s, and currently what Vietnam has been doing. With the current Oli administration moving at the snail’s pace to the economic development, the answer to the question could be hardly positive again because the infrastructures required for such high growth of the industrial sector is lacking and the current Oli administration has to demonstrate, yet that it could meet such requirement soon.


Then, if the target of the economic growth the NPC has set for the fifteenth five year period is not ambitious then what is it again a question. It is surely the ambitious one that would be very hard to achieve. Thus, the exercise of preparing the periodic plan for the economic growth has been just the periodic rituals as if performing shard means a memorial service performed in the names of the departed souls.


So, the target of achieving even US$1,400 per capita income after five years not to mention the US$5,000 the joint election manifesto of the CPN-UML and the Maoists had pledged, might not be realized because it needed a high rate nearly 10 percent of the economic growth for five years. The poverty might continued to live on despite the Oli administration had the agenda to reduce the poverty from the current 28 percent of the people living under the poverty to zero after five years as envisioned in the fifth plan.


For the coming few years, the economic growth of the country would remain around six percent no matter what NPC writes and what Oli says. To achieve the economic growth of 10 percent as mentioned in the plan the National Development Council had passed on April 4, 2019, the economic growth rate needed to be at the rate even now to take off to reach the 10 percent growth the next year. However, the current finance minister has hardly shown any positive signs to this end.


The next thing required for the development to achieve the highest possible economic growth that is 10 percent at least is the heavy dose of the foreign investment in the country. The Oli administration had held the “Nepal Investment Summit 2019” on March 30 and 31, 2019 to court the foreign investors to invest in Nepal, as the climate for investment has been considerably positive and favorable, as the political stability has been ensured, and some laws have been amended to make the environment conducive to investment. That is what the Oli administration publicized.


Some economists believed that the political stability had nothing to do with the economic development. For example, the autocratic family rule that had lasted for 104 year until the last century did nothing to develop the economic condition. So, the attitude of the guys in power needed to be positive to the development rather than the political stability. The positive attitude of the folks in power to develop the country has been surely lacking even today.


Enactment of laws is one thing enforcing them is another? The history of law enforcement had been arbitrary and sometimes weak. The laws had been often made to interpret them the way the officials liked and wanted. Most of the time, most of the laws had been open-ended. Would the foreign investors take risk to invest in such an environment?


The exchange rate of the Nepalese rupee fluctuates following the rise and fall of the exchange rate of Indian currency because the NPR is tied to the Indian currency. The exchange rate of the Indian currency changes depending on how the Indian economy performs. Nepal heavily depends on India for import of everything. Even the third country imports have to come through India making more dependent on India. Surely, this might be one of the many constraints on its economic development Nepal has been facing. Nobody knows when India might impose another blockade on Nepal. This is another uncertainty prevailing in Nepal. Investors certainly take these constraints into account for investing in Nepal.


Surprisingly, most of the foreign participants have the positive image of what the Oli administration has been doing. The national businesspeople and industrialists also have positive thinking about the current admin even though as recently as a few weeks ago they had been severely criticizing the bureaucracy and the politicians for asking informal payments at every step in the Oli administration.


However, even the private media not to mention the State-run media failed in highlighting the serious concerns some foreign participants had expressed at the Investment Summit. Some of them had questioned how the Oli administration had been coping with the project time overrun and the cost overrun, and why the Oli administration had not bring the defaulted contractors to justice. They had also raised the concerns about the visa for the foreign professionals, problems of transporting fossil fuels, unanticipated shutdowns, local folks obstructing the projects, and many more problems of obstructing the projects. They had also complained that the Oli administration had not made any provision for paying compensation for the loss of the project work due to the obstructions for their no faults.


Not all participants in the “Investment Summit” were convinced that the Oli administration would create an environment conducive to the investment. Yes, memorandum of understanding were signed off for 13 investments, and committed to three projects. However, following these commitments even if those investments were realized thinking the investment environment has been favorable these investments would be a peanut to meet the requirements for the economic growth Prime Minister Oli has in mind and NPC put it in writing.


“We have adopted a socialism-oriented economic system which is the best system in the world. When you combine justice to the prosperity, it becomes socialism,” said the PM, the news on quoted Prime Minister Oli as saying on April 5, 2019. Probably, the prime minister has developed a new definition of socialism, which has been so vague in the past.


If Prime Minister Oli could enforce the system what he called a socialism-oriented economic system, which probably is the combination of the prosperity with justice, then it would be the best system in the world. Eventually, it might create an egalitarian society. This might be the complex system, which would be difficult even for the lawmakers to understand not to mention the common folks. Thus, the prime minister combined the prosperity with justice.


Probably, Prime Minister Oli must have meant the equitable distribution of wealth when he was talking about the prosperity with justice. However, the trend had been just the opposite because the looters had been becoming billionaires overnight whereas the sincere and hard-working folks had difficulty in making ends meet. Could anybody name a large development project that has not been subjected to many irregularities in the implementation? These irregularities are the means for the politicians in power, bureaucrats and surely for the contractors and businesspeople, too to make fortunes.


Certainly, the prime minister could make the equitable distribution of the national wealth no doubt about that. However, he needed to work to this end. First thing, the prime minister needed to do is all the children have the opportunity of the same kind of education no matter how poor or rich they are. However, it could be only wishful thinking, as the gap between the high cost private schools and the State-run schools has been increasing every day even now.


The next thing required for the equitable distribution of the national wealth was every child needed to have an equal opportunity of growing healthy. Again, the State-run health posts, health centers, and hospitals had been suffering from the lack of even the basic medicines, then surely from the lack of health professionals. Some state-run hospitals might have modern equipment and instruments but the professionals were not there to run those equipment and instruments. Then, how could the less fortunate folks get their sick children treated?


NPC has defined what is happiness to help understanding the second half of prime minister’s slogan “Prosperous Nepal and Happy Nepali.” Folks could be happy without material prosperity but the prime minister has combined the prosperity with happiness. Then, the definition of happiness is really warranted.


NPC has defined that happiness comprises the rule of law, timely State service delivery, availability of basic needs such as water, electricity, cooking gas and other fuels for transport and industries. So, Prime Minister Oli in one of his public speeches said that Nepalis would not need to worry about the basic needs even though the short supply of basic needs was visible everywhere. Therefore, the folks at the NPC and the prime minister must have grossly ignored the ambition the NPC has demonstrated to achieve the most ambitious slogan of “Prosperous Nepal and Happy Nepali.”


Let us forget about the 10 percent economic growth the NPC has set for the government to achieve, the Oli administration has been even hesitant to firmly say when the folks in Kathmandu would have the water from the almost completed Melamchi Drinking Water Project, when the dusty roads elsewhere in Kathmandu would be repaired, and when the dust particles in the atmosphere would be reduced to the acceptable level in Kathmandu from the point of the view of the public health.


It has been already more than a year since Mr. Oli has taken office, and he has been promising and promising the fast economic development and reducing the corruption to the minimum level, and saying that he has zero tolerance of corruption. If Oli could have kept his commitment to curb the corruption it would have helped to achieve a higher economic growth but he had to convert his words into deeds, yet even after a year in office. What is it? Whether he did not want to do or he could not do or both?


Most of the corruption level would have drastically gone down if the Oli administration had brought the defaulted contractors to justice. What had prevented the Oli administration to bring those non-performing contractors to justice has been mystery so far. If the prime minister had brought the contractors who had got the contracts on large projects to justice, such actions would immediately bring the economic prosperity because those projects would directly benefit the common folks, flourishing their businesses that would heavily contribute to the economic prosperity the prime minister had envisaged.


The prime minister had seen and has been seeing now how the actions of the former Maoist Energy Minister Janardan Sharma appointing the most competent professional to the chief executive position of the Nepal Electricity Authority had ended the power outage popularly known as load-shedding, and contributed to the direct financial benefit to the State-run agency and also to the industrial growth, business growth, and social growth in the country, and avoided the need for importing the high cost batteries and inverters for the common folks for the household use when the power from the national grid went off.


Now, the question is why Prime Minister Oli could not appoint another ten such executives as of Kulman Ghising to run other State-owned agencies so that everybody could be star performers as Kulman Ghising has been. Kulman Ghising has been running the Nepal Electricity Authority perfectly to utilize every asset it possesses. Probably, many such Kulmans must be waiting for the opportunity but the prime minister and his ministers so far did not act as Janardan Sharma did. Again the question is what has prevented the prime minister to act in such a way if he has a good and sincere mind to develop the country.


If the prime minister had a zero tolerance of corruption then he needed to act on the irregularities in purchasing two wide-body airbus planes for the National Airlines at the cost of NPR 25 billion. It had been widely publicized, and the House Committee had instructed the Oli administration to take up the issue of irregularities within 45 days but the Oli administration had been taking time to do so even after three months.


The main opposition in the parliament that had been prompt to stop or disrupt the House proceedings when their demands were not met had been mute so far on the irregularities in the purchase of the wide-body airbus planes. Some folks had been already talking about whether the opposition also had the share in causing the irregularities in purchasing the aircrafts if not then why the opposition did not take up the issue of the public interest in the House. Probably, the irregularities in such purchases must be the joint ventures of the party in power and the party in the opposition. Then, what the common folks could do; nothing except for waiting another movement for justice and development Prime Minister Oli had said he would deliver.


The sub-committee the House Committee on International Relations had formed to investigate the irregularities in the Taragaon Regency Hotel Ltd, submitted its findings to the House Committee chairperson suggesting to take back the 150 ropanis (one ropani=75ftx75ft) of land transferred to Taragaon Regency Hotel Ltd, the news on stated on April 8, 2019.


The irregularities in the hotel businesses have created uproar in the media. Concerning such serious issues, the Taragaon Regency Hotel Ltd issued a long statement and published it in “gorkhapatra” on April 3, 2019. Most of the explanations given probably would be hard to understand for the common folks but one thing which might have attracted the attention of every folk is the Article 6 of the published statement that has stated that the Asian Development Bank sold its shares at NPR 67.20 to the two private companies holding major shares in the Taragaon Regency Hotel Ltd at the time when the shares at the Nepal stock exchange was listed at NPR 101. In other words, common folks were willing to buy the shares of the Taragaon Regency Hotel Ltd at the rate of NPR 101. Instead of explaining why the ADB sold its shares almost at the half the price listed at the stock market, the statement has stated that it has made the benefit of US$1,686,030 to the country.


Let us see whether Prime Minister Oli would make his dream of having a zero tolerance of corruption come true immediately straightening out the irregularities in the Taragaon Regency Hotel Ltd.


Some experts who had participated in the two-day meeting of the National Development Council said publicly that some construction contractors had complained at the meeting that the Oli administration had not cleared off the bills worth of NPR 52 billion they had submitted for the payment. What prevented the Oli administration to pay the contractors was not known.


The experts opined that if the Oli administration had paid up the bills then sufficient liquidity would have been available in the money market and the banks would not need to pay higher interest to the depositors and the borrowers would not need to pay high interest on the bank credits they received that would certainly fuel the economic growth.


Probably, the Oli administration knew that it needed to do more to hit the ambitious target of the economic growth. However, it obviously failed in doing something to expedite the economic growth. It is already the sign of the economic target the NPC has set might remain in the nice document called the Fifteenth Five Year Plan that would be shelved after it is printed and distributed.


Provincial chief ministers and others have been complaining that Prime Minister Oli loves to keep all the power with him. So, the federal admin has been keeping more power than the constitution permits. Delay in power transfer to the provinces and the local government means the delay in development opined the development experts. Some experts questioned how Oli could deliver the fast economic development concentrating all the power in him.


If the Oli administration is working with such an attitude of not transferring the power to the provinces and local governments as prescribed by even the constitution, and not paying the contractors in time, then holding the investment summit, and crafting the periodic plan with so high ambitious economic growth targets would not make any sense, most of the economists opined.


So, the NPC must have done the five yearly rituals of crafting the periodic plan not even caring about the development targets it has set whether the current Oli administration would be in a position to achieve them or not.


Prime Minister Oli has the slogan “Prosperous Nepal and Happy Nepali,” and he has the zero tolerance of corruption. However, his activities demonstrated that what these slogans meant probably, Mr. Oli needed to care about them, yet. So, he moved on his path without considering what he had said and done. So, the Oli administration would live with the high sounding speeches of parroting the “Prosperous Nepal and Happy Nepali” at the same time keeping the economic growth low ignoring the corruption, which has been the main culprit of killing the development activities.


Nepal has a tiny neighbor that is proud of keeping its citizens happier than prosperous. That country has set the happiness index and kept measuring the happiness. Now, Nepal follows the neighbor with the slogan of keeping the citizens happy and prosperous. NPC has already defined the happiness. So, the Oli administration has to follow the definition until then Nepalis would probably be happy enough to keep Mr. Oli in power.


April 8, 2019


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