Positive Changes for Nepal

The month of May brought some very positive changes for Nepal. With the first round of local elections successfully held after almost 20 years, there is fresh hope and jubilation in people. Political parties have also generally accepted the results. Upholding people’s choices in this way is indeed a mature gesture from our political leaders. New challenges now lie ahead. Representative local governments shall be a novelty in the country, and flexing responsibility by those newly elected will come with its own set of learning curves.

Similarly, growth rebounded to a two-decade high of 7.5%, albeit with many exogenous factors. Sustaining this growth is also another challenge for us. Our researcher has identified a number of fundamental pillars to create a conducive environment for sustaining this economic growth. A recent World Bank report also stresses that Nepal needs to seriously reform its policies and create more room for competition in order to sustain growth. Our commentaries on the need to remodel public education system, and malpractices committed by the petroleum sector monopoly further highlight this need to ensure competition. We are happy to see that idea of strategic partnership between Nepal Airlines Corporation (NAC) and Lufthansa, which our study also advocates as a necessary reform for making the NAC more competitive in the market, is gaining ground.

Along this line, instatement of local governments within the new federal constitutional provisions lays down genuine reasons to be optimistic about inter-local government competition. The recently-unveiled fiscal budget (unlike past years) does not specify any new programs; however, it does give considerable financial responsibilities to local governments. Now that human capital is going to one of the greatest resources for any local jurisdiction, it will be particularly interesting to see what kinds of economic policies these local governments will adopt to retain and attract individuals and capital, and how people will respond to them. There can be no doubt that the more conducive the local policies are to doing business, the higher their chances of growth will be.

The second round of local elections is now just around the corner. Only yesterday, we also had yet another change in premiership. Impressively, this has been achieved through one of the most normal processes in Nepal’s decade-and-a-half of tumultuous power shifts. This is perhaps an indication of our gradual shift towards maturing of democracy.

Author :  Robin Sitoula, Samriddhi Foundation Executive Director