Complexities and challenges of Nepal’s development

Nepal’s transition to federalism encapsulates many aspirations of the general people. Economic aspirations are one of them. The country is projected to attain a 23-year high economic growth rate of 5.84 percent in the current fiscal year 2021-2022 and plans to become a thriving middle-income country by 2030. While the United Nations specifies that a country’s gross national per capita income must be at least $1,222 in order to qualify as a developing country, the Central Bureau of Statistics estimates that Nepal’s per capita income is currently $1,191. Nepal has also committed to achieving seventeen Sustainable Development Goals (SDGs) which further include major objectives of alleviation of extreme poverty, providing equal employment opportunities, environmental sustainability, and economic growth by 2030. 

Nepal has made significant social and political growth during the last few decades. The gains in the education and health sectors, in particular, have accelerated the country’s progress toward its development goals. However, poor economic development remains a matter of concern.  Although Nepal has undertaken various development projects aligned with all the commitments the nation has made, the pace of progress has not been adequate. Most of the development works have been hitting the roadblocks despite the country’s best efforts. We can see that a crucial element has been missing in order to successfully achieve the essential objectives. 

Let’s examine a few recent instances to identify the aspect that is lacking. 

Three cases

The Nijgadh International Airport project is perhaps the biggest talk of the nation at the moment. The construction of a full-fledged airport as an alternative to Kathmandu’s Tribhuvan International Airport is a project targeted to be completed by 2025. If built, it would be the largest airport in South Asia and the fourth largest airport in the world in terms of land area. Along with the airport, the establishment of an airport city in the vicinity would pave the way for Nepal’s prosperity. The government’s decision to develop the multi-million-dollar airport, however, has been a matter of major contention with even the judiciary stepping in and remaining indecisive. Finance Minister Janardan Sharma announced that the project development work for Nijgadh International Airport will be carried ahead through Investment Board Nepal by identifying the investment structure while presenting the budget for the fiscal year 2022/23 even after the Supreme Court overturned the government’s decision. This depicts friction within the executive, judiciary, legislation and the public. 

Likewise, in the case of the Kalimati-Nagdhunga road expansion project, the Supreme Court ordered to halt the widening of the road which had been undergoing for nearly a decade. The court ruled that the government must follow the Land Acquisition Act in terms of compensation when acquiring private land. Instead of stating that compensation should be determined by the government or market rate, it states that compensation should be determined by the landowner’s demand. The rate of compensation was so high that the government had to spend a huge amount of money.  This decision has been contentious and plainly contradicts the state’s infrastructure development policy–the Local Infrastructure Development Policy (2004). This depicts a fine line between development and destruction. The landowners have the right to get compensation but when nations lack administrative and financial competence, governments cannot afford to provide for the rights. 

Similarly, in a recent case, the Supreme Court ordered not to implement an increased tax on electric vehicles. The clause to increase taxes on electric vehicles has sparked significant outrage since it aims to discourage the usage of environmentally efficient vehicles. Since Nepal has aimed at becoming a country of green economy, restoring taxes only on high-end electric vehicles wouldn’t help in fostering green technologies overall. In these terms, the judiciary seems like overstepping the role of the executive while directing the fiscal policy of the country. 

Bring on board

All these cases reflect that nothing works in tandem in our country. It looks like everyone is talking over one another and not a single development project gets completed successfully. One thing we can learn from these instances is that development can be a complex endeavor, and these incidents reflect the complexities in the development of the nation. Political instability and the tensions within the government have created complications in development that have led to hindrance in attaining development goals that our country has made commitments to. 

Therefore, in order to achieve such development ambitions, the government needs to engage every key development stakeholder in the process of planning development projects. Close coordination amongst the key stakeholders in emerging economies–government, private sector, and the cooperative sector–is essential for the planned development and its success. Not only the organs of the government but also the public need to collaborate with the stakeholders so that their voices are heard, and their interests are addressed while planning certain works. 

As Nepal aims to attain at least seven percent annual growth in per capita GDP by 2030, adequate interactions, dialogues, and debates among the key development stakeholders, political parties, the public, and other business sectors can contribute to accomplishing these objectives. Thus, the ‘crucial’ component that has been missing is the inclusivity in the process where the stakeholders should be engaged in all the steps of development and own the outcome. Although development can be a very complicated endeavor, in order to achieve such a development agenda, the government must be stable to implement such works considering the involvement of the key stakeholders on the path of development of the nation. Therefore, their inclusivity in the process is itself a good lesson to take it forward that will ensure economic enhancement. 

Else, we will be treading the same path of hostility, and nothing will be completed in time. Time is a valuable thing and we do not have much of it.

This article was originally published in Nepal Live Today by Sabeena Sharma on July 4, 2022.