Nov 11, 2013

Election Promises!

The second round of the Constitution Assembly polls are at our doorstep. So are politicians representing different political parties. Political parties have come up with their election manifestos which, if reality were to be ignored, are very impressive. Almost every political party has gone out of their way to make beautiful commitments, especially in the economic sphere.

Unrealistic Promises

For instance, U-CPN Maoists party has promised us a 7.9 per cent economic growth rate for the next five years which is supposed to increase to 11 per cent in the next decade whereas the Rastriya Prajatantra Party has promised us double digit economic growth within a decade. Nepali Congress promises us a double digit growth in four to eight years. Similarly, CPN-UML promises to create 300 thousand jobs annually and bring two million international tourists to Nepal in the next five years among other things.

Although fun to read, these manifestos raise some very important questions:

The first and foremost question is how. How are they going to achieve those goals? How is Nepal going to have a more than seven per cent economic growth rate, let alone double digit growth? If we look at our current growth rate, it hovers around four per cent which is hardly indicative of our possibility of leaping to a double digit growth in the near future. Economic growth does not come out of thin air. It requires economic policies friendly to growth, an environment encouraging entrepreneurship and a commitment from the government to support the growth process or at least not act as a hindrance to economic growth.

In this regard, the current picture of Nepal is miles away from satisfactory.  In the recently released Doing Business 2014: Understanding regulations for Small and Medium-Size Enterprises report, Nepal ranks 105th out of 180 countries with regards to the ease of doing business. Although improving, the pace of reforms are too slow to have any significant effect. Similarly, in the latest Economic Freedom of the World report which measures the degree of economic freedom enjoyed by citizens of a country, Nepal ranks 125th out of 152 countries with a score of 6.19 out of 10. Out of the 10 components of the index, Nepal’s performance is especially dismal in regard to legal structures and security of property rights. Security of property rights and economic freedom are essential for growth of any society. Empirical evidences also show that promotion of entrepreneurship and the private sector is a prerequisite for economic growth and development.

Unfortunately, none of the political parties seem to have anything to say on these issues. 

Unanswerable Questions

Since the upcoming elections is Constitution Assembly polls not just regular elections, it is important that political parties discuss macro issues like economic model, role of government and private sector in the economy et cetera rather than micro issues like how many tourists we will bring or what roads will we build. What kind of development path shall we follow is more important than what roads we will build. Rather than discussing what amount of Megawatts of electricity will we produce, we should be discussing about macro issues like will foreign direct investment be a major instrument of hydro-power development? If we are creating 300 thousand jobs, how will that happen? Will the government create those jobs for the sake of jobs or will the government be committed to creating a business-friendly environment to create more jobs? Will the government be committed to building the necessary infrastructure and business environment for preventing industries from shutting down? Will we embrace an open economic model or try a closed economic model?  Will we do it through economic reforms and by attracting foreign direct investment like China and India or will we shun foreign investment like before?

Not answering these questions means repeating past mistakes. The Nepali people have heard promises of rapid growth, transformation of Nepal into Singapore and Switzerland number of times. And they have been disappointed several times and this time will not be an exception too. In the last CA elections too, we had heard numerous lofty promises such as 10,000 Megawatt of hydro-electricity within a decade. The ensuing disappointment is well-known to everyone. The trend of making arbitrary promises in election manifestos also shows that political parties are not taking economic issues seriously.

Conclusion

For every revolution and political change in the past, political agendas have taken the front seat. An economic agenda has never been a priority and no wonder countless revolutions and political changes have failed to deliver economic growth and prosperity.  It is time that political parties start taking about economic issues and agenda more seriously. The citizens too have the responsibility to ask and analyse how political parties plan to achieve what they promise. Without answers to the how question, the economic aspects of the manifestos are nothing more than empty promises. 

-Surath Giri