Policies to develop Nepal: A very brief summary

By: Bikal Dhungel

First there should be a political will to develop. Policy makers must want a prosperous nation. Then create a political foundation, which means ensuring political and macroeconomic stability and creating inclusive institutions that safeguard rule of the game. Why industrial revolution took place in England and not in Russia or South Africa or elsewhere is because of the Glorious Revolution of 1688 that installed inclusive institutions, created a political foundation which in turn gave incentives to people, as a result of which great minds like James Watt could launch their innovation that had enormous spill-over effects in the economy. Reform the education sector, import ideas and best practices from abroad but check for its feasibility in local culture before integrating it to the curriculum. The East Asian economic success could be attributed to its world class education system in the initial stage of growth. Social security is vital. Recognize who are real poor and guarantee the basic education and healthcare for them and their children. Don’t say you cannot afford, you can. Germany was much poorer than Nepal in terms of purchasing power parity when it introduced social security system. If you fall short of money, then save in security expenses and unnecessary benefits for the politicians. Liberalize the economy but not text book liberalisation but be strategic. Protect the industries and help them grow where you think there is a future. However, as soon as you recognize that they are not progressing, pull out the fund. For hi-tech sector, liberalize, guarantee tax free imports of technological goods. Liberalize financial sector and expand credit availability especially for the poor and small scale entrepreneurs however, create a separate institution to monitor financial institution because undisciplined financial institution can ruin the nation. See financial crisis of 2007/2008. You don’t need roads to every corner of the nation. Focus on cost-effectiveness. Incentivize rural dwellers to immigrate to urban areas and be prepared for that, which means design an intelligent city, green and sustainable. Otherwise, there will be slums everywhere. Reform the “sarbajanik kharid yin”, the current system is crap, it is impeding growth. Reform the “Tender” system. Don’t give the project to lowest bid. Advanced nations don’t give to the lowest bid. You should not be transparent in this matter. Ensure a high class public service. When a citizen should spend 5 days to get a job done in any public authority, you have a serious problem. Guarantee property rights, provide physical security and end all forms of discrimination on ethnic, sexual or religious ground. Once you think on these issues, growth will follow but remember that there are dozens of steps and they do not take place overnight. State should be in a position to enforce law. Justice system and central banking should remain without political influence and teach your citizen not to be blind followers of their history and culture. Culture that do not suit with modern scientific way of life based on humanity and international solidarity, your education system needs correction that teaches it. Finally, respect work, be selfless, praise creativity and hard work, and most importantly end nepotism. Imagine that the son of a good football player always gets a place in national team based on his father's performance and not the person who plays better. This is the same when capable people are barred from a particular job but incapable ones rule.