Almost two years after being formed, the government with a two-thirds majority in Parliament has become defensive. Economic indicators are down and the people’s daily lives have become even tougher with ever deteriorating public service delivery, bad governance and politicisation of administrative functions from the local to the federal level. There are no indications of Nepal becoming a middle-income country anytime soon as the government is claiming, and no attempts are being made to improve public service delivery to poor people. The government is working day in, day out only to curtail the public space for intellectual debate and freedom of expression and trying to diminish the size and voice of civil society.

This is exactly what the country gets in return when an overtly nationalist and extremely populist political figure wins the election with a two-thirds majority in a country where there are no independent sources of power.

Budget to badge holders

Finance Minister Yuba Raj Khatiwada tried his best when he created his first budget, but the political pressure was too much this time around when he created the budget for the fiscal year 2019-20. He has tried to appease all by giving money to parliamentarians and increasing the old-age allowance and the salaries of civil servants. But he was naïve to do this at the cost of his credibility because he will not be credited for this in the future. There is not much to be said about the budget because it’s a mere list of things designed to feed the party cadres to keep them loyal. There is little for the people. The government is more concerned about consolidating power than establishing institutions with independent sources of power.

The economy will grow by around 7 percent in the fiscal year 2019-20, but that will not change the people’s daily lives. There are countries where the economy grew by double digits but that only widened the inequality. Such a tendency is becoming visible in Nepal with the rise of corruption. The way the government is functioning is similar to what happens in a totalitarianism-oriented regime, where people’s mouths are shut and the entire society is caged by a layer of political discipline that silence the voices of those who speak up against corruption and misbehaviour of the state.

If Nepal continues taking on this path, the destination will certainly be a doomed nation where only two races exist—those who have everything and the rest with nothing. The budget tabled by Khatiwada in Parliament only serves this path of the country. There are not only fault lines in the budget but it is also tainted by theoretical and political dishonesty. Khatiwada is well aware of the system, and he knows what doesn’t work within the system. But he can’t touch anything without the political green signal because he is inside a zero zone that is encircled by political cadres who do the task of bookkeeping. He is forced to fulfil the political ambitions of his employer who is the chairman of the Nepal Communist Party.

Clearly, the country has fallen into a black hole of bad governance, corruption, nepotism and totalitarianism created through the ballot box. We have seen in history how dictators emerged through the elections and ruined the country’s future by blocking the path to prosperity, especially the distribution part of the wealth generated in the economy. The generation of wealth keeps happening even in such a scenario because that’s how the specific political circle makes its power more authoritarian by retaining loyalists and party workers. However, the country doesn’t move forward because people do not get to participate in the whole process and never get their share of the pie.

The federal government has repeatedly failed to give a sense of a functioning state in numerous cases. The local and provincial governments have become another Singha Durbar, a place that only serves those who have vested interests. An epic example of this is the provincial governments' allocating money to provincial parliamentarians in a much larger proportion than what they generate in revenue. The logic behind federalism was that people would have easy access to public service delivery mechanisms and get their problems addressed. But that is not happening, and the government is not heading in that direction. Moreover, it has created a layer that clearly defines who is entitled to use or misuse state resources and who are not.

Lost hope

The most dangerous aspect of the current state of society is that people have lost hope that the country will come out of this vicious cycle of poverty and underdevelopment. There was a belief that the country would leapfrog once we had political stability with a majority government. That’s why one party received a clear mandate. But now that has evaporated and hope has gone. The current government’s slogan of 'prosperous Nepal, happy Nepali' sounds only like pompous political rhetoric. The only fear now is whether federalism is going to sustain and function with this level of implementation and with the institutions we have. The government has become defensive, people have lost hope, and neighbouring countries have other much more important things to do.

Foreign direct investment is decreasing, and donors have become hesitant to put anything at stake by disappointing the government because they have seen in other poor countries how there comes a point where they can’t help even though they want to. Nobody knows where the country will end up. Like the late scientist Stephen Hawking said, you never know what will happen when you fall into a black hole.

Poudel is an economist.