Cost of coalition politicsIt is evident that the coalition of parties neither stands on a moral nor ideological foundation.
People haven’t given up hope of building the nation. The recently completed local elections exhibit that sentiment. The country is moving forward despite the challenges and problems. We no longer need a detailed explanation of the challenges and issues Nepal has. At the same time, economic performance has been slow and weak, while it appears that Nepal has been making progress politically.
Most importantly, the completion of the local polls on time is laudable. This has been particularly appreciated primarily because of the theatrical political scenario at the federal level in the last couple of years that reflected poorly on the political parties. The general assumption was that the country would again fail to hold timely elections.
The narrative of “prosperous Nepal, happy Nepali”, unveiled by a left-oriented government with a two-thirds majority in 2018, was inherently pompous. That euphoria evaporated quickly with the ousting of the KP Sharma Oli-led government. The country lost politically and economically due to political uncertainty induced by leftist leaders compounded by the effect of the Covid-19 pandemic. Most of the objectives set by the government were changed as a result of the global pandemic. And the government’s mishandling of the pandemic led to unprecedented problems for the average citizen. The loss was inconceivable both at the personal and economic levels. But even after all these months, formulating a roadmap or a framework for recovery hasn’t been achieved.
While most of the developing world is bouncing back with a high economic growth rate, Nepal is struggling to maintain basic economic performance thanks to poor public finance management and a weak regulatory framework for procurement and capital expenditure. With the dissolution of Parliament, KP Sharma Oli also let his aspirations be dissolved in dirty politics that changed the course of his party and himself and the country.
The new coalition government led by Prime Minister Sher Bahadur Deuba, chair of the Nepali Congress, was formed in line with the Supreme Court’s verdict in July 2021. The government seemed uninterested in economic and development agendas with no apparent economic and growth strategy; the default was the continuity of corrupt practices and half-hearted measures towards achieving the development goals.
The government lacked ownership of anything as it just followed a to-do list from some interest groups and power centres. All it did was overhaul the existing bureaucracy by making new appointments, which is deplorably customary after the formation of a new government. Most importantly, the government withdrew the Federal Civil Service Act from Parliament for endorsement. The government has failed to resume more comprehensive consultations on the new Federal Civil Service Act, nor has it been able to identify the core issues hampering the progress of sub-national governments at the local and provincial levels. Progress has been held up in the absence of the most important law to manage human resources from the federal to the local level.
The incumbent government is focused solely on doing well in the next election and remaining in power; little is being done on the development front and recovery from losses caused by the pandemic. It is evident that the coalition of parties neither stands on a moral nor ideological foundation. The CPN (Maoist) and CPN (Unified Socialist) both are operating to sustain power politics by being a mere support number for the Nepali Congress in Parliament. In return for their support, the Nepali Congress gave some key portfolios such as the Ministry of Finance and the Ministry of Energy, Water Resource and Irrigation to the CPN (Maoist); and other ministries to other parties in line with their representation and influence.
The cost of this trade-off is well reflected in the current macroeconomic outlook and the budget for the fiscal year 2022-23. The government’s budget that came amidst the need and urgency of recovering from the colossal loss of the pandemic and bad economic scenario has more to do with populism rather than tackling the actual problems of the economy and giving headway to the country.
Since 2020, the world has been trying to change its operating system due to the Covid-19 pandemic. But these efforts have been successful only in a handful of countries or sectors. With the easing of restrictions in movement and other economic and daily activities, almost everyone is trying to get back to normality. But what is not always recognised and accepted is that the times have changed. There has been such a loss that the world, in some cases, has been permanently re-engineered. Hence, it is improbable that things would be as they used to be in pre-Covid-19 times. This must be accepted by the government while formulating any new policy.
On the global front, Russia’s invasion of Ukraine has caused a sharp increase in fuel prices; and subsequently, prices of food and other essential goods have risen sharply. The impact of the war combined with the after-effects of the Covid-19 pandemic has been devastating lives and dragging down growth. At the same time, businesses have suffered unprecedented losses, making economic recovery an uphill task. The liquidity crisis, too, has been causing an additional burden on the economy as there is no investment in expanding enterprises and improving production. And sadly, the government’s policies and approach are just trying to underplay the severity of the situation on the eve of the elections by making a bad situation worse.
Without a clear roadmap for economic development that is based on recovery and rebuilding, the country will stagnate as a poor and low-income country for the entire decade. The time limit to graduate from the status of least developed countries is set for 2026, but that looks highly unlikely in the current scenario if we walk at the current pace. The reality is that we have not been able to prioritise our political, social and economic objectives for the last three decades since the opening up of the economy. The challenges will be continuous as we advance, along with the threat of climate change. The potential confluence of calamities in the future, as the International Monetary Fund puts it, both at the global and national levels, will only make our lives more difficult. If the leadership doesn’t take responsibility for all this chaos, we will still be in this same spot a decade from now, in the 2030s, continuously losing our youth to the promise of a better life by nations that value their talent.