Austerity Must Begin From Top

It would be most cynical to write every article on a negative mode. But it is said that journalists are the most cynical persons and they do nothing else and only point out faults and write depressive news for their followers. For now, let us start with a positive factor. It was good to hear that the present coalition partners are ready to stick together till the next general elections scheduled to be held this coming November. Just the news of having a stable government is good news for most Nepalis. But as it is politics and little can be forecast as to what will happen next.

It was also good to read in TRN, a reporting of how the Nepal Rastra Bank (NRB) had unveiled the monetary policy of the nation and it sought to maintain price stability. This report was published and broadcast by other media outlets with different views as well, but the major part is how strong are the authorities in implementing these pragmatic suggestions of the country’s Central Bank. This writer admits that he is actually a novice as far as the complicated theories of a nation’s economy are concerned, but like any other layman, he understands that a huge trade deficit, lack of liquidity even in the banks of the country, declining foreign exchange capacity and mind-boggling inflation which will surely be followed by increasing recession, are not good for any country. Leave alone an underdeveloped country like Nepal, which is struggling both economically and politically as well.

Crucial juncture 

It would not be out of place to say that PhD holders and other individuals have also been appointed as finance ministers in the past. But specially degree holders and other individuals never realised the real situation of a poor country like Nepal and tried to only imitate what other policy-makers in developed nations did. When individuals not at all familiar with fiscal policies, have been appointed as ministers, then it is not surprising that the results have been disastrous and we have had to see business people and middlemen taking advantage of the naivety of such ministers and use their links to be richer at the nation’s cost.

At this crucial juncture, it was good to see the NRB coming up with some sound suggestions on how make to the economy stronger and also increase liquidity in the market. But sadly it has not mentioned how the tradition of most people to invest only in unproductive sectors should be broken and they must learn to spend more so that their earning whether they have “begged for, borrowed or stolen”, will have a trickledown effect if they spend such money in productive sectors rather than in just buying gold or land.

This writer has visited a few well developed countries in his long stint in the journalism sector, and through experience he has learnt that the people in those countries do not have any gold and most of them did not own any land. They spent what they earned and in return it helped the government to earn more revenue, for the markets to be more robust and for people like themselves to also get employment. That is what keeps the economy of such developed countries thriving.

Imagine what would happen if banks had only depositors and they could not invest money in some productive works. The banks would become bankrupt by paying only interests to its depositors. But one must also accept the fact that banks also chose to invest most of their money in land and housing projects, both of which were unproductive and did not contribute in any way to the economy of the nation.

Again to go back to what this present government is doing in spite of criticism from many sides is that, it is at least making efforts to bring back the tottering economy back on track. For example, the Nepal Oil Corporation (NOC) has also provided a long list of suggestions to the government on how to bring down the import of fossil fuel and also contribute to reducing the dangerous level of pollution in the country. Again, it is up to the government on how it can implement such pragmatic suggestions.

For now, what the government could do at once is to begin in following the saying that “charity begins at home”. In other words, the top level leaders, ministers and government officials should set an example by not buying huge luxury vehicles that guzzle many litres of petrol just in going a short distance. It was reported in a vernacular daily how provincial governments are also spending millions of rupees in buying such vehicles and also in taking funds from the government to buy fuel for such four wheelers. Not doing this would encourage the common public to also slow down on the use of vehicles on a day-to-day basis like suggested by NOC and also help in the country saving a huge amount of foreign currency in just importing fuel.

Nonstop power supply 

Yes, electric vehicles and electrical appliances can also be used, but the people will have to be convinced that there will be an uninterrupted supply of power, which citizens of many other countries take for granted, and policies – short-term and long-term -, have to be made so that electricity produced in Nepal will be given to Nepalis first and then only thought should be given on selling this energy to neighbouring nations.

Forget other natural resources of the country, just managing the abundance of water has to be given thought instead of only allowing it to flow into other countries and eventually to the seas. For such pragmatic paths to be followed by the government, the leaders should be able to first sacrifice unnecessary spending and show vision and also seek suggestions from the right people. We understand everything cannot happen at once and it will take some time to change the attitude of the policy-makers and also the common people to adjust to a less expensive lifestyle. We know we need austerity, but like mentioned before, such austerity measures have to begin from the top.

(The author is a freelancer.)