Creating Autonomous Economic Space

Development has captured the imagination of the diverse Nepali public now more than ever before for reasons of growing democratic awareness and expectations and ensuing crisis to realise it. Obviously, it cannot be delinked from the integrated view of life and a condition of freedom from anxiety — of fear and necessity. The primacy of existence underlies the prime source of hope for development and the nation’s future. In this sense, development is a non-linear process unlike flirting with economic growth, modernisation, structural adjustment or neo-liberalism. Nepali leaders and experts have often swapped sides to whatever development idiom flows from outside regardless of its relevance.

The last one sought a paradigm shift from the nation’s agriculture and industrial growth to financial capitalism. It is fed by three sources: Nepali state’s retrenchment and restructuring, spur to identity politics where each fought the other for separate privilege and post-modern turn which separated the intellectual and leaders’ liberal spirit from a common cause with the people. Each element cloaked the logo of development — emancipation of people from their constraining condition and sowed the seeds of subsequent downhill of the real economy. Development can capture the complexity of national ecology, society, politics and intellectual tradition without any decay of home-grown knowledge, institutions and public interests.

People-centric development

Nepal’s endorsement of the right to development articulated in universal declaration of human rights, popular sovereignty enshrined in its constitution and inviolability of local self-government promise a departure from the deterministic, paternalistic, expert-driven and top-down model of development to a choice model of locally evolved people-centric, participatory and bottom up reconciliatory process. Development is a process that unpacks the dynamic factors of society responsible for human and scientific sensibility of inclusive social transformation and a solace from the trouble of everyday drudgery of life for existence. It seeks what the Nepali constitution visualise -- the creation of an egalitarian society out of unequal ability, potential and outcome of people.

Yet, the constitutional aspiration of socialism-oriented economy, dominance of self-declared socialist spectrum in politics and compulsion of migration of a huge populace for jobs abroad, however, mark the troubling trilemma of Nepalis’ public life. The new ecological, gender and identity-driven crusades have left the class-conscious development wayside. Even the crystalline charity of business, civil society and NGOs approaches proved ineffective to lift up the weak. Their Sisyphean mission of unshackling the bonded and child labour amply illustrates this. The partisan model has displayed anti-state bias and sought tribal conformity, not the detribalisation and democratisation of parties and leadership.

The adoption of the motto of sustainable development goals, “no one is left behind,” affirms the coherence of values but without political will and resources to realise them. Those who defend development as a choice, capabilities, justice or freedom question whether external policy prescriptions as an aid conditionality assumes full cognizance of context, local knowledge and skills and freedom of choice of Nepalis or imbibe only destructive potential of disciplinary rationality of social sciences devoid of cultural sensitivity and systemic conscience. 

Any rational reflection of development of Nepal thus entails not just the material growth but also historical, cultural and cognitive ones because such a reflection enhances the ability of people to know the dignity of labour through work opportunities and freedom so that they are able to live a fully human life without destroying nature's resilience. Reflection also helps Nepali planners to learn the lessons why all national plans have failed to achieve the set goals and bulk of people are eternally drawn on the edge of abyss. Development requires an adoption of “national culture and characteristics,” not the caricature of others. Nepalis consciously internalise their experience and culture and evolve social vision, connection, cooperation and associational solidarity and entrepreneurship at the grassroots level.

The abdication of policy-making responsibility by Nepali parliament and political leaders only mark their dullness. Any escape from this dullness requires their self-critical rationality and de-lobotisation. Nepali development planners and experts need to eschew from quibbling with the dogmatic assertion of supremacy of external theoretical models as the best and play by their rules.  It is important for them to know contextual sensitivity and critical self-reflection, not self-alienation from the nation’s heritage of enlightenment and positive inputs flowing from Nepalis who are the stakeholders of development. It is important to integrate their knowledge, experience and wisdom by indoctrinated leaders and disciplinary experts and grasp inter and intra-disciplinary and institutional insights so that they become sensitive to the fundamental view of indigenous progress with moderate support of capital, technology and skills from outside.

Common sense rationality tells that diagnosing the fundamental causes of underdevelopment is essential to know the derivative causes and effects and remove the traps that grips social dynamism in production, self-reliance on essential goods and national independence in the diversification of economic, political and foreign policies. Covering up self either from the failure or popular feedback and attributing causes to the past practices only leads one to blind alley mirroring self-doubt, if not guilt. Considering the past as an enemy and not learning the progress it has made has turned the once peaceful nation chaotic, with amnesia of elementary foundation to start sustainable development initiatives.

Nepali political leaders need to bear the accountability for their promises made during election, constitutional obligation and public international laws. Only then can democracy, constitutional bodies, political parties and other institutions of governance be suitably disposed to fit with inclusive development that can keep macro-political and macroeconomic stability robust. A polarising development succumbs to resistance and the slough of layered struggle of Nepalis for survival, competition and recognition. Nepali leadership must have enough political will and coherent vision to execute its inclusive democratic constitution to stop the temptation of winner-takes-all game in political economy so that those at the bottom do not have to race to the bottom.

The democratic rules of leadership does not consider its power, authority and legitimacy unconditional when ordinary Nepalis are stuck in the misfortunes of poverty, inequality, joblessness and alienation caused by unequal distribution of the factors of production, misuse of public resources, capital flight and non-investment of surplus capital in agricultural and industrial sectors which is vital for social peace. The constant stagnation of the foundation of Nepali economy caused by declining capacity of production, excessive imports, financial indiscipline, debt increase and technology-induced disruption  and its corrosive effects on ecology, natural resources use, social and cultural renewal and political instability have raised the spectre of scepticism whether the nation is heading towards sustainable development path. Similar policy mistakes have cropped up in the execution of laws about the devolution of power and resources.

If this is the case, why is the execution aspect not stabilised? Obviously, power devolution does not serve the interest of political class dominating political parties, business class thriving in monopoly and bulk of partisan bureaucracy obsessed for career enhancement than public welfare.  In such a context, the role of attentive public lies in articulating the interests of people and providing them a broad cultural interpretation that explains to people how deprivations have come about and how to overcome them. The other is the democratisation of political power that erodes the base of the informal political system maintained historically by patron-client relationship and the web of power of interest groups that creates a blockage between peoples’ rights and skewed allocation of resources.

Nepal does not possess a homogenous economic and political space, nor are its potential regional growth hubs well linked to Kathmandu for policy articulation. Owing to an open border, the major towns of the Terai have better exchange ties with their Indian counterparts. The incongruity of its economic space with the political heartland, the hills and valleys, has faded the political effect of economic action. It is, therefore, difficult for Nepal to cohere security, resources, population and political economy for national integration. Capturing the economy of scale through integration of its segmented market as well as creation of a single labour market by means of proper public policy is, therefore, essential to build Nepal's democratic development.

 It is feasible to create an autonomous national economic space without risking the alienation of external capital investment, labour market opportunity, advice, technology and aid transfer, trade and management of ecology which transcends national boundaries. If development is about improving the quality of life, the nation needs the modernisation of productive forces and an alteration in property and power relations. It will be difficult if education, income and opportunities, the sources of social mobility, remain dysfunctional and disembodied. Only visionary leadership can create a sustained order of development that can prioritize the interests of the people, catalyse the dynamic sector to uplift the lagging ones and balance the aspiration of Nepalis for equitable development.

External challenges

 But the state must mediate the contradictions of society, between the general and particular interests and spur the pressure from below for self-governance and manage global integration so that development policies are executed without resistance. Nepalis need an embodied state as a buffer against internal and external predators and to manage the flip side of globalisation thus unlocking the diversification of its economic relations. The national response to external challenges becomes feeble if the economic gap spawns a political cauldron of instability triggered by the welfare deficits. The moral responsibility springing from the vast poverty in rural areas and the wealth concentration in urban areas has to be mediated by the state.

The nation’s backwardness can be corrected by putting an optimal set of policy reforms and eradicating the structural factors that breed poverty. Without comprehensive reforms of its political economy, it would be hard to democratise the polity and ensure sustainable development. Promoting development is something more than a soothing approach to poverty alleviation. Many-hand approaches to development coordinated by the state are vital to set the coherence of disjointed projects, promote the political economy of scale, balance the market economy with the common good and fuel the source of light and hope of Nepalis in the precarious world.

(Former Reader at the Department of Political Science, TU, Dahal writes on political and social issues.)