Government’s White Paper
The current finance minister who has a reputation of an expert development economist issued the white paper on behalf of the government of Nepal recently. White paper ordinarily refers to the government report that intends to provide pertinent information on a particular subject including the future plans. Similarly, from an organisational perspective, it refers to a concise report that informs readers about crucial issues that often convey the ideology of the business including the ways of persuading customers.
From the macro-economic point of view, the issuance of white paper holds significance. First, such paper clearly depicts the state of the economy with an overview of the key indicators. Second, it is taken as an attempt on the part of the government to acknowledge the situation of the country and communicate its future plans and strategies to improve the situation. Third, it also highlights the expectations of the government from the other stakeholders of the economic community- government ministries and departments, private entrepreneurs, general public, corporate sector, among others, to expedite the development activities.
Issuing the white paper, Dr. Yuwaraj Khatiwada described the present situation of the Nepalese economy. In fact, he painted a gloomy picture of the economy and stated that the coffers has become empty. The report refuted the neo-liberal policies adopted by the Nepali Congress (NC) during its government for creating the economic mess. However, the current projection of the Nepalese economy in the white paper has become unacceptable to the Nepali Congress and few others. The present government has also been alleged of exaggerating the reality. More importantly, the manner in which the ministers presented the paper raises the question of accountability according to a former technocrat. Instead of focusing on the plans and strategies of the government to tackle the grave economic problems, the bulk of the report has been spent on narrating the economic failures of the country and making various authorities responsible for this.
According to the report, increasing trade deficit, decrease in the flow of remittance, lack of the investment climate, rise of non-budgetary expenditure, growing fiscal indiscipline, low capital expenditure and corruption have resulted in the current status of our economy. With an average growth rate of 4 per cent in the last decade, the Nepalese economy has come to a standstill. More than 90 per cent of the share of income is being spent on consumption resulting in low savings. Similarly, the economy has become totally import oriented. While 15 per cent of the imported item includes fuel, 14 per cent of such items include agricultural products. Ranging from food, clothing to raw materials and construction materials for industries, we are relying on other countries which is really worrisome for economic growth.
Describing further about the causes of the economic downfall, rise in informal economy has also been projected as a significant factor. In the same way, lack of the rational budget estimations, low revenue mobilisation are equally pertinent issues. No less significant is understanding the gap between the investment pledges and the real amount of money that the country has received. In case various commitments made during investment summits in Nepal have so far not obtained, it shows the tendency of the donor community to sell false promises to a developing country like Nepal.
The minister also unveils the plans of the government to address the pressing economic problems. With the policy of promoting a socialism oriented economy as envisaged by the new constitution, the government intends to foster the coordination among the public, private and co-operative sector in the economy. Meanwhile, mobilisation of the domestic and foreign capital through management and policy reforms is high in the agenda. Conducting capacity development programs for improving the revenue mobilisation of the provinces and the local levels to enable them to exercise the powers as enshrined in the constitution is a top priority.
In a bid to create a positive impression among the public, the government has stated that the stable politics will be a boon to translate the vision of the economic development and prosperity. The paper appeals the ordinary public and other members of the economic community to lend constructive support to the government in getting the country out of this situation. Hence, the intention of collaborating and consulting with various organisations and the public is clear from the report which is indeed a sign of government’s commitment to respect diverse views.
Nevertheless, it is imperative that the new government take the opposition in confidence in its endeavour of economic transformation. Rather than engaging in the blame game, the present minister can seek advice from some influential finance ministers who are in opposition this time as to resolving the myriads of economic problems. Intense consultations with key economists and policy makers will be the stepping stone to translate the vision into action.