Prime Minister’s Address To Nation
Of course, the year gone by, 2074 BS, was a year of great political achievement for the three tier elections, that of the local, provincial and federal, were held, which also effectively ended the decade-long political transition. In his new-year address to nation on the first day of this year, 2075 BS, on April 14, Prime Minister KP Sharma Oli rightly mentioned the political achievement made so far. He also highlighted on the challenges the country has been facing and the potentials yet to be tapped. He reaffirmed the nation would have a positively different face as his government would speed up development works and change the living conditions of the people.
His words have raised optimism among the common populace. He raised some pertinent issues about development of agriculture sector, easy access to education, trade diversification, augmenting favourable investment environment and curbing corruption. Most importantly, he said the government’s overarching objective was economic prosperity. The way he stressed on turning the country into an organic area is really impressive. However, what was lacking in the address is a clear picture of the country in terms of fact and figures related to different sectors at present and how the country will be different in the next five years from the same view point. He talked in words, not in facts and figures, and words in most cases come out to be elusive. Even then, as said above, the PM’s address has injected new hope for the New Year.
It is a common sense in Nepal that corruption is our chronic national disease. It is one of the major causes of our backwardness in terms of economic development. We have not made any progress in controlling it, the report of the Transparency International (TI) released recently proves it. In view of the score Nepal has got for the last few years as per the corruption perception index of the TI, the global corruption watchdog, Nepal has always been among the most corrupt countries. With 31 score, Nepal has been ranked 122nd among the 180 countries in the TI’s corruption rating in 2017. Those countries which score less than 50 are considered as highly corruption countries as per the TI’s standard, and by scoring only 31 points, Nepal’s international image is that of an extremely corrupt country.
Against this backdrop, Prime Minister Oli’s repeated pledges to do away with corruption gives a big hope. The PM seems to have realised magnitude of corruption and its overall effects on national development. And he has repeatedly been making pledges to fight against it. In his address to nation on New Year from the bank of the heavenly beautiful Rara lake, Nepal’s largest, the PM vowed to end corruption the way he made promises to do the same during the election campaign in Biratnagar on November 4, 2017. Only one thing the PM needs to note in this regard is that, as per the TI’s report, with only 25 points, political corruption is the worst in Nepal.
The other important point the PM raised in the address is about development of agriculture sector. Despite that fact that we are an agricultural country, we import food grains worth over Rs. 100 billion a year now. But unfortunately, according to the White Paper released recently by the Finance Ministry, only 25 per cent of our arable land has irrigation services. While the contribution of agriculture to GDP is one third, two-thirds of the total population is still engaged in the same sector. Now, we this depressing fact, two-third of population is making only a third of contribution to the GDP. Without elaborating on how contribution of the other sectors to GDP would be increased, the PM said that agriculture’s contribution to GDP would be brought down to around 25 per cent. This is something contradictory or something that leads to misunderstanding. The other point the PM missed to mention is the status of employment in different sectors and how number of the employed will be increased in the next five years.
The PM has also focused on increasing production and productivity. It is heartening to listen to such commitment. But, we have to note, banking sector has not been oriented to production sector and the banks and financial institutions (BFIs) have been engaged in unfair competition for interest rates, according to the White Paper of the Finance Ministry. Of the total loan, the BFIs have invested only 16.3 per cent in the production sector. And this is a hopeless situation. This must have affected job creation as well. It is known, investment in production sector has doubly beneficial: it creates jobs and it reduces imports. However, the PM did not mention about it. Had he made it a point that the government would make such a policy that the BFIs have to make a certain percentage, let’s say 40 per cent, of loan investment in production sector that would have given rise to a real hope of development of production sector. It is surprising, the central bank, Nepal Rastra Bank (NRB) can limit the loan investment in real estate and automobiles sector, but does not fix the minimum loan investment in production sector.
Development of production sector is critical in the present context that trade deficit has increased by 42 folds in 25 years. And in the past, the deficit was covered because of remittance. But now, remittance has started to diminish and it is unlikely that it will increase anytime soon as the number of outbound migrant workers has started to decrease. If contribution of import related tax to the total revenue of the country at present is 47 per cent, it will be less than that when import goes down.
The White Paper said over 30 per cent businesses registered in VAT did not submit details, but the PM did not talk about what action the government would take against such cheat. Manufacturing sector is dwindling, its contribution to GDP was 14 per cent a decade and half ago and now it is only 5 per cent. Contribution of Industrial sector was 10 per cent some two decades ago and it is only 6 per cent now. It is hoped that, there will be a significant progress in such figures within next five years as the PM has said the face of the country will be changed by then.