O ver the past 75 years of modern Nepal, the country has undergone four epoch-making political shifts: the abolition of the Rana regime in 1950, the royal coup in 1960, the establishment of multiparty democracy in 1990, and the abolition of the monarchy in 2006. Presently, we face the ‘Gen-Z change’.
Each time, citizens were promised that political transformation would accelerate national prosperity. Sadly, over the past 37 years, economic progress has lagged significantly behind that of comparable nations. The irony remains that no intellectuals, political leaders, or international agencies, such as the World Bank, Asian Development Bank, or International Monetary Fund, have answered the crucial question: what went wrong?
For decades, scholars from premier institutions like Harvard and Oxford have researched global governance, development, and prosperity, producing extensive literature and recommendations. While some nations embraced these insights, Nepal unfortunately falls into the category of those that ignored them.
It is crystal clear that the trajectory pursued by successive governments over the past 37 years has failed to deliver expected results. Political changes alone have not brought prosperity. A drastic, epoch-making economic transformation is needed. One that transforms labour, capital, resources, and information into
higher-value products and services.
Most importantly, this transformation must prioritise job creation, the fundamental driver of prosperity. While leaders in the developed world emphasise employment in their agenda, Nepali leaders rarely do. The second essential factor is national wealth creation, generating investor profits and boosting government revenues to fund education, healthcare, and infrastructure. Because the private sector largely drives both job and wealth creation, it is tragic that past governments neglected the business community’s struggles. Instead, political leaders and the bureaucracy remained tied to restrictive laws, rules, and regulations that stifled trade and industry.
Every nation possesses a unique combination of geography, size, population, culture, political system, and institutional capabilities. Therefore, Nepali political stalwarts and top bureaucrats must determine what drives results in the local context, identifying why past efforts failed and which factors can unlock prosperity for a strategically located, landlocked country. We must remember that today’s developed nations were once poor, corrupt, and poorly governed. They achieved economic transformation by establishing robust institutions and legal frameworks.
Regarding past failures, politicians and intellectuals frequently offer a standard explanation: political
instability. However, this claim should be taken with a pinch of salt. No political party intentionally obstructs development or discourages domestic and foreign investment simply due to a change of guard in Singha Durbar. Furthermore, frequent government turnover is an inherent feature of the Westminster parliamentary model, which persists unless the democratic framework itself is altered.
Common sense dictates that the economic growth engine cannot run at full speed unless business entities are motivated to invest and facilitated to perform. It is high time to comprehensively review and reform the entire gamut of institutions, laws, rules, regulations, and processes governing both private and public enterprise, with the sole objective of achieving super-high economic growth.
Finally, cross-subsidisation remains essential in a country where over one-fifth of the population lives below the poverty line. Public sector entities can play a vital role in this model by generating profits from those who can afford it to subsidise poorer populations. Additionally, integrating Artificial Intelligence (AI) and other advanced technology tools on a large scale will be critical for achieving effective and efficient governance.
(Kansakar is former CEO of Nepal Telecom and Nepal Airlines)
