Nepal’s development challenges highlight the need for a new inclusive economic strategy and local leadership empowerment.
Nepal faces significant challenges in its democratic and economic landscape, largely stemming from a historical lack of inclusive development. The shifts the country has undergone in recent decades prompt a need for thorough analysis. In this context, Madhukar SJB Rana’s posthumously published work, An Alternative Development Paradigm for Nepal, emerges as a crucial document that attempts to elucidate the country’s development profile and fundamental issues.
Rana argues that a traditional top-down approach, characterized by national planning and reliance on state enterprises and labor unions, may not adequately facilitate the inclusion of all segments of society. Instead, he advocates for a development model that fosters opportunities through market support, alongside necessary reforms in agrarian, economic, financial, administrative, and labor sectors. This approach emphasizes the significance of local leadership and culturally relevant innovations in achieving Sustainable Development Goals (SDGs).
For Nepal, development strategies must account for the structural limitations imposed by its economy and geographical context. Policymakers need to demonstrate empathy towards the precarious conditions faced by citizens, particularly in light of a lack of constructive dialogues that could bolster the national economy. The current crisis, marked by excessive imports and the export of human capital, underscores the need for a robust economic development plan.
To address these issues, a comprehensive development agenda focused on reducing imports and creating job opportunities is essential. This requires a fundamental transformation in how development is conceptualized in Nepal, with an urgent call for a paradigm shift towards inclusive growth. Such growth should prioritize productive employment and investment in human capital, benefiting individuals and families alike.
Strategic planning must encompass macro, meso, and micro levels. The macro plan should outline the desired economic structure over the next 25 years, while five-year plans must center on human resource development that aligns with the economy’s long-term needs. It is crucial to integrate manpower supply and demand projections with educational initiatives that promote vocational and technical training across various occupations.
Inclusive growth necessitates a participatory approach that considers diverse factors such as geography, demographics, and governance. This process should involve all stakeholders, not just the state apparatus, and requires collaboration with Nepal’s National Planning Commission (NPC) to ensure research and planning adapt to political changes.
Moving forward, Nepal requires an Integrated Sector Programming and National Performance Budget framework, similar to the Fiscal Responsibility and Budget Management Act (FRBMA) in India. This would shift the focus from mere inputs and outputs to tangible outcomes. Development plans must be cognizant of economic structures and constraints, engaging both public and private sectors in meaningful dialogues to establish realistic targets and outcomes.
In setting economic growth targets for each five-year period, consensus among political parties is vital to avoid reliance on external influences. Realistic GDP and sector targets should guide action plans across the country. Strategies for import substitution and export promotion must be developed in partnership with the private sector, leveraging foreign direct investment to compensate for low household savings.
Additionally, addressing the needs of farmers through subsidies and improving irrigation infrastructure is essential. The challenges of international migration and associated debts highlight the importance of planning a remittance economy that empowers women and supports the next generation. Overall, Nepal requires an inclusive Constitution that fosters justice for all, alongside independent institutions that ensure accountability and transparency.
Despite the establishment of new provinces, they have largely failed to meet developmental goals, often becoming an additional bureaucratic layer. Many of Nepal’s current issues are rooted in the armed conflict that began in 1996, which had devastating social impacts and damaged infrastructure, further complicating the path to recovery and growth.
