History and context from Mahat

From Nepali Times, (19 December, 2019)

Ram Sharan Mahat, former foreign and finance minister of the Nepali Congress, has published an important book that serves as an explainer and update on Nepal’s political transition and state restructuring exercise. It is an encyclopaedic dive into the political economy of present-day Nepal, useful not only for non-Nepali readers, but also Nepali students seeking to understand history, trends and context.

A senior member of the Nepali Congress party, Mahat lost his seat in Parliament in 2018, after having consecutively won four parliamentary elections from Nuwakot since 1994. This forced respite actually allowed the economist-politician the time required to pen his thoughts on critical national events of the past two decades, committed as he is to the middle way that shuns populism and profligate governance.

This work, together with Kul Chandra Gautam’s Lost in Transition (2014), provides antidote to the English language narrative of the conflict and post-conflict transitional era, which has been presented mainly by writers bowled over by radical leftism. Trials, Tremors and Hope also complements Mahat’s earlier work, In Defence of Democracy (2005), published even as King Gyanendra sought to convert Nepal into a royal autocracy.

Mahat is the person who guided Nepal into the era of liberal economics, and rather than be coy he spends considerable space here defending his plans and policies as a six-time finance minister. He introduces us to BP Koirala’s evolving thinking on economic governance, and reminds the readers of once-important entities such as the Socialist International, and the Club of Rome and its ‘Limits to Growth’.

Mahat was sceptical of not a few elements that went into the new Constitution, fought a rearguard action on the establishment of provinces, and advocated local government energy channelled via the 75 districts. And yet, unlike many Constituent Assembly members who became lukewarm towards the document they promulgated, the author seeks ways to implement the Constitution as the only way forward.

He writes: “Managing the new federal structure is an un-tested and daunting challenge. The multiple levels of governance in a relatively small country with a history of centralised administration creates problems of overlap, ambiguity and conflict of authority… The main task at present is to building of institutional capacity at the sub-national and local levels … (with) supporting legislation, regulations and necessary manpower they are lacking at present.”

With the Constitution declaring Nepal a ‘socialism-oriented’ (‘samajbad unmukh’) economy, it has been imperative to have authoritative interpretations of the phrase to avoid confusion, and to save the society from the radical trap. The economist and administrator in Mahat does not fail in providing his elucidation. Noting that “there has been no major change in the fundamental orientation of the country” despite the regime change, he writes: “ The socialist objectives are to be met through democratic norms and values including competitive plural politics, as well as an elaborate list of fundamental rights, including those related to social protection, the security of property rights, among others.”

Elsewhere, to drive home the point, Mahat writes that the goal of socialism is guaranteed to be based on “competitive multiparty politics – including periodic elections, adult franchise, press freedom, civil liberty and an independent and impartial judiciary.”

Decrying the “unproductive recurrent spending which is rising as a result of competitive populism”, the author suggests capitalising on the comparative advantage possessed by the country in “clean energy, biodiversity, eco-tourism, together with cultural heritage, strategic geo-political location between China and India, and the goodwill accorded to Nepal by the international community.”

At a time when many intellectuals prefer to handle the Maoists with kids gloves, especially now that they are tied umbilically to the erstwhile UML, Mahat is clear on what the Maoist conflict “inflicted on the nation” – besides the deaths and maimings, “disruption of social and economic lives, destruction of physical assets and infrastructure, leading to derailment of development and slowing down of economic growth”.

For a work with such a sweep, over 12 chapters and 242 pages, there are some aspects that Mahat has preferred to side-step partly that maybe because he is top leader of the Nepali Congress, which itself is hardly playing the role of a responsible and critical opposition to the present very-powerful CPN government. One would have wanted Mahat to be less descriptive and non-opinionated, and not be too careful about who’s toes he would be stepping on.

While the author does refer to the Indian blockade of 2015, he does not dwell much on how those five months became an economic and geopolitical watershed for modern Nepal. He is ideally placed to discuss the potential debt trap of being over-beholden to Chinese debt largesse, but there is not enough discussion of that here. As Nepal rushes headlong into infrastructural development, Mahat should have made his position clear on what is propped up as the ‘development vs. environment’ debate, but he takes a pass.

How is Nepal to emerge from the remittance economy? Mahat does warn that the reliance on remittance “has reduced pressure to generate more productive employment leading to loss of the country’s competitiveness”, but the author was well placed to provide a guide to generating in-country employment. Similarly, a wide-ranging work such as this required rumination on the climate crisis, which is set to hit Nepal’s population and economy, and Southasia as a whole.