Kathmandu: Prime Minister Sher Bahadur Deuba’s six-month old Cabinet has been unprecedentedly eventful. His first weeks were begun with high-impacting programs such as “land-reforms”,”Kamaiya liberation” and the talks with the Maoists insurgents. Merely months later his cabinet had to see the emergency imposed in the country. This month saw him hosting SAARC Summit and US Secretary of State Colin Powell.
These high profile activities however, have done little to boost his image. The land reforms are viewed everywhere as ineffective. The bonded labor issue is recognized to have rebounded. The Maoists talks failed and thus the emergency. SAARC saw of little Nepali priority and more of the Indo-Pak angle. Powell left Nepal suggesting better governance.
At a much more urbane level, bad governance, bad politics has shifted attention forcefully to the economics of it all. The government is broke. Investments are scared. Production has stalled. Consumption has slumped. Any promise of economic enthusement is tarnished by the focus on the insurgency and the emergency.
These have resulted in very contradictory moves on part of government reflecting the desperation. The need to raise spending money prompts government to focus on revenue collection. Common economic sense would want to woo money circulation through concessions in revenue. As a result of the focus on taxes, spending has decreased. Our revenue-based economy has thus been further affected. An income from customs tariff has slackened while tax collection has been far removed from expectations. To boot, spending in productive enterprise as investments has been scared. Government itself accepts that all traditional earners and employment sources have been radically affected in the non-agricultural sector. Government accepts again that even the traditional sector, agriculture, is not finding suitable prices at home.
It is these real indicators that signal imminent economic collapse. While Sher Bahadur Deuba is certainly not to be blamed for the problems, his choices of remedies have hardly been effective. They have actually compounded the problems and contributed to the current malaise.
It is these factors that make the forthcoming winter session of the parliament crucial. Far from the fact that the session is to decide upon the emergency’s longevity, it is also to discuss the approval of the supplementary budget and the dislocation of allocated funds approved in the current fiscal year. Moreover, the winter session is to be the arena for yet another power-grab from Deuba’s party detractors. Politics continues no doubt, but the economy is regressing.