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Money for development

Publication Date : 30-10-2012


All political parties of Nepal had agreed on October 1 to finalise the date of the new elections and work out all other contentious issues, including the formation of a consensus government through a “package deal” by mid-October, a deadline long-gone. If the parties are unable to reach an agreement by mid-November, the remaining budget for this fiscal year will be stalled, with only one-third of it released so far. Without the full budget, the already-fragile economy will undoubtedly take a hit. The International Monetary Fund, to which Nepal is party, has been right in expressing its concerns on the issue, stating that the budget is a prerequisite to keep the economy afloat and to avoid a looming economic crisis. Mired as the country is in a political crisis, adding an economic crisis will have devastating consequences. That’s why the budget should be passed at the earliest possible, and in full. The “package deal” that the Nepali Congress (NC) and Unified Marxist Leninist (UML) are insisting on, which would form a national unity government and declare a new date for elections ahead of the budget, is unlikely to be finalised in the next couple of weeks. First passing the budget would allow some more time for parties to agree on the contents of the deal, for it is not pragmatic politics to solve all issues in “package deals”.

The trend of obstructing the budget is however not new. It has been characteristic of the opposition since the 1990s, regardless of which party or coalition has been in power. It has been used as a means to exert pressure on the ruling party or coalition. It can be assumed that is precisely what the NC and UML are doing now by preparing to obstruct the budget passing in full. But all parties must remember that keeping the economy hostage to unstable political affairs is unwise. The opposition, which is reportedly “set” to oppose bringing out the budget through an ordinance, should use this opportunity to set a new precedent where the parties do not let political disputes paralyse the economy.  In the near future, this would be beneficial to NC and UML too. When the roles reverse and they come into power, the NC and UML too will have to face the wrath of the opposition in passing the budget.

That’s not to say, however, that the parties, and particularly Prime Minister Baburam Bhattarai, don’t have to explain to the people why the election, which was slated for November 22, couldn’t take place. Some explanation by the PM will be necessary and he will have to work extra hard in reaching out to find an agreement on a political roadmap to move the process forward. Towards this end, if need be, the PM may also have to step down. For the past four years, and during PM Bhattarai’s tenure as the premier, the larger national goal has been a new constitution. Although, to his credit, it was in his tenure that the army integration process came to an end—and for that history will likely judge him kindly—the PM should not forget that a new constitution is still the paramount goal. The opposition, for its part, must refrain from taking steps that can plunge the country into an economic crisis. All parties need to get their act together, and soon.


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