Parliament reinstated through popular struggle made a historic declaration affirming the popular sovereignty and declared the people as the sole source of executive power. How will this declaration be put into practice to fulfill the aspirations of the popular movement? This has been the subject of general expectation now.

After unification, Nepal has been under one form or the other of autocratic rule based on feudal hereditary power. The feudal rule aimed to strangle popular sovereignty by putting into practices untouchability, patriarchy, Hindu domination, and promotion of hill nationalism aimed at excluding the citizens of the terai. General people were forcefully excluded from the national economy. Kathmandu became the state for the rulers and the rest of the nation was mere colony. In fact, until the parliament made that declaration, the feudal rulers in one way or the other kept the state power in their own grips. The ruling system and the mode of production adopted by it did not match with the fast-evolving level of the people’s consciousness and the need for providing for the basic necessities of the life for the majority of the people. The popular movement in a way tried to integrate the past movements, peoples war and small and medium struggles from around the country. The aim was to eliminate the feudal state and mode of production and establish new democratic state and production relations.

Socio-Economic Transformation

The most important thing is to put into practice what is said and written in texts. The socio-economic policies can be evaluated only after they are put into practice. Nepal is preparing for transforming itself from the centuries-old autocratic feudal rule. Sharp divisions along caste, ethnic, gender, linguistic and class lines are deeply entrenched. The past rule and production relations have created deep divisions among people. There are people who can afford to travel to moon and there is the large majority who are not able to eke out basic livelihoods even after toiling for 18 hours a day. Poverty, illiteracy and backwardness is deep-seated in Nepali society. The main question today, therefore, is to identify ways to alleviate the suffering of Nepali people.

Finance minister Mahat has presented a white paper on the economy in front of the sovereign parliament. Everyone knows, the feudal monarchy has torn the economy inside out. It is indeed challenging to bring back the economy from the brink of collapse. In his 17-page white paper, minister Mahat has presented the existing situation of national production, monetary supply, external trade, prices, revenue, public expenditure and other economic indicators and has tried to explain the difference between the economic situation when he had left the government in 2001 and at present. He makes a case that present revenue is not enough to run the state now. In front of the donors, he argued that there will be 8 billion rupees deficit this year. During the discussions, he emphasized that the main responsibility of this government was to conduct the election to a constituent assembly and ending the armed conflict. In addition to that, he also asked support for eight-point program. These programs included restarting postponed projects, financing the budgetary deficit, rehabilitation of the victims of conflict, reconstruction of infrastructure, building new infrastructure, constructing new hydroelectricity and power plants, and community-based income generation projects.

The question arises: Is this package going to lead to transformation of economy and society? Has the popular movement given Mr. Mahat the mandate to impose policies and programs which have long term implications? Is the restructuring of the state that the popular movement emphasized on possible with what Mahat has presented before us? Can this program fill the gap between social and economic inequality?

Restarting the Old Problem

One of the preconditions for the socio-economic transformation is to change the political institutions. In the last 21 years, the World Bank, Asian Development Bank and the International Monetary Fund played very significant roles in the economic and political life of Nepal. They decided how much to allocate in what sector during the five-year plans. In other words, this meant that decisions regarding the needs of Nepali people were not taken by their representatives, but by these institutions. Since 1948, a handful of people became rich and the overwhelming majority remained poor the world over due to the faulty policies of the World Bank and the International Monetary Fund.

Dr. Mahat is among those who designed the post-1990 economic policies in Nepal. He is now repeating the same policies that have been in place since last 21 years. Is it possible to build a new society that the popular movement demanded with these policies? Can the neo-liberal market fundamentalism go hand in hand with the popular sovereignty?

Majority of the people in the third world are against these neo-liberal policies. These policies are notorious for widening the gulf between ethnic groups, economic groups and generating conflicts in society. We also have gone through this. Loans and grants aimed at keeping the existing structures of the state and economic policies intact are not going to solve the long-term economic problems. Economic policies based on support from outside have not been able to bring about fundamental change in society anywhere in the world. Therefore, it is necessary now to look for alternative economic policies that fits in with the requirements of our society. We can learn from emerging practices of alternative policies in many of the countries in the Third World today.

There are many ways to solve the problem of liquidity of money in Nepal. First of all, Mahat himself has listed in the annexes the name of people and institutions who have not paid back their due to the state. They can be forced to do so in a very short time. Why can’t we do this? Why not confiscate the property of those who had through illegal decrees amassed wealth during Gyanendra’s direct rule? Billions can be collected through this action alone which can solve the immediate need. Why is the government with popular mandate dillydalying on this?

As far as the issue of socio-economic transformation is concerned, wide debate and dialogues are necessary on this across the country. The general people will themselves initiate debates on the utilization and management of resources available in the country, and they will establish their rights over them. We cannot decide on this now without their consent. Similarly, national consensus can be developed on the issues of education, health, land reform, employment, infrastructure development, and public distribution system. This is the demand of people’s movement and that of enlightened people in Nepal.

Many "Marshall Plans" are being put forth for reconstruction, conflict resolution, rehabilitation and many other things. It could be that these plans are being put forth for the benefit of the Nepali people. However, these plans do not guarantee that Nepalis will be self-reliant and will be able to evolve independent economic policies. Many instances from around the world point to the dependency-generating effect of these plans. This does not mean that we reject all aid and support. The important issue is what kind of aid we take, when we take it, and how we take them. At the moment, parliament is passing the political decisions.

Sadly, finance minister Mahat is taking unilateral decisions without regards to the seven party alliance partners (see Bharat Mohan Adhikari’s comment on www.nepalnews.com on May 18), forget about taking the Maoists into confidence. Is this democratic exercise? Many know Mr. Mahat is an adherent of neo-liberal policies, the same policies which have taken Nepal to its present condition. He is mainly responsible for this. He is same Mahat who was opposed to constituent assembly till the final moments of the movement approached. Now he is hell-bent on reviving the same old exercise. It is necessary for the members of civil society, political actors and other groups to beware of his policies and programs. Otherwise, the necessary restructuring of the state, and social, political and cultural transformation will remain a distant dream.

(Published in Nepali in the Kantipur daily on May 17, 2006) - INSN