Kathmandu, July 20:
Senior economists, representatives of the private sector, bankers and other
expert-stakeholders discussed the economic aspects of the draft constitution
and their implications for the country. The discussion was organized by South
Asia Watch on Trade, Economics and Environment (SAWTEE) to gather experts
opinion on Nepal economic system that has been proposed in the draft
constitution, and to prepare a set of suggestions to be considered when
finalizing the constitution.
Dr Posh Raj Pandey,
Chairman, SAWTEE, highlighted the provisions of the draft constitution that
have implications to the economy and economic system. He said that the provisions
of the constitution should be instrumental for the creation of prosperous and
just Nepal. “But the draft—that will write the fate of generations to
come—includes several contradictory provisions which may obstruct economic and
social transformation as dreamed during the people’s movement ”, he added. He pointed out that we have not
assessed the financial obligations created to the state—as well as in defining
governance structure and state apparatus—in ensuring rights, such as that of
free health and education, of employment and food security, among others,
enshrined in the rights of the citizens. He also questioned whether the
cooperatives sector is a part of the private sector or an independent sector as
provided in the draft. He opined that it would be unjust to an individual entrepreneur
to provide in the constitution a provision to treat cooperatives specially and
differently without any regulations, but regulate the private sector. He also cautioned
that assigning banks and financial institutions to the federal states would jeopardize
the growth and stability of the financial system. He further said that the draft
constitution is not coherent with Nepal commitments at the international,
regional and bilateral levels, such as providing national treatment to foreign
investors.
Mr Pashupati
Murarka, President, Federation of Nepalese Chambers of Commerce and Industry
(FNCCI), demanded that the ‘socialist’ word used in the draft be termed
‘democratic socialism’ as there is no possibility for Nepal to deviate from the
market-led economy. He was of the view that the draft talks about the rights of
the labourers, while it is silent on the rights of the private investors. He
demanded that the constitution explicitly mention that no industrial property
will be nationalized. He further opined that the federal government should have
all the rights of imposing indirect taxes and income taxes so that duplication
of taxes will be avoided. He further opined that the prerogative rights on the
natural resources conferred on the locals proposed by the draft will deter investment
in harnessing natural resources.
Dr Shankar Sharma,
Former Vice Chair, National Planning Commission (NPC), was of the view that the
federal government should make investments on important sectors such as
education, health and agriculture for equitable and sustainable development of
these sectors that are the backbone of development for any country. He
suggested that state obligations on sectors such as health and education should
be based on state’s ability to provide such services as directive principles on
progressive realization that the state can ensure such services on the basis of
economic viability.
Dr Yuba Raj
Khatiwada, Former Vice Chair, NPC and Former Governor, Nepal Rastra Bank (NRB),
was of the view that the constitution should not be like a ‘plan document’ of
the government. He was of the view that when the constitution tries to cover so
many topics, the main focus gets diluted. He also pointed out that the issues
that should be covered under ‘social security’ have been included in the
fundamental rights, which will pose an unlimited responsibility of the state
coffers at the cost of capital formation. He opined that the private property
should not be nationalized by the government, while the natural resources
should be owned by the state. He also suggested that the cooperatives sector,
which has emerged as a very important segment of the Nepali economy,
particularly in rural areas, should be viewed as one of the pillars of the
economy. He further suggested that the new constitution should include air
space of Nepal as the country’s territory.
Mr Hari Roka,
former Member, Constituent Assembly (CA), shared his experiences—along with Dr
Sharma—of writing the draft constitution during the first tenure of the CA. He
opined that the state must have bigger obligations to its people and only
socialism can ensure welfare state in Nepal. Similarly, MrDeependra
Bahadur Kshetry, Former Member, NPC, and Former Governor, NRB, said that
socialism is the ultimate stage which can be reached through the development of
capitalism that guarantees welfare to the citizens. It is good that the draft
encompasses the notion of socialism, he added.
Participants
further opined that the draft is at times incoherent and inconsistent, and has
also not prioritized sectors for economic development. It was agreed that the
draft should be simple and not highly subjective, which could make it
impossible to implement. Further, it was agreed that the federal states have
been proposed without a proper homework on the overall economic efficiency. Importantly,
the participants argued that the institutional mechanisms and provisions
envisioned by the draft are too costly for Nepal, which may erode
competitiveness and productivity of the economy, and escalate the cost of doing
business. They viewed that the draft is silent about the movement of capital
and is weak in regards to protecting private sector investments. They also
argued that the draft is not able to adequately reflect on issues important for
enhanced productivity of land—one of the important economic factors of
production. Importantly, the participants
strongly argued the constitution should have provision for proper audit of
political parties.
Dr Prithvi Raj
Ligal, Former Vice Chair, NPC, speaking as the Chair concluded that the draft
should lay the foundation for prosperous Nepal and must not deter the economic
development process. At the same time, he argued that the draft constitution
should efficiently address the aspirations of the people, more so of the poor
and excluded segments of the society.
Altogether 39
experts participated in the discussion.
The suggestions were
submitted to the constituent assembly on 21 July 2015.
Media Coverage
· Setopati, 21 july 2015
·
The Kathmandu Post, 21 july 2015
