In the first week of March, Finance Minister Bishnu Paudel complained that he was unable to meet expenses by raising revenue. In the same meeting of the Parliament, former Finance Minister Prakash Sharan Mahat proposed to privatize the Nepal Airlines Corporation, suggesting that it should be privatized immediately, as the public institution, a white elephant, was kept in Nepal and the national budget had to be spent to maintain it.

After the broadcast of this news in the Parliament, I wrote a short comment on my Facebook wall, "The minister is not going to tell the truth. Can't be blown away, not hanging on to the post. Everyone knows that the country is going through a deep recession.

The crisis is in the structure of the country's economy, in corrupt institutions, incompetent politicians and corrupt employees. But the purported policy makers seek not to change the structure and increase production, not to maintain the old institutions - to privatize public structures. A commission was created 5 months ago. Where did you disappear now? Who will answer? Want to know?' 

This comment is not written with the intention of criticizing anyone's political ideology or economic thinking. I am a citizen of a sovereign country. I made this comment through reasonable reasoning because I did not understand the government's purpose and operation to enjoy the rights granted to the citizens by the constitution.

After raising a question in public, it becomes the duty of the incumbent to answer through one or the other official. But in Nepal, the tradition of taking such responsibility or being accountable has disappeared. This is not a new thing for me. 

On 21 October 2081, a five-member high-level economic reform suggestion commission was formed under the chairmanship of former finance secretary Rameshwar Khanal. The need for a high-level economic reform recommendation commission was felt by all in a country experiencing a decade-long stagflation (a combination of high inflation plus unemployment and recession). The discussion of such a commission was proposed by the previous Prime Minister Pushpa Kamal Dahal, but for some reason, that proposal was not approved. Even when Dahal suddenly shifted the yoke of power from the shoulders of the Congress to the shoulders of the UML, he did not mention that the main reason was the matter of economic reforms and the commission.

Liberalization of the last installment

On 24th January 2081, i.e. in about three months, the commission submitted an interim report to the government. I asked friends in the capital to give me advice on what form the economy should take now. On the one hand, there is the decades-long economic recession, alarming unemployment, rapid migration, natural disasters caused by environmental changes and the damage caused by them.

Similarly, on the other hand, the general poverty, more than 50 percent of Awad land lying barren, people who have become depressed and desperate due to the collapse of service sectors such as education, health, excessive corruption and black market and the increasing public anger due to high prices, it was not unusual to arouse curiosity as to what kind of land reform programs the Commission, which was named as high-level, would have recommended.

Friends informed that the report could not be made available as it was not made public. Therefore, I personally called the Finance Minister and requested to receive the 'soft copy' of the high-level report. But as the days passed while waiting for 'Let's make arrangements after a few days', 6 ordinances were issued. 

Kakatali or by showing planned solidarity, two days after the report of the high-level commission led by Khanal, i.e. on 26 December, the government recommended presenting 6 ordinances through the president. In a few days, the President will issue the Ordinance to Amend Some Nepal Acts on Good Governance Promotion and Public Service Delivery, 2081, Economic Procedures and Financial Responsibility (First Amendment) Ordinance, 2081, Privatization (First Amendment) Ordinance, 2081, Ordinance to Amend Some Nepal Acts on Economic and Business Environment Improvement and Investment Promotion, Ordinance to Amend Some Nepal Acts on Cooperatives, 2081 and Issued Ordinance, 2081 to amend some Nepal Acts related to land.  As soon as the

ordinance was promulgated, advertisements were started in their favor with dramatic exaggeration of their character, characteristics, and benefits. Suppose a new product is introduced in the market and has to be sold in a hurry. These exaggerated and sponsored propaganda created more doubts and misgivings about the Ordinance. After that, Federation of Nepal Industry and Commerce, Confederation of Nepal Industry, its former officials, private entrepreneurs and businessmen issued statements in praise of the ordinance. It was not difficult to conclude that these ordinances were not in favor of the majority of the people.

In fact, apart from the first ordinance, 5 other ordinances were brought to complete the neoliberal market economy. That is, in the eyes of neoliberal market advocates, there was the third but final installment of liberalization. It seems that these ordinances have been introduced with the intention of completely changing the laws, rules and regulations in order to facilitate the use of water, forest, land, industry, health, tourism, banking and financial sectors in favor of the rich.

Another objective is the sale and distribution of public assets (land and the right to sell at scrap prices, such as: Janakpur Cigarette Factory and Birganj Sugar and other enterprises and properties in the name of factories) that are yet to be privatized. Thirdly, full or partial privatization of Nepal Airlines Corporation as a public service.

Fourth, an ordinance was issued as if it were the last responsibility of the government to continue the monopoly of the rich in production, import-export. The main reason why entrepreneurs and businessmen warmly welcomed the 6 decrees in the form of ordinances was to support their class interests. 

Where did the state go? 

The finance minister has rightly said that he is able to meet the expenses by raising revenue. Such a crisis did not arise yesterday. The economic model adopted by Nepal is the first responsible party for this. Most of the world's poor developing countries were forced to adopt the neoliberal market economy model tested in Chile in Latin America in the 1980s.

Those countries have been experiencing economic difficulties for decades. Some collapsed economically, some continued to have economic disruptions and some continued to face crisis. There has been a difference of opinion among the leaders and economists of many countries about how to use neoliberalism. In the name of neoliberalism, the countries that have adopted state capitalism, especially China and the East Asian countries, have done economic miracles.

Influenced by liberalization, Nepal and other developing countries adopted policies of privatization, marketization and liberalization according to the Washington consensus. A neoliberal economic strategy was formulated citing the inability to properly mobilize resources due to excessive state intervention. Adopting this logic, developing countries stopped all forms of government intervention and allowed the market to run smoothly.

It was said that the purpose of doing this was to protect large scale capital intensive industries. Public enterprises were taken to be privatized because the state would not undertake the enterprise. Which were industries related to social stability, basic needs fulfillment and import substitution. East Asian countries including China continue to provide support and facilities after privatizing large scale capital intensive industries.

so that those industries survive and jobs are protected. The aim was that there should be no increase in the prices of goods and services, artificial shortage of consumables used by the common people and consumption should not decrease. Uncontrolled, unmonitored privatization and liberalization, launched as campaigns in accordance with the Washington Consensus, led to the destruction of the entire enterprise. It was like 'soak therapy' for the country.

Political leadership, bureaucracy, and businessmen in collusion with the privatization led to the separation of backward and forward linkages between the backward and advanced sectors. Like the relationship between Birgunj sugar factory and sugarcane farmers, the relationship between cigarette factory and tobacco farmers, the relationship between leather shoe factory and raw/buffalo meat traders and the relationship between jute factory and jute farmers etc. The state could not identify areas of comparative advantage.

The government could not predict what will happen to rural employment and urban employment, and what will happen to our balance of payments when the government is leading liberalisation. It was not possible to predict how cyclical and class contradictions brought about by the market would arise in the old ancient society and what kind of contradictions it would create in the society.

While imagining that foreign investment will come in and competition in the employment-generating industry, what kind of business environment is needed and what kind of infrastructure should be prepared was not even thought about. Since it is not possible to establish enterprises in all places, East Asian countries including China started new industrialization by establishing Special Economic Zones (SEZ). Later, some opened up economic corridors and established industrial parks, export processing zones.

Organized Normal University, Training Center for skilled manpower required by old, new and visitor industries. This made it possible to take a competitive advantage among the industrialized countries of the world. In the past four decades, they achieved economic stability, dynamic growth rate and mastery in foreign trade. 

In 1992, when Nepal was fully liberalizing, it did not want to learn from East Asian countries. At present, the situation of the country has become serious. Among the total 23 sectors of the macroeconomy, none of the sectors are growing in a good, employment-oriented, inclusive and participatory manner.

Although 62 percent of the families are involved in agriculture, the contribution of the agricultural sector to the total domestic product is only 24 percent. The contribution of industrialists is 13 percent. The annual growth rate of the industry is 1.37 percent. According to the Economic Survey 2081/82, the service sector accounts for the largest share (62.48 percent). This data not only shows the contribution of those sectors, but also shows the immense poverty and the widening economic gap in society.

The gap between imports and exports is widening due to declining food production and disappointing industrialization. Importing food and fruits worth about 6 trillion in an agricultural country with so many households dependent on agriculture is a shameful matter. 

If we talk about the current financial year, in the last 8 months, while 1,145 billion was imported, only 158 billion was exported. On the one hand, money is stored in the bank, on the other hand, there is a trickle of meter bags. Although proud of the increase in remittances, the national saving has not increased and investment in the productive sector is very low. Compared to the previous financial year, more than 30 percent of development programs, especially irrigation, drinking water and rural roads and other necessary infrastructure, have been cut in this financial year.

Government data (Consumer Price Index) issued by the National Bank, Statistics Department has increased the inflation and also the unemployment rate. Opportunities for capital formation are gradually decreasing. Anyone can feel that the country is becoming a victim of inefficiency due to the terrible reduction in the capital expenditure allocated in the government budget.

A famine of thought

The world has changed. No one is going to help anyone for free. It is interesting that Nepali leaders and policymakers do not realize that the global economy is undergoing a dramatic change, as indicated by series of events such as not only the 'behavior' of the United States of America with Ukraine, but also the increase in tariffs on the products of the main producing countries such as China, Mexico, Germany, the war on the State of Palestine and the embargo on USAID, the new cold war against China, etc.

Trying to complete it through ordinances in the style of 'neoliberalism is dead, neoliberalism is alive!' is trying to ignore the current reality of the country and the world. This is nothing but a theoretical twist at the level of thought.

Getting a USAID is hard. Even if the US courts wake it up, it is not possible to return to the old format. Western countries such as Difid, GTZ, Danida, Finida etc. have already announced a huge reduction in donations. It is sure to have an impact in Nepal. No matter how generous and hopeful it is, it does not seem that foreign investment will enter into employment-generating enterprises according to Nepali needs.