Nepal’s Economic Growth
In the Election Platforms of recently held Constituent Assembly/Parliament election, three major political parties in Nepal, Nepali Congress, United Marist-Leninist and United Communist Party (Maoist) have promised a MOON to the people if they form the government. They have promised to attain annual per capita income growth of 10% for the next 10/20/40 years and have offered plethora of programs to be implemented on every sector of the economy. In this paper, I evaluate the three parties’ economic agenda and find that their “promises” may look “visionary” to them but in substance, they are insincere, downright illusive, and sometimes irrelevant. Their agenda are jumbled wish lists, lacking basics of aligning instruments with targets. To fill this gap, I lay out a comprehensive framework for economic growth outlining its determinants and identify major impediments to them in Nepal. I show that Nepal’s major growth obstacles are distorted investment priorities, massive inequality of opportunity, pervasive rents and rent-seeking activities, incentive- penalizing institutions and extremely self-centered own payoff maximizing political parties. Not only investment rate is very low but most of the investment is on wealth transfer rather than wealth creation and services duplication rather than services creation. Nepal’s long term sustained economic growth and development requires several and drastic policy changes — different from what the parties have promised — which I recommend as a 12-point agenda.