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Topic Discussion I
Politics of Hard Choices
Political Transition and Economic Restructuring
Room 3
(8 of 13 pages)
Another major problem as far as Nepal is concerned is that corruption has become
one of the major issues and corruption has undercut liberalization. For instance if you have privatization and
you decide to privatize a company where you sell the proceeds of a company and you find that the sales proceeds
are not even equal to realistic value of that company then you have a very serious problem. So this corruption
raises a second major problem.
The third major problem is revenue has to be raised. Revenue raising has not been a very successful enterprise
in Nepal in these last nine years. The government is faced with a problem where they have to deal with a famine
now. It has to deal with its small programs but it has to deal with immediate safety nets. An immediate safety
net that must be spread is that the famine has to be rested. The poor have to be fed. Money has to be put out for
security in a very big way because programs are very expensive to deal with. So because of the poor raising of
revenue there is a major problem as the far as the normal goals of government are concerned.
I think that the fourth point, which our friend from Yemen also raised, is that the IMF and the World Bank talk
about safety nets but a serious program for poverty alleviation is yet to come out from either of these institutions.
What are we talking about when we talk about poverty alleviation, no liberalization program in countries like ours
where more than 40% of the population is below the poverty line is elevated to succeed unless you have side by
side poverty elevation program. A poverty elevation program is either you create assets for the poor or you create
employment for the poor. Those are the two things that you have to do. Those specific objectives have really not
come out in either the World Bank and certainly not the IMS programs. I think what we need to look at is the way
we tended to look at enterprise as the monopoly of major businessmen. Enterprise exists even in the small farmer
that turns from a traditional crop into a cash crop. So it is how you mobilize the enterprise of thousands and
thousands of small entrepreneurs that is going to create success in our countries. It is this kind of problem that
should be addressed much more than the traditional ones that we have been dealing with in safety nets.
Speaker (from the floor): [translation not available]
Dr. Abdul Karim Al-Eryani: I have listened to the interventions very carefully and in particular the facts
on the adjustment policy that has to take place in a very slow manner otherwise it will disturb political stability.
As the Prime Minister of Yemen I have mentioned that after the prescription has been made the government is more
comfortable in doing it in five years and I have been requested to do it in two years and this kind of idea of
giving the responsibility more to the country is the idea of ownership of the method and that is what we have been
stressing in the field and in discussions with the OTD and also in UN. This idea of ownership, partnership and
comprehensive approach to the issue of economic development has been what we have been trying to promote in the
UN under the new development strategy. I think that the recent trend has been toward posteric policy leading to
the political changes. It is the same in every country and in our country too, as you may know our economy is not
doing so well these days, I hope that we will also be able to harvest this fruit in the coming two years but for
the moment it is still difficult. Although the government views that we have already hit the bottom and it is going
to rise. But because the economy is doing so badly and one and a half years ago the government at that time wanted
to introduce a plan to achieve a balanced budget in only about three years then the government at that time lost
the popularity and lost the election and had to have a new Prime Minister. So everything has to come, although
the adjustment policy has to come in a gradual manner and this kind of idea is more and more being accepted in
the bigger institutions, especially in the World Bank. The World Bank has been promoting the idea of a comprehensive
development program (CDP). The elements of comprehensiveness is not only taking the ODA or private sector investment
but everything, all elements which contributes to the development should be considered in a comprehensive manner.
Through that process of gradual change economic development will be achieved and this will of course contribute
immensely to the political stability.
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