Artha Beed: Maonomics

Maonomics
How will the Maoists turn their economic policies into action?
Artha Beed
Nepali Times, Issue #396 (18 April 03 - 24 April 03)

Some habitués of the Kathmandu cocktail circuit have had a sudden change of heart and are trying to find socialite Maoists who they can strike up a conversation with. But the Beed is still getting calls from people full of dread at the prospect of the new People’s Republic of Nepal. An important qualification needed to be part of the Kathmandu elite is to be able to take a negative view on almost any situation.

This Beed would like to give the Maoists the benefit of the doubt. The important thing is now to help them in ensuring that peace is sustainable and economic development begins at last. There are many matters that were put aside until after the CA elections. Now the elections have happened, there can be no more excuses for not addressing the economy seriously and with purpose.

The key challenge for the Maoist-led government will be to convert their policies into action. They will have to start giving a tangible meaning to phrases like ‘pursuing transitional economic policies’. With the Maoists, there has always been a big gap between their policies and their actual actions on the ground. While they have said their kangaroo courts were no longer operating, their party cadres out in the villages have not stopped issuing rough justice. Now that they will be leading the government, they need to shun their parallel government. Perhaps, the first gesture of their seriousness may be to vacate the government and private buildings that they are using.

The business community is especially worried about the attitude of workers who have either formed Maoist-affiliated unions or been forced to align with them. The Maoist leadership will have a hard time convincing the more hardcore factions amongst workers that the goalposts have now changed and labour reforms are necessary. If the new government does not put into action commitments made by the leadership on bringing about reforms in the labour sector, Nepal will not see any increase in investment.

A section of the business community is also elated as a majority-led government would ensure there are fewer people to keep sweet and fewer palms to grease. The Beed just hopes that we will not repeat the story of West Bengal in the late seventies and a good part of eighties where a Left Front government with several coalition partners, embarked on protecting a section of the business in the name of protecting ‘national capitalism’.

This attitude of the then West Bengal government threw the state out of the national development map and even after nearly thirty years, they are still busy fixing those mistakes. The CPN (Maoist) manifesto does lay down the strategies they would like to pursue for promoting domestic and foreign investment. The challenge will be how to put these into practice.

The other worry for the business community and citizens in general is the issues of right to property and ownership. The government has to seriously state its intention to keep these rights intact. On the other hand, laws such as inheritance and land laws could well be reformed. If inheritance was heavily taxed it might give people a stronger incentive to be productive themselves rather than waiting for windfalls from their family. If land records were maintained electronically then the government would actually know how much land an individual owns.

The last important challenge for the new government will be fiscal balance. If the Maoists are really able to dole out all the goodies promised in their manifesto like free education, subsidised food supplies, and millions of new jobs, this will cost money. With global increase in food prices and the market crisis suddenly hitting economies hard, it will be difficult to ensure that a large fiscal deficit from all the state spending does not lead to inflation. Large price hikes would lead to street protests and an opportunity for opposition to the government, and the Maoists know what that means better than anyone else.

Yes, the mandate has been given for building a New Nepal and everyone wants it to be better than the one we have been living in. Let’s hope our hopes are not dashed again.