Post Conflict’s New Development Agenda
The necessity to promote the micro-enterprise sector holds more significance for post conflict Nepal to address the poverty grounds of the conflict and the present political volatility.
- By Sudarshan Shrestha
Rhetorical statements by the political class to transform the state continue unabated and there is confusion and indifference amongst the people. While some want their minority voices to supercede the mainstream voice, there are others who have become voiceless and are struggling to get themselves heard. In this entire quagmire since the end of the people’s movement in May 2006, nothing appears to have changed for the rural masses other than the relative freedom to move and to be lambasted with politico information underscoring the country’s progression with democracy. The hand to mouth situation for the poor has not changed but the political promise is that all problems including poverty will be addressed following the constituent assembly elections.
There appears to be optimism in the development sector since the Finance Minister’s budget speech when he categorically stated that the interim government will increase employment opportunities through the micro-enterprise and cottage industry sector. For this, he said a “Micro Enterprise” policy would be implemented. To compliment the development of the micro-enterprise sector, the minister in paragraph 128 of the budget speech stated that a micro-credit policy would also be introduced next year. Clearly the present government appears to want to follow a two track approach in the political process i.e. strengthen peace and democracy and address underlying poverty in the country.
Micro-enterprise sector
The Micro-enterprise sector, complimented by the much talked about micro-finance quarter could turn out to be a dominant economic development tool in the post conflict situation. Micro-enterprise development as an income generating strategy helps generate employment and income opportunities amongst hardcore poor and low income and disadvantaged groups. And this hypothesis has proved itself around the world with development agencies such as USAID, DFID, Asian Development Bank and the World Bank who have been investing in the micro-enterprise sector. Looking at the records of the Asian Development Bank, in January this year it approved the Rural Skills Development Project for Bhutan with a US $ 2 million grant which was supplemented with US$ 15 million in loan for the Small and Medium Enterprise/Micro Enterprise Development Programme.
In this reference, it might be worth taking note of the joint Government of Nepal and the UNDP’s Micro-Enterprise Development Programme (MEDEP) which has helped facilitate in poor people fulfilling their personal, family and community’s economic needs. Although the project’s outreach to the poor has been limited to 21 districts, it was one of the few development programmes which were relatively not affected by the insurgency since 1998 including during the heightened period of the conflict. Even though the project was being implemented by the Ministry of Industry of Commerce and Supplies, the programmes was so well-liked by the rural people that political leadership in the districts including the then outlawed Communist Party of Nepal (Maoist) extended their support to the programme; the reason being it was a pro-poor and people centric programme.
Because micro-enterprise programmes have packages of services needed for rural people’s engagement in business such as basic entrepreneurship development, skills and technical training, market support services and micro-credit facilitation, they are more output and result oriented than micro-credit stand alone projects. In addition, micro-enterprise programmes are designed with a combination of services and sequencing them to provide rural people the space and time to make progress and sustain business.
An aspiring new breed of development planner, Ms Sanju Koirala, a Masters Degree Student in “Regional Development Planning and Management” at the South Asian Institute of Technology says resource based micro-enterprises have enormous scope to improve the livelihood of the poor. In the course of her extensive research on the impact of micro-enterprises amongst indigenous people in Nawalparasi district, she found that a majority had a monthly income of seven thousand rupees (US $106) while they were others who exceeded the ten thousand mark. Interestingly, as far as meeting goal 2 of the MDGs is concerned, her study concludes that all indigenous children in the age group of 3 to 14 whose parents were involved in micro-enterprises went to school. Following their engagement in enterprise, only 5% of her research sample continued to go to traditional healers for medical attention while 26% went to doctors before consuming medicine. In terms of poverty and hunger (Goal 1 MDG), 43% of respondent micro-entrepreneurs from indigenous groups said that they had food security for the entire year from their income while only 3% faced food shortages at some point of the year.
She reports that only 3% of her study sample had personal saving prior to engagement in business and the figure rose to 79% after engaging in micro-enterprises in Nawalparasi district. And to underscore the significance of micro-enterprise in addressing poverty, the Master’s student found that 28% of her entrepreneur samples bought additional land (10-15 Katha) after establishing their enterprises in addition to accumulating other assets such as television, radio and even mobile and wireless phones.
Former National Planning Vice Chairman Dr. Shanker Sharma is of the view that the issue of poverty cannot be addressed without addressing underemployment and unemployment. He argues that micro-enterprise programmes, with its high labor-capital ratio, have proven to be one of the successful modalities to create employment. He narrates that his own experiences tell that the impact of micro-enterprises in creating sustainable employment and increasing income for the poor and traditionally excluded groups is significant. Supporting MEDEP’s achievements, he also reveals that the project has been able to reach out to traditionally excluded groups such as people from scheduled castes, ethnic and indigenous groups, which he claims is very impressive. In reference to the significance of the micro-enterprise sector in the post conflict situation, the development planner says the enterprise model promoted by MEDEP is suitable in the present context and should be promoted by the government during the transition period using conflict sensitive approaches.
The UNDP, which is providing logistic and technical support to the United Nations Mission in Nepal, appears to understand the changing nature of the conflict in the country by trying to address political and social discord in the Terai by proposing to implement its “Community Quick Impact and Support Initiative for Peace” programme in six Terai districts. It has been reported that the platform to launch this programme is through the Micro-enterprise Development Programme which UNDP’s senior official Arun Dhoj Adhikari says is one of the UN’s most successful pro-poor development flagships in Nepal. Although the UNDP’s micro-enterprise project aims to reduce poverty, it should also be recognized that the micro-enterprise sector should only be seen as one dimension of the strategy to reduce poverty. Programmes such as MEDEP should not be burdened with unreasonable expectations to contribute to meeting MDG goals although its output does compliment meeting MDG goals 3, 6, and 7 and provides supplementary support in meeting goals 2, 4 and 5 and redressing poverty. Hence, it appears that UNDP is aware that in additional to political influence and engineering, there are strong links between addressing poverty, income and employment opportunities and the peace process.
Tribhuvan University Prof Pushkar K Pradhan gives more clarity to the significance of the micro-enterprise sector when he says enterprise development projects should be able to penetrate into what he calls the ‘progressive or productive’ class who are desperately seeking ‘sparkle’ support (credit, skill training, market linkage, etc) in the post conflict’s fluid political situation. He argues that considering the government and the political parties have their focus in the process of political restructuring of the state, their immediate priorities may not be towards addressing poverty. Since the process of survival cannot wait until the political and peace process yields results, he argues that donors should see Nepal’s picture beyond the management of UN cantonment sites. He strongly advocates that there has to be immediate investments in ‘welfare elements’ which facilitate the economic empowerment of hardcore poor households.
Looking back at media discourse when more than 3,000 Maoist guerrillas left UN designated cantonment sites in February this year in Chitwan, there could be arguments to state that the rural people who volunteered to join the Maoist insurgency were driven by abject poverty rather than their belief in the political ideologies of Maoism and Prachandapath. If the guerrillas could abandon camps to seek work in banana plantations and brick kilns, there is no reason why combatants (voluntary) in limbo in the arms management and political process can’t be engaged in micro-enterprises to take home four times or more money than they get as political gratuity from the state.
Niranjan Baral, Joint Secretary at the Ministry of Industry, Commerce & Supplies which oversees the development of the micro-enterprise sector, says the larger question is how the micro-enterprise sector can serve a larger section of the rural population and not just in particular districts. He is optimistic that the micro-enterprise policy drafted by his ministry will be implemented this year as committed by the Finance Minister. With reference to development space for the micro-enterprise sector in the interim period, he argues that donor agencies must take the lead in making enterprise investments (poverty reduction through micro-enterprise development) for the poor while political efforts are focused on the elections and political process. And he expresses surprise why the donor community has not been forth coming in supporting the government to create jobs and employment to address poverty during the interim peace process. However, the joint UNDP and government’s micro-enterprise model has started to get attention with development agencies such as SNV and Helvetas and even the ILO. They are using the MEDEP model to reach out to the poor and excluded groups in Karnali zone, Kailali and Kanchanpur, Dhanusha and Ramechap respectively. However, it appears the government and the UNDP seems to have lost out when it comes to receiving credit and acknowledgement for its initiative.
As the volatile political process remains a serious concern to the country and the international community, development actors need to act with urgency to facilitate in creating an "enabling environment" wherein the economic grounds of the conflict are gradually addressed. It is a positive development that DFID and AusAid have shown dedicated interest in the Micro-Enterprise Development Programme with a DFID team just completing an assessment of what the micro-enterprise sector has/can achieve to meet goals 1, 2, 3 and 7 of the MDGs. The lead taken by development actors to create economic opportunity for the rural poor will release temporary pressure on the government and it should help the over all peace process and detract who were not ideologically driven into the conflict to constructive business engagement. Last year’s Nobel Peace Prize winner Dr. Mohammed Yunus underscores the links between poverty and peace when he states "It was impossible to conceive of a world at peace when the poorest 60% of humans live on just 6% of the world's income. In this context, the necessity to promote the micro-enterprise sector holds more significance for post conflict Nepal to address the poverty grounds of the conflict and the present political volatility. Micro enterprises strategies could help create or strengthen social and political safety nets but the strategy needs broader national debate between the political and development class.
(Shrestha, a former East West Center and Chevening scholar, is an independent media and communication consultant who has been associated with both the government and private media and the development sector for more than a decade and can be reached at sgshrestha@info.com.np)
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