We did wrong after the restoration of democracy in 1990. Political parties failed to work towards creating an ideal society (equal distribution of income, free from exploitation and corruption, equal footing in creating and distributing opportunities, vision in the balanced development approach, rational utilization of state property etc) within the framework of globalization and liberalization. Grievances over the performance of the leaders amplified as the aspirations turned into frustration and pessimism. Hence the quick spread of Maoist movement pushing Nepal to the brink of being a failed state. 

It had to change somewhere and somehow and therefore the people’s movement in 2006 restoring democracy and getting rid of the autocratic monarchy. Even after the sea change as it was believed to be, the tradition is same and bound to repeat. The country is yet to taste the fruit of Federal Republic. Contrary to the expectations, people are being hammered by unexpected price rise, widespread unemployment, and unequal distribution of opportunities and income. People are experiencing lack of good governance that has led to more corruption and fraud. In addition, law and security are out of order, the peace process is dwindling, and progress, if any, in writing the constitution is frustrating. The biggest party that secured 38% seats in Constituent Assembly after winning it for one and half years and heading the government for nine months is in opposition and is planning more street protests. Amidst bleak politics and financial indiscipline, it could be another downturn to further frustrate the great majority of people. 

Under the political instability, the country is wasting its limited resources in the unproductive sector. There is a strong positive relationship between rising political instability and misuse of limited resources. To make rational decisions on matters of national issues, it becomes necessary to formulate a national government represented by all the parties in the Constituent Assembly.  

Nepal is located between the most emerging and economically prosperous countries of the world. India has recorded 6-8 percent economic growth rate per annum since the last fifteen years. China is the fast growing economy in the world with economic growth rate ranging from 8-10 percent per annum since the past two decades. These miraculous and dramatic achievements on the economic front of our neighboring countries have not been quite able to influence our economic condition as the overall performance of the economy is poor with 2.7% economic growth during the last decade. Nepal and India adopted liberal economic policy since 1990 with more similarities than odds. For example, both have been adopting multiparty political system, both depend on agriculture; both have problems with the basics like food, education, poverty, and many more. The only dissimilarity between Nepal and India is that Nepal is small and landlocked with disappointing economic performance whereas India is big with huge access to sea making rapid economic progress to register itself as the world’s most emerging economy. The annual economic growth rate of India still is above 6% despite the world is being badly plagued by the current financial crisis. The relationship between the economic growth of landlocked and sea locked countries reveals that 1% increase in the GDP of sea locked countries would increase the GDP of Land locked country by 0.4% if the pace of development is in equal footing.  These evidences are not applicable to Nepal. If they are then Nepal’s economy would be at least 40% as good as India’s or even China’s. 

There are various reasons why Nepal has not progresses as much as it should have. First and foremost, Nepal is plagued by political instability. Political instability entails a lot of economic hardship as there is a strong negative association between it and economic development. The data published by Human Development Report 2009 reveals that the annual average growth rate of per capita real GDP for Nepal was 1.9% during 1990-2007 while the same for Bhutan, India and Bangladesh were 5.2%, 4.5% and 3.1% respectively. Similarly, Human Development Index (HDI) another indicator of development which is based on the combined average of income per head, longevity and education index shows that Nepal has second lowest HDI value (0.553) among the member countries of South Asian region and 144th out of 182 countries. The same for Bhutan, India and Bangladesh was 0.619, 0.612 and 0.535 respectively in 2007. These countries have maintained minimum political stability required to continue economic development. These indicators have proved that Nepal is not inspired or influenced by the development of the economies of its neighbors. 

Restoration of political stability thus, can be considered as a prerequisite for economic progress. It reduces the allocation of limited resources in the unproductive sector which can be transformed into the most productive sector. Defense expenditure can be reduced to minimum once the political stability is restored. Formation of inclusive and transparent government represented by all the parties in the Constituent Assembly is a need today. It can break ongoing political stalemate which is needed to bring peace in a logical order and maintain security by enforcing effective law needed to carry out the economic progress. If we ignore the reality learned from the past it will be unfortunate for the democracy of infant federal republic.

(Editor’s Note: Nepalis, wherever they live, as well as friends of Nepal around the globe are requested to contribute their views/opinions/recollections etc. on issues concerning present day Nepal to the Guest Column of Nepalnews. Length of the article should not be more than 1,000 words and may be edited for the purpose of clarity and space. Relevant photos as well as photo of the author may also be sent along with the article. Please send your write-ups to  This e-mail address is being protected from spambots. You need JavaScript enabled to view it  ) 

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