Democracy must be founded on people’s trust on their representatives, respect for rule of law, deliverance of justice and peace and security for all. Each individual must be able to feel that s/he has a role to play in the State affairs at local, national and international levels and that the political leadership will not disappoint them with unfulfilled electoral promises. Unfortunately, none of this happened in the last 12 years of democratic exercise in Nepal.

For far too long, Nepal’s geography and history have been projected as the cause of its under-development. Henceforth, we can turn these weaknesses (forces and factors) into our national strength that will enable us to develop Nepal as a prosperous nation of the 21st century. For too long, we have been preoccupied with the quest for the right development policies, when, in reality, we should have been in pursuit of the right institutions for development and democracy. No wonder we are so poor at organising and implementing, as well as in communicating and coordinating our development policies and programmes. We have spent far too much of our time, effort and resources on planning, monitoring and evaluating, and far too little on organising and actuating — especially by using our own collective vision and intellectual capacity that is free from interests of donors and foreign aid providers.

One institution that we must now effectively develop for the economic prosperity of the nation is the institution of market. The market should function according to property law, law for cost-effective adjudication and settlement of disputes, law to harness competitive behaviour by suppliers of land, labour, capital and technology. There should also be law to foster economic freedom of entry and exit, and expansion and diversification for all purchase and sale of goods and services and law to allow for individual bankruptcy and retrenchment of excess and undisciplined labour.

We must finish the unfinished post-1990 revolution. First and foremost, we need to sign a memorandum of understanding (MoU) as to how best Nepal may avail of the non-reciprocal preferences provided by India for Nepal’s industrialisation. To garner a win-win scenario for both countries, there should be a comprehensive MoU to cover trade, investment, technology transfer, payments and research and development collaboration over selected sectors, sub-sectors and products and services. The MoU should lay down the institutional mechanism for monitoring and taking necessary joint actions for industrial cooperation. Nepal must get back to promoting sub-regional cooperation in the form of the already agreed-to SAARC Growth Quadrangle (SAGQ) by speeding up project identification, selection and implementation in the areas of transport, energy, tourism and environment infrastructure investments. As a least developed and landlocked country, Nepal must give priority to promoting regional production complementarities and not just simply regional trade complementarities based on South Asian Free Trade Area (SAFTA).

It would be advantageous for Nepal to enter into a long-term transport arrangement with India to integrate rail, road, waterways and cargo handling operations. Technological advances in multi-modal transportation require such cooperation as land and sea transportation has to be integrated and inland waterways developed accordingly, specially to integrate hinterland economy into the process of globalisation.

These facets as vital national strategic management are unfortunately highly underrated as development institutional priority in Nepal. At all times, transportation planning must be a constant search for alternative sources of energy for transportation, particularly the use of hydro-energy and high-speed rail transportation for the future. One would hope that negotiations on bilateral cooperation in the filed of transportation would be preceded by India signing the New Convention on Land-Locked States 1965 to give way to any fear that Nepal may have.

Speeding up the advantages of inclusion in the World Trade Organisation must be another agenda of economic diplomacy. Nepal must push the international community for duty-free access to all of its products for it to be a dynamic part of the world globalisation process; and for trade in goods and services to be its engine of economic growth as it should and can be.

Lastly, setting of a high-powered, creative and problem-solving Board of Investment will help in improving domestic investment climate as well mobilising the desperately needed foreign direct investment that will help us outdo the expected six per cent GDP growth rate per year. With seven to eight per cent GDP growth rate per annum, we may be able to eradicate poverty in 10 years since latest research from UNCTAD shows that one per cent growth rate results in three per cent decline in poverty levels in the least developed countries.

Rana is former finance minister