The government has deferred its plan to graduate to league of developing nations for next three years, as per capita income is lower than required threshold. Being a low income country compounded with low investment in human capital, lack of adequate infrastructure and resources, Nepal has the onerous task of achieving targets of Sustainable Development Goals by 2030. Against this backdrop, the government faces challenges in terms of bringing effectiveness in service delivery, smoothing transition towards federalism, and improving doing business climate and governance, among others to achieve development targets committed to international fraternity. Pushpa Raj Acharya of The Himalayan Times caught up with Prof Puspa Raj Kandel, newly appointed vice-chairman of National Planning Commission, to learn what approach NPC will take to create synergy for overall development. Excerpts:

Planned development in Nepal was initiated in 1956, however, we have been weak in executing the plans. As vice-chairman of National Planning Commission, what will be your priority to effectively implement the plans?

In the last two-and-a-half decades many Asian countries took a leap towards economic development but we were embroiled in the armed conflict and political transition. And the transition is still ongoing. Political instability, lack of evidence based policy-making approach, lack of human and technological capacity and lack of efficient allocation of available resources are the major reasons behind the low output. We must admit that we were more donor-driven in the selection of our projects and resource allocation was done without proper groundwork for infrastructure projects. We could not make substantial progress towards sustainable growth due to lack of lifeline infrastructure like roads, energy, irrigation and telecommunications that are vital to explore the economic opportunities attracting private (domestic and foreign) investment. Due to lack of a congenial environment for the real sector, private investment was largely focused on speculation that we witnessed in the past like the asset bubble. Political situation is expected to be stable in coming days as we have ensured the political rights of the people through the constitution written by the elected representatives. In this condition, my focus will be on advising the government on smoothing the transition towards federalism and on service delivery. As the next fiscal year 2018-19 is the last year of the ongoing 14th three-year plan, the next plan will identify and develop a special purpose vehicle for key infrastructure projects that will unleash the economic potential of the country, increase investment in the real sector, create jobs and also create the environment to move towards the path of sustainable economic growth. Having said that, I do not want to blame the past governments formed during transition because we have made substantive progress in many social indicators and improving livelihoods despite the difficult situation.

What can people expect from the next budget to promote real sector growth? 

As I assumed office just two weeks back, we could not do much homework for next fiscal’s budget but the machinery (bureaucracy) of the NPC has worked on it. Budget formulation has already gathered pace as the federal government has to present the budget to the parliament by May 29. Though I could not make any contribution for next fiscal’s budget, it will be aligned with the targets and programmes of the 14th three-year plan and the finance minister who is also a former vice chairman of NPC, better knows what should be done. We will begin formulation of the next plan immediately and I would like to pledge that the country will witness tangible changes in the next five years. We will give due priority to implementable projects in energy, road, transportation, tourism, health and education sector. There is debate going on about privatisation of education and health sector and weak regulations. We will definitely do something that will favour the general public in this regard. Meanwhile, the most crucial challenge that we are facing at present is the brain drain. The qualified population do not see a future in the country. Even those people who lack skills have migrated to the Middle-East to seek job opportunities. In the next five years, we will bring about transformative changes in the country in which the qualified population can also trust and even those unskilled people who have migrated to the Gulf can also get job opportunities in the country.

What plans does the government have to ensure quality education and better access to health care as you have spoken about the need of reforms in education and health sectors? 

Regulation must be improved in the education and health sectors. We have opened up investment by the private sector in these two sectors and allowed them to operate businesses without proper regulations. There have been extreme thoughts that the state should take the responsibility of education and health but I do not favour that. We will definitely encourage private investment in these sectors, however we will enforce strong regulations so that people can access affordable quality services. Another crucial aspect is that the government has been making huge investments in education and health sector and we have to assure that the government’s spending matches the results that we are getting. There should be performance based evaluation of service delivery mechanisms in schools, universities, health posts and hospitals and we must also ensure skilled human resources in these institutions.

NPC will soon start formulating the next periodic plan. Will it be a three-year, five-year or 10-year plan? 

I think we do not need three-year plans. The Medium Term Expenditure Framework (MTEF) — three-year expenditure plan of the government — can be taken as a short-term plan. NPC has set a long-term vision for 2030. We have yet to consult with the prime minister and development council members, but I think we need a medium-term plan and it should be implementable. In the changed context, NPC will formulate long-term policies, carry out research, monitoring and evaluation of development projects. NPC will also give due priority to governance reform measures through long-term plans to bring effectiveness in service delivery and implementation of projects. NPC will be focused on national level development projects in the future. We will not select projects that are feasible to be implemented by sub-national governments because sub-national governments will be framing plans for themselves as 36 per cent of the budget will go to the lower layers of administration.

Based on your experience in the academic sector since the last three decades, what is the major bottleneck for the economy that needs to be addressed?

I found connectivity and energy are the major bottlenecks for low productivity, less investment and lack of job opportunities. Connectivity is the lifeline for livelihood improvement, market creation, service improvement, job creation and urbanisation. Likewise, the problem of tourism infrastructure also needs to be addressed as early as possible to exploit the potential of the tourism sector in the context of rising outbound travellers from neighbouring countries India and China. Similarly, we have to capitalise the potential of IT based industry and increase the use of information technology in production and governance.

We have planned to graduate to league of developing nations by 2022 and we have to achieve the targets set by the SDGs. We need a lot of resources to achieve the SDGs. From where will the resources be generated? 

We do not have to worry much about resources because our revenue position is strong and there are chances of reforms in revenue sector to expand the revenue base. On the other hand there is Official Development Assistance commitment of development partners that we can mobilise and another important factor is we can attract more domestic and foreign investment and investment of cooperatives in the economy by improving the investment climate. We require $17.5 billion annually till 2030 to achieve the development goals. While achieving the targets of Sustainable Development Goals (SDGs) we will be at that level of development that we have desired and imagined. In fact, that are the goals set by our long-term development plan and policies. We will graduate to league of developing countries by 2022 and achieve the target to graduate to league of middle income countries while moving towards achieving the targets of SDGs.