After promulgation of the new constitution the country has primarily focused on its execution. In this respect, there would be a huge role of the National Planning Commission to internalise the spirit of the new constitution in government policies, plans and programmes. The government recently appointed Yubaraj Khatiwada as Vice-chair of the Prime Minister-led apex planning body of the country. After being appointed as NPC Vice-chair, Khatiwada said he will give top priority to narrowing down the economic vulnerability caused by the disruptions in supply lines at the Nepal-India border and normalising the life of people by adopting internal measures to the best of NPC’s ability. Along with this, NPC will also focus on internalising Sustainable Development Goals and ensuring the rights of citizens provisioned by the new constitution in terms of government policies, plans and programmes. Pushpa Raj Acharya of The Himalayan Times caught up with Khatiwada to know about NPC’s priorities in the present context.

The country has been facing several problems after promulgation of the new constitution. The economic situation has been deteriorating due to disruptions in supply lines. What should we be focusing on at the moment?

The Nepali economy has been facing unprecedented challenges for the last several decades. We have faced a decade-long conflict and another decade-long political transition. Now we have been facing disruptions in supply lines at the Nepal-India border and people are suffering. The recent problem is of a different nature. At this moment, a small group in the Tarai which is unhappy with some of the provisions in the constitution has been staging protests and blocking the access points at the Nepal-India border through which the country receives a majority of its imports. We have to solve this problem because it is like a state of being an economic hostage. The first challenge for us now is to smoothen the supply of petroleum products. Our effort is to see whether we can better substitute some of the petroleum related energy needs by other means including electricity and other alternative energy sources like solar and bio-gas, among others. We also have to normalise trade with India as there is no perfect substitute to trade with the southern neighbour. We can have trade diversification, but we have limits. We should make Indo-Nepal trade relations fair, rule-based, and slightly better managed in a more transparent way. The transit and trade rights should be protected. And the most important thing is the government needs to seek all alternatives at the earliest to ease the blockade in the border area, which is a political issue. The blockade has crippled the industrial sector with many industries in the Tarai being shut down and people have lost their livelihoods. So the state should use its clout to clear the border at the earliest.

You have talked about diversifying import of petroleum products to resolve supply constraints. We have been talking of import diversification right now but as is always the case once the disruptions in supply from India have been cleared we will forget all these issues. Do you think the government is serious regarding diversification of petroleum imports?

After joining NPC, I spoke to the commerce minister. Since Kathmandu Valley is the largest consumer of petroleum products — nearly 40 per cent of the total import — there would not be a huge difference in terms of price whether fuel is brought from India or Kyirong in China. If we bring fuel from Kyirong to cater to the demand of Kathmandu in a commercial way we can distribute fuel imported from India in other parts of the country. However, the strategy of diversification should not be artificial or sentimental. The government is mulling over bringing at least one-third of the total petroleum demand from China. On the other hand, we have to understand that the demand for petroleum has been increasing because of its gross misuse, the shortage of electricity, lack of alternative energies like solar and bio-gas, among others, for cooking, heating and other purposes. We are looking at all the alternatives of petroleum and their import.

What do you think could Nepal do to cope with the current energy crisis?

We have to be conscious and solve our energy needs properly. We must promote public transportation rather than private vehicles and even government officials should avail public transportation. We would be able to airlift petroleum for public vehicles if needed but the private vehicles should not expect to get airlifted fuel. Private vehicles cater to limited users and that could be done when the supply situation improves. We have intensified discussions with different government agencies. Another major problem is regarding cooking fuel. If we could supply biomass (firewood), kerosene and briquette, and rapidly expand bio-gas projects in the Tarai, we could provide alternatives to the people because LPG is not readily available. I have been told that kerosene could be airlifted to mitigate the current crisis. Similarly, we have to complete the energy projects faster. There are projects in the pipeline that can be completed within six months. We can generate power from solar by installing more solar plants, but that would again take a few more months.

This means the country needs to focus on translating this crisis into an opportunity to be self-reliant regarding energy sources?

We are talking of an energy mix in our system. Of course, in the long run we have to reduce the use of biomass, which has environmental and health impact. But when there is no alternative then we have to resort to biomass and expand bio-gas usage. At present, I would put more emphasis on bio-gas in the Tarai area and solar in the hill areas and generation of 200 megawatts of electricity through solar within a year is not a difficult job. We should also not forget that we are still importing electricity from India and if anything happens to that supply we would not be able to recharge our telecommunication systems and that would be another disaster, so we have to have solar back-up for most of these lifeline services and utilities. This is also an opportunity to have a new energy-mix in the country.

The government has projected the economy to grow by six per cent in current fiscal, which would largely be backed by the reconstruction activities that are yet to start. Other economic activities have also dampened due to the blockade at border points. Do you think the government needs to review growth forecast?

It is for sure that we are not going to achieve six per cent growth because we did not perform well in agriculture because of this monsoon. We have also not been able to take dairy products, vegetables and fruits to the market due to the protests in the Tarai and lack of transportation facilities in other areas, which will cause a huge loss in agriculture sector. Likewise, manufacturing industries have closed down and construction sector has also been hit because of this fuel crisis. Wholesale and retail trade is also in problem and the financial sector has not picked up pace because there is not much lending to the private sector. On the whole, disruptions of supply lines at the border points have dampened economic activities and the economy has remained stagnant. In the mid-year budget review, the Ministry of Finance perhaps could review the growth forecast but I think if we achieve half of the projected GDP growth it would please us.

After your appointment as vice-chair of NPC there is expectation among development partners that reconstruction works will get momentum. How are you planning to expedite reconstruction works?

I wish the National Reconstruction Authority was in place by this time. But instead of just waiting for it to take shape, NPC will take initiative regarding reconstruction activities. Government has allocated Rs 17 billion to be spent via line ministries in reconstruction works till the authority is formed. We have not been able to mobilise the budget and our first effort would be to set proper rules to disburse that amount by demanding appropriate programmes from the respective ministries. So this is in the agenda and we will start next week. And we hope that the reconstruction authority Bill would be passed and an institutional set-up would start soon.

How would you assure development partners that government can spend all the funds pledged by them in reconstruction activities?

Development partners should understand that we have been passing through a very difficult phase. Since country was promulgating constitution and state restructuring was in the process, it was obvious reconstruction Bill and other Bills would be in second priority. Now that the constitution has been delivered we can make no more excuses. We should not delay in getting the authority institutionalised. Prior to that, to fill the gap, Ministry of Finance and NPC are working closely to see the reconstruction budget committed by donors is utilised and very soon we will come up with some programmes.

The 13th plan is going to end by this fiscal. Would the next one be a long-term plan or like the three-year plan that we have introduced since the 11th plan?

After promulgation of constitution, we are still in a transition of state restructuring process. In a situation like this, I don’t think we will have any long-term plan. This is risky because we would have three layers of government from next year or in a few years. There are responsibilities at the local, provincial and central levels. So we have to see how we can better organise these things and if we bring a long-term plan that would again be a centralised plan and would not fit with the spirit of the constitution. We are thinking about having a medium-term plan and we will see the appropriate tenure of the plan.