The CPN-Maoist has emerged as a strong political party from the decade-long insurgency. But its real popularity will be tested only after the results of free, fair and peaceful elections. It is but natural that the pubic and major donor countries/agencies are eyeing on the fundamentals of the Maoist’s economic policies since their political philosophy is based on centuries-old communist dogma.

The theory behind the communist philosophy of guiding the government’s economic activity to promote people’s economic welfare has largely failed owing to the collapse of the former

Soviet Union and Eastern European countries under its influence, among others.

Predictably, the transformation of the so-called ultra left economies into liberal system of market economy during the 1980s and 1990s resulted in significant economic performances that have once again proved the merit of the market economy.

The recent views of the Maoists on transferring individual property in the party’s name in order to create a communist commune are no doubt a big blow to the advocates of free market economy. The proletarian view might fit well with ancient economic thoughts or during an armed revolutionary phase, but cannot be a working model for economic development. The signals coming from the Maoists of commune shelter and party’s ownership of lawmakers’ income are enough to understand their purely communist ideology.

This raises doubts over the liberal views of mixed economy, among other models, made public by some of their senior leaders at mass meets and various forums. It might, however, be a welcome step if they decide to keep a record of private property of their cadres in order to keep the party disciplined and clean. The refore, all the parties should develop the mechanism to disclose the income of their cadres. The government should also adopt a similar approach for its citizens who will help to uproot corruption and underground economy and create tax consciousness.

It is desirable to have a mechanism that requires every household to report its income so that higher tax can be imposed for high-income groups, whereas low-income households would be liable for a subsidy or negative income tax. The highly progressive tax system can be opted in Nepal’s context that lacks a dynamic social security mechanism. However, such a tax policy might not be conducive for an efficient economy. After all, why penalise the efficient and successful people by trying to reward the inefficient and unsuccessful ones? An efficient democratic culture provides opportunities to all but without compromising equity at the cost of efficiency.

In the context of increasing regional and global integration, it is difficult for any country to survive in isolation. Being a member of multilateral agencies and following liberal policies, Nepal is headed for greater internationalisation in the days ahead. What would be the democratic world’s response if a major stakeholder in the transitional government advocates policy of setting a limit on private property only to show its difference from a capitalist culture? Holding of private property is a basic human right and a most effective incentive for people to be more innovative and efficient.

The model of equity at the cost of efficiency — the core ethos of communism and ultra-socialism — has become obsolete because of its failure in many countries. The economic growth of post-communist regimes shows the effectiveness of allowing private property. Hard work, efficiency and innovation result from the recognition of individual potential. Nepalis have enjoyed a life style though they have lacked corresponding economic support. In this scenario, the likely impact on peoples’ efficiency and innovative abilities of laws forbidding holding of private property will certainly jeopardise the overall development process.

Low level of economic growth and poverty, no doubt, support the dynamic and

revolutionary efforts to improve the economy but not at the cost of free and fair norms of human life. It is impossible to fulfill peoples’ aspirations for fast development by mobilising domestic financial resources and labour. For this, it becomes vital to implement universally accepted norms on private property.

It will be hard to persuade the democratic world at large to help Nepal’s development efforts without the adoption of legal mechanisms to safeguard private property. Salary is a major incentive for labour. It has a direct bearing on the marginal productivity, which is based on the level of reward each person gets. Politically, commune life might matter but it cannot be imagined as a rational choice in today’s world guided and driven by efficient economic management.

Dr. Paudel is RBB board member