TOPICS: Maoist economic policy: Will it work?

The CPN-Maoist, the largest party in the Constituent Assembly, is to lead the future government. People voted for them with the expectation of restoration of peace, economic prosperity and maintenance of law and order. The Maoists are committed to abolishing Nepal’s feudal production system through land reform, whereby the state acquires land from those who own more than the specified ceiling and distributes it to the landless. However, the issue of land reform is not as acute today as it was in the 1960s and 1970s.

Land reform will divide the land into small pieces, which will intensify fragmentation, resulting in decline of agricultural production. Today, the country is facing the problem of land consolidation rather than fragmentation. Therefore, a policy to consolidate land in association should also take into account its fragmentation. A small piece of land in an urban centre gives a bigger return than a large plot of land in a rural area. Thus land reform should be implemented taking into consideration the urban-rural differences. Maoist leaders have advocated economic policy based on capitalistic production, involvement of investors in development process and economic liberalisation. They also seem to believe in public private partnership (PPP). These commitments reveal that the party will allow personal liberty and freedom on social, political and economic issues.

Reflective of these commitments, the Maoists have forwarded a ‘new transitional economic policy’ with proposed medium level development in the next 10 years, high level growth in 20 years and ultra high level development in 40 years. This is not impossible provided strong political will. But the success of the proposed development strategies will remain in question if the Maoists fail to rein in corruption.

Furthermore, there are short-term problems. Politics is unpredictable, the economy is slowing

down, food prices are rising and so is fuel cost. Load shedding is another acute problem. Unemployment is rising. Nepali youths remain unemployed for lack of job opportunities. In this light, an immediate economic package is needed.

The Maoists have promised more employment opportunities through development works under which millions of youth will be employed. But the Maoists have no specific means to get to their ends. How will they undertake development activities and at what cost will they make people development-oriented.

In order to achieve such a colossal level of development there should be concrete policies to act as guiding principles for development. To cope with these problems, the government needs to implement short-term relief measures and devise a policy to avail goods and services at the right place at the right time, and at a reasonable price. Enforcement of immediate relief measures backed by strong policy with effective monitoring mechanism in place are preconditions for any future government.

Dhungel is associate professor of Economics, TU