Starting as an official in the Nepal’s Ministry of Economic Planning in 1963, Mohan Man Saiju has been intimately connected with Nepali development policy over the years. He was a member of the National Planning Commission for almost 13 years, the last five at its helm. In September, he was named Ambassador to the United States. What follow are excerpts from conversations with Promode Bahadur Shrestha in Kathmandu and K.M. Dixit in Washington DC.
HIMAL: If there is one lesson you have learnt during your years of planning development, what is it?
SAIJU: Despite 25 years of effort, we are not yet where we want to be. The lesson I take is this: the people have to be the focus of the process of development. Their participation is the answer. They must be involved in the decision making process. An elitist topdown approach clearly will not work and has not worked. People should be involved not after but before formulating programmes.
HIMAL: But by now we all know that decentralization cannot happen by mere decree.
SAIJU: The Nepali villagers are quite capable of reaching a decision once they are given the responsibility. In recent years, particularly since the beginning of the Seventh Plan (1985-1990), local institutions have been revitalized. District, village and town panchayats have been given more say. Of course, that responsibility also gives rise to accountability. The bureaucrat must re-evaluate his own attitudes, which should no longer be those of chief and master.
HIMAL: Are you optimistic?
SAIJU: Every year, people are more aware of the opportunities offered by development and more willing to question decisions taken for them by others. A pressure group is being created.
HIMAL: But what was wrong with the system that it could not deliver?
SAIJU: Well, in the 1950s and the 1960s, the received wisdom was to go for “growth”. There was little infrastructure to distribute the gains of progress. Today, there is transport, and organizational entities to deliver services like never before. The challenge now is to use what has been created. Infrastructure is not an end in itself. There are now highways to Pokhara and Kodari, but their potential has to be harnessed.
HIMAL: What are the main roadblocks?
SAIJU: Development will not happen until we know how to manage the numbers. By that I mean fertility rates, the distribution of the population and the migration problem. It is clear that coercive population control methods will never work with Nepali society. The only way is to enhance awareness, but not through a “change agent” sent from Kathmandu, because the villager will listen to him but never really believe him. Awareness must be spread through local institutions.
HIMAL: What about the question of equity?
SAIJU: The problem is enormous. About 42 percent of the population remains outside the economic mainstream, isolated and incapacitated. Destitution exists regardless of caste, ethnicity or region. But the Government is responding and trying to match growth with equity. The total growth rate has to be translated to per capita growth.
HIMAL: Are you concerned about the failure to raise internal resources for development?
SAIJU: Very much so. We have yet to succeed in that sphere. Domestic resources can be mobilized in various ways. With the extent of the landed aristocracy in the country, it is interesting that we have not raised the level of land revenue for two decades. Meanwhile, the focus has been on indirect taxation, which hits the poor. Also, more efficient tax collection through administrative, streamlining would add to the national coffers. Unfortunately, as things stand, our resource base is dependent on custom duties on imported goods. This shows poor productivity. I look to the day when excise duties will overtake custom duties. That will indicate some progress.
HIMAL: How do you rate foreign aid?
SAIJU: Foreign aid per se is not bad, but it must be used to complement our own efforts and not as a panacea for all our development difficulties. It is Nepalis and Nepalis alone who will prove whether Nepal can develop. Like it or not, however, foreign aid will continue to play an important role for at least another two decades.
There are some areas where, provided we increase our absorptive capacity, foreign aid should even be increased, as for example in large capital investments for building dams. On the other hand, projects such as minor irrigation canals must be financed domestically.
HIMAL: What are the problems of agriculture?
SAIJU: A breakthrough is needed in irrigation. Because the targets were never met in the past, today we have only 400,000 hectares under irrigation. The projection now, is for nearly 800,000 hectares to be irrigated by the year 2000. It is an ambitious task, but not impossible to achieve.
The farmers definitely need more incentives. It is getting difficult to motivate them to go for higher productivity because theirs is the only sector that has not received the benefit of spiralling inflation, even as the price of machinery and fertilizer continue to rise.
HIMAL: What model should Nepali planners strive for?
SAIJU: We must look for a way to help the people to earn more. The fiscal policy of the day serves as a disincentive on that score. The entrepreneurial genius of the people must be released and the private sector made more productive. I personally feel that the South Korean model, in which growth is encouraged but through strong state intervention, is the one to study.
HIMAL: Are not the goals of the basic needs strategy as articulated by the Planning Commission too utopian?
SAIJU: How can you say that? A goal of 2200 calories for an adult person, isthat too much? The provision of 11 metres of cloth per individual should be within reach. A family income level of NRs. 10,367 cannot be considered outrageous. If we cannot achieve even these targets, where do we hope to be?
HIMAL: The basic needs programme presupposes a village level effort to alleviate misery. But the Government has also embraced the IMF and World Banks’s structural adjustment loan strategy, which is macroeconomic and “trickle down”. Is there not a contradiction here?
SAIJU: I do not think so. Because the structural adjustment package alone would undercut our societal goals, we have simultaneously put into effect the basic needs strategy. Nepal is one of the few countries to have such complementary programmes. The important point is to insist on their simultaneous implementation, or else the result will be skewed against the needy.
HIMAL : Nepal seems to be relying increasingly on loans from international partners.
SAIJU: Fortunately, we are not in a debt trap like so many other developing countries. But it is true that our dependence on foreign assistance, including loans, is increasing. We must be very cautious and think twice and even thrice before agreeing on loans. Many of the debt ridden countries are resource rich and can in the future overcome their problem with relative ease. When a country like ours is down in debt, however, we are sunk.
HIMAL: The Planning Commission has to monitor the crucial areas that we have talked about, but it has no teeth. It is ineffective.
SAIJU: Firstly, it is not supposed to have “teeth”. It is the apex body that advises the Cabinet. Certainly, there are some institutional constraints, but the Planning Commission is not part of government bureaucracy, which allows it to be more independent and objective. We can provide a better perspective not because we are fine people but because we do not get involved in executing recommendations.
HIMAL: But Kathmandu circles rate the Commission’s reports poorly.
SAIJU: No doubt, there have been some lapses, but by and large our output has been good and critical. We are not paid to be populists and our reports are not written for the press. I must say this, though: we often do not receive the cooperation of what I call the “sleeping intelligentsia”, those very people who are so quick to criticize. As we prepare documents, we send them all over for review and comments but receive very little feedback, which is unfortunate.