Government's Priorities

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Government's Priorities

In welcoming the new government headed by Prime Minister Lokendra Bahadur Chand, the business community has expressed its hope that the problems plaguing the economy will now be resolved. But it would be better for the business not to pin illogically high hopes as the new government does not have any magic wand that it would wave to drive away all the problems.

Moreover, the immediate concerns of the new government are political and security related, not economic. None of the five points of the directives that the king has handed down to the new government has revival of the economy as its agenda.

By logic, the first priory of the new government is to hold the elections by improving the security situation. And if the government is able to achieve this objective, this in itself will be enough to bring the business back on the tracks. Tourism may start revival, people may be moving freely around and the factories will be able to utilize more capacity.

That means the present situation warrants an active role by the ministers of home and defense, not of finance. But that is going to be a preposterous conclusion. The finance minister indeed has a lot to do. All problems are not related with security alone. The dwindling exports of garments and carpets have nothing to do with security. Though tourism may be affected by security, that is only one of many other more important problems, which lie elsewhere, not in security.

 Viewed against this perspective, it was logical that the new government brought out a detailed report depicting the actual situation of the economy. What has been brought out is just a compilation of what was already published by the central bank on different occasions. 

The reform agenda that followed the state of the economy report is neither better. Such documents in themselves are not going to be enough. More important steps are needed to restore business confidence. Some examples of such steps would be cleaning the pending issues in privatization and speeding up the clearance of the projects till pending with the licensing board.

Equally important step would be for new finance minister Dr. Badri Prasad Shrestha to make public his views on the economic policies that were being pursued during the last one decade or so, because there are doubts about his ideological convictions. For example, he has been regarded as a vehement critic to the policy of economic liberalization that has been the cornerstone of all policies and programs on-going at present. Are they going to be continued under Dr. Shrestha's stewardship? 

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