A crisis with opportunity for Nepal

For Nepal, the long-term impact of the COVID-19 crisis is likely to be exacerbated by perennial vulnerability and a legacy of past poor policy choices, George Varughese and Iain Payne write.

The COVID-19 pandemic has triggered a global crisis that is already transforming social and economic life while altering the practice of politics and government.

Amidst an ever-extending lockdown, there are clear signs that Nepal is struggling to cope during this crisis. Hurriedly grafted onto a public administration system that is hollowed out and weakened by a deeply entrenched kleptocratic network, Nepal’s emergency measures appear technically compromised from the start, vulnerable to unscrupulous opportunism, and lacking in strategic coherence or direction.

Caught by the COVID-19 pandemic amidst the biggest governance transition in its troubled modern history, Nepali policymakers have been hard-pressed to make choices that can help turn the crisis into an opportunity for durable reform.

In countries like Nepal, where myriad developmental needs clamor for policy attention and scarce resources, there is great temptation during crisis to react only for the immediate term. That would be a big mistake: as every recent crisis has revealed, Nepal is extremely vulnerable to underlying threats that can quickly become existential for large sections of the population.

For Nepal, response to crises must therefore be treated as a strategic opening, an opportunity to turn focus onto these underlying threats – as well as a chance to push for appropriate and affordable policy choices.

Firstly, crisis resilience must become a strategic policy priority for Nepal. There is an urgent need to achieve food self-sufficiency and renewable energy security, rationalise emergency services and stockpiles across all seven provinces, counter violent extremism, and better manage borders.

Crisis resilience also requires strategic investment in technologies that support vertical and horizontal coordination of government, remote education and health, food supply chains, and energy efficiency.

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Secondly, the crisis exposes critical gaps in Nepal’s policy-making infrastructure, which must be plugged. Nepal’s unwieldy, bloated pre-federal public administration architecture must be rationalised to drive policy coherence across the whole of government.

Further, massive weaknesses in how data and evidence are utilised by government become glaring during crises.

For example, despite the announcement of COVID-19-related economic support for the poor, there is neither a standard definition of ‘the poor’ in Nepali government frameworks, nor a database it could use to identify those who qualify to receive support. The fragmented approach to data is not helpful, especially in the context of federalism. Improving and unifying data for policy-making is an essential policy choice.

There is also a critical gap in Nepali policy-making when it comes to the way the informal economy intersects with the vulnerability of workers. The COVID-19 crisis has abruptly illuminated the glaring disparities between Nepal’s ‘haves’ and ‘have nots’, most starkly between those in the formal versus informal sectors.

The continued failure to understand, treat, and engage the informal sector as the majority perpetuates the development of policy that fails to engage fundamental governance concerns on inequality and justice. The pressing needs of society’s most vulnerable will be better understood and prioritised through an informality-based policy approach.

Thirdly, the crisis provides a strategic opening to reimagine policy support for development effectiveness in Nepal’s federalised context. In a country with scarce state resources and challenging geography, inter-sectoral policy coherence is essential.

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This is the case in health and education, for example, where the desired outcomes of citizen wellbeing and capability depend on the effective, and concurrent, delivery of both health and education services. In a crisis, both of these come under strain, and their resilience demands policy coherence across sectors.

Similarly, choices should be made on the architecture of service delivery. Continuing to use district administration in the current architecture of the Nepali state does not fit purpose nor is constitutionally legitimate in many instances. It is time to separate districts into special jurisdictions of provincial government for provisioning public goods and services more effectively.

Crucially for development effectiveness, it is important to rethink policy choices around development funding. It should not take the panic of crisis to be creative in funding. It should be rationalised and linked to both government and non-government entities based on ability, utility, and accountability.

Further, subsidiarity and resilience can be guiding principles that incentivise provincial and municipal governments to raise and spend resources for development.

For any of this to work though, Nepal’s kleptocratic network must be dismantled. The recent medical equipment procurement scandal clearly highlights how the country’s kleptocrats undermine the public good even during acute crisis, putting the prime minister’s office on the backfoot precisely at a time when there is urgent need to build public trust for government.

Prioritising the elimination of corruption in the centre of government is critical. Other strategic countercorruption entry points are the reform of campaign finance and the elimination of the use of the army for non-security matters.

Finally, the crisis reveals continued challenges in effective representation of Nepali interests globally. The hapless Nepali migrants stranded around the world and the controversy surrounding the country’s diplomatic representatives are symptomatic of deeper problems of unaccountable process and of thin substance in foreign policy choice, just as an example.

In addition to rationalising political appointments and better utilising Nepal’s foreign service professionals, a foreign policy white paper must be produced. The paper should present Nepal’s self-interest rightly understood, avoiding language about ‘balancing interests’ or ‘maintaining equidistance’ and using evidence to prioritise important relationships and justify diplomatic missions.

Instead of continuing poor policy practice, Nepal can adapt and respond to the changed patterns of international life through a self-critical appraisal of circumstances and a seriousness in policy choices going forward. While the COVID-19 pandemic response presents a serious challenge for Nepal, if policymakers make crisis preparedness and good governance a priority in the process, it could become a unique opportunity to chart a course to better days.