New Nepal has to be peaceful, inclusive, just and prosperous: Ken Ohashi

:: Why is it that differences are growing between the World Bank and Nepal’s private sector?

>> I wouldn’t say that we have differences with Nepal’s private sector. Perhaps differences are growing within the private sector. Some continue to practice connection-based capitalism and want special treatments for bank defaulters, while others are creating innovative and value-adding businesses. Not only that, this latter group tends to be civic minded. We strongly support and try to work closely with this group. We hope to see more leadership space taken over by these individuals so that they can lead by example. You can say we do have serious differences with the other group.

:: It’s true, isn’t it, that government itself continues to default on its commitment to take strong action against bank defaulters?

>> Yes there’s been a lot of talk for a long time about serious action against bank defaulters. But there has been very little action, if any at all so far. Maybe this time will be different. But let’s see. It’s only been six years (laughs)...

:: Why is implementation of reforms faltering?

>> Nepal is going through momentous political changes and it’s only natural that the country is preoccupied with the political agenda. Nevertheless, I think implementation of the agenda of development and reform is equally important so that people see that the changes are starting to have a positive impact on their lives. If development slows down, the danger is that people will become impatient and the political space for achieving lasting peace would also narrow. In this sense, I think political change and accelerated development need to go hand in hand.

:: Governance seems to be a key priority for the Bank in Nepal. Any particular reason?

>> We have learned that money is not always the solution to the development challenges we try to help solve. More fundamentally, the impediments seem to lie in weak relationships between the state and its citizens. When citizens lack voice and means to hold the state accountable, the state tends to act irresponsibly. Vested interest groups then find it very easy to entrench themselves. Furthermore, feudal practices have historically run through every aspect of Nepali life. As such, the politics of patronage is deeply ingrained in Nepali society. These practices have to go if Nepal is to ever become a modern state. Of course it will not happen overnight, because we are talking about behavioral norms and political practices; it will require generational changes. But, some reforms in the institutions and procedures can enhance transparency and give the citizen more voice. Such changes can accelerate the transformation of the governance system. You might also think of it as state building. The kind of state Nepal needs to make a “New Nepal” possible. This is why we focus so much on governance. We hope that it might help Nepal transform itself into a modern nation in the shortest possible time.

:: What is the controversy about the Labor Law?

>> I believe one must look at the big picture. One of the top priorities for Nepal will be to find decent jobs for some 400,000 young people who enter the labor force every year. Of course, changes in labor laws alone will not produce enough new jobs for all. But if labor laws are progressive and pragmatic, they will help – to an important extent – in improving Nepal’s climate for investment and growth. Eventually, only a growing private sector can produce jobs and absorb labor in these numbers. The question Nepalis need to ask is whether it is in the country’s larger interest to simply protect existing unionized jobs (of which there are probably less than 100,000), often in sectors that are stagnating, or to improve the investment climate – including the reform of labor laws – so that every new worker that enters the labor force has a fair chance of finding decent work. This is really a challenge for your own political leadership to sort out.

:: What are the Bank’s key areas of focus in Nepal?

>> The Bank’s program of support to Nepal is based on the pillars of Nepal’s own Poverty Reduction Strategy. These include broad-based economic growth, human development, inclusion, and governance. We believe that the basic thrust of the program remains robust. But the program will need to respond to new opportunities and challenges that the unfolding situation in Nepal will present. Therefore, we are currently in the process of updating our strategy to reflect these new realities.

:: What changes, if any, has the political developments in Nepal brought about in the World Bank’s strategy.

>> Like our development partners in Nepal, we too are very hopeful that development efforts will be revived with renewed vigor. The end of the conflict will give the Nepalis a chance to reflect on and redress the underlying socio-economic causes of the conflict, and move forward to realizing their aspirations of transforming the current cessation of hostilities into durable peace. We will adjust our support strategy where necessary to give strongest possible support to this process.

:: Is the Bank becoming community-focused in its poverty reduction mission?

>> ‘Communities’ have proven to be Nepal’s special assets and there is by now plenty of evidence to prove this. Communities, broadly defined here to include not just rural communities but also such groups as campuses of the Tribhuvan University or cooperatives, have done wonders when they are provided with resources and empowered to make their own development choices. It is a very simple formula. This goes to show that development does not have to be complex and convoluted. We hope to help Nepal build on these successes.

:: The Bank has been among strong advocates for a development vision. Why?

>> Like many Nepalis, we too feel that Nepal faces a rare opportunity to break from the past and set out on a new path. And yes you are correct that we are advocating the need for a broadly shared vision for the future, in terms of social and economic transformation over the next 20-25 years. We may all agree that the “new” Nepal has to be peaceful, inclusive, just and prosperous, but such an unobjectionable statement is not enough to give a meaningful direction to the huge social energy unleashed during Jana Andolan II. Unless such energy is united in constructive purpose, it might quickly dissipate. Worse still, without a shared sense of mission, those energies could pull the country in different directions in pursuit of special interests by different interest groups. In fact we already see this happening in the form of “bandhs” demanding leniency for bank defaulters; protests against competitive bidding; and demonstrations for permanent positions. Quite surprisingly, these demands seem to resonate at the level of political leadership, regardless of the rhetoric about a “new” Nepal.

On the other hand, a shared vision that gives a clear sense of where Nepal is going and how can begin to help define the current as well as medium-term tasks for the country to achieve the long term goals. Such a process, we feel, should be homegrown, independent and citizen-led. It needs to be a collective process of reflection and search for solutions. The World Bank will only provide external support as and when necessary.

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The exclusive interview was taken by Mr. Suresh Acharya, editor of Agenda Weekly to the country director of World Bank Nepal, Dr Ken Ichi Ohashi recently.

Courtesy: Agenda Weekly