Where does Nepal stand?

 The Himalayan Times

7 April 2022

Where does Nepal stand?

Blame goes to COVID -19 pandemic for the financial woes of many countries, and some of them are in a critical situation. Among them is Sri Lanka, which is passing through a disastrous situation financially. Was COVID-19 really to blame or are there other factors as well? Is it bad governance of the ruling party led by Gotabaya Rajapaksa or the accrual of the mismanagement of past governments? It remains to be seen how the Sri Lankan government will resolve this crisis amidst dozens of lawmakers quitting ruling coalition “Dozens of lawmakers quit ruling coalition as Sri Lanka crisis deepens” (THT, April 5, Page 3).www.nepalitics.com

I am not so sure if Nepal will have to face a situation similar to that of Sri Lanka, but I can guess the day is not too far considering handling of state affairs by the federal government in an irresponsible way. Government past and the present don’t seem to be putting much effort on increasing the volume of exports against the ever rising import to reduce trade deficit. Unless, the government plans to improve the volume of exports of agriculture products and other goods by facilitating the farmers and concerned groups with appropriate mechanisms, trade deficit will continue to only grow, which could paralyse the state affairs sooner than later. 

Owing to its federal structure, the growing administrative expenditure to run the three levels governments has been challenging and raising serious concerns as to whether Nepal can afford the federal system. If yes, for how long? As we have seen, Nepal’s annual budget has always shown a deficit, which has been going on for so many years in the past. A budget deficit occurs when a government spends more money than it generates.

Rai Biren Bangdel

Maharajgunj