Development Governance
A Brief Introduction
Although governance concerns all sectors, whether economic, social or political, public or private, in the context of development, governance primarily relates to role of the state in envisioning, facilitating and achieving valuable and sustainable development through its various constitutional powers and commitments. Development governance in relevance here, focuses on social, economic and infrastructure growth through effective institutions and mechanisms that includes, sound policies, budgetary allocations, resource distribution, monitoring and evaluation of roles and responsibilities of designated bodies, etc.
In a global context, according to UN, Nepal falls under the least developing countries category with Gross National Income (GNI) per capita 1,027 US dollar, Human Assets Index (HAI) at 74.9, and Economic and Environmental Vulnerability Index (EVI) value at 24.7. However, even against this background, if we look at the advent of democracy in the year 2007 to second tenure of local governments in 2022 after adoption of federal governance structure, Nepal has achieved significant socio-economic development. In fact, development of the country has taken simultaneous and unprecedented turns with political transitions in Nepal.
In relevance, a detailed outlook of socio-economic growth of Nepal in the fiscal year 2020/21 can be seen as below:
| Indicators | Nepal | Province-1 | Madhesh Province | Bagmati Province | Gandaki Province | Lumbini Province | Karnali Province | Sudurpaschim Province |
|---|---|---|---|---|---|---|---|---|
Economic growth rate | 3.98 | 3.54 | 3.52 | 4.65 | 3.56 | 3.81 | 3.77 | 3.56 |
No. of registered Industry | 8384 | 791 | 564 | 5450 | 733 | 612 | 78 | 116 |
No. of Small and cottage industry | 475677 | 63290 | 66654 | 159564 | 49189 | 81164 | 23254 | 32558 |
Investment in Industry (Rs. in Billion) | 2245 | 517 | 119 | 822 | 474 | 142 | 131 | 39 |
Hydropower (in MW) | 1386 | 280 | 13 | 472 | 527 | 31 | 11 | 52 |
Access to electricity (in percent) | 93 | 82.43 | 99.05 | 94.44 | 92.79 | 91 | 34.75 | 64.69 |
Local Road Network | 63577 | 12782 | 5965 | 15692 | 11494 | 9051 | 3266 | 5326 |
Number of schools | 35674 | 6958 | 4164 | 7054 | 4349 | 5728 | 3191 | 4230 |
Approved industries of foreign investment | 5181 | 129 | 162 | 4328 | 443 | 74 | 88 | 47 |
Source: Economic Survey 2020/21, MoF
As seen in Table 1, despite numerical growth in economy, many improvements in development governance remains challenging in Nepal. Amid rampant corruption, mixed division of power and responsibilities among the three tiers of government, failure of coordination among relevant stakeholders and poor practices of long-term infrastructure investment, governance conflicts are inevitable to cause hinderances during pre, during and post phases of developments.
Development Governance in Federal Nepal
Aligning with Millennium Development Goals and Sustainable Development Goals (2030), Government of Nepal has initiated various planned development efforts at national and as well as community levels. Several periodic plans (1st to 15th Five Year Plan), sectoral perspectives related fiscal action plans and political parties affiliated election manifestos are adopted to guarantee equitable and fair allotment of budget and proportionate sector-wise development in term of both physical infrastructure development and social development within the country.
For instance, according to Ministry of Finance (MoF), Government of Nepal allotted a total of NPR 161.56 billion for infrastructure development in fiscal 2022/23. Nepal has also received foreign loans, grants, and technical assistance from various bilateral, multilateral, and international agencies to improve, promote and strengthen development priorities and its sustainability. As per MoF’s latest data, in FY 2020/21, Nepal received NPR 32 billion as foreign direct investment and approx. USD 1.8 billion as development assistance from its bilateral and multilateral partnerships. Additionally, for better governance supporting development projects in federal system, the newly endorsed constitution (2015) has provided power, functions and responsibilities to local government and provincial government to execute development activities as required in their respective areas. Also, various institutional arrangements and national policies are in place for strengthening the development governance in Nepal (as shown in the Table 2).
Table 2. Government bodies and policies related to development governance in Nepal.
However, despite the establishment of institutional mechanisms and national legal policies and directives, development governance has not been adequately functional and well executed in Nepal. Several anecdotal evidences show that monopoly of leadership and persons in power, bureaucratic hurdle, poor fiscal management and high corruption, lack of integrated development plans relevant to actual needs of local communities and suitability of topography and environment are some of the major factors that have hindered sustainable and valuable development in Nepal.
Way Forward
Notably, in absence of coordination between the relevant stakeholders and communities, and inadequate need-based assessments of the topography and landscape, demographic population and the local communities, insufficient allocation of budget and resources have failed to provide socio-economic advantage to the local communities.
More so ever, minority and marginalized communities are the ones who bear greater losses since they are fundamentally unable to obtain timely judicial assistance and compensations in cases of development related disputes. Therefore, there is an urgent need to examine the existing as well as potential conflicts in governance, policies or mechanisms that continue to hinder sustainable and valuable development activities in Nepal.
