News & Events

Event Date:
Event Type: News & Events
Event Location: New Baneshwor, Kathmandu

Parliamentary Visit

 

Nepal’s Fiscal Challenges: Insights from the IIDS Delegation's Parliamentary Visit

On June 16th, 2024, a delegation of 24 IIDS interns visited the Nepalese Federal Parliament intending to attend a parliamentary session to review the performance of the Ministry of Finance (MoF). The intent of the visit was to get a better understanding of democratic processes in Nepal and how reviews of institutions in the Nepalese Federal Government are undertaken. Interns had the opportunity to speak with several members of parliament such as Hon. Dr. Swarnim Wagle and Hon. Bishwa Prakash Sharma and tour the parliament grounds following the session. The delegation attended from 11:30 to 1:30, during which 9 speakers voiced concerns relative to the MoF’s budget statement and performance for the fiscal year of 2023/24.  The subjects discussed varied from restrictions on domestic investments and prioritization of foreign investment to misallocation of funds and lack of progress in funded projects. Parliamentarians suggested greater oversight and accountability from the Ministry of Finance. Additionally, the MPs suggested a shift in MoF policy to prioritizing local investors, easing investment restrictions on local investors, and increasing monitoring of foreign direct investment (FDI) to avoid potential issues that they could pose to national security

The speakers all shared similar concerns; the emphasis was placed on three subjects empowering local investors, oversight of FDI into sensitive industries and sectors such as hydropower, and misappropriation of funds. A recurring topic was that of foreign investment into hydropower and foreign influence in the sector, the issue was first raised by the Honorable Prem Suwal of the Nepal Majdoor Kisan Party (Nepal Workers Peasants Party) and echoed by the Honorable Rajendra Lingden of the Rastriya Prajatantra Party (National Democratic Party) as well as the Honorable Bishwa Prakash Sharma of the Nepali Congress Party.  Hon. Rajendra Lingden notably commented on the interest foreign investors have in the Budhigandaki and Tamor hydroelectric projects and how they’ve been favored to become shareholders of the project rather than local investors. The two projects would be some of the largest hydropower providers to the broader South Asia region. Hon. Prem Suwal suggested that limits should be placed on Indian investments that would redirect water from the Aarun river posing a threat to national water availability. Hon. Mr. Suwal also suggested that the Ministry of Finance should take steps to empower local investors to focus on the hydroelectric projects and compete with foreign investors.  

Another multipartisan concern shared was the disenfranchisement of local investors and the local populace by the Ministry of Finance. Hon. Bishwa Prakash Sharma (NC) suggested the establishment of a Government-Diaspora-Partnership model that would bring investment from the large Nepali diaspora abroad; already one of the largest contributors to the Nepali economy via remittances. The proposed model was met with support from members of all parties on the parliament floor who showcased their support by banging on their desks. Hon. Dr. Swarnim Wagle of the Rastriya Swantra Party (National Independence Party) suggested that national investment should be focused on meeting sustainable development goals (SDG) presented by the United Nations 2030 Agenda. Hon. Mr. Suwal (NWPP) and Hon. Mr. Sharma (NC) both presented urgent concerns regarding the labor exodus has had and the lack thereof incentive to retain talent in Nepal.

Hon. Dr. Swarnim Wagle (NWPP) gave the parliament a twenty-minute speech on what the outlook of Nepal should be. Hon. Dr. Wagle started his speech by giving background to the recent history of economic development in Nepal ranging back from 2048 (1991) to 2080 (2023). Hon. Dr. Wagle recommended that the government usher in the next phase of economic reform in Nepal by suggesting that the government implement programs that focus on achieving three central goals: increase trust in the government, reduce current government expenses, and establish incentives for economic growth. An important concern Hon. Dr. Wagle raised was the rising threat of energy insecurity due to a lack of balance in electric generation through the seasons. Honorable Dr. Swarnim Wagle recommended that Nepal shifts away from conventional energy sources such as wood, dung and imported oil and gas and transitions towards clean, modern energy production methods. As for the gaps in capital in a majority of the development projects, the Honorable Doctor advised that the government should implement measures to raise investment from green and innovative financing. Hon. Dr. Wagle also highlighted the importance of completing a half a dozen irrigation projects in time for enhancing agriculture productivity.

Honorable Rosan Karki of the Rastriya Prajatantra Party (National Democratic Party) was outspoken about misallocation of funds by the Ministry of Finance and her parliamentary colleagues in the last budget statement. Hon. Ms. Karki called out the negligence of the MoF specifically towards a project with the Nepal Cancer Hospital and Research Center that aimed to provide subsidized healthcare to disadvantaged women suffering from ovarian and breast cancer. Hon. Ms. Karki also spoke sarcastically on the fact that the MoF had allocated 1 Lakh ($780 USD) towards the establishment of a University for Ayurveda Sciences but had directed over 6.9 million rupees ($50,000 USD) towards a retirement home in India. Honorable Mukta Kumari Yadav of the Nepali Congress party echoed concerns that parliament had directed the Ministry of Finance to allocate unnecessary amounts of money solely for the travel expenses of MPs. Almost all speakers convened on one specific topic: the inefficiency in the development and realization of Nepali Pride Projects and regional projects. Hon. Ms. Yadav pointed out the slow progression and funding of the Chure Conservation project which seeks to protect the climate-vulnerable region of Chure through a series of smaller development projects in turn putting millions of people in the Terai region and parts of India at risk of danger brought by climate change. Hon. Mr. Sharma (NC) spoke on the poor conditions of Nepal’s electrical grid and transmission lines as well as failure to invest and progress with the expansion of transmission lines that could help feed clean hydropower electricity to the rest of South Asia.

All the concerns put forward by the speakers were multipartisan and found minimal resistance, how and when these concerns are addressed by the Ministry of Finance is an issue that depends on how all parties choose to collaborate on the planning of the next fiscal year’s budget allocations. The concerns stretched from issues that put Nepal’s national security and sovereignty at risk to the negligence of investments on disadvantaged Nepalis: a broad set of challenges that must be addressed in the coming year. The MPs all reinforced the idea that empowering local investment could help address many of the concerns whilst propping up the Nepali economy and maintaining Nepali interests at heart, preserving national sovereignty and a future for Nepal.

 

Written by Enzo Rovira Diaz, Summer Intern, IIDS & edited by Kritika Bhandari, Summer Intern and Isha K.C., Regular Intern, IIDS

Share: