Former finance ministers attempt to allay 'socialism' fear

KATHMANDU, August 3:

Former finance ministers have tried to assuage the fear that private sector has due to inclusion of 'socialism' in the preamble of the draft constitution.

Speaking at a workshop on 'Resource Management in Federal System' organized by Confederation of Nepalese Industries (CNI) in Kathmandu on Monday, they said that the mention of 'socialism' in the new constitution would not imply limitation of the scope and role of private sector in the country.
"The private sector should not be afraid with the socialism-oriented economic model stated in the preamble of the draft constitution," former Finance Minister Barshaman Pun said. "There was widespread fear among the business community when we came into political mainstream that the UCPN (Maoist) will impose its communism agenda. However, we did not make any policy changes to curtail the role of private sector. The mention of 'socialism' in the new constitution would not impinge the growth of the private sector. The arrangement would not undermine the private sector," Pun, who is also the senior leader of UCPN (Maoist), added.

Likewise, another former Finance Minister Surendra Pandey also said that the new constitution will ensure liberal economy irrespective of the political system enshrined in the new constitution. "There are constitutions in the world which sets the stage for communism, but have market-led economy. There are also constitutions in the world which stipulates market-led economic system but practice dictatorship," said Pandey, who is also the standing committee member of CPN-UML, said. "Our economy will be liberal regardless of what is mentioned in the constitution."

He, however, was quick to point out shortcomings of Nepal's private sector. "The private sector has not been able to build infrastructure and hydropower projects. The government needs to complement for the massive growth of the economy. Thus, the government's presence is required," he added.

Minister for Finance Ram Sharan Mahat, however, voiced dissent over the mention of 'socialism' in the preamble of the draft constitution. "There should not be mention of any 'ism' in the constitution. These are practiced by the political parties," Mahat said. "Private sector, however, should not be afraid because of the mention of socialism in the draft constitution. Still, the constitution should not mention 'socialism' since there could be chances later when the laws could be framed in line with such arrangement."

Former finance ministers' comment on 'socialism-oriented' draft constitution has come amid widespread concerns of the private sector led by CNI and Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and Nepal Chamber of Commerce (NCC).

Though the draft constitution recognizes cooperatives as one of the three economic pillars of the country, Finance Minister Mahat said cooperatives should come under the private sector. "The draft constitution has attempted to limit the scope of private sector. The cooperative sector is part of the private sector," he added.

Likewise, former Nepal Rastra Bank Governor Yubaraj Khatiwada said that the central bank should be restructured in the federal setup. "Resources and rights are shared and redistributed in the federal model. Some of the supervisory and other rights should be devolved to the provincial unit of the central bank which includes the licensing and supervision of micro finance and institutions not mobilizing deposits," Khatiwada, who is also the former vice-president of National Planning Commission, said. "Otherwise, what is the rationale of going into federal system when you have to come to the bank's headquarter in Kathmandu to sanction your loan above Rs 500,000," he said.

Shankar Sharma, former vice president of NPC, however, opined that the central bank should be under the federal government. "If the central bank and regulatory authority goes under the local government, will it be able to handle it," he questioned. "The failure of a bank in such scenario can lead to financial crash throughout the country. To prevent this, the central bank should be under the central government," he added.

Source: Republica