Murari Sharma: Test of Leadership

It was a tragedy that the first Constituent Assembly (CA) could not deliver a new constitution. It will be a farce if the second CA cannot issue the new statute by 22 January 2015, as scheduled. However, what I am most worried about is this: If CA II issues a shoddy law of the land, it will tear apart the land as we know it.

At issue are differences on the judiciary, the electoral system, the form of government, and the number and nature of federal states. All these issues, if not handled prudently, could do irreparable damage. However, any imprudent decision on the number and the names of federal provinces could prove a poisoned chalice for the country.

Two camps are pulling the federalism in divergent directions. The single-identity-state (SIS) camp, led by the Maoists, wants to have 10 to 14 provinces, each after the largest minority group of the region. Hill minority parties (HMPs) and the main Madheshi parties (MMPs) have supported the Maoists. HMPs want single-identity states to rule. The MMPs have joined this camp in a marriage of convenience — they have supported single-identity states for the Hills, but insisted on geographical provinces for the Terai.

In contrast, the multiple-identity plus viability (MIV) camp, led by the Nepali Congress, has proposed six or seven provinces. The Communist Party of Nepal (UML), a partner in the current ruling coalition, the Rastriya Prajatantra Party, and several other outfits have backed this position. There is a stalemate between the two camps.

CA I had decided identity and economic viability should be the two main criteria for creating the provinces. Unfortunately, the SIS camp has discarded the economic viability. The MIV camp has sidelined the identity.

The SIS camp has argued that identity politics should prevail over economic viability, citing two reasons. First, it is essential to empower the minorities with their dedicated states. Second, if Nepal itself is surviving on foreign aid, there is no shame if the states also rely on external assistance. Until the states become viable, Kathmandu should help them stand.

The MIV camp has contended that the provinces should reflect the multi-ethnic Nepali demographics and should be economically sustainable from start. Evidently, it has two fears. First, the largest minority group may insist on priority rights for itself over resources within the state, and smaller minority groups may resent and rebel it, creating a permanent source of conflict. Second, the economically viable states may rise against Kathmandu if it takes resources from them to support weaker states for long.

This difference between the camps persists unremittingly. It had killed CA I without procreating a new statute. Then neither camp had a two-thirds majority to approve the statute. CA II may go over the cliff as well, even the MIV camp has the requisite majority, unless this camp can push the law through, something the SIS camp has vowed to stifle.

It is easy to tackle the MIV camp’s first fear: Just mention in the new constitution that no minority group in any state will have priority rights and privileges. If there is no agreement on the names of states, let the state assemblies decide by two-thirds majority and with the approval of the federal parliament.

The second peril is more complex and problematic. Neither the MIV nor SIS camp has come up with the cost estimates for states. The MIV camp has been lazy to do it, and the SIS camp has avoided this issue, knowing that 10 states will be outright economically unsustainable.

Politics is a game of power wrapped in public service wrapper. Therefore, up to a point, I do not blame either side. However, political leaders have no right to destroy the country in their power game.

I believe recognizing identity is important for the empowerment and inclusion of the minorities. I am also convinced that development and prosperity of the minorities will bring them better life and greater dignity than backward single-identity states. Empowerment needs education and awareness and economic progress requires investment. Too many states will eat us most resources and prevent the federal and state governments from investing in education and in development.

The economic cost of states is going to be significant and formidable. If you create 10 states, there will be 12 legislatures, the upper and lower houses at the center and one assembly in each state. All federal ministries — except the foreign and defense — will have their counterparts in each state. Both federal and state governments will have their employees in every district to look after their respective jurisdictions – issues and projects.

Obviously, there will be huge expansion in structures, in the number of political officials and government employees. The resources needed for salaries and allowances, office and equipment, and expenses for water, power and telephone services will be prohibitive for a poor country.

Some might suggest that we have no basis for estimating the cost of states that are yet to be created. That is a lame excuse. We can learn from the experience of those countries that have had a federal system of government. For instance, let us take the number of employees, the largest component of regular expenses of government.

The following table shows the ratio of federal, state and local level employees in the United States, India and Switzerland:

Total Employees/ Levels United States (1) India (2) Switzerland (3)
22,040,106 11,973,000 102,000
Federal level 12.7% 21% 39%
State level 24% 61% 59%
Local level 63.3% 18%
Total 100% 100% 100%

(1). US Bureau of Census (2012)

(2). Ministry of Statistics (2012). This does not include employees working for public enterprises.

(3). From different sources (2008). State and local level not presented separately.

Nepal has now about 90,000 people working in the civil service. About 40 percent of these posts could be transferred to state governments, though the employees cannot be forced to convert to state employees. Assuming that local level offices and services are left unchanged, another 72,000 and 126,000 posts will be needed for the state level, if we follow the US and Indian ratio, respectively. And we will have no problem costing this component.

The Swiss ratio looks far more attractive, but it is irrelevant for two reasons. First, Switzerland has only seven federal ministries and cantons have less. Some cantons have just a few dozen officials. For Nepal, it is inconceivable. It has already more than 25 ministries; its states will rather follow the example of some Indian states that appoint 51 percent of state assembly members as ministers to prevent the vote of no confidence.

Second, a highly advanced Switzerland has limited government role to maintaining peace, security and justice. It implements very few development projects on its own.  In contrast, Nepal, a developing country with a small and limited private sector, will have to execute development activities across the country, requiring personnel, structures and equipment to do it.

Emotions and resentments fuel revolutions, but they do not bring stability and prosperity. Investment in development and progress do. Every extra rupee of regular expenditure means one rupee less for development expenditure. Obtaining the twin objectives preventing revolutions and bringing prosperity will stringently test the statesmanship of our leaders. The leaders failed last time. I hope this time they will pass this test.

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