Economic costs of leaders’ rants

Directives without well-defined vision cannot stop the economy’s downward spiral.

Prime Minister KP Sharma Oli and Finance Minister Bishnu Prasad Paudel appear determined to “solve” the entrenched economic problems of Nepal (only) by giving directives. In a meeting of the Developmental Problems Resolution Committee of his ministry last week, Paudel reportedly directed inter-ministerial agencies to improve weak economic indicators by utilising the strengths of the areas of the economy that are performing better. He enlisted foreign currency reserves, the balance of payment surplus, remittances, the abundance of liquidity in banks, low interest rates, low inflation, and an expected marginal rise in revenue collection and economic growth as the strengths. Paudel also urged the utilisation of its strengths to offset trade deficit and improve production, demand, capital expenditure and investment, which constrain growth prospects and overlook a proximate cliff of a potentially sharp recession.