KATHMANDU : Easing tensions between different levels of the government and improving capacity at the local levels would support a successful federal transition in Nepal, a new World Bank report said.
The report titled ‘ South Asia Economic Focus’ under the theme of ‘Making (De)centralization Work’ also stated that the transition will need time to deliver better services and managing the expectation of people will be helpful for this.
It is the report that the global development bank publishes every six months.
Nepal has adopted federalism under which separate the governments have been formed at three levels—central, provincial and local with relatively more power to the provincial and local levels compared to the past. There are elected governments at all three levels since the elections were held of all levels in 2017.
Despite high expectations of people from the federal set up, service delivery for the sub-national governments (provincial and local) has been challenging due to their capacity constraints, according to the report. “Three of the seven provinces spent less than half of the budgeted expenditure in the last fiscal year 2018-19 and some local government seems still dysfunctional,” it said.
In order to make decentralization work, the World Bank report has suggested prioritizing both decentralization and centralization highlighting the important role of sub-national governments to ensure better service delivery and the central government’s role to create integrated market and ensuring harmonious standards.
“The central government can set the standard for education, health care, the environment and other services,” the report says. “Without effective central government, decentralization can degenerate into fragmentation.”
Highlighting the report’s findings, Dr. Hans Timmer, chief economist for South Asia of the World Bank said that without effective central government, an integrated market for the businesses could not be created nationwide. “You can learn from the example of Pakistan where different laws and rules in different provinces are creating chaotic situation,” he said.
He however said in the case of Nepal, the sub-national governments don’t have enough power. A lot of infrastructure projects are handled by the national government. In such a situation, it is difficult to implement decentralization effectively,” he said.
Sharing experiences about running local governments in the last two years since local elections held, Kantika Sejuwal, Mayor of Chandannath Municipality, Jumla, said that the local governments are more empowered by the constitution as it gave them rights to frame their own laws and rules. As such laws should be consistent with the federal laws, the federal governments’ delay in formulating laws in line with new constitution, hampered the local government’s effort in creating legal framework for the service delivery, according to her.
Complaining about the little resources allocated for the local levels, she said that local governments should also be involved in large scale infrastructure projects.
Since the country adopted federalism, it has been easier for businesses to register enterprises. According to Mausami Shrestha, director, Shreenagar Agro Farm Private Limited based in province 5, they should not reach to the central government to register enterprises and other various services bringing down time and expenses for them. In order to create value chain for industries within the country, she stressed on the need for developing specific products in specific areas. “We can take support of provincial and local governments to get delivery of certain agriculture goods that can be used as raw materials for i
ndustries if necessary products are abundantly available there,” she said.
Dr. Pushkar Bajracharya, professor of Tribhuvan University stressed on the need for central government incentivizing the local governments provided they make proper initiative for the development of the local economy.
Swarnim Wagle, chairman of the Institute for Integrated Development Studies, a think tank body which partnered with the World Bank to launch the report, said that both central and sub-national governments have roles to play to make decentralization a success.
“The central government should be involved in the areas where there is an economy of scale and maintaining law and order, judicial system, water resources and creating common standards in the areas of education. “But, local government should be given full authority in public service delivery,” he said.
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