Neoliberalism Weakens Nepali Welfare State

Dev Raj Dahal

The hasty collapse of bureaucratic form of communism in the late eighties and the manifestation of grim crises in the laissez faire capitalism after eighteen years what is called the Great Recession had set off fiery debates on the redefinition of the role of state, re-regulation of market, environment protection and distributive justice for improving the quality of life of citizens. The crises of these two dominant ideologies questioned the linear progression of human life as both failed to resolve the tension between human nature and the purpose of politics. It has entailed critical social research with the view to rectify an imbalance of power between the state, citizens, and capital. The last component is more integrated into the global financial markets than to the national political economy.

Its instinct for crass profit has spawned social, economic, and environmental crises, growing poverty and social inequality, precarious labour markets and direct threat to the integrity of both weak states and poor citizens. As a result, the intrinsic belief of the market-fervent Nepali leadership that strengthening of the market forces can increase efficient resource allocation, individual responsibility and neutralise the capacity of polity to interfere in economic trajectory has been largely falsified by the subsequent birth of consumer culture which has embourgeoised the political elites at the expenses of masses and enfeebled the nation’s democratic political order and dignity of citizen.

Citizens as umpire

Nepali design of constitutional welfare state has sought to blend territorial space, loyalty of citizens, legitimate government and popular sovereignty aiming to resolve the Hobbesian problem of state of nature. It has spelt out full freedoms, rights and duties of citizens so that Nepali state can act as an impersonal umpire among diverse social classes and institutions for the preservation of peace. It has neatly set up separation, checks, balances and devolution of power in proportion to the specialised functions of the public institutions aiming to create regulatory order, defined the rules of engagement of citizens and tried to prevent the abuse of power within its domain to trudge democracy relentlessly forward.

The constitution gives a human face by recognising the enduring self-determination of the people thus making self-governance a practical possibility. A social welfare state does not entirely absorb the energy of societal power to self-organise, articulate and effect collective action. It abides by the normative rules of civilisation. The Nepali state ensures universal admission to social services such as rights and access to education, health, employment, social justice, social protection and assistance and social security provisions and management of regulatory systems to safeguard proper environment. Nepal’s constitution embodies all these elements.

The only question remains: are there sufficient political will, efficient and responsive admin and institutional and material resources to implement them affirming a belief that democracy is the final evolution of human destiny unless another better system of governance is invented? Popular sovereignty embedded in the constitution presumes that Nepalis are eternally sovereign. They do not have to periodically renew their legitimacy. They have legislative power which is the foundation of sovereignty and source of laws. The merit of law is that all citizens must comply with it. No actor or institutional mechanism can alienate, divide and reduce their sovereignty. Not even the head of the government or unelected judges have the ultimate word. It is inseparable, for it echoes the harmony of general will of all Nepalis aiming to diminish disorder which is inimical to their liberty, choice, and dignity.

Political power is a public trust. It is largely based on the promise of leaders, public opinion, election, representation, and constitutional tradition. This means the elected representatives of Nepal have only delegated powers subject to timely renewal of their legitimacy through fair elections and walk along the path of popular mandate. Democratic power essentially springs from the bottom-up process. Various normative ideals – popular sovereignty, social inclusion, proportional representation, subsidiarity, principle of affected, social contract and the provisions of constitutional and human rights are its templates. They aim to create a just and legitimate order in consonance with constitutional patriotism, humanitarian norms and international law.

Under global imperatives of Washington Consensus, Nepal’s successive governments since 1991 have, however, began to cut a hole in the welfare hammock, used textual justification of neoliberal ideology to delink the public economy (through privatization and denationalisation) and civil society from the state’s authority, gave autonomy to banks and abandoned the role of national parliament as an arbiter of public policy. Moreover, as a means to achieve fiscal balance, the Nepali governments have further weakened the power of peasants and workers by cutting the state subsidy offered to them and left them at the mercy of market materialism considering it an engine of fast economic progress.

Nepal’s three-decade of unceasing drift to financial capitalism, deindustrialisation and resignation to structural adjustment marked its decline productive capacity, stoked a crisis in its autonomy from the dominant interest groups and an ability to exert control over population, politics, law and policy sovereignty. This shows that the market reflected central political dynamo and offered disproportionate benefits to those at the top of the economic and political ladder while inflicting a livelihood crisis on the masses.

The political edifice of (or adaptation to) neoliberal policy of social, economic, and political deregulation and denationalisation sought to fend off the regulative capacity of Nepali state to maintain security, public order, social discipline and avert conflicts. Deregulation as a policy challenges the purpose of any state to offer public good to all Nepalis without excluding anyone. As a purpose, it is necessary for the state to achieve the Weberian legitimate monopoly on power, muster resources either through taxation or foreign aid, hone the loyalty of citizens and stay legitimate in the eyes of the international community. In Nepal, deregulation has, however, produced many signs of dysfunctions at the top of governance as there was hardly any innovation in institutional adjustment to fit with and make the nation competitive in the interconnected world.

In clear strategy terms, it was a deviation from the nation’s historically defined “middle path” between the interest of the private sector, welfare politics and the capacity of Nepali state to produce, exchange and distribute public goods at minimum cost which the majority of Nepalis can easily afford. Primacy of market over politics created its own distortions. Progress is about priorities, about choices to the people and about the allocation of scarce resources so that friction and conflicts are averted. All of these obviously include political judgments. The value of rational distribution of goods and services can re-moralise Nepali politics, uplift human condition and moderate certain groups’ temptation for either status quo, reaction, reform or extremism.

The salience of post-conflict, post-quake and post-pandemic phase demands democratic self-confidence of Nepali leaders to follow the rules of civility rather than become swayed by the dynamics of political instability reared by geopolitics and capital politics while shepherding the nation in hard times. The current return of distributive justice as a part of nation building is Nepal’s old theme that supports the satisfaction of minimum basic needs through the distribution of resources across various identities, generates sufficient political will to resolve multi-dimensional grievances and creates an easy access political order for social cooperation and solidarity.

Redistributive justice is a central architectural feature of democratic governance to avert the emerging trends of politics of rage, alienation, polarization, fundamentalism, agitation, and organisational splits. Perceptive Nepali leaders, policy experts and social scientists continue to advise the governments to reflect on citizens’ living conditions, acquire contextual social learning of the ideas bubbled up from their historical experience and beef up poverty-fighting institutions and resources to muster the capacity of natives for self-governance. A reflective concept of democracy seeks a normatively justifiable solution which rejects purely proceduralist and electoral narration of elite circulation that reduces democracy to a decision-making power irrespective of the substance of the decision.

Democracy presupposes the fact that leaders abiding by the constitution must ensure that certain goods are not reduced to mere commodities: national security, rule of law, justice, voice, education, health, syncretic culture, and natural environment upon which sustainable development goals are founded. They are public goods and cannot become subject to skewed distribution in society in favour of powerful interest groups by creating inordinate costs which most Nepalis can ill-afford.

The main questions pertaining to Nepal’s welfare state are: Can the Nepali state caught in the economic and political syndicate of mainstream parties and populist trap of disloyal opposition settle the nation’s myriad of issues and create the legitimacy of public order? Is it possible to make the poor and dispossessed stakeholders of democracy with the ability to exercise citizenship and human rights and contribute to building a constitutional welfare state? How can the state and diverse social classes keep social solidarity between the informal and formal sectors of political economy and reorient new actors such as NGOs, civil society, cooperatives, consumer groups, local bodies and identity-based various groupings to livelihood projects and peace building?

Can Nepali professional classes and politicians transcend their class interest to work together for the common interests of all citizens for sustainable development or continue to nourish and maintain monopoly of power through changing political combinations irrespective of ideological and identity difference? Are cultural industries adequately supportive of a robust statehood or spur multi-voice communicative and linguistic contexts for centrifugal tendencies providing geopolitical penetration and political instability? Answers to these questions suggest whether Nepal is moving toward a constitutional welfare state or not.

Impact of globalisation

Obviously, the effects of globalisation have worn off many features of Nepal’s constitutional welfare state. The law-making process has involved political bargaining of power while row over the legal experts and judges over the resignation of chief justice indicates a drain of constitutionalism. As per promise, leaders have failed to clone Nepal in the image of Switzerland, Singapore and South Korea in terms of development glitz. The energy of Nepali political parties is spent on their own contradictions which diverts their attention from political stability and nation building.

Top leaders are on the cusp of holding early national elections, talking on future coalition building, forming the extra-constitutional party coordinating committees and establishing their own invincibility in politics yet gripped in the conflicting panaceas of the solutions of nation problems. The challenge for them is how to make Nepali politics adequately political and national and address the concerns of ordinary Nepalis.

The Rising Nepal

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