Mds 2018

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MANAGEMENT DEVELOPMENT SCENARIO 2018
Chandra P Rijal, PhD in Leadership
Abstract
Nepal has achieved much awaited political stability and attainment of policy stability has
been undergoing as a new common goal at all levels. The national leadership has been
able to create high hope among common people for national development. The general
public and their representatives at various levels of government have been quite sensitized
to have in place new paradigms of thinking and national development. All it may require
effective management development system and practices in place at all levels of
governments, public, private and development sectors having a shared vision on national
transformation, consistency of purpose and resources, total participation, continuous
improvement, good governance and general compliance, and more importantly, ‘people at
the bottom’ of the pyramid focused service and development interventions. It is high time
to prioritize and enact ‘system defined approach’ to national development. Management
Association of Nepal (MAN) needs redefining its role in changing national and global
context.
Author
Chandra P. Rijal, MBA, MPhil and PhD in Leadership
Possesses expertise in transforming effective learning and development, research and
innovation, policies and programs for a prosperous nation building with sustainable
development system practices.
1. INTRODUCTION
1.1. Preamble
Year 2018 has gifted a remarkable historical identity for Nepal in course of successful
transition to federal democratic republican system with a vision to ultimately proceed onto
socialism in long-run. Successful completion of the first federal system based general
elections and formation of federal, provincial and local level stable governments by the
publicly elected representatives is the biggest success and it will serve as a milestone for
the overall national development and prosperity in future. Successful accomplishment of
noble task of general elections management as per mandated spirit of the Constitution of
Nepal with overwhelming public participation should be recognized as the biggest
milestone of effective management in 2018 in Nepal. Such an achievement would have not
been possible without effective commitment, cooperation, collaboration and tireless joint
efforts of Election Commission, political parties, security forces, public sector line
organizations, civil society organizations, national and international agencies, media,
independent and associated observers, the general public who exercised their civic rights
through this event, and most importantly, thousands of candidates betting for the battle.
Through this discourse, the nation achieved the common goal of empowering gender and
social inclusion with the mandated spirit of the newly enacted Constitution. May it be
remembered as a case of effective management with task imperfection!
Till the time as Nepal entered into a completely new paradigm of transformation in national
political-legal premises, administrative bureaucracy and governance system, numerous
evidences reveal that the road to success was not smooth. For quite a long period of time,

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Nepal became victim of ineffective management surpassed by culture of corruption, social
injustice and inequality, red-tapeism, systemic delay and service denial to common people
by the state. All these contributed to prolonged engulfing into internal insurrection. Finally,
the traditional institutions fell down as a result of leadership failure to effective
management of crises. Amid the process of peace building, a never expected catastrophe
of Gorkha Earthquake – 2015 broke down. The situation required effective management
of immediate disaster risk response initiatives, mid-term psycho-social and economic
resilience inputs and long-term infrastructure reconstruction.
The developing situation urged the nation to move ahead with a three-fold primary task –
a. mitigating the consequences invited by the national disaster, b. giving the final shape to
the process of crafting and promulgating much needed Constitution, and c. finally
accomplishing general election to form the governments at all three levels of national
governance with the spirit of newly enacted national Constitution. However, it took time,
later two tasks are accomplished with high level of performance and valuable support and
acceptance of wider spectrum of stakeholders at national and international level; and
accomplishment of former objective is also in track with a satisfactory level of
performance. All this must have been possible as a result of unified national and
international effort with perfection of management. In fact, the peace building process of
Nepal and its success must have served the world with establishing numerous lessons and
best practices which could be replicated in other contexts in future. Thus we proclaim,
“Effective management has power to produce results and impacts beyond the capacity of
available resources, processes and technologies.”
On the other hand, there evolved another national goal with global linkage -- to move ahead
with the world of sustainable development for achieving national prosperity at a time when
the country had just recovered from internal insurrection and natural catastrophe. And it is
an apparent fact that achievement of sustainable development and prosperity faces a
continued pattern of low socio-economic development and growth, natural spatial
complexities, political instability, structurally generated and deeply entrenched forms of
exclusion, poverty and inequality. In fact, these are a few systematically rooted challenges
that Nepal has to face in politically and socially fragile, post-conflict situation (National
Planning Commission [NPC], 2015). Despite its tremendous effort in accomplishing
impressive human development gains over past two decades, Nepal still has a low human
development status as it commenced from a very low base. More recently, United Nations
Development Program ([UNDP], 2018) has claimed that a nation should place high priority
to achieve effective human development status in three aspects – transforming a long and
healthy life, providing access to knowledge and confirmation of a decent standard of living.
At the same time, Nepal is set to graduate from the least developed country (LDC) status
by 2022 and emerging as a prosperous middle-income bearing country by inducing
effective management philosophies and practices for the attainment of ‘Welfare State’
recognition in the world, and also by standing strong on its global commitment achieve
sustainable development goals (SDGs) by 2030. All this would require introduction of
breakthrough paradigms of leadership thinking, national vision, political and structural
governance, public administration, empowerment of private and development sectors with
shared responsibility and national accountability at large. Year 2018 must have served as
a base year to systematically address the issue of SDG and Nepal’s commitment on it, and
at the same time transform national happiness with attainment of shared prosperity.

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When a policy guided by love, respect and commitment of all becomes the part of an action,
it results with prosperous outcomes for long-term (depicted from the historic teachings of
Chanakya, B. G.). How can we limit the meaning of prosperity within the boundary of
words, whereas it uncovers a horizon of happiness beyond our imagination? Let the days
of hatred be over; suspicion end up here; and the new vibrant nation should take off its
flight. The overall scenarios appeal us to respect, raise and move ahead in action for what
we are capable of. Even smaller jobs delivered well, will hopefully contribute significantly
in achieving national success leading to attainment of prosperity. The World Bank (2019),
one of the long-standing policy reform and development partners for Nepal, has recognized
that Nepal is undergoing a historic transition toward a federal and secular republic, which
represents a window of opportunity for the country to further reduce poverty, increase the
income of the bottom 40 percent and pursue its ambitious agenda of inclusive growth and
accountable service delivery. Here, the country needs to address swiftly the issue of ethical
compliances in many respects at different levels of governance, general administration and
politics (Aryal, 2019).
Along the course of institutionalization of Federalism through the enactment of the new
Constitution, there has been shifts in the general management scenarios leading national
transformation towards prosperity. The general public also may have multi-fold
expectations from recently elected Local, Provincial and Federal Governments after a
prolonged and chaotic situation following national insurgency, process of peace building,
new Constitution drafting and emergency response to devastating ‘Gorkha Earthquake’ of
April 2015. At this juncture, the public expectations for change and development may be
considered quite reasonable as the insurgency is over; national Constitution is in place;
post-earthquake development and reconstruction initiatives are in successful execution;
most of the socio-economic development indicators have turned favorable; and there are
functional governments at all levels of national governance with more confirmed
symptoms of political stability and good governance. Thus, it is imperative for all to move
ahead having a shared vision aiming at the attainment of total prosperity and shared
happiness. A triangulated vesting of effective knowledge, right skill competence and
positive will power or hunger to make it happen may lead to success. It is all about effective
managing.
At this juncture, let the truth be well told, Nepal has been welcoming varying initiatives
for socio-economic development and prosperity at a time when public private partnership
(PPP) approach (Ministry of Finance [MOF], 2015) has been proven as a powerful
instrument leading sustainable development across the world. Government of Nepal also
has accepted PPP as a strategic tool for sustainable development in all sectors of national
economy and social well-being. Thus, it is quite obvious for the governments at all levels
seeking opportunities to have mutual bonding with the private sector. Accordingly, the
private sector also may be quite ready to materialize such arrangements whereby a number
of socio-economic development and welfare initiatives may be crafted and implemented
based on mutual trust and interests of both public and private sector.
Numerous goals have been already spelled at different levels, so now the nation requires
swift action in respect with consistency of purpose, goal focus, total participation, system
standardization, robust measurements, continuous improvement, confirmed national and
international compliances, and most importantly, leadership commitment for change (Rijal,
2011) and there is no substitute to effective management for this all to happen. Also, there
is immediate need to have an independent assessment of prevailing national

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competitiveness, emerging scenarios and strategic ways forward to national development
and change (NDC). In fact, there is immense need of an integrated approach to assess these
aspects with coverage of multi-sectorial disciplines. For this, the task of writing
Management Development Scenario (MDS – 2018) may serve instrumental for all actors
of general politics, system governance and administration, socio-economic development
and also the learning communities.
1.2. Problem Statements
To accomplish the valuable task of writing a paper entitled management development
scenario 2018 by incorporating grounded multiple realities, a two-fold statement of
problem was devised to guide the overall exploration in a more systematic and scientific
manner. It reads as – how is the overall management development scenario (MDS) evolved
within year 2018, and what strategic measures should be undertaken to transform
management decision-making in different sectors of concern for overall socio-economic
development of the country?
Primary objective of the present work was to establish management development scenarios
evolved until 2018 from the perspectives of effective national structural system
development, governance, policy discourses, national infrastructure development, social
sector development, international relations and advocacy, management of national
resources and economic development. Further, the specific objectives of the present work
were to –
a. revisit the scope of transformation in management development system practices
in addressing the issue of national restructuring under the changed situation,
b. identify the policy gaps facing transformation of general management development
and system practices for overall national development and prosperity,
c. assess effectiveness of management system practices and issues pertaining to
development and enhancement of Nepal’s country competitiveness in appealing the
national and international investor community for their participation in socio-
economic development by promoting trade and commerce,
d. perform relevant policy revisits for strengthening Nepal’s management competence
in addressing its international advocacy and relationship evaluate the effectiveness
of management competence and system practices in setting national priorities,
resources allocated and achievements made,
e. assess the general status and situation of management development leading
effective promotion of Nepalese trade and commerce, and
f. explore management development best practices and exemplary institutional
cultures in place replicable for rest of sectors.
In reflection with pre-determined statements of problem and objectives of the study, the
present work was guided by a set of specific concerns of inquiry, considering year 2018 as
a base period. Such queries have been outlined as follows:
a. How supportive is the process of ongoing national structural system transformation,
policy development, and strategic execution from the perspectives of management
development leading to overall socio-economic development in Nepal as a means
to achieve national prosperity?

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b. How is the level of fitness of the prevailing management development system
practices in establishing national development priorities and plans aiming at
sustainable development to achieve socio-economic growth and national prosperity
in context of Nepal?
c. What are the key success factors and exemplary management practices that can
be replicated in rest of sectors of national development?
At the time of ongoing national transformation, this MDS 2018 paper may have its own
significance in different respects, such as:
a. National political, governance and administrative system leadership would be
benefitted from the suggested strategic directions aimed at effective leadership and
management in the very special course of sustainable national development.
b. Leadership and governing bodies in public and private sector institutions would
find it a pathfinder in setting national, regional and institutional working principles
and priorities for development and prosperity.
c. Private institutions and individuals having intensity to finance in business would be
benefitted from the sectorial assessment of Nepal’s potential for socio-economic
development by promoting effective management of trade and commerce based
initiatives.
d. National and international agencies serving with development initiatives may take
it as an independent institutional work to align best management development
practices with their development and welfare initiatives as per changing national
contexts.
e. For national and international professional societies, associations and knowledge
community, it will serve as a referred source of information needed to design and
implement a series of other studies with concern on effective management
development.
1.3. Methodology and Scope of Works
As a purely exploratory discourse of learning, the present work was mostly confined to
desk reviews of documents related to development advocacy, planning and policy
interventions, research and innovation, scholarly publications, public, private and
development sector agency reports, and personal observation and interaction with key
stakeholders of the diverse fields of specialization.
Similarly, key informant interviews (KII) and panel discussions were used to gather expert
experiential information pertaining to the assessment of national competitiveness and
evolving management development scenarios in the country.
All required logistical support was provided by Management Association of Nepal (MAN)
and overall field observation, facilitation of KII and panel discussions, review works and
documentation of the paper was personally accomplished by the present scholar.
The overall approach and style of documenting the paper has been a blend of narratives,
content analyses, subjective and objective assessment of the latest policy and execution
level developments resulting in management development scenarios. Accordingly, suitable
reflections have been made by analyzing national and international case studies and

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management best practices. The overall exploration and paper documentation has been
accomplished by applying a positivist-constructivist perspective of qualitative discourse.
1.4. Conceptual Framework of the Paper
The overall work of writing this country scenario paper was governed by a few pre-
determined premises as outlined in following figure:
Figure: Conceptual Framework of the Paper
As presented in above figure, the overall paper has been documented in four specific
sections where the first section deals with the introduction part of the paper, followed by
Situation Analyses
1. National Structural System [spirit of
federalism: politics, bureaucracy, governance,
law and order situation, power sharing and
local autonomy]
2. Policy Development [national economic
development policies, planned approach to
national development and national priorities on
socio-economic development; Nepal on SDC]
3. Development of National Infrastructure
[transportation, transmission and information
communication technologies (ICTs)]
4. Social Sector Development [education, health,
social security, employment and livelihood]
5. International Relations and Diplomacy
[political, economic and cultural relations;
adoption of the Principles of Panchsheel]
6. Resources and Markets for Trade and
Commerce [national spatial location, natural
resources, local, regional and global markets;
bank and financial institutions (BFIs), service
industry, manufacturing, international trade,
foreign direct investment (FDI) and access to
international sources of financing]
7. National Economy [GDP; federal fiscal
imbalances]
8. Key Success Factors and Marketing
Propositions [experience of conflict resolution,
indigenous knowledge, resource abundance,
size of productive population, natural beauty
and diversity]
9. Country SWOT Analyses [analyses of national
strengths, weaknesses, opportunities, threats,
strategic constraints and challenges]
Management Development Scenarios
1. National Structural Systems Transformation
[paradigm shifts in political, legal, governance,
administrative systems, law and order situation,
power sharing across the levels of governments,
national policies on socio-economic
development and evolution of welfare state
mechanism]
2. National Infrastructure Development
[construction of national and international
networks of land, air and water based
transportation, micro to mega hydro projects,
solar electricity systems, wind-mills,
establishment of communication broadways
within and beyond the nation; commencement
of genetic science and engineering research and
innovation; infrastructure development for
planned communities, education institutions,
health facilities and tourism destinations]
3. Economic Transformation [skills for
employment and livelihood promotion, social
empowerment, local autonomy, usage of
resources and means, planned priorities on
promoting commercial agriculture, tourism,
power production, forest and mines based
industries; motivation for private sector
participation national productivity and BOP;
moving towards welfare state mechanism]
4. Exemplary Practices and Breakthroughs [brief
cases from public sector, private sector and
development sector organizations]
5. Exemplary Practices and Breakthroughs [brief
cases from public sector, private sector and
development sector organizations]
Defining the Context
1. Defining the Problem [Setting preamble; crafting the objectives, statement of problem, concerns of inquiry, and
significance of the study; defining methodological perspectives; revisiting MDS 2017]
Policy Implications and Conclusions
1. Strategic revisits [at general policies on system governance and administration; HRD; entrepreneurship
promotion; research and innovation; technological administration; recognition of MAN]
2. Conclusions [confirmation of grounded reality; visualization of future discourses with a positive hope for better]

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review and discussions on different perspectives to accomplish the analyses of general
prevailing situation and context. Similarly, the third section presents with deduction of
general management development scenarios in reflection with the key thematic areas of
observation considered in the present work. Finally, the fourth section of the paper attempts
to establish needful policy implications and learning conclusions on the basis of evidences
established on national management development situation through this discourse.
1.5. MDS 2017 a Recap
In 2019, Management Association of Nepal (MAN) is set to celebrate 39 years of its
glorious history. As part of its mandated institutional function and a responsibility in
promoting advocacy for effective management in all sectors of concern, MAN has been
publishing Management Development Scenario (MDS) since year 2008 as one of its annual
publications. MDS has been positioned as a tool to help the nation in course of informed
decision-making in the matters of public concern. To give continuity of this culture of
inquiry, it would be relevant to briefly discuss the main challenges, opportunities and ways
forward envisaged in the previous publication.
Presenting Management Development Scenario (MDS) 2017, two scholars have
recognized the global political dynamics that would impact overall national socio-
economic and political aspects of Nepal. For example, the changes undergoing in the
United States of America (USA) after the presidential election 2016 may have global
impacts (KC, & Pant, 2017) and Nepal may be affected accordingly. For example, the
USA’s recent moves on pulling out of North American Free Trade Agreement (NAFTA),
withdrawal from Transpacific Partnership and Paris Climate Agreement, intention to build
a wall across Mexican borders to America, supporting the political faction of United
Kingdom (UK) on their steps towards ‘Brexit’, recognizing Jerusalem as the capital of
Israel, and American stand on North Korea and Qatar would have global adverse impact.
Continued and emerging scenes of terrorism would further crunch in global socio-
economic and cultural bonding and strengths amid the world’s attempt to recover from a
decade-long economic turmoil resulting in decreasing rate of economic growth in China
and India also alarm Nepal as a dependent economy. Accordingly, introduction of goods
and service tax (GST) in India would have deeper consequences in the Nepalese trade and
commerce and entire economy (KC, & Pant, 2017).
MDS 2017 has also highlighted that successful conduction of local, provincial and federal
level elections as an integral part of political stability under federalism would serve as a
milestone in the process of implementation of new constitution which envisions
empowering local bodies (KC, & Pant, 2017) by strengthening systems, procedures and
management practices at all levels of national governance and general administration. At
the same time, political instability, followed by continuing slow rate of economic growth,
inability to spend allocated capital budget, high rate of inflation, inconsistency in fiscal and
monetary policies, higher degree of economic dependency on remittance, slow pace of
post-earthquake reconstruction and lower level of national achievement in global
competitiveness were a few of the impediments described in the paper. Most of these
symptoms have been continuing this year too.
KC and Pant (2017) have identified that private sector could witness several positive
changes and gain in its confidence as a result of restoration of political stability,
transformation in financial sector via merger and acquisition, promotion of private equity
management systems, increased level of confidence of insurance sector, launch of special

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economic zones, promotion of entrepreneurship and innovation, promotion of media and
improved national efficiency in managing the supply of electricity. However, these
scholars have not assessed the consequences of local government imposing various types
of taxes on business.
On the other hand, increased level of use of information communication technologies
(ICTs) in various public sector organizations including bank and financial institutions,
initial public offering (IPO) and stock exchange system supported garnishing private sector
confidence. Improved performance of Nepal Electricity Authority (NEA), Election
Commission (EC), state priority on public private partnership (PPP) in economic
development, reform of public administration system, introduction of compulsory health
insurance of general public, de-regulation on various policy frameworks with an aim to
strengthen private sector were recognized as equally important achievements of the year
2017. These scholars have also identified a few weaknesses of the public sector including
failure of Nepal Reconstruction Authority (NRA) to achieve its post-earthquake
reconstruction targets, slow pace of development in aviation sector, unstable government
policies and poor performance in education, which would have collectively contributed to
state failure for the attainment of national development and socio-economic prosperity.
On outlining the ways forward, KC and Pant (2017) have emphasized on application of
modern, innovative management systems, policies and practices across the sectors so as to
sustain the momentum of change, with due emphasis on institutional system capacity
development under federal regime of governance and management. In continuation with
these all aspects, the present situation in Nepal demands a swift transformation leading
policy stability and private business friendly culture and practices.
1.6. Definition of Key Terms
Country competitiveness, in this paper, refers to the overall level of strengths of the country
from the perspectives of policy regulations, infrastructure development, resourcefulness,
cost of doing business, natural and national demographic setting, market reach,
international relations and diplomacy. On the other hand, structural competitiveness refers
to the exhibited national political, legal, administrative, governance, economic, socio-
cultural and technological systems assuring public service delivery, prevalence of peace
and security, and overall national development required under federal democratic
republican regime of national administration.
For the purpose of management development scenario (MDS) of Nepal, management
development has been defined as a dynamic system processes and methods applied to
transform institutional systems and management capabilities to ensure the attainment of
institutional efficacy (KC, & Pant, 2017, as cited in Chhetri, 2015; Upadhyay, & Khanal,
2012; Shrestha, & Pant, 2008). We add; such a development should be aimed at – 1.
attainment and maximization of stated goals, 2. utilization and maximization of resources
and means, 3. rationalization of organizational system and processes, and 4. maximization
of stakeholder satisfaction as an going process to proclaim it as ‘effective management’.
Prosperity, in this paper, refers to overall level of socio-economic, behavioral and material
attainment revealing positive growth of the physical and psychological status of
individuals, society and the nation at large.
Sustainable development, for the purpose of this paper, refers to a holistic approach to
development which is crafted on local, regional, national and international needs;

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empowered by wider stakeholder participation, ownership and use of local resources and
technologies; maintaining environmental balance; and paying off with equitable and
accessible rewards and benefits to all, even beyond geographical territories.
2. SITUATION ANALYSES
To establish a detailed situational analyses on management development scenarios in
context of Nepal for the year 2018, the present scholar has delimited the focus of analyses
to national structural system and policy transformation, development of national
infrastructure, social sector development, international relations and diplomacy, resources
and markets for trade and commerce, national economy, key success factors and marketing
propositions, and management of country competitiveness.
2.1. National Structural System
Year 2018 will be remembered in future as a year of historic transformation of the national
structural system by the spirit of federalism leading the attainment of socialism. Guided by
the spirit of local empowerment with participation and ownership in overall governance
and social development under the newly enacted federal structure, the present national
political system, governance and administrative structure have been streamed with genuine
effort to transfer the power from ‘Singhadurbar to local bodies’ as an outcome of
federalism in action. In this discourse, development of local and provincial system
capacities, policy guidelines and quality human resources have emerged as the immediate
needs from the perspectives of management development.
The Federal, Provincial and Local Level Governments are mandated with 25, 21 and 22
executive powers respectively. Similarly, there is a provision of 25 powers sharing between
Federal and Provincial Governments and 15 powers are shared by all tires (Karki, 2018;
Dhakal, 2017; & Khanal, 2017) of governments and empowerment of local governance is
the central governing philosophy of this newly enacted structural system of the country. In
this context, the service delivery mechanism and management system practices at local,
provincial and federal levels of national structure a lot of innovation, new creation and
existing system revisits.
More recently, a study team had recommended to have only 15 Ministries (including 1
Office of the Prime Minister and Council of Ministers) at the Federal Level and 7 Ministries
(including 1 office of the Chief Minister and Council of Ministers) at each Provincial Level
(Editorial, October 9, 2017) governments. In reality, there are as many as 21 Ministries, 1
Office of the Prime Minister and Council of Ministers and 54 Federal Departments at the
center and each provincial government comprises of 7 ministries including 1 Office of the
Chief Minister and Council of Ministers. Similarly, there are altogether 753 Local
Governments having 6,742 Ward Councils in place with mandated 22 executive powers
and 15 sharing powers (Editorial, June 6, 2018; & Dhakal, 2017). It is yet to be confirmed
what could be the right size of such structural system for a country like Nepal as a new
practitioner of Federalism, especially from the perspective of effective management
development. In fact, the new constitution of Nepal is set open for any systematic changes
as per the need of future.
Moreover, along the size of presently adopted national structural mechanism, the
management criteria to determine the provinces, districts, local units and also number of
representatives to be elected and nominated for different levels of government may change
over time, provided there is shared national political willpower. Even there is space for

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adaptation on present philosophy of inclusiveness in terms of effective management during
the process of direct election and proportionate nomination of representatives in the
assemblies and municipal corporations by addressing the prevailing issues on compliance
of legacy in terms of empowerment of women, Dalits, Janajatis and other minority groups
with scientific representation from all geographic clusters of the country, provincial
regions, and local political and administrative territories. To make the national
bureaucracy, defense and police service systems more effective, numerous tires of levels
and positions may require revisits. Still there is very strong need of having a powerful body
in place to address these aspects. Let these all matters remain as the subjects for further
discourses in future.
Bajracharya and Grace (2014) have indicated that Nepal faces a huge challenge in moving
to a federal, secular and democratic state whereby making the government more efficient
and receptive to the public demands by improving the system and employee efficiency and
motivation in entire public sector employment. Similarly, these scholars have also pointed
out lack of conducive professional behavior of the public sector employees as one of the
biggest challenges at structural, managerial and bottom-line functional levels. These
scholars also have hinted for the possibility of either having a uniform public
administration system or uniquely different one across the provincial regions.
The Nepalese bureaucracy has been recognized as a mixture of traditional and modern
features, where traditional forces are comparatively stronger than the modern ones. For
example, Shrestha (2014) has questioned the significance of having political party
affiliated civil service trade unions as it pushes back the national bureaucracy onto a
traditional and more challenging path of a divided mentality, ultimately making the
national bureaucracy a weaker and dependent organism. Additionally, the Nepalese
bureaucracy has been charged as one of the world’s weakest and non-performing systems
because of lengthy decision-making process, power and position oriented system rather
than being results oriented. Faulty promotions, sluggish implementation, inefficient service
delivery, ‘tomorrow’ driven response of the service providers, and most importantly, quite
expensive to receive the services for the service seekers as they have to stay in headquarters
for many days even for minor services. As a result, the government has been losing public
confidence all the times, development projects are failing in achieving their targets and the
rate of capital expenditure has been continuously declining. For these all reasons too,
having in place a robust management system practices becomes an imperative need of the
nation. In fact, year 2018 has lit a hope that full exercise of their mandated roles by the
local bodies will help address these issues, challenges and problems in the days to come.
Accordingly, the developing situation in the country demands for a total overhauling in the
national bureaucracy and administrative systems making it operationally efficient, cost
effective and beneficiary responsive. Here are a few real-life stories on of our national
bureaucracy --
… other equally important reasons resulting inefficiency of bureaucracy include low level
of motivation, unnecessary expansion, lack of effective mechanism of reward and
punishment, over-politicization, too many layers in decision-making process, a weak
mechanism to make individual officials accountable and difficulty in adopting new
technology effectively (Shrestha, 2014). Thus, the government must take careful steps to
make the bureaucracy ‘intact’ and free of influence of politicians, elites and trade unions;
there should be distinction between the politicians and bureaucrats; they should not
interfere each other.

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Nepalese bureaucracy is a composition of civil servants, teachers, and employees of public
corporations, medical institutions and other organizations under government control and
ownership. Civil servants are, however, the strongest component. The employees of public
corporations and teachers are more responsible for delivering better service to the general
public and quality education to the students. But they seem to be weak in rendering their
services, while being highly politically motivated and difficult to control or discipline. For
this, it has become imperative to have an effective system to instill high moral values with
a goal-oriented mind-set in the bureaucracy with non-interference of political leaders and
optimal use of technology to simplify and make credible the process of flow of services.
Other equally important steps required include emphasis on human resource development,
time-bound promotion, career development, scientific transfer, financial incentive and
proper evaluation as defining features of goal-oriented bureaucracy. Networking and
collaboration with the private sector and civil society would further benefit the service
seekers. Capacity building of civil servants through proper training and education would
enhance responsibility exhibiting capacity among the civil servants. Good governance is
the demand of the time and expectation of the general public. Since the entire machinery
of the government is responsible for good governance, it should not be limited to
administrative reforms, rather, people’s participation is a must to design the administrative
services. It is necessary to reform the electoral and political system, the judiciary and police
along with the civil service. For this all, it requires strong political will and commitment as
the first step towards bringing about bureaucratic reforms and placing the right person in
the right place with right duties and responsibilities, right in time.
At this outset, Lama (2018) has raised the immediate need for expediting the process to
take civil bureaucracy to the grassroots to create a shared happiness among the people
living in rural and remote places by means of national administrative service delivery at
their doorsteps. What, if the national bureaucracy is well prepared in this mission? It is one
of the biggest challenges Nepal has to face immediately. Civil service policies, guidelines,
facilities and training and development has to be transformed making it a center of
attraction for the new generations. However, the present level of strategic knowledge and
systems preparedness may not be enough to make the national bureaucracy a public service
friendly. For this, need for a number of management development initiatives arises.
Another biggest challenge with the national bureaucracy is to keep it away from politics.
Politics has been deeply rooted in each element of national bureaucracy; unless it is kept
aloof from the political interference and protection, public administrative service system
may not be promoted effectively with a vision ‘reaching to unreached at the grassroots’
and ‘transfer of power from Singhadurbar to grassroots’. It requires very strong
commitment, willpower and action from all levels of governments, leading political parties,
civil society organizations, development agencies as well as private sector to promote
national bureaucracy as a ‘neutral’ organism of the nation. The existing union system and
general practices of holding political party affiliation/membership by the civil servants as
well as political party and leadership protection to civil servants in different circumstances
needs be harshly addressed in respective civil service acts, rules and regulations on the
universal grounds that politically affiliated civil servants can no longer serve to general
public with equal treatment and truthful spirit of service for humanity.
Authority and control over public security, district administration system and law and order
enforcement agencies has already been emerged yet another important matter to address
with urgency as the nation heads onto implementation of federalism in action.
Accountability, responsiveness, line of order, protocols and reporting of the police force in
the districts and local units, and district administration system needs be urgently redefined
and enacted as per the spirit of federal Constitution envisioning transformation into a
‘welfare state’.

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The concept of local autonomy also may require immediate revisit by creating a distinct
demarcation of limits on taxation, determination of salary and benefits to civil servants and
security forces, determination of facilities for elected persons in different positions of the
local units, and defined protocols for various position bearers in terms of being in touch
with external agencies, governments and various associations. These aspects need be
transformed guided by the best management principles and practices evolved more
recently.
2.2. Policy Development
After the restoration of stable governments at all levels of federal structure of the nation,
working for policy level stability has emerged as a dominant responsibility at all levels of
national governance. National planning and economic development policies need to
function in congruence with the changing national structural scenarios and mission to
achieve prosperity. The year 2018 has left with quite a positive hope in this respect as the
entire national machinery has been already engaged in the process of transformation of
different policies, acts, guidelines, and rules and regulations.
Among a number of policy developments and revisits taking place in the nation at present,
revisit on existing Industrial Act is in its making. In a more recently organized program on
producing stakeholder inputs, a panel of major stakeholders shared their expectations on a
number of immediately required changes in the existing national industrial act (Kantipur
Reporter, 2019). A collection of prologues has been developed as follows –
Wagley, B., Secretary, Government of Nepal: The Act needs be private sector friendly in
terms of motivation for investment and its protection.
Golchha, S., Senior Vice-President, FNCCI: The existing acts, rules and regulations are
not in favor of industries and various provisions made in such policy premises are
counterproductive for the industries in maintaining cost effectiveness. The cost of doing
business in Nepal is big and there is lack of uniform provision on tax exemption in various
policy regulations.
Shrestha, H. B., President, Confederation of Nepalese Industries (CNI): Nepal needs to
increase the state support for the industries. Due to lapses in providing effective state
support, doing business in Nepal has become almost 37 percent dearer compared to India.
So, how can we influence an investor to invest in Nepal? The customs duty on industrial
production inputs should be reduced to 1 percent.
Sharma, S., Former Vice Chairman, NPC: The two years earlier revised Industrial Act
must be brought to implementation with the spirit of single-door policy. The investors may
not take bigger risks in smaller economy. There must be effective coordination between
the Ministry of Finance and Ministry of Industries.
Gyawali, K., Former Secretary, Ministry of Industries: The focus of Ministry of Finance
on generating income tax should be shifted towards industrial development by energizing
the industries.
Shrivastava, B. P., Chairman, Industries and Commerce, and Labor and Consumer
Welfare Committee: The Act must have effective provision for an attractive package for
investment and domestic employment generation. There should be an appealing provision
for exemption on duties and taxes for the industries promoting national employment. The
culture of labor-based Bandh and Hadtaal must end.
Rijal, P., Chairperson, SAARC Chamber Council for Women Entrepreneurs: Government
of Nepal should help women entrepreneurs by having a separate industrial zone for women
and constructing required physical infrastructure thereon.

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Banskota, S., Secretary, Federation of Small and Cottage Industries: Nepal needs to have
separate rules and regulations to govern and promote small and cottage industries. The Act
must spell the ways forward to improve quality of production so as to promote export.
Khatiwada, Y. K., Secretary, Ministry of Industries: Among the various Acts under
development or revision, Industrial Act will come the strongest one (Kantipur Reporter,
January10, 2019, p. 13).
The above all discourses confirm the need of swift policy revisits to make Nepal an industry
friendly country to be able to attract investment for industrial development in the country.
Since there has been political stability in place, year 2018 has witnessed the significance
of policy level stability as an equally important and urgent task to transform efficiency for
management development leading overall socio-economic empowerment of the country.
As Nepal follows a system approach to national planning and development with defined
priorities for industrial development, the national priorities need be revisited from time to
time. It has been quite a long time Nepal has been stressing poverty reduction through
planned approach to national development. For example, the 10th
plan was developed and
enacted positioning itself as a strategic document for poverty alleviation (National Planning
Commission [NPC], 2007) with generous efforts made to make easier for inflow of foreign
investment by means of several administrative and legal reforms. Also, the plan firmly
recognized the prevailing peace and security situation, socio-economic structures and
scarcity of resources as the impeding challenges facing the planned approach to national
development. Further, NPC (2013) recognized at least three additional impediments to
national development – illiteracy, backwardness and youth and intelligentsia brain-drain
making it a daunting task to achieve sustainable development supporting the national vision
to upgrade itself as a developing nation by 2022 from the prevailing status of the least
developed nation.
While assessing the prevailing status and setting the roadmap 2016 – 2030 for Nepal on
Sustainable Development Goals, NPC (2017) has recognized, “Nepal’s relative
underdevelopment is somewhat of a paradox with compelling potentials of a uniquely
attractive country sitting underutilized because of politico-institutional weaknesses” (p. 1).
The Commission has further visualized, “We envision Nepal as an enterprise friendly,
middle-income country by 2030, peopled by a vibrant and youthful middleclass living in a
healthy environment, with absolute poverty in the low single digits” (p. 2). The commission
has also recognized government bureaucracy as one of the impediments contributing to
slow pace of decision-making, which hindered overall development. So, there stands the
importance of inducing effective management development system and practices.
NPC (2017) has recognized the nation’s spatial location as a source of game changer for
generating, sharing and sustaining prosperity by means of effective adaptation of new
patterns of trade and commerce, transformation of overall education system making it more
affordable and quality focused, adoption of natural disaster and climate change resilient
models of human development and complete switchover to clean energy production and
consumption in all spheres of public livelihood and industrial development by 2030.
It would be equally important to raise a developing issue in relation to latest policy
development pertaining to planned approach to national development. The government has
been establishing a National Project Bank within NPC. Through the initiative of NPC, the
Government of Nepal directed all ministries to submit their planned development projects
for future (Tamang, 2019). The main aim of such an initiative is to undertake a coordinated
and scientific approach in project selection, prioritization and allocating resources to make

14
sure that all developmental projects are fully implemented with less deviation in required
resources, timelines and expected outcomes. On effective management of implementation
process of this new initiative, the current practice of selecting large scale projects on ad
hoc basic will end and the nation will be benefitted by incorporating the right projects, right
in time, in right places, in support with right scale of resources and funding with improved
level of inter-departmental coordination and facilitation (Bhatta, S., Member, NPC; based
on sharing in a panel discussion on January, 25, 2019). Hopefully, this initiative on its
successful rollover, would serve as a game changing approach in project planning, design
and implementation in a more coordinated manner. For this, NPC may be required to be
capacitated with resources and knowledge to transform this dream into a reality. Such an
initiative also may require a robust policy development and changes in national projects
planning framework.
The Constitution of Nepal 2015 envisages a three-tiered, devolved and decentralized
architecture of governance, comprising of the Federal, Provincial and Local governments
(NPC, 2017). The aim is clearly to bring the government closer to the people and for
enhancing the speed and quality of development by providing space for peoples’
participation in development and governance. As the Constitution aims to transform its
vision of building an inclusive nation, it ensures that key government services are
accessible to all citizens and are delivered in a transparent and accountable manner at all
tiers of the government. Year 2018 has witnessed reflection of this vision into reality as the
country has already been in the hands of first publicly elected people’s representatives.
In this discourse, the Constitution refers to spheres of governance and service deliveries as
(a) Exclusively Federal Functions, (b) Exclusively Provincial Functions, (c) Exclusively
Local Functions, (d) Concurrent Functions of Federal and Provincial Governments, and (e)
Concurrent Functions of Federal, Provincial and Local Governments. Accordingly, many
of the SDGs, such as basic and secondary education, basic health and sanitation,
agriculture, cooperatives, local infrastructure, water supply and sanitation, environment
and biodiversity, social protection, and disaster management fall under Local Government
responsibility and a few of these functions are concurrent with the Federal and Provincial
Governments as well. As these functions have yet to be unbundled and specified to each
level of the government, confusion and conflict may arise among different tiers of
governments for integrating SDGs into their own plans and programs, resulting to a risk of
under-delivery of SDGs and inefficient delivery of basic services. The government has
taken some initiatives to specify the concurrent functions of each tier of the government
but it has yet to come up with enabling laws for its enforcement (NPC, 2017, p. 22).
At the same time, to enable each tier of government with management efficiency to execute
their mandated powers and functions, it is equally important to segregate the duties and
responsibilities of public and private sector operators and development agencies to
contribute collectively in the process of goals attainment in SDG framework of Nepal. As
the SDGs have to be operationalized at the provincial and local levels for their effective
implementation and properly addressing the issues of targeted group of people, elected
governments at those levels would be critical for public accountability. A milestone in this
process has been the election for Local Governments held in two stages in May and June
2017 electing more than 36 thousand people’s representatives, with at least 40 percent
women (inclusive of one dalit woman in each ward of the local government units), to run
the local governments. These elected representatives would be critically important
foundation for the implementation of SDGs with accountability to the local community.

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More recently, Government of Nepal has promulgated and implemented public private
partnership policy with a vision to ensure public access to infrastructure and services
through their participation in qualitative and sustainable development. Its goal is to enhance
the joint investment by public and private sector on development and operation of public
undertaking through the adoption of PPP model for comprehensive socio-economic
development (MOF, 2015). The two-fold objective of this policy aims to – i. create an
environment that attracts private investment to meet requirement of capital, means and
resources for development, reconstruction and operation of public infrastructure and
services, from private sector, and ii. utilize professionalism, work efficiency,
entrepreneurship and technical skills available with the private sector to render qualitative
public infrastructure services needed for the country.
The policy directions set in this arrangement aim to --
a. promote PPP related current principles and norms of international standards in all
feasible areas, apparatus, organs and entities of the state,
b. create conducive atmosphere for investment of additional capital, means and
resources required for the development, reconstruction, management and operation
of infrastructure services from private (domestic and foreign) sector, and
c. make optimal utilization of professionalism, entrepreneurship, ability, competency
and latest technologies of private (domestic and foreign) sector in the development,
reconstruction, up-gradation, operation and management of infrastructure service
for country’s overall development.
In fact, present national situation demands more tangible contribution by the private sector
through such arrangements of partnership with the government and the enterprises owned
by the government as it is quite easier to gain the general public trust and confidence to
invest in such arrangements. For this too, Nepal needs to develop technical human
resources and management practices to leverage the diversity and intensity of partnerships
to help the nation gain economies of scale. Year 2018 has already served in recognition of
public-private partnership to establish and promote numerous polytechnic institutions,
training and development centers and other institutions under public-private investment
and ownership to safeguard the much needed sustainable development of the nation, and a
good news is that many municipal corporations and provincial governments have already
commenced working in this respect.
2.3. Development of National Infrastructure
The government of Nepal has recognized public private partnership (PPP) as one of the
working propositions to initiate sustainable infrastructure development to shoulder the rest
of development activities across the nation.
One of the most recent developments taken place in the year 2018 in this respect is the joint
initiative taken by the public and private sector to establish a ‘special category’ bank -
Nepal Infrastructure Bank Limited under the PPP model of investment and management.
The institution is jointly promoted by the Government of Nepal, financial institutions and
private sector. The prime objective of the bank is to foster economic development by
investing and providing allied services to the infrastructure development projects. At the
moment, the institution is in the final stage of obtaining permission from Nepal Rastra
Bank (NSB) for the commencement of operation. Upon successful operation of the
institution, it has been expected to serve as backbone for the infrastructure development
through PPP model of investment (Setopati, 2018). Similarly, US$ 630 million joint

16
initiative of Government of Nepal and US Federal Government supported Millennium
Challenge Compact (MCC) is going to commence project implementation activities from
September 1, 2019 with focus on national road and transmission sector upgradation and
development. The contribution of MCC Nepal Compact will increase the availability of
electricity and lower the cost of transportation, and thus serve instrumental to spur
investments, accelerate economic growth and reduce poverty (Office of the Millennium
Challenge Compact Nepal [OMCN], 2019). In addition, a number of national pride projects
also are in the verge of completion, whereas many of them have already commenced their
erection. Completion of these pride projects will, of course, smooth the land and air
transportation, hydropower production and transmission and agricultural irrigation. More
importantly, effective management of these projects by the time of their completion would
produce a massive trained workforce, empowerment of technical knowhow and happening
of more trade and commerce in future as each of these pride projects has been visualized
as a ‘game changer’ in the country. For example, completion of Kathmandu-Terai Fast
Track and development of international airport in eastern Terai would result in
establishment of more than 1000 small, medium and large size industries creating at least
100 times more employment opportunities, it is near to universal reality.
At the same time, efficient national infrastructure development has been regarded as one
of the universal requirements of sustainable development in changing context. Different
studies confirm that the backbone of national infrastructure development comprises of
transmission, transportation, communication, education and development of other public
and business utility facilities. Accordingly, there emerges wider scope for the application
of effective management in the nation. In this respect, the latest initiatives taken up by
Nepal Electricity Authority (NEA) under the leadership of Er. Kulman Ghisingh but the
mission of developing national transmission system capacity has been obstructed from time
to time at local and regional level and it requires strict national rule for paving the path to
establish and/or upgrade hydroelectricity transmission lines across the country (Setopati
Reporter, January 28, 2019).
Effective policy intervention is equally important component to be considered while
developing national infrastructure for development. In this respect, in addition to giving
continuity to a number of ‘national pride projects’, the newly formed government of Nepal
has placed high priority on strengthening East-West Highway, connecting mountains, hills
and Terai by constructing different roads, bridges and cable car systems, and conducting
feasibility study of railways and metro links (Ministry of Finance [MOF], 2018). The
process of transforming Hulaki Maarga into a hill-to-hill-to-Terai connecting highway is
also given continuity in the year 2018. Inception and construction of a number of
transportation projects including the construction of Kathmandu-Terai Fast Track,
Kathmandu-Chitwan tunnel way, Kathmandu-Dhulikhel Metro System, Kathmandu Ring-
Road Projects I and II, various Metropolitancity, Sub-Metropolitancity and Municipality
based roads and upgradation of many domestic airports is underway. Renovation of school,
health and communication sector infrastructure has been widely emphasized.
Accordingly, agricultural corridor development has also been prioritized by the state as
well as development agencies. For example, agricultural value-chain infrastructure
development support provided by High Value Agriculture Project (HVAP, 2009-2017),
Improved Seeds for the Farmers Program (ISFP, 2013-2019), Knowledge-Based Integrated
Sustainable Agriculture in Nepal (KISAN-II, 2017-2022), Rural Enterprises and
Remittance Project (RERP-Samriddhi, 2015-2022), Prime Minister Agriculture

17
Modernization Project (PMAMP, 2016-2025), Adaptation for Smallholders in Hilly Areas
(ASHA, 2015-2021) Project are a few examples of game changer initiatives in agricultural
innovation, modernization and commercialization in the country. From the perspectives of
management development, these projects must have produced a large pool of qualified and
trained technical and administrative workforce in the country by now, as most of the
projects are either near to accomplishment or in the mid of their duration.
The process of upgradation of existing airports in Dhangadhi, Nepalgunj, Bhairahawa and
Pokhara to connect these locations internationally is underway. The only international
airport in operation in Kathmandu needs multi-fold transformation to promote it at par with
international airports abroad. The agenda for development of a new international airport in
the Eastern Terai has been on rollover.
Hydropower production and effective management of transmission has been a national
priority to fuel overall national development with attainment of some success more
recently. However, financing of mega hydropower projects is another daunting task for
Nepal. At the same time, Nepal requires a number of transmission systems in place to
export hydropower to neighboring countries. Accordingly, the nation is in need of
establishing agreements with different neighboring countries for the trading of electricity
as per the need and market demands, especially in the SAARC region. In this respect, more
recent government achievements to establish such agreements with Bangladesh and India
should be considered as the policy level strategic milestones achieved by Nepal. In
addition, Nepal has signed an agreement with India on energy exchange as per the needs
of one another (Pariyar, 2019). Again, lack of own technology and poor financing capacity
of the country would prolong the dream of economic empowerment by addressing the issue
of deficits in balance of payment and federal fiscal imbalance through export of electricity
as a primary source of revenue of all tiers of governments, public and private enterprises
and the general public at large. Managing this vision with materialization of policies and
projects is a big job emerged more recently for the management advocacy providers and
practitioners.
Nepal has been already connected with Chinese gateway of fiber-optic network but the
country needs to develop adequate infrastructure connecting major market zones within the
country. In this respect too, the nation must have realized materialization of local
technologies and innovative breakthroughs to connect communities with resources and life
support system available across the world.
The process of disinvestment of Nepal Telecom, Nepal Airlines, Nepal Oil Corporation,
Nepal Drugs Limited and a number of other state owned corporations has been taken into
consideration by the present federal government. Effective execution of PPP Policy 2015
(MOF, 2015) would leverage this mission as the country already has stable governments
at all levels since 2018.
It has been much delay for Nepal to equip various sectors of national infrastructure
development with relevant technologies and knowledge. As a result, a large share of
investment on infrastructure development has been drained abroad while procuring such
technologies and knowledge. If the nation intends to build railway tracks, metros, irrigation
channels, drinking water supply systems, varying scales of hydropower production projects
and international airports, Nepal needs to have its own, cost-effective and output efficient
supply of required technologies and ‘knowledge management’ in place. Turbine, irrigation
and tunnel projects are yet to be made the part of national engineering education curriculum
in Nepal across all universities providing engineering education, research and innovation.

18
In this respect, the early breakthroughs made at Institute of Engineering, Thapathali and
laboratories established at Kathmandu University (Turbine Testing Lab, Technical
Training Centre, Biomass Stove Testing Lab, Renewable Energy Lab, Machine Vision
Lab, CAD/CAM Lab, Heat Transfer Lab/Thermodynamics Lab, Fluid Mechanics Lab,
Metrology Lab, Engine Combustion and Gasification Lab, Welding, Smithy and Foundry
Shops, Machine Shop and Automobile Lab may serve as technological milestones
(Kathmandu University, Department of Mechanical Engineering [KUDME], 2018). In
fact, the early results of innovation at Turbine Testing Lab in Kathmandu University are
more encouraging with comparatively better performance efficiency of the machine while
compared with the global leader innovations in selected segments. These institutions need
more national and international support to strengthen themselves with world-class
technological workforce leading the innovation of breakthrough technologies for Nepal
and beyond.
More recently, a new dimension of strategic thinking has emerged in Nepal with the idea
of having own ships, rail connectivity with China and India and replacing the consumption
of petroleum fuels by electric charging systems. Required policy interventions leading the
development of national infrastructure for these all is on await as of now. Department of
Railways and Department of Shipping need be empowered with required policies, strategic
guidelines, technologies, financing and effective workforce.
Moreover, since long Nepal also continuously faces a number of apparent and hidden
international obstacles against its mission to develop sustainable national infrastructure to
promote trade, commerce and human development. Nepal has to work very much
cautiously and strategically with the closer neighboring countries by promoting and
strengthening trade and cultural bonding, especially with India, China, Bangladesh and
Pakistan. For this, the nation requires a permanent body of policy and strategic advisory
think-tank to provide effective advisory support to the federal government (KC, B., 2019;
depicted from the personal interview).
On top of these all, Nepal has been a severe victim of massive corruption and system
induced procedural delay in national infrastructure development sector. Development of
national infrastructure has been victimized by multi-fold nexuses of different players
having their vested interests; vested purpose-driven behavior and ‘powerful circle’ shared
culture and grapevines formed representing selected national contractors of physical
infrastructure, license holders of large scale hydropower projects, political leadership, top
administrators in the bureaucracy, even the national judiciary professionals and leadership
in the governments have remained rampantly disputed from time to time. Time and again,
the responsible private and public sector actors of national infrastructure development have
been reportedly observed to be abusing their duties, roles and general norms of project
administration and governance by using political influence over expected accountability
and responsibility. Keeping politics aloof from these nexuses is a daunting task for Nepal,
if it were to achieve success in developing required management competence in national
infrastructure development sector. Year 2018 has served as an open source of disclosing
numerous stories in this respect.
Similarly, the nation is in urgent need of ending the present practice of implementing
numerous projects on ad hoc and scattered basis with lack of consistency in prioritization
over time. A project, once adopted by the government, it should remain in the pool of
national priority till its completion, no matter whatever changes occur in government or
national administration (Bhatta, S., Member, NPC; based on sharing in a panel discussion

19
on January, 25, 2019). For this reason too, there is high significance of having in place
National Projects Bank within National Planning Commission (NPC) and all national
development projects of different ministries should be pooled in the bank and government
approval should be provided only after necessary technical assessment of such projects.
Year 2018 may receive big credit in future on this dimension of thinking on project
development and management.
2.4. Social Sector Development
Among the many elements of social sector development, education serves as a life blood
to empower rest of sectors. Numerous studies initiated by the state as well as private and
development sectors confirm that education is one of most victimized sectors since last 7
decades of systematic development in Nepal. Lack of consistency of purpose, absence of
defined national priority in action, failure to implement various policy documents and plan
of action in real-life administration and management of education sector, absence of
application of measures for universally accepted quality assessment and accreditation
(QAA) and lack of adequate investment on infrastructure and educational resources in the
nation are a few continuing challenges and problems of Nepalese education system at large
(Rijal, 2011). In addition, high political interference and direct engagement of teaching
force into various political parties have also been witnessed as dangerous scenarios in
education, especially in the public education. Private sector has attempted a lot for the
transformation of education sector in the country but there is severe lapses from the side of
national administrative and governance system to provide with effective protection for the
private sector which has been delivering with high performance efficiency. Nepal is in
urgent need of having defined roles, responsibilities and duties of the public and private
sector on education of all types at all levels.
In this respect, Government of Nepal formed a fifty-member High Level Education
Commission and eleven-member High Level Task Force to come up with policies,
programs and organizational structure suited to federal system (Ministry of Education
[MOE], 2018; & myRepublica, September 8, 2018). However the committee could not
establish consensus among all members involved in respect with the addressing the issue
of private participation in education, majority of the ways forward envisaged in the
proposed mechanism seem to serve as game changing phenomenon in national education
system, if effective policy development and its implementation is assured.
Nepal has been able to provide with essential public health services through the nation-
wide network of Primary Healthcenters, Healthposts, District Hospitals, Zonal Hospitals,
Regional Hospitals, National Hospitals and various university Teaching Hospitals
promoted by both public and private sectors. No availability of adequate and quality human
resources, inadequate and inferior technologies, lack of modern medicines and inadequate
financing are a few impeding challenges facing the mission of making health service reach
to the unreached groups. At the same time, development of health sector has always
remained a national priority but with minimum tangible action. On top of all, extreme
political interference and engagement of health service providers in general politics has
been equally hindering this sector. In fact, Nepal may require to work on establishing
effective projection of various types of human resources, technologies, medicines and
infrastructure for effective delivery of health sector services. More recently, the federal
Assembly has passed a long-time disputed but high in public demand of promulgation,
National Medical Education Bill 2018 (Setopati Reporter, January 28, 2019) and now it
requires a national consensus on its effective implementation so as to enhance the national

20
system capacity and public affordability on medical education as well as access to medical
services.
Nepal is on its mission to proclaim as a ‘welfare state’ by 2030, for which providing with
numerous measures for social security and protection becomes a mandatory task for the
national governance and public administration systems. The present government’s policy
on participatory schemes would serve as a milestone but it has been already questioned on
grounds of financing capability and readiness of the private sector as the entire national
economy is still fragile.
It has been visualized that the tourism sector alone may generate millions of new
employment within a decade. More recent development on materializing the idea of having
a national university system to oversee the issue of development of quality human
resources, research and innovation in the entire sector of tourism development can be
reflected on ongoing process of establishing Nepal Tourism University (NTU) under the
initiation of Ministry of Tourism and Civil Aviation (MOTCA, 2018).
Similarly, inception of cooperative and commercial farming systems, agricultural value-
chain systems, launching of mega projects for national infrastructure development, etc.
would generate large scale of employment at various skill levels but all what is required is
keeping adequate political distance from these sectors of national development. The
mission to promote quality of life through general livelihood promotion and socio-
economic exposure should not be hindered by any political interest or intervention. Again
abuse of politics is only the threat in this respect too.
Although Nepal is a small country, it is full of diversity in many respects. Soulful appealing
diversity of the natural settings, people and cultural practices provide unique experiences
in each community settlement of the country, making it a perfect tourism product as a
whole. Nepal is quite reach in languages; secular in terms of religious faiths; and three belts
of geographic construct of the country – Himalayas, Hills and Terai – provide with a unique
feature of unity within diversity. The new constitution of Nepal has placed high priority to
respect diversity by means of social inclusion for empowerment of people at all levels of
national administration, politics and other walks of welfare-state mechanism (Secretariat
of the Constituent Assembly, 2015). The constitution also provides with provision for
rights based approach to follow social cultures and religious practices.
2.5. International Relations and Diplomacy
Since long, Nepal believes in and treats with the rest of the world by the spirit of Principles
of Panchsheel (Cheyenne, 2018), probably first crafted and agreed between India and
China after world war II in their treaty, initiated through the soulful initiatives of Jwaharlal
Neharu, the then Indian Prime Minister (Verma, 1989) creating a breakthrough in
international law in Asia. Nepal firmly believes in universally significant Principles and
Panchsheel and its presence in the UN system, advocacy on promoting peace and global
brotherhood has been widely appreciated in the global forums. Nepal’s long-standing
cultural linkages with China and India as well as open-border to India are instrumental in
promoting cultural and economic exchanges between these two economically powerful
nations in the world.
As of January 26, 2018, Nepal has established and has been continuing with 158 diplomatic
relations, 163 bilateral relations and at least 4 membership in the regional and economic
cooperations (Ministry of Foreign Affairs [MOFA], 2018), 39 Nepalese missions overseas

21
(30 Embassies, 6 Consulates and 3 permanent missions to UN), 26 Residential and 83 Non-
Residential Foreign Missions Accredited to Nepal.
As a result of its liberal foreign policy and varying needs of the country, more than 200
International Non-Government Organizations (INGOs) and many international
institutions, donor agencies and development partners have been working in Nepal to
address multi-fold issues, challenges and problems.
The fundamental objective of Nepal’s foreign policy is to enhance the dignity of the nation
by safeguarding sovereignty, territorial integrity, independence, and promoting economic
wellbeing and prosperity of Nepal. It is also aimed at contributing to global peace, harmony
and security (MOFA, 2018). Nepal’s foreign policy is guided by the following basic
principles:
a. Mutual respect for each other’s territorial integrity and sovereignty,
b. Non-interference in each other’s internal affairs,
c. Respect for mutual equality,
d. Non-aggression and the peaceful settlement of disputes,
e. Cooperation for mutual benefit,
f. Abiding faith in the Charter of the United Nations, and
g. Value of world peace.
In fact, these policies are based on the Principles of Panchsheel, first agreed between India
and China after the world war second (Cheyenne, 2018). Similarly, the Article 5.1 of the
Constitution of Nepal (2015) has made provision on National Interest and Foreign Policy
by safeguarding of the freedom, sovereignty, territorial integrity, nationality, independence
and dignity of Nepal, the rights of the Nepalese people, border security, economic
wellbeing and prosperity as the basic elements of the national interest of Nepal. Similarly,
the directive principles (Article 50.4) state that the state shall direct its international
relations towards enhancing the dignity of the nation in the world community by
maintaining international relations on the basis of sovereign equality, while safeguarding
the freedom, sovereignty, territorial integrity and independence and national interest of
Nepal. Finally Article 51 on state policy aims to conduct an independent foreign policy
based on the Charter of the United Nations, non-alignment, principles of Panchasheel,
international law and the norms of world peace, taking into consideration of the overall
interest of the nation, while remaining active in safeguarding the sovereignty, territorial
integrity, independence and national interest of Nepal, and it also provides legitimacy to
review treaties concluded in the past, and make treaties, agreements based on equality and
mutual interest. Now, the government empowered with stability will have to deliver its
level best in respect with the mandated spirit of the national constitution.
2.6. Resources and Markets for Trade and Commerce
From the perspectives of promoting manufacturing industries, Nepal is full of resources
for industries specializing in agriculture, forest, water, mine and minerals based inputs.
Various destinations, local cultures and traditions could serve as the nature gifted resources
for tourism development and promotion. For the business process outsourcing services,
cheaper availability of young workforce could be regarded as equally potential resources.
Information communication technologies have been taking place in diverse sectors of
business and service operation; communication superhighways are in the process of

22
making; production of hydroelectricity is likely to replace almost rest of fuel consumption
in households, offices, industries and road based transportation.
Abundant availability of natural spring water is likely to be regarded as one of the cheapest
natural resources gifted for Nepal in closing the historical deficit in balance of payment.
India and rest of South Asian region is likely to be the major market for exporting electricity
and processed drinking water. For tourism services, Nepal may have tremendous scope of
marketing in the developed economies by crafting premium service packages. Nepal may
find a superior market position in the global market places for its organic paper and
traditional crafts.
Despite very high expectations of diverse sectors from the present government to deliver
with effective results in response to public mandate for political stability after a long period
of uncertainty and instability, the early results indicate need for additional works taking
benefit of political stability to transform policy stability. Still the private sector seems to
have little confidence in the Nepalese economy. For example, Nepal received total foreign
direct investment (FDI) of worth NRs. 4.95 billion within the first four months of running
fiscal year (FY 2075/076), whereas this figure was NRs. 10.17 billion in the same period
of the last fiscal year (Dhungana, 2018), citing the information released by Nepal Rastra
Bank (NRB). This information gives an impression that only political stability alone may
have little to offer in absence of policy stability. Dhungaga (2018) has further stressed that
one of the major reasons of such a slow-down of rate of FDI inflow could be failure of
leadership in the Ministry of Finance and Ministry of Industries to create conducive
environment for private investors – the government role needs to be shifted to effective
‘facilitation’ rather than ‘intimidating’ the investors and business institutions. Let’s add
one concurrent happening, the perceived risk of high tax imposition by the local
autonomous governments also might have created ‘wait and see’ situation among the
existing and likely private investors.
Nyaupane (2018) has recalled the opinions of different high profile personalities speaking
on current behavior of private investment inflow and found that there many competitive
options available to the foreign investors and they obviously choose the easiest locations
for investment (based on open response of Sharma, H. B., President CIIN), whereas another
contemporary expert was of the opinion that present situation of having controlled political
environment and administrative hurdles are the key obstacles facing FDI flow in Nepal
(based on open response of Gyawali, K., retired Secretary, Government of Nepal [GON]).
Similarly, a renowned business person in Nepal cited problems in legal and policy
frameworks as a majority of laws and policies governing private investment are yet to be
transformed (Based on open response of Shrestha, R. K., President, Nepal Chamber of
Commerce [NCC]).
2.7. National Economy
The economic growth rate in Nepal was projected to be 5.89 percent in the current fiscal
year 2017/2018. The national accounts statistics of the fiscal year launched by Central
Bureau of Statistics (CBS) revealed that the contributions of primary sector to the Gross
Domestic Product (GDP) were on decreasing trend whereas the contributions by service
sector were on the rise, based on trends produced from the real figures of last nine months.
According to the accounts data made public, agriculture and forestry, fishery and mining
under the primary sector is estimated to contribute 28.21 percent to GDP. Though the

23
agriculture sector did not see substantial growth in the current fiscal, the use of forest timber
for reconstruction had caused rise in the production in the sector. Meanwhile, construction,
industry and electricity, gas and water under the secondary sector were estimated to have
contributions of 14.18 percent to GDP. Acceleration in reconstruction and other
construction works, expansion of energy sector and production rise in industrial sector
contributed much to that sector. Likewise, retail and wholesale transaction, hotel and
restaurant, transport, communications, financial mediation, real estate and commercial
services, public administration, education and health have contributed 57.61 percent to
GDP.
Rise in production of domestic goods, increase in in-flow of tourists and smooth power
supply have triggered substantial improvements towards social service. CBS sources
indicate that agriculture sector was primarily estimated to contribute 27.10 and non-
agriculture sector 72.90 percent to the national GDP. The agriculture sector was estimated
to experience an inflation of 2.82 percent in fiscal year 2017/2018.
In a recent research, Wagley (2018) has confirmed that the most overarching and
universally accepted imperative to federalize any unitary nation-state is to reduce, both
vertical and horizontal, fiscal imbalances by ensuring the availability of financial resources
to augment all forms of well-being and prosperity. This scholar has claimed that such
imbalances hinder the attainment of desired economic outcomes. This study shows that
mainly vertical fiscal imbalance alarmingly persists in Nepal even after federalization and
it would impact on the fiscal federalism framework and functionality of the country. The
Panel Corrected Standard Error (PCSE) model examines how these imbalances between
the federation and the sub-national units (vertical) and, also among the States themselves
(horizontal) are likely to act and it contends that highly skewed distribution and
mobilization of financial resources essentially defeats the very rationale of federalizing
Nepal and, much debated identity consideration in federalism has no positive welfare
implication. This is an alarming imperial evidence of likely consequences of promoting
federalism only under the political will whereby ignoring rest of equally important pillars
of federalism development and promotion. The immediate need here is to enact a robust
decentralized economic development framework under federal structural system.
The first federal budget of Nepal accounting NRs. 1.31 trillion for the fiscal year 2018/19
has set an ambitious goal of achieving 8 percent economic growth with targeted annual
revenue growth of 29.8 percent having disproportionate allocation of NRs. 113.43 billion
to seven provinces and NRs. 195.05 billion to 753 local bodies as equalization and
conditional grants. Under the revenue-sharing scheme, the provinces and local bodies have
been provisioned for NRs. 60.42 billion and NRs. 53.82 billion respectively (MOF, 2018).
From the perspectives of management development, two key thresholds of the budget
include attempt for job creation and creating appealing environment for foreign direct
investment (FDI) in Nepal. For the purpose of job creation, the government has allocated
NRs. 3.10 billion to initiate Prime Minister Employment Program with an aim to generate
employment opportunities. Accordingly, a provision for providing a concessional loan of
upto NRs. 700,000 at 5 percent interest rate backed by educational certificates to help
young entrepreneurs to launch their small and innovative ventures with special emphasis
promotion of entrepreneurship and job-skill development training programs (MOF, 2018)
initiated by the young graduates. Similarly, from the perspective of FDI attraction, the
budget has provisioned 5 percent cash incentive on exports to leverage industrial
development of selected products including cement, sugar, iron rod and others. The budget

24
also has specified that the companies of the real-estate sector with capital above NRs. 1
billion should be converted into public limited form and be listed in the stock exchange
market. However, such a vision may serve counterproductive against the present Finance
Minister’s pledge to clear the hurdles in doing business and encourage foreign investment
in Nepal as not all the foreign investors would be willing to convert a private limited
company to a public limited company. For this purpose also, it may require some point of
attraction to strengthen the management efficiency of the firms during their transition to
upgrade into public limited form.
For the purpose of effective management of the issue of tax misappropriation and leakage
by the business institutions and individuals, enforcement of integrated tax-payers
management system and implementing the electronic billing system to register tax payers
into the central billing monitoring system is part of enhancing efficiency in revenue
management system.
2.8. Key Success Factors and Marketing Propositions
For the purpose of promoting trade and commerce activities in the country, various levels
of governments, civil society and development agencies should focus on full utilization of
a number of success factors of Nepal. Such factors include – 1. patriotic culture and
citizens, 2. abundance of natural resources, 3. fame of Gorkhas, 4. spatial location between
two economically powerful nations in the world, 5. growing size of productive national
population, 6. Nepal’s national identity as a peaceful nation, and 7. successful experience
of transition from internal conflict and insurrection. There is equal chance of achieving
success by means of innovative breakthroughs and social entrepreneurship.
Similarly, Nepal may have tremendous scope for marketing and promotion of natural
places, products and services. Similarly, we can also create new space for Nepal in terms
of indigenous knowledge in education, agriculture, tourism and medicine (Aayurvedic
Medicine). Since all these aspects have been very well accepted by the world today, proper
scoping of these products and ideologies coupled with global marketing and promotions
would serve instrumental in exploring new investment as well as market opportunities.
It has become very late to act swiftly in terms of identifying and redefining various
indigenous knowledge elements inherent in Nepal and transforming them as part of
intellectual property rights protection and promotion. Such an act today, would serve as a
noble investment for the generations tomorrow.
We can promote Nepali products and services by branding and promoting them in tune
with the concepts of Origin of Himalayas, From the Footprints of Lord Buddha, Grown in
Virgin Land, etc. to tap the global markets and acquire deeper consumer imagery over
products and services made in Nepal.
Key marketing propositions (KMP) refer to the specific positioning aspects of Nepal and
its marketable entities which could be promoted globally. Purity of resources from
Himalayas, bravery of Gorkhas, internationally acclaimed zone of peace, birthplace of
global ambassadors like Siddharta Gautam, Janaki, Bhrikuti and Araniko, Nepal’s
continued stand on global brotherhood, peace and harmony, and most importantly, highly
patriotic Nepalese people with smile may be noted as a few marketing propositions of
Nepal in the global politics and economy.
Key success factors (KSF) refer to the factors that can be counted for the success of any
initiative. KSFs are the factors serving as professional and institutional credentials or

25
measures of success. Nepal’s friendly relations with other countries (especially in the South
Asian Region), proven contribution in the United Nation’s (UN) peace keeping, national
experience of handling conflict, abundance of natural resources, natural beauty, spatial
location and availability of cheaper labor force could be regarded as the KSFs of Nepal.
2.9. Country Competitiveness
On the basis of overall assessment of Nepal’s country competitiveness, relevant analyses
of national strengths, weaknesses, opportunities and threats has been depicted as follows:
Table: Nepal Country Competitiveness Analyses
Positive or Driving Factors Negative or Restraining Factors
Strengths Weaknesses
Increasing public faith on federal
democratic republican system
resulting with high degree of public
participation in national missions of
general politics, governance and
development.
Spatial location of the country
between two economic powerhouses
of the world – India and China, Nepal
can be promoted as an important point
of transit economy between these two
countries.
Rich in history of independence,
patriotism and international
brotherhood.
A state guided by the Principles of
Panchsheel (United Nations [UN],
1958) and Eastern Mythologies
whereby Nepal stands firm with
shared international ideology to treat
each member state in the world with
mutual respect for each other’s
territorial integrity and sovereignty,
mutual non-aggression, mutual non-
interference in each other’s internal
affairs, equality and cooperation for
mutual benefit and peaceful
coexistence.
Likely stable governments at all levels
as a result of overwhelming public
participation during the general
elections.
Spatial location of the country; Nepal
being a land-locked and sandwitched
between two economic giants of the
world.
Poor initial delivery of first elected
governments at all levels under federal
regime; Nepal being very new to
practice federalism.
Too small economy to bear the multi-
level government costs of federal
governance and bureaucratic structural
system. The provision of 7 provinces,
77 districts and 753 local units with
more than 36,000 members
representing federal, provincial and
local assemblies; all too large to bear.
Continued instability of policy
development and implementation for
socio-economic and human
development.
Opportunities Threats
Private sector friendly government
policy by emphasizing on promoting
public private partnership (PPP)
Risk of entrepreneur/investment-drain
to appealing destinations as a result of
additional and unaffordable fees,
duties and taxes levied by the local

26
based model of socio-economic
development.
Abundance of natural resources for
water, agriculture, forest and mine
based industries.
Appealing touristic destinations and
unified national diversity to promote
as a source country of memorable
experience economy.
Chance of promoting innovative
breakthroughs and entrepreneurship
by blending between Nepalese
indigenous knowledges and modern
technological advents across the
world.
autonomous governments, with
different rates in different provinces
and local units. Higher cost of doing
business in Nepal compared to other
neighboring countries.
Brain-drain of youth and intellectual
community as a result of lack of
opportunities and respectful structural
environment.
High political interferences in almost
all sectors of socio-economic
development and general
administration.
Risk of likely national financial crises
in mitigating the mounting structural
costs of federal administration and
welfare state delivery.
Based on proceedings of a depth interview with Professor Bijay K C, Dean, Kathmandu
University, School of Management, following critical views have been deducted as part of
Nepal’s strengths, opportunities, threats and future course of action:
a. Public participation in national politics is overwhelming in Nepal, thus the
expectation from the elected governments at different levels of federal system may
be much higher.
b. Political stability is a basic requisite for policy stability to take place, which is
crucial for sustainable development of a country, and still there is a lot of work due
for Nepal to respond swiftly with adequate and effective policy reforms in its course
of strengthening federalism. Only the blend of good policy, good people and good
action in place would serve instrumental in gaining confidence of private investors
in our common goal to transforming the nation at large.
c. Lack of clarity and consistency on national policies, failure to address the
immediate public needs at micro level and untimely intervention taking place in
respect with social security related issues would serve counterproductive against
the national mission to economic development.
d. Increasing cost of doing business in Nepal hints uncertainty for the future of
industrial development in the country. The present practices of local units on
taxation may not appeal the private investors.
e. There is a big gap between promised national development goals and local,
provincial and federal responsibility and accountability.
f. The government seems stuck in multiple piles of micro management issues and
establishing a clear strategic roadmap with long-term, visionary thinking supported
by relevant policies, rules and regulations leading sustainable national development
and prosperity.
g. There is immense need for having an institutionalized practice of national
development projects inception, development and implementation with defined
priorities and continuity of state support throughout the implementation process.

27
h. Equally important is that quite a few national pride projects need immediate
reengineering and overhauling of the implementation approach.
3. MANAGEMENT DEVELOPMENT SCENARIOS (MDS – 2018)
3.1. Scenarios on National Structural System Transformation
The various discussions produced in the previous section confirm that the following
scenarios have appeared with respect to national structural and governance system
transformation:
a. By the end of 2018, Nepal has received long-awaited peace and political stability
and there is national constitution in implementation confirming Federal Democratic
Republican system of national restructuring. As a result, local, provincial and
federal governments are in action with popular public mandate received via first
general election at all levels.
b. Nepal has been undergoing a post-conflict, national administrative systems
transformation with multiple layers of national bureaucracy covering at least three
structural levels in congruence with the spirit of the new Constitution of Federal
Democratic Republic of Nepal by enacting various government systems and
institutions under federal structure of administrative power division and
decentralization.
c. Different studies and global best practices reveal that Nepal still has to rethink on
existing policy and practices in addressing the issues general compliance with
respect to the promotion and empowerment of diversity and intensity of gender
empowerment and various forms of social inclusion in the national structural
framework of bureaucracy covering all levels of general administration and
governance system.
d. At least next five years will witness a number of policy interventions and technical
game changer breakthroughs in the country across various levels of general
administration and governance in the national course of institutionalization of
federalism as per the spirit of the new Constitution.
e. Need for addressing the issues of corruption, accountability, transparency, process
delay and other general compliances have been widely raised and the national
political and bureaucratic leadership are expected to have swift response in these
issues to maintain effective compliance of law and order with due respect to general
ethical compliance.
f. The overall developments taken place in Nepal until the end of year 2018,
especially in field of restructuring national bureaucracy and administrative system
as well as its governance has evolved urgent need for establishing a national
institution to provide with policy advocacy and leadership for enacting a system
approach with effective plans and policies on HRD covering the HR needs of local,
provincial and federal governments to assure Nepal’s transition to ‘welfare-state’
and achieving shared happiness and prosperity by means of effective public
administration and public services.
g. Collectively, these scenarios raise the immediate need for having a robust plan of
action with its implementation for having adequate and quality human resources
and management development system practices in place to promote the national

Mds 2018

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