“Insufficient government officials is the biggest challenge in Province 1”

Mr. Subodh Pyakurel is the Honorable Vice-Chair of the Province 1 Planning Commission. Mr. Pyakurel, a renowned human rights campaigner, has knowledge of development issues. IBN Dispatch talked in detail with Mr. Pyakurel on development prospects and the implementation challenges of development plans at the provincial level. Mr. Pyakurel said insufficient government officials in Province 1 is the biggest challenge in implementing plans.

What are the economic prospects of Province 1?
The economic potential of province-1 is very high. Province 1 mirrors Nepal, with geographical diversity from Kechanakalan, the lowest point in Nepal, to the highest peak in the world, Mr. Everest. Province 1 is home to the highest concentration of ethnic communities in the country. This province is well ahead of other provinces in terms of agriculture development, water resources, forestry, industry and tourism. Similarly, this province is far advanced in literacy and overall human development. This province is not only the capital of industries but also a producer of surplus agricultural produces. This province is also historically significant being the flashpoint of Nepal’s political and labour movements. So, I would say, this province holds immense potential for economic development and for attracting huge investment in a number of sectors. However, until now we have missed the importunity to harness the immense potential that is present in this province.

What are your priorities in the process of provincial planning?
We have given first priority to the agriculture sector where we can incentivize producer groups and provide them with irrigation and fertilizers to see an immediate return within a season. We are encouraging the production of organic fertilizers, scientific land management and the development of land banks to boost farm production. It is found that 33 per cent of the food grains are lost in the process of storage in the absence of a proper drying and packaging system. To prevent food loss, we can use sunlight for eight months of the year for drying food grains while a dryer can be used during the remaining months.

For industrial development, we are facing a shortage of land available for industrial use. Hence, we are thinking about pooling government land and developing a land bank for establishing industrial estates. We are also planning to supply the necessary white collar and blue collar workers to industries by providing them necessary trainings. Another priority sector is tourism. We are planning to mobilize local people to explore and promote local trekking routes. The provincial government can support the development of necessary infrastructure for tourism while local governments can encourage local people to run home stays for visitors. In addition to these three sectors, we have seen huge potential in connecting India, Bangladesh and China through this province by developing a transport network. We have also seen immense potential for exporting fresh water from this province to India. The Koshi River and Tomor River can be utilized as a source of fresh water not only for Nepali cities but for bordering cities in India, where drinking water is scarce. Similarly, we can tap the ever increasing international market for jute which can be widely produced in this province. We can also take benefits from medicinal herbs that can be produced in this province. Given the opportunity to add value to raw medicinal herbs to produce herbal medicine for export, we are considering promoting investment in medicinal herbs production and processing.
However, implementing these plans is challenging. Some of these tasks are under the jurisdiction of the federal government which has an administrative process that is very lengthy and tedious. We have been advocating to reform such impractical process for doing business.

What are the challenges you are facing in executing these plans?
The biggest challenge is an insufficient number of government officials to execute these plans. Take the case of our province, it has been running without a secretary and under-secretary for a long time. In our Provincial Planning Commission, only three (including myself as vice-chair) members out of five members have been appointed. We lack experts and qualified officials. The existing Public Procurement Act has barred us from hiring individual experts as per our requirement.
The Government of Nepal should formulate laws, regulations and guidelines to facilitate the implementation of plans at a faster pace. We are hopeful the government will move towards this.

We are thinking about pooling government land and developing a land bank for establishing industrial estates. We are also planning to supply the necessary white-collar and blue-collar workers to industries by providing them with necessary training

What are the financial sources for the implementation of these plans?
The provincial government has allocated a budget for the Provincial Planning Commission. However, the budget is not sufficient. We are not worried about the scarcity of fund. We are confident that financial resources will be arranged without any difficulty once the implementation of plans moves ahead. For the development of key infrastructures, we have to rely on assistance from the federal government because provincial governments do not have huge resources.
More than 80 per cent of its revenue goes to the federal government as per the existing revenue mobilization system. We are also hopeful that domestic as well as foreign investors will be attracted to tap the vast investment potential in our province. Investors from various countries have been showing an interest in investing in our province. However, the Provincial Planning Commission does not have the capacity to analyze their investment proposals. So, we have recently established the Provincial Investment Authority (PIA) and we are in the process of selecting a chief executive officer (CEO) for it. Once the PIA comes into operation, the investment process will be smoother.

Have you selected projects that can attract FDI?
We are talking about how to attract FDI in principle because provinces are not authorized to deal with and promote FDI under existing laws. We need to take permission from the federal government for the implementation of FDI related projects. Securing buy-in from the federal government is a really time-consuming process which is not helpful for boosting FDI in the provinces.

How can Province 1 attract investors?
I would give my assurance to any investors that we are investment-friendly and will extend any support they need in the process of doing business in our province.
The first attraction to Province 1 is the number of ethnicities with a culture of entrepreneurship. Second, province 1 is more advanced than other provinces in terms of transportation, communication and electrification backed by a strong population base.

More than 91 per cent of the population in our province has access to electricity and the entire population of the province will get access to electricity within three years. All Rural Municipalities will be connected through a road network within three years. Third, road linkages with India and China will enhance cross border connectivity and widen international markets for local industries. Within two years, our province alone will be in a position to produce around 1,500 MW of electricity. Other large scale projects including Tamor and Arun-3 Hydropower Projects are under implementation. We will be able to export electricity within two years. Tourism is also an attractive sector which can offer attractive returns without making huge investments. We have a plan to upgrade and expand Biratnagar Airport to facilitate the mobility of tourists.

Are there any special packages for investors in Province 1?
As per our existing legal provision, provinces can’t collect much taxes. Hence, we cannot offer any tax rebate to investors. However, we can create a conducive environment for entrepreneurship which is more important than tax incentives for investors. Entrepreneurs can feel a welcoming environment throughout our provinces. As per the principle of federalism, the allocation of jurisdictions has not been completed and thus the related laws are yet to be formulated. Furthermore, federal laws are dominating provincial laws, reserving authority within the federal government. We are hopeful that such inconsistencies will be removed gradually in the coming days.

How is province 1 maintaining Inter-Agency coordination to implement provincial plans?
We have been resolving problems by coordinating with officials from different line agencies through informal channels. We are forced to squander a huge amount of time carrying files from one agency to another in the name of coordination and consensus-building among line agencies. No ministry is in a position to make prompt decisions on particular issues. Until and unless such a trend is not eliminated, we can’t move forward with the speedy delivery of plans.