D. D. Poudel, the Founder of the Asta-Ja Framework
Asta-Ja is a theoretically grounded grassroots-based planning and management framework for conservation, development, and utilization of natural and human resources. Asta-Ja means eight of the Nepali letter “Ja” [Jal (water), Jamin (land), Jungle (forest), Jadibuti (medicinal and aromatic plants), Janashakti (manpower), Janawar, (animals), Jarajuri (crop plants), and Jalabayu (climate)]. Asta-Ja promotes accelerated economic growth and socio-economic transformation of the nation.
It is a scientific, holistic, systematic, self-reliant, and multidisciplinary framework for the conservation, development, and utilization of Asta-Ja resources. The eight elements of the Asta-Ja system are very intricately linked and strongly connected. Hence, it is important to have sustainable conservation and development of each of the eight elements of Asta-Ja for better functioning of the entire system.
Asta-Ja Framework emphasizes community capacity-building, self-reliant, and national, regional, and local level planning and development of environmental and natural resources for socio-economic transformation of the nation.
The best governance of Asta-Ja is the ultimate goal of a government.
Frequent and often unnecessary changes in the structure and the number of Ministries has become a major natural resource governance and developmental concern in Nepal.
These changes are motivated largely by the ambitions of our political leaders to become ministers or stick on to the power forever. The historic jumbo fifty-member Deuba Cabinet to 40-member Oli Cabinet within past five years and current Oli Cabinet with 22 Ministries out of the constitutional limitation of 25 Ministers including the PM and State Ministers (Part 7, Article 76(9)) sufficiently tell us that how much splitting, merging, adding and bargaining goes in terms of power-sharing in the country.
Frequent splitting or restructuring of the Ministries adversely affects their functionalities, outcomes and services to the society. Not too long ago, there was a Ministry of Agriculture and Cooperatives, which was converted into Ministry of Agricultural Development, giving away the “Cooperatives” part to another ministry. After sometime, the Ministry of Agricultural Development split into Ministry of Livestock and Poultry Development and the Ministry of Agricultural Development.
Now, there is Ministry of Agriculture and Livestock Development. The “Cooperatives” part is merged with another ministry to become the Ministry of Land Management, Cooperatives and Poverty Alleviation.
Similarly, once there was a Ministry of Science, Technology and Environment which split into two ministries to form the Ministry of Forests and Environment and the Ministry of Education, Science and Technology.
These are just a few examples in relation to braking and dividing of the Ministries whenever power-sharing becomes necessary in governance.
This practice of breaking, merging, and forming new Ministries to meet political desires have created serious confusion and hindrance on natural resource governance, program implementation, and enforcement of laws and regulations.
National Natural Resources Fiscal Commission (NNRFC):
Nepal’s Constitution Section 26 Article 250 institutes National Natural Resources and Fiscal Commission (NNRFC) as one of the several Constitutional organs of Nepal.
The NNRFC was established on December 28, 2017. The first Chairman of the Commission, Mr. Balanada Poudel, was appointed on March 21, 2019. In Nepal’s Constitution, Section 26 Article 251 stipulates functions, duties and powers of the NNRFC.
Some of the functions and duties of NNFRC include: 1) determination of the bases for the distribution of revenues from utilization and development of natural resources between Federal, Province, and Local Government, 2) investment recommendation for natural resources utilization and development and the estimation of returns, 3) study on possible disputes and resolutions which may arise while dealing with the distribution of natural resources between Federal, Province, and Local Governments, 4) studying and making suggestions about Environmental Impact Assessment while utilization and development of natural resources, and 5) making recommendation on the ceiling of internal loans that Federal, Provincial and Local Government can burrow for natural resources development and utilization.
Other constitutional organs established by Nepal’s Constitution 2015 include Commission for the Investigation of Abuse of Authority (CIAA) (Section 21), Auditor General (Section 22), Public Service Commission (Section 23), Election Commission (Section 24), National Human Rights Commission (Section 25), National Women Commission (Section 27, Article 252), National Dalit Commission (Section 27, Article 255), National Inclusion Commission (Section 27, Article 258), Indigenous Nationalities Commission (Section 27, Article 261), Madhesi Commission (Section 27, Article 262), Tharu Commission (Section 27, Article 263), and Muslim Commission (Section 27, Article 264).
According to Section 4, Article 60 of Nepal’s Constitution, the Federal, Provincial, and the Local Governments can collect royalty on natural resources utilization and development within their jurisdiction.
The Government of Nepal should make a provision for equitable distribution of the revenues collected by the Local, Provincial and Federal Governments as recommended by NNRFC.
The Government of Nepal should distribute fiscal equalization grants to the Provincial and Local Governments on the basis of the need for expenditure and revenue generation capacity. Factors like population, geographical area, Human Development Index, and status of the development are considered while distributing the royalty.
Mountain climbing and tourism, forestry, electricity and water resources, mineral and mines, medicinal and aromatic plants, and other natural resources include current revenue generating items in the country.
There are several provisions on the collection of taxes. For example, while transportation taxes are collected by the Provincial government, all income from Custom Offices goes to Federal Government.
In case of rock, gravel and sand, the District Coordination Committee collects the taxes and distributes to the Local and Provincial Governments according to their tax agreements.
Revenue sharing on natural resources utilization and development is a complex and contagious issue and needs a thorough research and understanding for its best outcome.
Natural resources projects such as hydro projects, mineral and mines, freshwater diversions, flood control, highway construction, etc. have significant environmental, socio-economic, human, and ecological impacts. Mitigation of these impacts often become very costly and resources become limited.
Therefore, there should be a provision for establishing something like Natural Resources Superfunds from current allocations for tackling unforeseen future environmental problems, if it has not been initiated yet.
Laws and Regulations:
The National Natural Resources and Fiscal Commission Act 2017, Intergovernmental Fiscal Arrangement Act 2017, and Local Government Operation Act 2017 provide some background for the operation of NNFRC.
As natural resources issues are cross-cutting and a wide range of institutions are directly or indirectly involved in these issues, it is a highly challenging task for NNFRC in establishing effective communication, collaboration, and coordination with the multitudes of agencies and stakeholders that are associated with natural resources utilization and development.
Some of the line ministries and agencies that are closely related with NNRFC can be cited as the Ministry of Finance, National Planning Commission, Ministry of Forests and Environment; Ministry of Energy, Water Resources and Irrigation; Ministry of Culture, Tourism and Civil Aviation; Ministry of Land Management, Cooperatives and Poverty Alleviation; Ministry of Agriculture and Livestock Development; Ministry of Industries, Commerce and Supplies; Ministry of Physical Infrastructure and Transport; Ministry of Federal Affairs and General Administration (MOFAGA), and many other stakeholders who are involved in developing policies, laws, and guidelines for natural resources utilization and development.
A close coordination between NNFRC, the Association of District Coordination Committees (ADCC), Municipal Association of Nepal (MAN), National Association of Rural Municipalities (NARM) and many other stakeholders in making recommendations to the Government of Nepal in relation to natural resources utilization and development is necessary.
The Intergovernmental Fiscal Arrangement Act 2017 provides necessary provisions for revenue sharing, revenue rights, loans, budget arrangements, grants, public expenditures, and fiscal discipline of the government of Nepal at the Federal, Provincial, and Local levels.
This act has a provision for the establishment of an Intergovernmental Fiscal Council under the coordination of the Minister of Finance to maintain coordination among the Federal, Provincial and Local governments on fiscal management.
The members of the Intergovernmental Fiscal Council, in which the Finance Minister is the Coordinator, include Finance Ministers from Provincial Governments, fourteen persons from seven provinces representing Mayors and Deputy Mayors of Village Bodies and Municipalities including one woman from each province, three financial experts including one woman nominated by the Finance Ministry, and the Secretary (Member Secretary) of the Ministry of Finance.
The Intergovernmental Fiscal Arrangement Act 2017 Section 7 sets the distribution of the royalty coming from Mountaineering, Electricity, Forest, Mines and Minerals, and Water and other Natural Resources among the Federal, Provincial, and Local Government as 50%, 25%, and 25%, (Schedule-4) respectively. Surprisingly, the NNFRC does not seem to have any role in the Intergovernmental Fiscal Council.
The Intergovernmental Fiscal Council Act does not mention NNFRC anywhere except using the word “Commission” in the “Note” section of the Schedule-4. This might cause a power tussle between NNFRC and other agencies.
National Planning Commission:
With federalization, it comes in the minds of most experts, academicians, and other concerned individuals that the new structure of National Planning Commission (NPC) should be more of a passive and facilitating rather than an active on national planning and development.
However, the spirit of the 2015 Constitution of Nepal, which envisions a socialistic economy under the federalized governance, nation’s heavy reliance on its vast natural resources for accelerated economic growth, and the presence of multitudes of socio-economic and infrastructural development problems in the country warrant a robust, dynamic, and active NPC.
An active NPC will be necessary for close coordination with the line agencies including the NNRFC and the provincial and local governments for the development of integrated national plans and their successful implementations.
There are many challenges for Nepalese economy under the federalized structure. Some of the major challenges include the best utilization and development of natural resources, the development of an appropriate revenue system, achieving balanced and inclusive development, reducing dependency on foreign aid, climate change adaptation, environmental quality, developing infrastructure, agricultural modernization, employment generation, and graduating from the Least Developed Countries (LDCs) status.
However, planning and development system of Nepal is seriously underperforming. National plans developed by NPC are poorly coordinated between programs and the budgets, lack clarity on their long-term visions, highly politicized, and are failure in their implementations.
In recent decades, Nepal’s developmental strategy has been the promotion of market-oriented economy with additional involvement of cooperatives and private sector.
The government has been emphasizing public-private-partnerships, private sector leaderships, and policy reforms in order to expedite socio-economic development of Nepal. In this context, there is clear need for strong coordination, collaboration, and communication among various line ministries, constitutional organs such as NNRFC, provincial and local governments, NPC, District Coordinating Committees, municipalities, rural municipalities, and other stakeholders in natural resources utilization and development.
Relatively strong presence of Federal Government is necessary for utilization and development of natural resources as well as making big investment on large projects until the private sector sufficiently develops.
In upcoming part 3, the author will discuss the issue of prioritization of developmental activities in natural resources governance.