National planning comission formation, System reforms, US- Nepal relationship

2.  Nepal being a developing Country now, was found to be
interested in economic development even before 1950’s
revolution.
 During the revolution , the Rana’s negotiated POINT FOUR
PROGRAM with the United States.
 As a result of which M.P koirala made first request for loan
from India.
(But he was told that, Nepal was required to develop
set of activities i.e. plans and policies to utilize the
loan amount in productive sectors (health,
education, and infrastructure development)
5/7/2013 2(C) REGMI MILAN

3.  Then, Subarna Sumsher (finance Minister at that
time ) made a comphrensive statement of
Government’s assets and plans for development.
 Deficit were supposed to be partly financed from the
reserves of $15.1 million in gold, silver and coins.
 Finance Minister then said that , the Government
will form a planning and development committee
under the prime minister’s Chairmanship to
coordinate development efforts and projects which is
currently known as NATIONAL PLANNING
COMISSION.
5/7/2013 3(C) REGMI MILAN

4.  The minister was optimistic about domestic sources
of funds to finance development in some cases some
schemes were productive whereas m some were not.
 This would be accomplished by raising export duties
and by abolishing birta i.e. tax free lands, by
changing tax collection methods.
 Since, there was appreciation in difficulties involved
in income tax collection(lack of IT, Inefficient HR,
Mal practices: Tax evasion),
 The minister suggested that national –saving
schemes are beneficial to the nation which can be
raised through issuing Government Bonds.
5/7/2013 4(C) REGMI MILAN

5.  Discussions and plans centering on economic
development and aid however , were pushed into the
background by the volatile political situation.
 And this political volatility isn’t settled yet , that’s
the main reason why Nepal has not been able to reap
maximum benefit from the Point four program, the
Swiss technical Aid program, and the Colombo plan
.
 This situation was visualized by D.R. Regmi
(Cabinet minister ), which is found to be applicable
in today's context as well.
5/7/2013 5(C) REGMI MILAN

6.  United states and Nepal doesn’t seem to have
sound relation earlier because:
a) There was some fear among Nepalese leaders at
that time, that US might be attempting to replace
British Influence in Nepal.
b) M.P Koirala always outspokenly , said that “The
American designers of war do not want
democracy in Nepal”
c) He further said “ This plan has failed only because
of protests from the Nepalese citizens”.
5/7/2013(C) REGMI MILAN 6
Nepal –US Relationship

7.  Though ambassadors were exchanged, they were not
resident in Nepal.
a) The Nepalese ambassador in London served
concurrently in Washington,
b) Where as, The United states ambassador to India
served in Kathmandu, Nepal.
 Such arguments makes clear that , there were not
good diplomatic relations between Nepal and
United states.
5/7/2013(C) REGMI MILAN 7

8.  This conflict between two nations ended when , both the
nations signed a “POINT FOUR AGREEMENT” on 23rd Jan
, 1951.
 This program called upon Nepal to coordinate all the
developmental efforts involving American assistance.
It is not with in the scope of this study to analyze in detail the
motives and assumptions of the American Aid, but in general
some points , which had a greater significance are mentioned
below:
a) The first assumption is about “ rising expectations”, which
has served as the foundation to the economic development
of Nepal.
5/7/2013(C) REGMI MILAN 8

9.  This was one of the logical concept , which says that “If
people were eager for change, helping the make changes was
relatively simple”
 It also advocates that , if the people of underdeveloped areas
are unable to fulfill their reasonable aspirations, then that
ultimately increases their ground for misery and sorrow’s.
 The problem in aiding economic development is “know-how”
and “show-how”. In other words, if people saw how it was
done , they would do it themselves.
5/7/2013(C) REGMI MILAN 9

10.  was an extension of the concept “Economic and political stability
are interdependent and together increase the capacity and the will to
resist internal and external conflicts and communist aggressions”
 The maintenance of political stability is dependent upon the
capacity of these countries to improve the productivity and the
status of the agricultural population.
 Therefore , the proposed program of economic assistance is
designed to bring about improvements in the status of the
agricultural population.
 Hence, the problem of political instability can be overcome by
assisting economic development as the agricultural sector was more
vulnerable now and then. Thus American assistance would be
focused on Agricultural sector strengthening and Development.
5/7/2013(C) REGMI MILAN 10

11. 5/7/2013(C) REGMI MILAN 11