Virtues of Impatience

In most cultures, patience is considered a virtue and a grace. Haste makes waste. In development, however, a healthy dose of impatience may be just what some countries need. At least that is what Mr. Shengman Zhang, Managing Director of the World Bank, who recently visited Nepal, seemed to be suggesting for Nepal.

During his recent visit, Mr. Zhang met a number of leaders both inside and outside the government. He visited a community-managed school and a community-managed sub-health post. He also met His Majesty the King.

Mr. Zhang's purpose was to see first hand the quality of the reform program that is underway as well as to understand better the difficult political and security situation in Nepal. He was impressed with the progress the country has made on various reform fronts over the last few years, the seriousness of Nepal's Poverty Reduction Strategy (which is based on the Tenth Plan), and the commitment demonstrated by reform-minded leaders. Nevertheless, he noted that when one steps back and looks at the macro-level development picture, not much has changed since he was here five years ago. For instance, per capita GDP (Gross Domestic Product)—or average output per person—has remained around US$220-240. Although per capita GDP is not always a good measure of the well being of the people, the stagnation of this number almost always means little has changed in the way of people's living standards. Mr. Zhang did not say it so bluntly to the reform leaders, but I could almost hear him thinking: "You seem very serious, but you are still too slow."

After all, Mr. Zhang himself comes from China, which achieved average annual GDP growth of 10.5% over the 14 years starting in 1989 (annual growth exceeded 10% in nine of those years). I understand how he feels very well. I come from Japan, the country that virtually invented the concept of high growth. (Japan's annual GDP growth exceeded 10% on a sustained basis in the 1960s.) I cannot take credit for being part of the generation of the Japanese who engineered this high growth. That credit must go to my parents' generation: I saw how they worked and behaved. For them, not providing enough food to their children was unacceptable; not educating their children well was unthinkable. They would work like mad to make sure these things did not happen. In short, they were impatient. I am sure Mr. Zhang has a similar attitude. I was sure he was thinking: "Your children are going hungry and uneducated. Yes, I can see some of you beginning to walk the reform talk, but how could you not be running like crazy?"

To be sure, there was a bit of collective craziness to these high growth episodes. Working long, hard hours, often sacrificing personal lives, was a little crazy, but all this hard work alone would not have created high growth. It was critical too that there was an environment in which individual hard work led to tangible improvements in people's lives. Where high growth took place, the economic policies were fundamentally sound, there was infrastructure investment, there were new business ventures, and there was reward for hard work. And when the whole nation (more or less) acted on its impatience and went a little crazy, it created a virtuous circle of increased production, increased income, and increased consumption…in short what we call "miracle growth."

I do not for a moment believe that Nepalis cannot work just as hard as the Chinese or the Japanese. Or that they don't care just as much about their children's health and education. Unfortunately, the environment has not been right in Nepal. Individuals working like crazy would not have gone very far; honest individual effort would not have amounted to very much in the face of just one too many obstacles. So, why bother? (Of course, many Nepalis still work very hard, but more often than not this is merely to survive rather than to improve their lives.)

For the first time in many years, however, I think the environment is beginning to change, despite the conflict and political uncertainties. Even if the private sector environment may not be very favorable for investment yet, within the Government there are now many reform initiatives underway. "Collective craziness" in the Government alone would likely create a significant amplification of the reform efforts as well as improvements in public service delivery. Just think, for example: There are many projects, in roads, drinking water, irrigation, telecommunication, etc., for which donors have committed considerable sums of money. If the Government and contractors could go just a little bit "crazy," more of this money could be used faster, and the people could enjoy the benefits sooner. There is nothing stopping this, other than a slight change to the mind-set.

Of course, the rest of the economy may not exactly take off like one of the East Asian tigers. Even when more efficient investment in infrastructure happens, other public services more generally improve, and economic policies become more investor friendly, the continuing conflict alone will dampen private investment. This, however, is no reason to be complacent or pessimistic. In fact, there is even more reason for at least the Government to be running as fast as it can to compensate partially for the weak investment incentives.

When Mr. Zhang met His Majesty, the conversation turned to the importance of reforms and urgency of improving the lives of the Nepalis across the nation. Interestingly, His Majesty seemed to share the sense of impatience with Mr. Zhang. In fact, he asked that the World Bank "insist" on specific and tight deadlines for implementing whatever the World Bank is supporting the Nepali Government do. He believed that, with a bit of nudging, Nepalis can move faster, and that simply they must. He said: "This is a question of changing the mind-set. I know we can do it." There was clearly a meeting of minds. I very much agree that there is a need to accelerate development work. As the Country Director of the World Bank in Nepal, I hope to bring more impatience to Nepal, and perhaps even a bit of constructive collective craziness. I am not sure whether I will succeed, but I sure will give it a try with all the impatience I can muster.