Building on Bihar

Poor infrastructure, weak human capacity, politicised local bureaucracies, difficult caste relations, debilitating power shortages and deeply entrenched poverty – driving around Bihar recently, it was clear that the state has yet to transform into the orderly, prosperous society that recent press coverage has suggested. That said, there is no doubt that a nascent but carefully structured institutional reform process is allowing for the slow emergence of a 'naya' Bihar. Since 2005, the government of Nitish Kumar has consolidated rule of law, built critical infrastructure, begun to deliver services, increased revenues and expenditures, improved bureaucratic functionality, and generated an important sense of citizenship among many of the state's communities. The economy has grown at over 10 percent per year for the past six years, despite the separation of resource-rich Jharkhand in 2000, periodic floods and droughts, and the recent global financial crisis.

Fifteen years ago, Nepalis would look to Bihar and bemoan their luck for being located next door to one of the most corrupt, crime-prone and poverty stricken states in India, from which migrants would flood northwards in search of livelihoods. Now it is the Biharis that look across the border, wondering when criminal gangs will be brought under control and seeking to draw on Nepali labourers to support the state's construction boom. In many ways, Nepal is far wealthier than Bihar in terms of relative capacities, structures and assets. The difference is that the current administration in Patna is moving to consolidate positive changes and create a virtuous circle of growth and development – albeit starting from a low base – while Nepal continues to struggle with difficult issues of state and market-building. While the ongoing changes in Bihar must be considered in the context of their own unique history, the current situation nonetheless poses two, inter-related questions: What broad trends can be identified from the recent history of Bihar that might be relevant for Nepal? And how can Nepal benefit from the positive changes happening to its south?