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Nepal still in Crisis  By Dr David Seddon   As the politicians continue to wrang

2015-02-17 06:52:08  来源: 【返回列表】

 

Nepal still in Crisis

 

By Dr David Seddon

 

 

As the politicians continue to wrangle over a new Constitution for Nepal, the state of the economy looks dire. The much vaunted potential for hydropower remains largely unrealized, with persistent delays, even in projects identified and planned long ago, restricting the supply of electricity to businesses and households and perpetuating the country’s reliance on imported fuel and power. Capital allocated for investment in infrastructure and development is constantly under-disbursed, for reasons that include unduly complex procedures followed by both government and ‘donor’ bureaucracies, and plain corruption. Natural resources are plundered, and preparations to respond to the environmental impact of climate change are woefully inadequate.

Agriculture is declining as a sector, both relatively and absolutely, and is characterized by low productivity and yields, inefficient plot and farm sizes, restrictive relations of production and a focus on subsistence rather than commercial production. Agricultural exports have been falling in recent years, and agricultural imports rising at an alarming rate (up from NRs 44 billion in 2009-10 to over NRs 127 billion in 2013-14), increasing their share of total imports from 12 per cent to 18 per cent in five years. This has not been compensated for by any growth in the industrial sector, where manufacturing continues to stagnate and construction has been impeded by draconian government restrictions on quarrying. The service sector has mushroomed, but is characterized largely by small enterprises and low paid workers in relatively insecure ‘informal’ employment. This includes hotels, restaurants and tourism, which for the time-being are booming and contribute to foreign exchange, but are also volatile and unreliable.

The overall trade deficit is alarming and growing, with the short-term benefits of reduced oil prices literally eaten up by the growth of agricultural and other imports as demand for externally produced goods and services increases ceaselessly. The total value of imports virtually doubled between 2009-10 and 2013-14, from NRs 376 billion to 723 billion. The trade deficit is still largely covered by foreign exchange earnings, from tourism, ‘aid’ and, above all, remittances sent back by Nepali migrants living and working abroad – the number of whom has increased by 20 per cent in the first half of this fiscal year (2014-15) and now totals several million. But reliance on this major source of revenues, significant though it is (providing some 20 per cent of GDP) as a source of foreign exchange at the national level and income to households at the local level, has major social as well as economic disadvantages. It is also an indication of the failure to create adequate employment and economic growth within Nepal.

It is possible that the situation is less grim than the official figures suggest, for the majority of the population is better off, and living better and longer lives than ever before, but there must be considerable doubt about the capacity of Nepal to meet its Millennium Development Goals this year and to achieve a transition out of ‘least developed country’ (LDC) status by 2020 as hoped. If media and public attention is currently focused, understandably, on the political crisis, there are other matters to be addressed. Unfortunately, as far as that is concerned, though the politicians pay little heed to the fact, Nepal is still ‘in crisis’. 

The writer is the co-author, among other works on Nepal, of the classic Nepal in Crisis (Oxford University Press & Adroit Publications, New Delhi)