Yeti's Foot Prints!

I have been closely following the development of the USD 60 Million climate-loan offered to Nepal funded by “the World Bank, Asian Development Bank, and the International Finance Corporation.” It is quite difficult to keep up as the proposed program is not readily available, and as reported by the BBC, the involved agencies have not been very cooperative. Nabin Singh Khadka of the BBC has done excellent reporting (Climate Injustice?, The Penny Drops, Double Talk) on the issue and his reports have primarily been my news source. His new piece discusses the WWF’s role in this issue and conflicting mission between the parent organization and its Kathmandu branch. There are many interesting facts and statements that are presented in the article. The following one from a WWF source caught my attention.

“The entire concept of climate financing is changing, it is no more just about demanding grants and opposing loans,” said the WWF official. “There are now talks about development through such funds, even the former prime minister supported it. So the question we asked was why can we not make use of this opportunity?” The official continued, “We can certainly demand that the use of the loan be transparent—that there has to be clarity on the plan and who gets the money. And above all, this money is said to be for the productive sector and not for adaptation; we have always said no to adaptation loans in line with our policy.”

First of all—just because there are talks about a certain process does not mean that we need to accept it as-is. These new concepts and buzz words are created everyday in business schools in the West. The political leaders need to understand that there are long-run consequences of their actions, especially when it comes to borrowing large sums of money for projects that do not contribute to the income of the nation. For example, I would borrow money to finance my education if the education increases my future income; a restaurant would take out a loan to buy a new stove as it is an investment that will increase future output and income; a firm would invest in new technology/ production line if it is expected to raise profit. Now, one would (should) hesitate to take out a loan to install a home-theatre with Bose speakers, especially while living in a housing project. But, what if I did not have to pay the loan amount? What if I could enjoy and move on while the burden of paying it back would fall on someone else?

Which brings me to my second point, what weight should the former prime minister supporting a loan have? My answer—minimal! The country is in a state of political chaos, a temporary prime-minister seems to stay in office longer than an actual one, and it seems to require a secret pact to become a prime minister. So, yes, the answer is minimal. Is it that difficult to see the reason as to why the present government officials want to take this loan? Common! (Refer back to the example above if you are still unsure).

Third, it is laudable that the WWF source pledges to “demand that the use of the loan be transparent,” however, these are just platitudes. Try digging through the Nepali bureaucracy to find the flow of money and personnel, and you will soon find out how transparent the process really is.

Fourth, if the money is going to be used for the productive sector, I would like to know what the productive sectors are. If we are talking about development activities that are related to climate change or have been perceived as being affected by it, then we are already receiving enough money. A 2007 OECD report claims that “official aid flows (ODA and Other Official Flows) across all donors into six developing countries indicates that a significant portion of this aid is directed at activities potentially affected by climate risks, including climate change.” The report puts the Nepal figure at USD 200 million. So the money is already there, it just needs to be adjusted to account for climate risk. The OECD report suggests, and I agree, that current development activities “need to address such risks as part of existing development strategies, plans, and projects.” No new money is needed, just new thinking!

Fifth, it is clear that “Climate Finance” is the new buzz word and related programs were even discussed at length in Copenhagen. However, involving the traditional international financing agencies in this type of program not only raises questions about the motives behind these programs but also discredits any potential local “good” that might come out of some activities covered under proposed paradigm (which I have not been able to find yet!). Arunabha Ghosh of Woodrow Wilson School, Princeton University and Ngaire Woods, Professor, University of Oxford discuss this in their analysis of the issue in Chapter 16 of their book on Climate Finance. One of their arguments is that trusted agencies are needed for such program to work especially given the “long history of mistrust between the North and South”—they write “Trusted institutions for decision-making and disbursement of finance are essential, and the Bretton Woods institutions may not be the answer.” Good luck finding one.

Finally, I come back to the ethical issue. I do not understand why Nepal, a poor country with about 0.1 metric ton of CO2 emission per capita, has to borrow money to address this global concern. Data proves that Nepal’s carbon footprint is nonexistent, but the financial footprint of this loan will be real for the next generation of Nepalese, long after the present politicians move on…

USAID In Nepal For 60 Years

US Amb DeLisi's remarks on USAID's 60 years in Nepal. http://nepal.usembassy.gov/sp-02-18-2011.html

Women From "Top Of The World!"

Nine Nepali women have done something that most of us never dream or dare to attempt—they have successfully climbed Mt. Everest! On May 22, 2008, these incredible women made history. Their team became the “most successful and largest women expedition to climb Everest” and one of their members, Nmdoma Sherpa (17), the youngest women to ever climb Everest. This success can be attributed to their determination and perseverance, the stories behind each women and, most importantly, all nine’s desire to break the societal constraint placed on Nepali women, once and for all.

It was a pleasure and an honor to meet two of the members, Ms. Shailee Basnet and Ms. Pujan Acharya, during an event highlighting their journey around the world. The event was organized by Mr. Dawa Sherpa (Owner) at Mt. Everest Café, Fort Collins, Colorado, USA. The venue was packed and everyone—a mix of Americans and Nepalese—was captivated by the mesmerizing pictures and Ms. Basnet’s entertaining and detailed narration.

I went to the event expecting another story about an expedition that climbed Everest. However, I left with a different impression—it was a story of breaking meaningless societal boundaries and ethnic stereotypes, a story about the fight for equality that little girls and women fight every day; it was a story of overcoming fear and conquering one’s dream, a story of human history—it was a beautiful story!

The ladies are now on a mission to climb the highest mountains in every continent. They have already conquered the highest peaks in 3 continents (Asia, Europe, Australia)--they have 4 more to go. In their travels they have met local girls and women and have learned about their culture while sharing their own. To learn more about these incredible women and their endeavours click on the logo below. Also, do not forget to share this story on your Facebook by clicking on the Facebook logo.



http://sevensummitswomen.org/

 

One More on "Climate Loan"

Just an update on what is going on with the loan from BBC's Navin Singh Khadka on today's eKantipur.

Constituent Assembly member Ram Sharan Mahat who had raised the issue in the Parliament said the government had to clarify what is the loan about. “We will be inviting Finance Ministry officials in the finance committee of the parliament to discuss this issue” he told the BBC Nepali service. “In the name of dealing with climate change, we do not want to end up taking loan for non-productive areas.”

Environment ministry officials have repeatedly stressed that the loan money would go to productive sectors such as hydropower, irrigation, development of climate-conducive seeds, among others. “We have repeatedly said that this money is not going for adaptation projects.”
Civil societies and non-government organisations opposing the loan argue that climate change is the result of rapid industrialisation in rich economies so they must pay for it and not lend money to poor and vulnerable countries instead.

Monkeynomics!

Environmental Justice--Not!

The BBC News reported that the World Bank is working on a loan to be awarded to the Nepali government in the amount of U.S. $ 110 million (50 m-Grant, 60m-Loan) last week. The news article mentions that there are many NGOs and environmentalist opposed to the plan even though some in the government are in favor of it. Anil Bhattarai wrote an interesting article on The Kathmandu Post pointing out the ethical issues involved with the proposed World Bank loan of $60 million to be used for climate change realted programs.

I was able to find (se below) the total CO2 emission (in metric tons) for Nepal and OECD countries.
 

CO2 emissions (metric tons per capita)

Data from World Bank

And here is the total loans and credits to Nepal from The World Bank Group over the last 50 years.

Visible and Invisible Hands

Here is a little blurb from an article titled "No Invisible Hands Here" written by Ms. Kalpana Khanal and Mr. Prakash Kumar Shrestha on The Kathmandu Post:

The developmental experiment in Nepal, and many studies done elsewhere, confirm that market-based development strategies alone do not work in countries like Nepal.
In the preliminary stage of development, the government should be instrumental in bringing the economy onto a path of development. The state can fail in many dimensions, but as Polanyi (1944) emphasised, it is the central economic actor.

I agree with the authors on most things they discuss in their article. However, I did have a slightly different view on the role of the government in the Nepali economy, which I expressed in my article "Of Growth & Visible Hands" published on Nepali Blogger. Here is a little blurb:

Yes, the government does have a role, an important one at that, to play for the development of a nation, especially when it comes to maintaining equity and addressing market failures. However, the economic problems of Nepal that the authors cite are mostly due to the ineffective government that Nepal has seen over the years, especially since the 1991 revolution. Giving more power and control to such dysfunctional government is a recipe for disaster!

Here is A Rose For You--Happy Valentine's Day!

While we all think about our loved ones on Valentine's day and run around town buying flowers, we seem to be oblivious to the process of how the flowers get to us. Well, I have put together a little story, thanks to Alex Tabarrok and Tyler Cowen of Marginal Revolution, on how the rose gets to a handsome young man in Chicago. You can put yourself in his place and think about how the flower gets to you in your city.

It is February 14th in Chicago and a handsome young man walks into the store to buy roses. As you may be aware, the weather has been brutal in the last few months in the Midwest and not ideal for growing roses. Do the local nurseries grow all of the roses sold in the windy city? Can they meet the demand in a city of about 3 million people? If not, where do the roses come from that our handsome young man buys for his beloved?

In the United States, for example, about 180 million roses are sold on Valentine’s day! Most of these roses are grown in Ecuador and Kenya. The roses are cut and flown to a small town named Aalsmeer in Holland. These roses are then sold in an auction where the price start off high and steadily fall until someone buys them.



Once bought the flowers are flown to wholesalers in the U.S. who then sell them to thousands of florists. This is where you come in. With a smile you walk in tall and buy a dozen roses which you later proffer to your valentine. Happy Valentine’s day!

Nepal Livelihoods & Forestry Program

Entrepreneurs For Nepal (E4N)

E4N, an organization that acts as a "platform for more than 3000 entrepreneurs, who have ideas and want to implement it in Nepal," has published a handbook of 'stories, advice and networks." This handbook prepared by Mr.Ujwal Thapa and Mr. Sagar Onta is a good read, not only for those of us with entrepreneurial spirit, but also for those with interest in Nepali businesses, leaders and success stories. This publication presents experiences of many prominent Nepali entrepreneurs, while providing tips and guidelines to those on the verge of embarking on a new venture. Please click here to get the entire book for FREE.

Ghintang Economics' Source: http://bit.ly/hyfcCP

Can’t Have It Both Ways!

A few people have written about the ineffectiveness of foreign aid in Nepal. As concerned citizens it is important for us to criticize the INGOs and the NGOs, institutions who are in control of the projects from the beginning, especially when these projects fail to meet the criteria set up to measure progress. This kind of discourse helps propel the debate on aid effectiveness forward and brings the issues to the forefront, which is important and could lead to solutions. A couple of articles (here and here) written on daily newspapers seem to have hit some nerves. People who are part of the aid machine in developing countries, especially the locals, seems to be resentful of any criticism. This is perfectly rational as from where they stand everything looks good--good inflow of funds, good wages, good office, sense of being an elite, self gratifying deeds--even though the macro picture looks grim. 
Here is an article written by Mr. Simon Galimberti, the deputy country director of CCS Italy (Nepal) and associated with the Association of International NGOs in Nepal (AIN), complaining about the criticism and frustration expressed in national media regarding the failures of these organizations on many fronts, including the alleviation of poverty.
Here is a graph that I created on Gapminder that shows the total aid received by Nepal over the years. We all know what has happened to income disparity, access to health care, clean water, electricity, etc., not just in Kathmandu, but also in other parts of the country. Now, it is not the NGOs or the INGOs actions that have brought a lot of pain to the Nepali people, however, it is their model and dispensing mechanism that has failed to do any good. So it is not only fair but also our responsibility to ask questions about the effectiveness of foreign aid in Nepal—it is the right thing to do!

In Florida for a conference--will resume posts soon.

FYI--Earthquake in Nepal

Getting Ready for the Next Big Quake in Nepal