"Good Reads"

• Rajju Malla Dhakal, an insider of the foreign aid apparatus in Nepal, discusses the various issues surrounding the donor-recipient relationship and the effectiveness of foreign aid. My Op-Ed a while back touched on some of the same issues and I am glad to see that people from within the aid-development nexus are blowing the whistle! 

• Nepal's first PM with a PhD signs a proposal to "chart out a stringent anti-corruption bill. Let's keep our fingers crossed.

• Mukesh Khanal, an economist at the Institute for Integrated Development Studies, discusses the free-rider problem (amongst others) related to the proposed federalism in Nepal.

• Kul Chandra Gautam provides friendly advice to the Prime Minister Dr. Baburam Bhattarai and lists "10 essential things" he must do to succeed. Number one on the list is to "reassess the Marxist-Leninist-Maoist ideology in the 21st century."  

From An Economist, Without Graphs and Charts

Ouch! As an economist, what Mr Anil Bhattarai wrote did hurt-but, what he is pointing out is true. Most economists take the traditional methods and processes as the panacea to all our development issues. However, I would not lump all economists as being “dangerously delusional” or using “selective statistics and concocted graphs.” I would argue that there are many economists who are doing good honest work and have strong academic and methodological approach to their analysis.

To be fair, all the possible ventures that economists told the Bookworm participants are not nostrum as Mr. Bhattarai calls them. In fact, most of the things on the “long list” are actually pretty good ideas and make a lot of economic sense—although, I could do without the cement factory. The problem, as I see it, and I think Mr. Bhattarai is trying to get at, has to do with "how to" not "what to." The list is valid. However, how to go about achieving those goals is, and should be, of concern. So, yes, we should look into exploring “minerals with the Chinese help” and growing “fruits and vegetables for the growing middle class in India,” but do so in a way that is sustainable and has minimal negative impact on local ecology and culture. And, yes, we should promote regional tourism and get the Indians and Chinese “to visit our beautiful mountains or sacred temples and monasteries,” but do so while following the guidelines for eco-tourism so as to create a sustainable system. In other words, we need to have a “systems thinking.” We should not engage in economic activity just because it provides us with a short run profits with complete disregard to social and environmental factors. Doing so will most certainly cost us much more in the long run--all the negative issues Mr. Bhattarai points out about India and China will become our own!

So, I do think the list is valid and do not criticize the economists for correctly pointing them out. But, I agree with Mr. Bhattarai that the local leaders, economists, and developers have to think outside the box and come up with new ways of doing business. We need to focus on development methods that promote sustainability, equity, and preservation of local traditions and cultures, while trying to capitalize on “enormous advantage of growing prosperity in our vicinity.”

May be a presentation on various alternative economic/business models could be a program that Bookworm can put together.

India's (Economic) Influence in Nepal--Deux

Previously I posted a graph showing the overall contribution of all major donors to Nepal's most recent budget. If one looks carefully through the tables it becomes clear that India has a big impact on Nepal's finances. This is true for both grants and loans when you look at bilateral financial transactions with nation states--The World Bank is the biggest donor on the non-nation category. 

Nepal Rastra Bank, in its recent Monetary Policy (2010-11), points out that the sale of US $ in order to buy Indian Currency (IC) went up by 40% between 2008/09 and 2009/10. This action was taken "in order to finance the huge trade deficit with India." 





NRB also reports that the imports from India on direct payments of US dollar "witnessed sharp increase to Rs. 45.59 billion from Rs. 28.87 billion in the corresponding period of the previous year." They point to the depreciation of the U.S dollar against the IC as one of the reasons for this reaction.

Having all this data in front of us should make it easy to comprehend the economic and political influence India exerts on Nepal. With all the financial, political, geographic, and historical ties India has been meddling in Nepal's business (for better or for worse) for, well, ever! This fact, perhaps, is something that Nepalis are uncomfortable with and find it offensive when someone lumps Nepal with India.

However misguided, offensive, and sad the recent "Taslima Nasreen incident" was, what I mentioned above may have been the reason for some Nepalis to tweet vile remarks towards her. I, for one, gave her "F" in regional geography (she is originally from Bangladesh- a member SAARC country) and went to the library to find her book.

Good Night!  

Too Good To Be True?

MyRepublica reported that "Nepal has recorded an astonishing 18 percentage point decline in absolute poverty in the six years between 2003/04 and 2009/10." The third Nepal Living Standard Survey 2010 is set to be released by the Central Bureau of Statistics in late August. The report is also said to have found a decreasing gap between the rich and the poor--the Gini-coefficient is said to have dropped "to 0.35 from 0.41 recorded in the second NLSS."

To be sure, this is very good news. However, the reality on the ground just seem very desperate as one travels through the country. We will have to wait until the full report is released to see what methodology and definitions were used and how they went about their analysis.

The article mentions that a person is categorized as being under the poverty line if s/he earns less than Rs 14, 430 (about US $ 200) per year. This is the amount that the person needs to consume "2,200 calorie per day" and pay for "other essential non-food items." Now, if you live in Nepal or have visited in recent months, it is outrageous to think that one can live a "not-poor" lifestyle with a mere Rs 14, 430! Have you looked at the prices of some of the staple foods for the Nepali people?

Again, this is great news if it is the trend. Moving in the positive direction, however small, is an important accomplishment. However, let's wait to see what the full report has to say before jumping up and celebrating--the stories on the ground just don't seem to warrant a celebration! 

Perhaps we need to redefine poverty!  

Shout out to Mr. Shreesh B. of Korbel School of International Studies, University of Denver, in bringing this story to my attention.