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!
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