Is Foreign Aid Necessary

Sunil Poudyal

Nepal?s dependence on foreign aid has always remained more than 50 per cent of the annual budget with some exception. The donors also never bothered to study whether the aid reached among the target group or not. It has also been found that the extreme dependency of the recipient country of the aid leads to the it plunging into the deepest pit of corruption. Nepal is no exception in this regard. Besides, the provisions set by the donors are so complex, especially for poor and strategically weak countries, that the recipient can hardly secure her people?s interest and/or sovereignty.

Graft

Right from the beginning of the process of aid, the network of commission starts being framed. There is also the donor?s domination and direct/indirect intrusion within the realm of freedom of the recipient. The recipient country has to satisfy the intermediaries, agents as well as some officials of the donor country or organization. The donor imposes on the method of the utilization of aid amount, ways to implementation the project, recruitment of advisors and most of the top level officials, procurement of machineries, equipment and logistics etc. This is rather unfortunate but a reality.If the administrators are visionary, sincere, dedicated, honest, confident, determined and if they have integrity, Nepal does not need any donor to help for its development. But we should hurry to stop the dependency on aid because its addiction to our economy is so severe that haste in this direction can ruin the economy. It should be decreased gradually to zero level within a few years. No country can remain aloof in the modern world. All the countries in the globe are interdependent. But interdependence and domination are two different things. Nepal holds nature?s blessings no less than other countries in the globe, though the type might be different. Until about two decades back we used to export bricks, cement, bamboo shoots, sugar, rice, floor etc to Tibetan Autonomous Region of China. There was also a time when we had exported timber to the then USSR. We have been exporting carpets, garments, herbs etc to foreign countries; the volume of exports fluctuate affecting the foreign earnings because of some problems including the lack of consistency in national rules and regulation.. If we pay due attention to make our policy, quality etc compatible to exploration and expansion in our foreign trade, we do not have to worry much to make the balance of payment favorable. Nepal is said to be a country with the second highest hydropower potential in the world. There is no doubt that if we go for mega hydro projects, they depend on foreign aid. By developing water resources for generating power, it can also be exported to India. It needs huge investment either through foreign or loans. However, the buyers are limited and Nepal has to abide by the conditions imposed by them. Therefore mega projects do not seem to be feasible for the country. Attracting foreign investments for joint ventures or national industrialists for medium scale hydro projects might be suitable for the country as power can be sold at the local markets. However, we should not forget to target our neighboring countries also to cash in on the surplus power, if any, provided the agreement is beneficial to us. It would be contextual to note that mega project of any kind is unsuitable to us considering the huge investment on imported resources and raw materials and equipment and because of transit problems.

It is advisable to also encourage small investment for micro scale hydro projects and other sectors. Again we should always remember that our policy and facilities guaranteed to the entrepreneurs should be reasonable, consistent and compatible to the interest of the country. If we develop hydro power project extensively, we can develop cable cars and rope ways facilities, extending them, especially, in the remote areas. It will also contribute much to solve the grave problem of irrigation and drinking water facilities.. It is worth remembering that the construction of is very expensive together with a big sum required for regular maintenance in comparison to cable cars and rope way system. The degradation of the environment is another curse that the land routes invite. Similarly, soil erosion, land slides and pollution that land routes initiate naturally causes extra burden on the national purse and hampers the life of human beings and the flora and fauna. Besides, regular import of means of transport and accessories is another big burden that the country has to face. The ropeway system help create market for the products of remote areas to cities and vice versa and the cable cars; to boost the tourism industry. The ridge, vivid impression of nature, the diaphanous landscape, the rock band, varieties of climate, unfathomable precipices, the flora and fauna, varieties of birds and animals (some rare in the world), varieties and colorful insects and butterflies, rivers for rafting, places for gliding and bungee jumping etc are the things which can tempt not only foreign tourists but also the domestic ones. The development of tourism will initiate the expansion of inns, hotels, restaurants, rest houses etc with the utilization of local materials.

Prosperity

If we cast our eyes from the east to the west of our country, some areas in the hills are very much favorable for grazing, cattle and sheep farming, dairy industry, fodder etc. Similarly, some areas are very promising for various fruits and vegetable, and some areas for forest products like Bijayasal ( Tacocarpus Marsupium). If these could be harnessed properly some of them can be exported to earn foreign currency. All these activities mentioned also help generate opportunities of local employment which naturally support to increase per capita income of the country. These all show that Nepal can not only survive without aid but also can prosper.

Source: The Rising Nepal, August 6, 2007

Right Decision

Jana Andolan II was a grand success thanks to the great participation of people from all walks of life despite the terror and suppression resorted to by the then royal regime. Many people, in the course of the 19-day revolution, sacrificed their lives all for bringing democracy once again in the country and to be free from the shackles of tyranny that was evident in the country then. The country and the people owe it to the martyrs and the other people who took part in the revolution without fear to do away with the authoritarian regime. Soon after the success of the April revolution, Parliament was reinstated. One of the major decisions of the government then was the formation of the high-level Rayamajhi Commission under the co-ordination of former Supreme Court Justice Krishna Jung Rayamajhi to probe into the misuse of state coffers and power of the erstwhile royal government during the April movement. It was a right move to find the culprits that tried to suppress the people's movement by committing excessive force and misused the people's money to gun down people. However, those who misused power and state money to suppress the people were swept away by the people's power. That was the beginning of a new era for the people despite the fact there is a lot to travel in realising the goal of the constituent assembly and the drafting of an all-inclusive democratic constitution to herald a new Nepal.

The Rayamajhi Commission had submitted its report to the government quite a few months back, but it had neither been presented to the legislature parliament nor had it been made public despite several commitments in the past to do so. Finally, the cabinet has decided to present the said report to the legislature parliament today. This is quite meaningful in the sense that the names of the guilty will be made public, and the necessary legal action against them can proceed according to the law of the land. It has been reported that there are over 200 people who have been charged in the report as having acted against the people during Jana Andolan II. The decision of the cabinet was made public by the Minister for Information and Communications. Now, the people can rest assured that the necessary legal action will be taken against those who had committed excess and misused the state coffers to suppress the people's revolution. The coming days will be very important in how the recommendations of the report will be implemented in the greater interest of the people and the country.

Source: The Rising Nepal, August 3, 2007

Government's Noteworthy Initiatives

Prem N. Kakkar

PROBLEMS crop up time and again in national politics. Since the success of Jana Andolan II and the formation of the interim government and the legislature parliament with the participation of the Seven Party Alliance and the Maoists, the country can be definitely said to be moving towards the goal of holding the constituent assembly (CA) polls on November 22. There is, no doubt, that the announcement of the CA poll date is very significant as it has erased all doubts and confusions that persisted in the minds of the people stirred by the political leaders themselves in their various addresses. That the government was dilly dallying over the date for the polls has been proved wrong.Law and orderNow that all eyes are set on the CA polls, it is the right time for all the political parties to concentrate on the drive to go to the villages and districts so that the people will have all the inputs to be aware about the poll and prepare for it. So far, it seems that the political parties and their activists have not adequately galvanised themselves for the purpose. This is rather disconcerting as the polls going to be held in the country for the first time has great ramifications for the whole political scenario.

That the polls are important has been highlighted by the political leaders and the government, but concrete steps on many fronts have yet to be undertaken to the fullest. The first and foremost is improving the law and order situation of the country. Without peace prevailing, it is clear that it will be difficult to conduct the CA elections. The government is well aware of the situation, so it is conducting talks with the various agitating groups. The talks are moving ahead, but the conclusion is yet to come about. It can be hoped that soon an amicable solution with the different groups will materialise in the interest of all, including the voters. The violence that is taking place in many parts of the country, especially the eastern Terai region, is of great concern. There are people who are blaming the government for this, but it alone cannot do everything and needs the support of all, particularly the stakeholders. The differences in opinion among the political parties represented in the government are natural, but the need is to resolve them through mutual understanding and dialogue. That has been the hallmark of the time since Jana Andolan II achieved success. This is the reason why the top leaders of the eight parties always speak of maintaining unity despite the fact that the CA elections are going to be competitive.The reason for maintaining unity is the outcome of the fear that the regressive elements might become active to undermine the gains made so far. A look at the way the cabinet meetings are being held shows this. There are differences, and then the meetings are stalled for a number of days. Following high level parleys, the cabinet again sits down to take important decisions. The same happened last week. Finally, a cabinet meeting was held on Wednesday.

The meeting took some very important decisions, including the presentation of the Rayamajhi Commission report to the legislature parliament so as to make it public. The cabinet also approved the tune for the new national anthem. In fact, the country had been without a national anthem for over a year.In making the Rayamajhi Commission report public, the people will formally come to learn of the people indicted by the Commission. It will also make it easier for the legal process to start to prosecute those who have been named in the report for their suppressive role during the April revolution. Over 200 people have been named in the report, against whom legal action has to be taken. In this context, it is not understandable why the government took so long to take the decision to present the report to the legislature parliament. Now that the decision has been taken, the people will be waiting to see what steps will be taken to implement the recommendations of the Rayamajhi Commission. That it has come a few months before the CA polls must also be taken into consideration. DemandsThough late, steps are being taken to take the people into confidence. This will boost the morale of the people in the run up to the CA polls. Meanwhile, steps must be taken to deliberate on the demands of the various agitating groups, improving the law and order situation and the campaign to go to the villages and districts to make the people aware of the importance and necessity of the constituent assembly election. If these are done, the dream of a new Nepal will definitely materialise.

Source: The Rising Nepal, August 3, 2007

Madesh In Turmoil : Still No Political Understanding

Vijaya Chalise

The Eastern Terai covering Mithila, the centre of ancient civilisation, has been facing constant turbulence since January this year. A number of armed groups claiming to fight for the rights of the Madheshi people have emerged, disturbing social cohesion. Despite a series of protests across the country against such violence, these armed rebel groups in the Terai continue to kill and abduct people, including government employees. With the emergence of various armed groups there, the security situation has deteriorated. The Goit and Jwala Singh factions of the Terai Janatantrik Terai Mukti Morcha (JTMM) have not only issued threats to the civil servants from the hills but even been involved in killing them. The local administration remains a mute spectator to all this.

Solution

The government has been trying to bring all the groups concerned to the negotiating table in a bid to find a peaceful solution to the problem. The eight-party coalition government even made changes in the interim statute-2063 constitution and agreed to increase the number of constituencies in the Terai region. Unfortunately, none of the groups, many of them splinter factions, has responded positively to the government's goodwill. Thus, questions are being raised as to whether the constituent assembly (CA) elections will be held as scheduled in November. Now that the CA elections are only 110 days away, it has become urgent to resolve the Terai problem to create a conducive environment for the CA polls. Political parties and parliamentarians have yet to forge a political understanding from the centre to the local level so that their presence can be felt in the troubled areas. Even the consensus reached on forming a unanimous voice regarding violence in the Terai has not yet translated into practice. The high-level Inter-party Co-ordination Committee (HLPCC) had recently reached a consensus to address the issue in one voice.

The government, too, has not been effective in initiating effective steps to bring the situation to normalcy by interacting with the locals in the region. Paradoxically, members of the council of ministers themselves have different views on how the problem should be tackled. While Home Minister Krishna Prasad Sitaula gave a 15-day ultimatum to the various agitating groups in the Terai to come to the negotiating table, Minister for Peace and Reconstruction Ram Chandra Poudel dubbed the Home Minister's ultimatum as something personal. Political observers say the Terai issue has two dimensions: first, it is political in nature; second, it is non-political, in that some of the activities are instigated by internal regressive forces and Hindu fundamentalists from across the border. If this observation is true, obviously, the first one should be settled through political negotiation. However, the second one will need to be dealt with from a different approach. In such a situation, where certain elements are also trying to fan communal violence by creating division between the Terai and the hills, the government and the eight-party political leadership should address the Madesh issue without bias or using it to secure votes during the election. Irrespective of the geographical region they represent, nobody would dispute the fact that all the people living inside Nepal are Nepalese. Therefore, there should be no hesitation in fulfilling the demand of the Madhesi people, who are still searching for their identity. Indeed, if their demands for an autonomous federal structure and an election based on proportional representation are addressed, one can hope to win the confidence of the Madhesi people. But noone would tolerate or compromise any act aimed at endangering national unity, sovereignty and territorial integrity.

At a time when the government is holding negotiations with the Terai Jana Adhikar Forum, Madhesi intellectuals during an interaction with the Gorkhapatra said that the Madhesi people's rights be guaranteed by addressing their genuine demand before the constituent assembly (CA) polls in November. Their demands, among others, include an election based on proportional representation, reorganisation of their identity as Madhesi Nepali and an autonomous federal structure for Nepal. Professor Dr. Mohammad Habibullah said that the monarchy was an obstacle to inclusive democracy, so a new system should address the social, political and economic problem of all ethnic, linguistic and regional communities. Likewise, Jeetendra Dev, General Secretary of Loktantrik Madhesi Sangathan, said that the root cause of the Madhesi problem lay in the eight-party alliance's failure to stick to their earlier commitment to establish the Madhesis' right to autonomy and proportionate representation in the national parliament. He suggests calling a round table conference of all the Madhesi and indigenous groups and asking them for a solution. Secondly, he says, the eight political parties should issue a joint statement with a political commitment to establish an autonomous federal system and agree to a proportionate election to ensure the Madhesi people's greater representation in the constituent assembly. If the agitating groups are fighting for the rights of the Madhesi people, then they should be ready to settle the dispute through dialogue and create an election-friendly environment for the November poll that alone would consolidate their rights. Obviously, the Madhesi people should be treated at par with the people of the hills. For this, the political leadership should be visionary and handle the situation with care to protect the Nepali culture of tolerance.

Reactionary forces

Since the election to the constituent assembly is the only option for fully empowering the Nepalis, including the Madhesi and indigenous people, all should actively participate in the election for securing their rights. The possibility of the reactionary forces impending the constituent assembly elections will continue to grow if national harmony is not restored. No one should ignore the fact that royalist feudalistic forces are actively working to derail the constituent assembly polls, and all should unite to defeat such regressive forces. The country must move towards declaring itself a republican state prior to the constituent assembly poll. Besides, removing the racial hatred seen in the Terai at present and cultivating goodwill and good understanding in its place is essential.

Source: The Rising Nepal, August 3, 2007

New Nepal - A Country Out of Whack

Sangram Singh Basnyat

The secularization of Nepal has made the ambiance quite treacherous for the holy cows of Nepal. But the predicament of the Nepali populace is even worse. With no water trickling from the spigots, irregular supply of electricity, scarcity of fuel, worsening food security, rising ethnic tensions, unabated criminalities, and nonchalant law enforcement, Nepal's plight is easily discernable. Also, no cover is adequate for security. While insecurity and inadequacies plague Nepal, the vaunted rhetoric of "New Nepal" is unfolding into a bitter irony.
The annual failed states index published by the Foreign Policy magazine had placed Nepal in the 21st seat. In the list of failed states, only 20 states were ranked worse than Nepal. In 2006, Nepal was ranked 20. When the indicators assessed a slight improvement in the overall conditions of the country, it nudged Nepal from the Red (1-20) to Orange (21- 40) category. It is to be noted however, that the 2007 rankings were the result of the data collected in 2006.
But today, if those same indicators were re-employed to calibrate Nepal's situation, it would certainly bump up Nepal 's ranking. Given the insecurity and inadequacies, it would easily position Nepal in the "Red" (Top 20) category. In just a matter of a year, Nepal's security situation has acutely deteriorated. Even at the crest of the maoist instigated violence, the overall security situation was not as bad as it is today. Today the entire country is gripped with fear and uncertainty.

From the King to the common man, no one feels secure. While the truculent government and parliament set on clipping all his royal prerogatives, the King feels the heat of abolition and even incarceration. Perhaps even execution if the maoists had their way. And recently, for the first time in history, the King has officially requested for extra security backup during his birthday bash. The King's request for security says it all.
It is not just the King however, but even the seemingly omnipotent prachanda feels threatened. Fearing an assassination attempt, he has demanded extra security. Currently there is fifty man contingent (a mix of maoists and armed police) to provide security for the maoist supremo (no other leader in Nepal has this elaborate security arrangement).
Other maoist ministers seem quite threatened too. Very recently, their paranoia of insecurity was exposed when there was a change in their personal army guards. Crying foul play, they claimed that the new Army guards were sent from the Bhairavnath battalion and Ranger battalion to assassinate them.
Not just the maoists, but the insecurity contagion has infected others top leaders and government officials as well. Surya Bahadur Thapa and Sher Bahadur Deuba recently demanded the government to provide them with extra security. Civil servants have recently halted work demanding extra security measures too. Even the VDC secretaries are staging protests demanding a secure work environment. Both the civil servant unions and union of VDC secretaries are currently launching a nationwide agitation demanding security.

Ironically, even the security forces have contracted the insecurity contagion. With the ongoing talks of integration of the maoists into the Army, the Army is jittery. Even during their clandestine stage, the maoists had threatened families of security forces. Now that the maoists are in the ruling coalition, many in the security forces fear reprisal for their involvement in counter-insurgency.
The Police force is the perhaps the most vulnerable security wing and is equally insecure. There are innumerable cases where the police force has shown absolutely no commitment in enforcing the law due to their personal insecurities. Rather, they continue to remain insouciant. The unofficial motto for the force has become "inaction is much safer than action."
If the security forces and the other big power players feel insecure, one can easily deduce the plight of the general populace. With no robust law enforcement against rising criminalities and ethnic tensions, the population feels defenseless. As the authorities and security forces lie emasculated and insouciant, a buffer between threats and society has collapsed leaving the people critically vulnerable.
On top of insecurity there are other matters of dire concern. The scarcity of water across the country is alarming. Despite being a hydro opulent nation, the spigots across the nation have barely trickled a drop of drinking water. Certain places in Katmandu have not had water for weeks now. And thanks to the bolshiness of the maosist minister yami, the Melamchi water-project is close to defunct.

Electricity too has become a rare commodity. While half of the population still lives without electricity, the other half is getting used to the darkness too. As vast swathes of land lie inundated due to the monsoon rains, the Nepal electricity authority (NEA) still claims that there is inadequate supply of water for electricity generation. So with hours of load-shedding, electricity is intermittent and utterly unreliable.
Another inadequacy is fuel shortage. Acute fuel shortages have also been a common phenomenon. Queues for fuel have been a frequent sight around Kathmandu. Laden with an unbearable debt, the Mecca of corruption and mismanagement - the Nepal Oil Corporation (NOC), is coming to a grinding halt. With losses of over 180 million dollars over the past five years and 250 million dollars of debt to Indian oil corporation (IOC) and other financial institutions, IOC may cut off supply if NOC doesn't cough up soon. Given the heavily indebted status of NOC, the future of fuel supply looks inexorably bleak.
The economy is looking grim too. GDP growth rate is estimated to be between 2.7 to 3.2 % - which is below the regional and global average (global average hovers around 4%). Inflation rate is close to 8%. Nepal Chamber of Commerce (NCC) has recently said that the government's goal of the capping inflation at 5.5% is unattainable and unrealistic. It is further said that due to the dwindling exports, trade deficit is widening and the balance of payment surplus of 8 billion rupees is something difficult to achieve. It has further warned of dire consequences if the economy became solely reliant on remittances alone.

Another blow to the economy came recently when the World Bank (WB) threatened to suspend all assistance related to the financial sector reform project, as well as the proposed budgetary support. The Scottish consulting firm, ICCMT - that had been handling the management of troubled Nepal Bank Limited (NBL) for the last five years unilaterally terminated the management contract on July 22, citing inadequate cooperation from the central bank. The WB has demanded an immediate reinstatement of the ICCMT team.
If the WB were to suspend the assistance, it will immediately affect US$ 100 million reform projects at NBL, Rastriya Banijya Bank (RBB) and reengineering at NRB. In addition, proposed grant assistance worth US$ 30 million aimed at enhancing access to finance will be an immediate victim. Likewise, the much-needed budget support for the current fiscal year will also become uncertain. The budget for the current fiscal year has anticipated receiving up to Rs 100 million.
Investment is intangible and taking a nose dive as well. Insecurity and instability have throttled foreign investment. Much to the consternation of the national industrialists and investors, maoists have aggressively formed labour unions left and right and are making preposterous demands. Even worrisome is the unabated extortion and the abduction of the individuals involved in the business enterprise. Criminal groups have gone on a rampage abducting Marwari businessmen and their family members for ransom. Such activities are fomenting capital flight and slump in investment. Due to the volatility, a large number of businessmen have already transferred most of their capital to overseas bank accounts.

Even food supply is in a precarious condition. Last week, the United Nations World Food Programme (WFP) and the UN Food and Agriculture Organisation (FAO) issued a joint statement raising alarm over the situation of food insecurity. Due to natural disasters and the conflict, food production has declined. Also, the frequent closure of national transportation arteries by random groups has severely hampered food supply. The most critical factor however, is the political unrest and violence in the Terai region. Considering the significance of Terai as the rice basket of Nepal, and the connecting conduit between the main supplier - India and the rest of the country, the turmoil is causing a huge distress to food production and supply.
The Terai conflict is evoking an even more hair-raising fright. Numerous violent madheshi groups have mushroomed in the past year with an array of demands. Although the demands of the different Madeshi groups are diverse, there is one unifying factor - they are all claiming to be the representatives of the Madhesi people. By identifying themselves as Madeshi people, they have distinctly separated themselves as different from the Pahades (hill-people).
Given the years of discrimination and marginalization, Madhesi demands for fair representation and opportunities may seem rational. But the violent tactics of targeting Pahades by radical groups like the JTTM Goit and Singh factions are fuelling ethnic hatreds on both sides. Till date, the ethnic melee has already cost scores of lives and appears to be heading towards a larger carnage.

During the April uprising, people rallied behind the SPAM coalition in hopes of a better future and more freedom. However, a year of SPAM reign has proved to be a damp squib. Ironically, Nepalis have lost even more freedom in the hopes of attaining more. Primarily, the basic amenities for survival like water, food and security is not only incommensurate but dwindling sharply. Hence, without much doubt it can be stated that the two main categories of freedom - freedom from fear and freedom from want are quickly vanishing. Furthermore, the banning of a song that mentions the name of the founder (Late King Prithvi Narayan Shah) of the nation accurately reflects the trend in freedom of speech.
However in contrast, other remarkable acquisitions have been made during the last fourteen months. Now Nepalis have the freedom to take ministerial oaths in denim jeans. There is freedom to amass an illimitable wealth through corruption without the fear of penalties, especially if you are the current prime minister's former associates. There is freedom to carry weapons into the parliament if you are a Member of Parliament. There is freedom to calls strikes, shut highways and roads in a whimsical manner. There is freedom to open steak houses and enjoy beef delicatessens. There is freedom to be called democratic without a democratic mandate. Practically, there is so much freedom that anyone is free to do whatever one’s heart desires. After all, the April uprising has supposedly unfettered Nepal from the manacles of feudalism and tyranny. So welcome to New Nepal - a country out of whack.

Source: American Chronicle, August 2, 2007