Download Economic Pursuit of Nepal

Economic Pursuit of Nepal
-Prof. DrMahendra Singh
1:Background
After the people’s movement of 2046, the people of Nepal gave a thumping
support to the government to carry forward a political and development agendas.
The government in its TYIE (2007-010) set a long term vision of making as
prosperous, modern and just Nepal. In this context the plan gave priority to
improve economic status of the people through employment creation and to
alleviate poverty through broad-based economic growth. The TYIP (07-010 and
010-011) also gave priority to the development of electricity, roads, irrigation and
communication to support agriculture, tourism and industry and to the
development of Human Resources through education, health, drinking water and
sanitation. The 3rd TYIP has targated annual growth rate at 6.00 percent by 2022
to upgrade Nepal from Least developing country to developing country.
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Table no 1: Summary Statistics of Nepalese Economy
Index
Achievement
Per-capita Income
USD 475 (2014)
Gross National Income
$ 19 billion
Trade Deficit (014)
Rs 689 billion
Import Share in Total Trade
86 %
Export share in Total Trade
14 %
Economic Growth rate (average)
4.1 %
Population below Poverty Line
23.8 %
Capital Expenditure (first half of the year
69.9 %
015)
Remittance ( First Half of the current fiscal
Rs2.75 billion
year)
Agricultural production growth rate (069)
1.3 %
Industrial growth (069)
0.3 %
Farmer below poverty line
78 %
Dependency in agriculture
67 %
Total export
Rs77 million
Petrol import
Rs10.7 million
16
17
18
19
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21
22
Balance of payment
Rs77 million
Global Terrorism Index
24
Consumption GDP ratio
93 %
Saving GDP ratio
7%
Literacy
86 %
Economic Freedom Index
149 out of 178 countries
Revenue collection average ratio of
16 %
increase
23
Global competitive index
125 out of 144 countries
24
Irrigation as % of total arable land
25 %
25
Hydro Electricity
650 MW
Source: World Development Report (013), Economic Survey (069) (071-072) and
various other sources.
The overall assessment of the above mentioned table shows the mixed results.
Positive trend has been observed in revenue collection and exclusively in social
sector. However, the progress in the areas of agriculture, industrial growth, and
road construction and irrigation facilities along with deficit in trade is far from
satisfactory. As a result no expected change has taken place in the economic
development of the country in general and in the living standard of the people as
their aspirations in particular.
It shows only cold pursuit of economic policies is no guarantee of success.
Now the government must chase after those long-term vision with great
determination and in hot persuit.
2:Constraint to Growth of Nepal
Target could not be met and programs could not be implemented due to
following constraint.
 Unstable Government
 Local bodies without elected representative
 Bureaucracy having poor chain of command
 Traditional & subsistence agriculture
 Plummeting industrial sector
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Power cuts up to 6.30 hours a day
Non-productive use of remittance
Menace of corruption
Under-spending of capital expenditure
Inadequate infrastructure
Implementation failure.
3:What is needed: Identification of core competent sectors of the Economy.
To achieve the mission of transforming Nepal into developed nation,
following areas should be picked up for integrated action.
1. Agriculture
2. Infrastructure ( Transport, Electricity, Irrigation and Communication)
3. Manufacturing and service sector
4. Tourism
5. Education and health.
These five areas are closely related, if harnessed in coordinated way, they will
lead to food sufficiency, industrial growth and broad based development of
Nepalese Economy as a whole.
4: The path Ahead : Innovative Development
Harnessing



Managerial skill
Access to Market
Maximizing yields
Enterprenecrial
approach
Cire
competencies
Modernisation of agriculture,
Tourism
Service Sector
education and health
manufacturing
Innovative
Development
Integrated
Development
And
empowerment
Capacity building
Infusion of
Technology
For
Skill
development
To carry non-linear
Growth
Objective
Assessment
&
accountability
Decisive, transparent, efficient,
honest, and Accountable Government
Fig : The Multi-pronged action approach as enabling condition for economic
pursuit in Nepal
5: Policies regime, regulations and facilitation
There is no dearth of policies in the area of economic development in Nepal. To
implement those policies, there have been proliferation of Act and rules in all
areas. But the Plethora of laws, rules and regulations seem greater than what is
required. Bureaucracy has so far failed to implement those laws. It has been
proved from international experiences that multi dimensional development can
be moved forward when people can be guaranteed for good governance. Only
formulation of laws (Regulations) are not enough, implementation of laws are
more important. Governance should be SMART.
S= simple
M= Moral
A= Accountable
R= Responsible
T= Transparent
We know there is no short-cut solution to Nepal’s chronic economic malaise. But
people are impatient because they have been waiting too long for development
to take place. They believe that the governance of Nepal may be the key to all
other necessary changes required for the development of Nepal.