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VOL. 27, NO. 5, September 14, 2007 (Bhadra 28 2064 B.S.)
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Petro Price Will Not Be Hiked Till Election
The government is preparing not to hike the price of petroleum products till Constituent Assembly (CA) election by bearing the losses itself. The state-owned Nepal Oil Corporation (NOC) has submitted a report detailing the losses that the government will have to bear if prices are not adjusted till election.
Deputy executive director of NOC Umesh Dahal has said that the government will need to provide it with Rs 2 billion if oil prices are to be kept stable till election in November 22. This amount includes NOC’s monthly losses, payment of its dues to Indian Oil Corporation (IOC) and interests. Dahal said that if the government provides that amount, NOC can ensure smooth fuel supply till the election.
Meanwhile, the last two weeks witnessed recurrence of fuel crisis as import was halted due to an indefinite strike called by tanker drivers and after IOC cut down supplies pressing for payment of dues. The strike ended after a week.
Subsequently, Dahal traveled to Raxaul and held talks with IOC officials who agreed to ensure smooth supply for the time being.
The NOC’s outstanding dues to be paid to IOC currently stands at Rs 3.2 billion. Accumulated loans to be repaid by the corporation have already crossed Rs 11 billion, said Ichha Bikram Thapa, spokesperson at NOC. Due to huge price disparity, NOC claims that it has been suffering a monthly loss of more than Rs 310 million and more than half of its loss comes from LPG. Since price disparity in LPG is as high as Rs 277 per cylinder, NOC is losing over Rs 160 million a month, the NOC official said.
Enlightened States Can Help Alleviate Inequality
Dr Ifzal Ali, chief economist at the Asian Development Bank (ADB), on Thursday, stressed on an enlightened and active state to alleviate inequalities, while policymakers must be made accountable for an inclusive growth. Rising inequalities in South Asia , particularly in Nepal , pose a clear hurdle impeding growth, said Dr Ali, while making a presentation at a program organized by the South Asian Institute of Management (SAIM), on Thursday (September 6).
Referring to Nepal ’s Gini coefficient which is among the highest in the region, he further said that although Nepal has achieved a lot in terms of reducing poverty, it has failed to address the gap between the poor and the rich.
Among South Asian countries, Nepal and Sri Lanka have the Gini coefficient of above 40 points, which is one the highest in the whole of Asia . Nepal ’s inequality is characterized by high inequality in access to education and basic health services, which is a strong impediment for upward mobility, Dr Ali said, adding that access to infrastructure is another crucial factor that constrains access to productive economic opportunities. “As a result, the rich are getting richer faster than the poor,” he added.
Contemplating the recent findings of ADB, he said that poorer households have benefited less from growth than richer households. This has, in many cases, hindered the growth prospects, resulting in redistribution and eventually to distortions of wealth and opportunities, Dr Ali added.
“In many cases, a high level of inequality may hinder social cohesion causing political instability. This is quite evident in Nepal ,” he said, adding that high concentration of income may enable the wealthy to steer economic outcomes and policies in their favor.
The main drivers behind inequalities in Nepal are unevenness in growth, particularly between the rural and urban areas. Real per capita income/expenditures increased by 42 percent in urban areas between 1995-96 and 2003-04 compared to 27 percent in rural areas, he said.
This phenomenon has led to a widening rural-urban gap.” Regional inequalities and structural transformation and outward orientation are other two main factors for the rising inequality in Nepal . Slowdown of public investment in rural infrastructure, breakdown of extension services to disseminate modern technology and depletion of natural resources have also resulted in fuelling inequalities in Nepal, he said.
Inclusive growth could be an answer to rising inequalities, but it needs to be well defined with a proper approach that role of public policy is to circumvent the disadvantages of circumstance-based inequalities, Dr Ali suggested. While, states should be enlightened and active, its policymakers need to be ready to be accountable for ensuring outcomes and impacts of such practice. (Courtesy: The Himalayan Times daily)
German Support For Peace Process
The government of Germany has provided assistance worth US$ 7 million for the peace process in Nepal.
The GTZ has launched the new project “Support of measures enhancing the peace process”.
The new project is aimed at improving the living conditions in the cantonments and the surrounding communities.
“The new project is only one in a series of activities with which the German Government supports the peace process in Nepal. All together, Germany has made available assistance amounting to more then US$ 7 million for the peace process in Nepal. Of that amount, more than US$ 6 million is fresh money on top of our regular development program,” said German Ambassador to Nepal Franz Ring, speaking at a program to announce the launching of new GTZ project.
Ambassador Ring said that the German Government has been supporting the peace process from the very beginning. “One week after the signing of the comprehensive peace agreement, our governments agreed to start right away with the German assistance for the peace process relying on existing infrastructure of ongoing projects but also making available substantial additional funds,” he said.
“The German development projects have been in a position to start providing assistance already since November 2006 in the areas of health services, medication and access roads, improving the sanitation in the Cantonments and the surrounding areas as well as organising surgical camps.”
The projects are aimed at supporting the people in need and internally displaced people (IDPs) by improving their living conditions.
The German Friedrich-Ebert-Foundation provides civic and voter education, thus supporting the constituent assembly elections.
Briefing about the new GTZ project, he said, the project is an integral part of the Nepali government’s peace and reconstruction policy as, among other things, expressed by the Nepali Peace Trust Fund policy.
For this project the German government has made available an additional amount of about US$ 4 million.
“Focal areas are medical services for both, the combatants in the Cantonments and the people living in the surrounding wards. Promotion of skill development for reintegration is also part of the project’s activities,” he said.
“For bringing the peace process to its logical end, it is of utmost importance that the constituent assembly elections take place as scheduled in November 2007,” he said, adding, that for allowing reasonably free and fair elections to take place, the security situation has to be improved considerably.
“Therefore Nepal needs the full commitment of all political parties to restore law and order,” he said. The ambassador also welcomed recent agreements between the government and Madhesi Janadhikar Forum and Nepal Federation of Indigenous Nationalities. “These agreements follow a good democratic tradition of compromise,” he said.
