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Kathmandu Saturday April 21, 2001 Baishakh 08, 2058.
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Subsidies
still needed
Most of the Nepalese people continue to live
in the mountain and hill regions of the Kingdom, where His Majesty’s Government has
not been able to reach the developmental infrastructures. Because of this, the picture in
these areas is dismal and heart-rending despite the rise in the per capita income of
Nepalese generally. For instance, the people of the Kathmandu Valley and the Terai region,
whose per capita income could be well over a thousand dollars, though it has not yet been
calculated, pay as little as Rs 29 per a kilo of sugar. The same kilo of sugar is sold at
between Rs 80 to 90 in many of the hill and mountain regions. Ditto for all other
essential commodities. And the per capita income of people there, also uncalculated so
far, could be less than 50 dollars. Is this fair? In an age of competition, all Nepalese
must be treated equal and must have equal opportunities. In short, there cannot be
competition in the true open market sense until the playing field is really level.
Government subsidies must be seen as a short term effort to make that field more level.
The alternative is to ask people in the hills to migrate to areas which are connected by
road, and have manufacturing units and all the economic infrastructures and employment
generating activities.
Against this background it is unfortunate
that there should be any difference of view between HMG and the Asian Development Bank
regarding subsidies. It is hard to believe that the ADB would be so dogmatic about
subsidies at a time when even agencies like the International Monetary Fund have taken a
more flexible attitude. The reality of the situation including topography must be taken
into account when discussing about subsidies in a country like Nepal which ranks as one of
the world’s poorest. Someone has described the topography here as murderous, and
without much exaggeration. Topography dictates the way most of our people live and move,
and the way they move their goods and belongings. To a substantial degree, it has also
dictated the way this country governs itself and goes about bettering its lot through
economic development and planning. Much of our developmental investment has gone into
neutralising our topographical disadvantages. And we still have a long way to go, quite
literally.
Subsidy need not be a dirty word at the ADB or
anywhere else. The Americans do it, as do the Europeans in their own ways. The American
government has for a long time been paying its farmers money to not cultivate their land.
This was in a bid to keep down the glut of grain in the silos and prevent grain prices
from tumbling. In the European Community, subsidies for French farmers have been one of
the main bones of contention among its members. And it is in agriculture that the question
of subsidy has become an issue here in Nepal also. HMG has fallen foul with the ADB over
its decision to reintroduce subsidy for shallow tube wells which are vital for irrigation
in this predominantly agricultural country. It need not have.
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