Discourage discrimination

The caste system in our society has ever been an obstacle to development. Not that this age-old system was not unabolished and lower caste people legally prevented from entering Hindu temples and other religious premises. But the upper caste Hindus always prevented Dalits from attending social gatherings and visiting religious centres and even prohibited them from meeting Hindus from the upper caste. As a result of such discrimination, the lower caste Hindus have remained ignorant, isolated and largely illiterate in our society. Theoretically, the introduction of the new Civil Code banned the practice of untouchability over four decades ago. Unfortunately, the ban was not put into practice as a result of the strong faith in the caste system among the upper caste Hindus. Had successive governments implemented the law, the Dalits, who have been discriminated against on the basis of caste, would have no longer remained a distinct underclass in our society. Mention should also be made here of the need for more affirmative action, including reservations if need be. Reservations should however not be allowed to get out of hand as has happened in neighbouring India. We should learn from the experience of our southern neighbour.

The cast system was a practice introduced only to govern society but it gradually turned into an ugly tradition which should not be allowed any longer. Manu’s objective in dividing society into castes was not only to ensure the division of labour but also to govern the social and religious activities of every individual. It had to do more with the specialisation of human skill than discrimination on any basis. However, over the centuries, the caste structures gradually rigidified to restrict certain section of people from attending or mingling at social or religious gatherings. The practice became uglier still when it turned into untouchability. Orthodox Brahmins even ignored the rights to equality and liberty guaranteed in our constitution.  Although there are laws against untouchability, the government has hardly taken any action against those who have practised untouchability. This apart, the penalty against violation of  this law does not exceed more than 250 rupees. How can the Dalits expect  fair and impartial treatment when the Civil Code does not permit a    fine of more than 250 rupees, a paltry sum today?

The entry of over 200 lower caste people at Pashupati and Guheshori temples the other day should be taken as a breakthrough towards integrating the Dalits into the mainstream of our society. The  government must now stop any caste based social and religious discrimination. Dalits, who are considered untouchable by a section of our society, must be given opportunities to share religious and social  platforms. They have been deprived of their rights to equality and freedom due to mere ignorance and crude faith. Orthodox priests, who have upheld faith in untouchability for generations, must not be allowed  to practise what is legally prohibited in our society. Above all, more widespread education should be promoted   among all classes including the Dalits themselves to foster social awareness that can be a potent  weapon in the struggle against social evil.

Much show, less substance

By Rajat Sharma

Industry as an engine of economic growth is still a popular concept in development. Agriculture, by contrast, was believed to be unresponsive to economic incentives, something that did not lend itself to technical change. Thus policy makers in the past believed that promoting industry at the expense of agriculture would sacrifice little output—or so went the conventional wisdom in the 1960s and 1970s. If a country like Nepal wants to achieve faster agricultural growth and faster economic growth, with fewer poor people, it should stop taxing the agricultural sector. It is unfortunate that the Budget Speech for this fiscal year has imposed taxes on agriculture.

Urban-based development: Over the past fifteen years, Nepal’s average growth rate has been 4.9 percent per year, while the population continued to grow at an annual rate of 2.5 percent, resulting in 2.4 percent per annum average per capita income growth. Although economic growth was significant in the urban-based non-agricultural sectors such as banking, real estate, trade and services, the last fifteen years have seen a decline in the average growth rate of agriculture, from 3.8 percent in 1985-1991 to 2.2 percent in 1991-1998. As highlighted in the Interim Poverty Reduction strategy, efficient economic management is hampered by the low redistributive capacity and resource constraints of the government.

Nepal initiated economic reforms in July 1992 after the restoration of democracy. During the last eight years, economic reforms have been introduced in various sectors, including industry, trade, foreign direct investment, infrastructure, telecommunications and so on. These economic reforms have been significant.

The agriculture sector, by and large, remained outside the purview of economic reforms. Our agriculture has the competitive capability to export a large number of commodities and products. The opening up of the Nepalese economy has contributed to improving three relative profitabilities of agriculture as compared to industry, particularly because some of the incentives and subsidies offered to industry have been lowered or reduced. The agricultural sector, however, largely remained under the control of the government, especially as far as export was concerned.

The agreement reached at the end of the Uruguay Round of Multilateral Trade Negotiations of GATT and the WTO has opened up new opportunities for agriculture in word trade. Nepalese agriculture can tap these export opportunities. Nepal’s share in world agriculture exports is very low. Nepal has ample potential for increasing production and export of a number of agricultural items like large cardamom, ginger, spices, floriculture, sericulture, angora rabbit  and tea.

Planning: In the recent Five Year Plan, agriculture has been given top priority, yet its growth rate is sluggish. A number of questions have emerged from this. Why should a developing country like Nepal invest in agriculture? To what extent has agriculture’s status of "priority sector" actually been translated into investment terms by the government? What exogenous institutional constraints impede agricultural development? Finally, are there any success stories that would justify continuing investment in agriculture?

No country has ever achieved sustained economic development without developing its agricultural sector first. Today’s economic giants - the USA, Japan and the countries of the European Union - all developed their agriculture before industrialization.

The former USSR tried to industrialize first, but all in vain. Agriculture plays a vital role in economic transformation by providing some or all of the following: raw material for the growing manufacturing sector, food for fast-growing non-agricultural production, export earnings to pay for imported capital goods, raw materials, infrastructure equipment and energy, surplus in the form of savings that can be invested in manufacturing industries and socio-economic infrastructure, a market for infant domestic manufacturing and service industries.

Measures for more agro products: It is necessary to broaden the pattern of agricultural development, eliminating a number of biases against this sector and improve the availability of key inputs, credit and extension services on a sustainable basis. Post harvest technology needs to be improved in the case of a large number of agricultural crops that have potential for export both in raw and processed form. Nepal is facing post harvest losses in fruits and vegetables because of poor infrastructure and lack of organised marketing. There is vast scope for private investment in processing and preserving technology since the country produces a large variety of tropical and temperate fruits and vegetables.

Our government should create necessary conditions to give a boost to the agricultural sector through new investments, greater availability of credit and development of infrastructure for production, internal marketing and exports. Apart from higher public investments in agriculture, private sector investments need to be encouraged to exploit the full potential of agriculture, and to make agricultural development sustainable. Wide-ranging policies are needed to augment agricultural production and exports. The policy should ensure profitability of agro-exports and better returns to the farmer, remove tariff and non-tariff constraints on agro-exports, promote upgradation of technology, ensure continuity in exports to sustain importers’ interests, remove physical barriers on quantities to be exported and so on. Likewise, marketing infrastructure needs to be augmented and streamlined especially in respect of perishable commodities so that primary producers are able to get a fair share of the price paid by the customers.

For sustainable agricultural development, at least three conditions should be met. First, small and marginal farmers must be enabled to adopt higher yielding varieties of crops and increase cropping intensity (by making credit easily available- not necessarily at subsidized interest rates, and providing access to irrigation and necessary extension services). Second, appropriate macroeconomic policies will have to be pursued in order to ensure that agriculture continues to be labour intensive so that wage employment can be maximised and the wage rate pushed up.

So many long-term perspective plans, strategies, studies, sectoral and sub-sectoral master plans and programmes were formulated, but most were neither officially endorsed nor were seriously implemented. Nepal’s agricultural development efforts have been guided mainly by the mid-term periodic plans. Since 1956, when the First Plan was launched, eight periodic plans have been completed, and the Ninth Plan is in the middle of completion. Interestingly, all the periodic plans have treated agriculture as a priority sector of the economy. Nonetheless, the overall performance has been dismal.

Budget for 2001-2002: The budget for 2001-2002 has made a provision for lowering the interest rate by one percent to promote commercial farm cash crops such as honey, cut flower, fresh vegetables, lentils, betel nuts, spices, cardamom, apple, wall nut, apricot, oil seeds, tobacco, and medicinal herbs. Critics say, agriculture has received the least attention from the budget makers. Instead of resuming subsidies on imports of chemical fertilizers and shallow tube wells as demanded by some political parties, the budget has proposed concessional loans for farmers to help them start commercial farming. The budget has also failed to devise any effective mechanism to implement the long term Agriculture Perspective Plan (APP), said to be the key to poverty alleviation.

Raushi English

By Ghanashyam Ojha

The government has finally come up with a decision to ban alcohol in public places. The decision also contains a number of rules for those who prefer liquor in private places to public. It must have been pleasant news for many wives, who were patiently tolerating severe blows and beatings from their drunken husbands. The hapless wives must have thanked the Young Turk for relieving them.

But the drunken husbands have not taken to the streets yet, a popular trend in Nepal to protest the government’s decision. Thanks to Husbands for not losing their patience.

The banning of Raushi, a local nickname for liquor, has hit the English language hard, at least in this country. This statement must have astonished you: how come Raushi is related to English language? Most of the South Asian people start blabbering English immediately after drinking Raushi a few sips that make wet their throats.

However, it is a kind of a recognition the South Asian people are paying for this language, though in a drunken stupor. I would like to inform you that the English spoken by our Raushi lovers is free of syntax and phonology. You know, English without phonology and syntax. The Ratatata... English from our bigwig is still fresh in our memory. So what! We managed to speak English, Raushi experts claim.

The Indian Prime Minister, highlighting the significance of International language, recently told mediapersons that the Indian English drove the British English away. He meant it to retain British English in India. Ooops!.. Imagine what our English, promptly spoken after taking local Raushi, could do to the British. Let’s hope it could be used as Lingua Franca in social gatherings among Raushi experts. You must not have forgotten Esperanto, the language that was developed in protest against the so-called International language. Given the culture of speaking Raushi English in this region, one day all could have spoken fluently the British English. But this hope has been shattered with the government’s decision to ban Raushi.

The Raushi lovers say: at least their rights to practise English should have been spared!

Energy export and progress

By Rajendra Kshatri

Water resources development in South Asia is largely dependent on international cooperation, with the emphasis moving towards multipurpose dams to provide water for all possible uses. Water resources in this sub-continent are, to a large extent, underutilised. Nepal has barely utilized a fraction of its total water resources potential.

Nepal alone, given its weak economy, cannot afford to undertake development single-handedly. It usually does not have the means of financing costs nor absorbing benefits. For these reasons, many projects, irrespective of their potential, are non-viable, unless jointly implemented through state-to-state cooperation or through huge private investment, though larger amounts of capital required for hydroprojects mean raising finances in the market. Therefore, a mechanism needs to be found so that the government’s desire to raise finances from a variety of sources for projects it considers nationally desirable will materialize, while at the same time providing the private sector with reasonable returns. But again, the reallocation and its corresponding financial implications may well be difficult.

Joint development of water resources generally goes wayward due to delay and discrepancies. The Indo-Nepal pattern of cooperation to this effect, however, is also not appreciable. There are many instances where constructions without prior consultation have posed problems. Moreover, it is lack of cooperation in planning and design that most often hinders development on both sides of the border.

In Nepal, governance is generally weak, due to a limited sense of commitment and purpose. Arrears in budgetary contribution also affect governance negatively. Development is at a low level, and organisations are weak due to undue pressures from political leaders. Development projects are most often defined without clear objectives and are planned with no reasonable time-horizons. Legislation and policies are often introduced hastily. Projects therefore must be based on real needs, and not politically motivated. Involvement of local experts, more in-depth understanding of issues
and better linkages with line agencies are some of the most badly managed aspects in the country.

The recently proposed Income Tax Bill, 2058 endorsing the concept of widening taxable areas, has curtailed the whole tax incentive package provided by the Electricity Act 2049 without sufficient reason despite the fact that India still qualifies for power projects and "tax holiday" status. Even if the proposed Bill is passed, it remains to be seen for how long project investors will be interested in investing in Nepal. In fact, the success of private generation projects largely depends on fiscal incentives. The Electricity Act, 2049 and the Local Self-governance Act, 2055 on the issuance of licenses in generating power by local bodies are mired in controversy. The Electricity Act empowers the Department of Electricity Development to process the application and the Ministry of Water Resources issues license. Such conflicting enactments have made things more difficult, but the conflict of jurisdiction between these authorities is yet to identified and quelled. It is important to prescribe one single authority to issue the license.

Likewise, the proposed Electricity Pilferage Control Bill, 2058 has finally come after a long time, for law enforcing agencies and government attorneys to take care of the massive or unauthorized leakage of electricity. How investigations will be done and how it will fulfil the objectives only through policing without technical knowledge are hard to imagine. Let us hope our parliamentarians will take this matter seriously.

However, questions such as - what do we understand by development of hydropower? Do we really need to give continued emphasis to it? If so why are such conflicting enactments coming up?- need to be answered. Certainly, there are no easy and simple answers, but problems can be addressed by establishing some basic concepts first, regarding the export of energy. There is little evidence that Nepal has achieved anything significant by opening up to global investment to fund its basic infrastructure needs, particularly for power generation to meet domestic demand growth as well as power export to neighbouring countries.

The Electric Power Trade Agreement between Nepal and India is one step further in paving the way for developing the power sector through private participation, but the agreement is yet to be ratified. Nepal has, however, ratified the New York Convention, 1958 on the recognition and enforcement of foreign arbitral awards and the MIGA Convention for the security of different risks associated with investment.

In order to harness the immense water resources, all political parties, civil society and the government must take the initiative to continue organising promotional activities and provide strong support for private enterprise related to the promotion of hydropower.

What private developers are looking for is long-term commitment from the government as well as from power purchasers. For private developers, the major incentive to invest is a fixed market for a long-term power purchase agreement with the countries having high demand.

However, which river basin should be given priority will ultimately depend upon the area of demand in the importing countries. Accordingly, it is advisable to develop schemes for power export within the vicinity of the potential importing countries. It is also advisable to start projects producing a large amount of firm energy. Therefore, agreements must be reached on the supply of electricity between Nepal and all neighbouring countries of SAARC to integrate the international power exchange system, as already practised in Europe and North America. Nonetheless, Nepal and India already have a power exchange arrangement, and it is better to extend this in order to save both investment and operational costs.

Unless Nepal establishes permanent markets for power sales either through power exchange programmes or power purchase agreements through the public or private sector to neighbouring countries, the attraction for investment could be fickle. This is because Nepal Electricity Authority (NEA) cannot continue buying electricity at a fixed rate through the safety net of "take or pay", irrespective of its needs. If this is allowed to continue, it will adversely affect the new plants of NEA. The government therefore should revise its policy immediately.