Invest in social sector 

This year’s Human Development Report brought out by the United Nations Development Programme (UNDP) has placed Nepal in an unexpectedly better position compared to the previous year. This is an indication that the country is making slow progress in terms of human development. Last year Nepal stood at the 144th position out of 162 countries, a ranking that hardly made us feel upbeat on the human development criteria. However, Nepal still remains more or less on par with 53 countries which are low on the human development index (HDI). The late Laurent Kabila’s war torn Democratic Republic of the Congo stands only three positions away from Nepal. Successive governments have realized that investment in the social sector would benefit the country in the long run. But what saddens us is that the people living below the poverty line have not been able to break out of the poverty trap as such.

The HDI report that was released the other day shows that Nepal’s mortality rate declined from 165 in 1970 to 75 in 1999. Similarly, the under five mortality rate also decreased by over 60 percent in three decades. However, the rate of life expectancy stands below that of Bhutan and Bangladesh, leave aside the life expectancy rate in other South Asian countries. In terms of the human poverty index, Nepal ranks 77th out of 90 developing countries. More than half of the population still lives in abject poverty and half of the adult population is illiterate. Similarly, the female literacy rate stands as low as 22.8 percent. It is saddening to note that out of 146 countries, Nepal is one of the three which has the lowest female literacy. However, the jump Nepal has made by 15 positions in the HDI is a result of improvement in the education sector. The gross enrollment ratio of school going children stands at 60 percent, which is the highest in South Asia.

The government must realize the fact that the higher the budget allocation in the social sector, the more the people are benefited. Such an investment will certainly reduce the gap between the rich and poor. Education and health are the two social sectors in which the Koirala government has failed to make any perceptible progress. The government has increased its development expenditure for education by about 18 percent, which is far less than the budget allocated for debt servicing. Similarly, the government has allocated just 7 percent of its development expenditure for health. This shows that although the government has introduced anti-poverty measures, it has not allocated adequate funds for the social sector nor has it taken this sector seriously enough. That has to change, and preferably before the next HDI report comes out.

Rhetoric to please international agencies

By Jal Singh

The second budget of the new millennium uses a lot of rhetoric to hide its true character. In fact, it is an attempt to kowtow the WTO and the World Bank and follow last year’s "Poverty alleviation" slogan. The gap between rhetoric and reality is reflected clearly in this budget.

Successive finance ministers including Dr Mahat have often lectured the nation about the need for fiscal correction, consolidation, poverty alleviation and so on. This year was no different. The poverty ridden people-woodcutters, street children, rag pickers, dalits, street vendors and the like-will all be wondering what this budget is all about. Does it concern them at
all in any way?

Every finance minister would like to put his best foot forward during the budget speech. Yet, downright fudging of figures is a new practice of recent origin. Dr Mahat has made the customary allocations for the poverty alleviation, which is like a dialogue of the deaf. Everyone talks but nobody can do anything about it.

There seems to be an overall consensus that the country is going through hard times. Economic growth has been showing a downward trend. As per the latest figure, the government revenue collection - which is far below the target - has increased below the inflation rate. The market is not expanding. Nepalese industries are finding themselves hard to market their products. Export in terms of hard currency is virtually stagnant. In brief, the economy is sluggish. Dr Mahat increased the spending on security to contain Maoist insurgency.

Finance Minister Mahat presented to parliament a Rs 99.79 billion - a deficit budget for the fiscal year 2001-2 beginning mid-July. Rs 49.32 billion has been earmarked for regular expenditure and Rs 50.47 billion has been set aside for development. A deficit of Rs 25.42 billion will be met through increased tax, internal borrowing, foreign loan and grant. Dr Mahat announced a special one percent internal security tax on imports to protect industry and business. He added this policy was temporary. The new budget has been increased by 19 percent overall as compared to the previous year, while the regular expenditure has jumped by 13 percent and the development outlay
by 26 percent.

Special road building projects will be implemented in five Maoist-hit districts in western Nepal, including Jajarkot and Bajhang next year. The VAT network will be extended to include hardware, electronics and other business, Dr Mahat said. Government investment in the social sector has jumped by 27 percent. The Ten highest paying tax payers will be honoured as Commercial Important Persons (CIPs) by giving them special privileges at the Tribhuvan International Airport. Likewise, the Home Ministry outlay has increased by 2.16 percent while allocation for the Defence Ministry jumped by 9.17 percent. Utility services such as the Postal Services Department will be privatized. Professionals, including doctors and engineers, will have to maintain audited accounts from the coming fiscal year. A new three-year project plan for development schemes have been envisaged to provide continuity. The budget aims to reduce poverty and unemployment.

The widow of Everest hero Babu Chhiri, who died in high snows while attempting to conquer the mountain for the eleventh time, will get a monthly government pension of Rs 10,000, Finance Minister Dr Mahat told the parliament. His children will also get education  scholarships.

Dr Mahat also said that Nepal expects to get Rs 14.12 billion as foreign grant and Rs 16.42 billion as foreign loan (30 percent of the budget). Besides the foreign loan, Rs 25.42 billion budget deficit will also be financed by Rs 9 billion domestic loan. The government has increased the budget for security forces to Rs 10.31 billion, which will be used for the police, and military forces, up from 9.17 billion rupees last year. Mahat said that an additional budget would be made available to the Integrated Security and Development Program, besides the allocated amount. There could be additional funds made available for the internal security from the 1 percent additional duty that will be levied on both import and export of goods.

The budget of any country, whosoever may be in power, is a paradigm not simply of economic development, but of a conjoined and interlinked process of social, political, ideological and economic development perceived in terms of progress towards the goal of material abundance in a least developed country like Nepal. As such, we are going through difficult and uncharted terrain where no action is without risk, and success will not always be immediate. We need patience, perseverance and national cohesion if we are to succeed.

Some economists are suggesting that the government should allocate more resources for development programmes to revive our economy even if it means increasing the budget deficit. But the government cannot raise budget deficit in a way that has negative impact on interest rates, raises the cost of capital and decreases competitiveness of our export goods. Our main problem today is not only the size of the budget. Effective utilization of the resources allocated for different programmes is the main issue of our economy. No doubt, there is resource gap in our economy due to rising expenditures and limited resources available, but we should not exceed limits of deficit financing. It is not good to opt for deficit financing that might pressure on inflation and  have a negative impact on macro- economic stability.His intentions are good, but the optimism of the Finance Minister has to be taken with a pinch of salt. The budget is a perfect model which is likely to please the World Bank, while the previous budgets were corporate-cum business models. Dr Mahat’s model is based on employment generation , incentives and opportunities for foreign employment and rural development.

Hunting sand-martins

By C B Dahal

The transient period between childhood and youth is always filled with events of unrivalled prank in everybody’s life. (Something like the decade old democracy.) That period is known as the "cat" years. This is so because all tend to eschew parental, or for that matter any form of guidance. Sulking comes easy, so does defiance to orders. Any semblance of query about personal activities is taken in the most offensive temper. You want to come and leave as and when you desire, and at times most suited to you.

I must say the stage did not escape me either. (It has not escaped the State too). And this narrative is one of the series of (un)fortunate incident that happened during that period in my life.

There flowed a perennial river, (an omniscient presence), at the edge of our land. The waters always clear, with pools most suited for afternoon dives. And, four-meter white sand cliff banks bordered the river and the
sylvan pools.

The sandbank cliffs were home to sand martin, a tiny bird that digs holes in the cliff and nests in the warm tiny dome at the end of it. It was common for us to raid these nests and catch as many birds as possible for they made
tasty roasts.

One day on a pretty warm afternoon, three of us were taking birthday-suit dips in the cool waters of the placid pool. After the swim all of us were quite ravenous, and roasted sand martins delicacy was all we wanted. So, we embarked on a mission, not wanting to be the one to catch the least. I began quickly by sliding my hand into the sand hole, feeling for the fluttering bird and retrieving it with the most satisfactory glee. A tiny nip on the neck and the limp bird flung on to the sand before the others in the hole got wind of the marauding gangs. All of us were adept in our hunting skills, and within no time I had three
to my share.

I went for the fourth. The hand slid into the perfectly fitting hole and my fingers could feel the feather smooth back of quite a large sized game. My fingers went around it, and pulled it out in all excitement shouting at my team that I had the best and the largest catch.

But, the catch simply kept on sliding out, and as I turned to see why it was taking so long to leave the hole, my hands simply froze. I was holding a large sized scaly grayish snake by its tail. Instead of a bird I had hunted a hunting serpent.

The next instance was all but blur. I let go of the smooth, leathery, cold tail, scooped the prized games, lying on the sand, and made the fastest retreat away from the
sandy cliffs. That was the last sand martin hunt for me.

I hope someone, as tender  in age as I was then, will not repeat the story.

Indo-Pak summit and Nepal

By Ghanashyam Ojha

Kashmir has been wrongly looked upon as a prize for India or Pakistan. People seem to forget that Kashmir is not a commodity for sale or to be bartered. It has an individual existence and its people must be the final arbiters of their future" (July 6, 1951, Pandit J Nehru).

Nehru, an eminent politician and scholar, who ruled India for fifteen years, had aptly remarked about Kashmir five decades ago. The problem then might not have been as grave as it has been today. Responsibility of this erupting chaos goes to both sides that became stubborn on their point for many years.

However, they appear as born enemies. The two nuclear powers in South Asia have finally decided to throw all the differences aside and come to a negotiating table.

The commendable decision taken by both nations is going to rewrite the history in this region. Pakistan’s military general-turned-President Parvez Musharraf leaves Islamabad for India on July 13 for the upcoming summit scheduled to be held in India's city Agra. In his words, president Musharraf is visiting with an open mind and open issues to talk about.

Since the independence of India and Pakistan from the British rule in 1947, both nations have fallen into three major wars over Kashmir. The main issue for their longstanding tussle is the small trouble-torn Himalayan state situated between the two newly nuclearised countries. Strategically, Himalayan state Kashmir situated between them touches both South and Central Asia.

So far, horrendous wars fought in the past have claimed the lives of 50,000 Kashmiris, besides backing ultras with billions of rupees.

In the course of staking their claim on this small Himalyan state, both conducted tit-for-tat nuclear tests, drawing condemnation from all over the world. India’s nuclear tests in 1998 was immediately retaliated by Pakistan in the same month. India has made seven nuclear tests including that of 1974, and Pakistan in return has done six tests till now. In doing so, both countries have not only proved themselves as nuclear superpower but have also triggered the region with fear psychosis.

The history of Kashmir states that the territory was transferred to an Indian Maharajah on a sale deal called the "Treaty of Amritsar" in 1846 in return for a sum of money by a British ruler as the control over the region was weakening. Later on, the Maharajah Hari Singh had problems with the insurgents and fled to Jammu on August 25, 1947 in order to take military help from India. He signed a treaty called the " Instrument of Accession", with India to fight back the insurgents that entered into the region. Indians too started making their abode along with the Muslims from Pakistan. It was indeed the seed of the feud sown between India and Pakistan. India, later on, claimed the State by the Instrument of Accession which was not accepted by the people of Kashmir, and it was at the same time challenged by Pakistan.

As the conflict flared up, it was taken to the United Nations’ Security Council too in January 1948. The Council suggested plebiscite to resolve the crisis. The UN formed the commission the "United Nations Commission for India and Pakistan (UNCIP)" to implement the resolution policy. But India dragged the decision back and the crisis remained. Since then, India’s claim has never been accepted by the UN nor has it gained legal status. The tests of nuclear bombs from both sides have given a threat to the region. Kargil war was fought, immediately after the nuclear tests, despite international objections. It again left the entire region in chaos and confusion.

This summit, claimed to be a historical one, is significant for Nepal. There is a growing concern of both countries due to some activities undergoing in Nepal. India has been alleging Nepal of anti-Indian activities provoked by the Inter Service Intelligence (ISI ), a Pakistani intelligent agent. On the one hand, India claims that all anti-Indian activities, including the Hritik Roshan episode, are instigated by ISI agents. On the other hand, Pakistan blames India for expanding Research Analysis Wing ( RAW)’s activities in Nepal.

Given such a situation, a number of questions have been raised. Is Nepal the common ground for these countries to carry out their activities? Isn’t Nepal abiding by the terms mentioned in the UN chart? Or are the allegations aimed at hitting Nepal’s sovereignty? There is a growing border dispute between Nepal and India and between India and Bangladesh in this region.

So it has become essential for the region if India and Pakistan hold summit to reduce tension. SAARC conference, frozen due to sudden military coup by Parvez Musharraf on October 1999, is expected to resume after this historical summit. Many more development works, to be initiated in the region, have been hindered due to the cold relations between these two countries. However, both countries are optimistic about the outcome of the summit. It could be a great historical summit for both the nations, if it yields positive results. But both seem to be still sticking to their
claim on Kashmir.

Now, it is too early to predict the consequences of this summit. It is high time all South Asian nations worked together to make this summit a great success. All the nations in this region might take the breath of peace and prosperity, provided the summit turns out to be a great success. But the growing concern is how these countries will go in future if the summit falls short of expectations.