Development, Poor And Poverty An Analysis

By C. D. Bhatta

THE debate on development, poor and poverty is immense and has become a catchword in a contemporary world. Spanning from the corridors of the academic institutions to the ballrooms of the five star deluxe hotels, it has become a main topic of discussion. Development 'to reduce world poverty and thereby brining significant changes on the socio-economic conditions of the poor' has become a main mantra for development gurus and policy analysts and an issue to deliver speeches for the political leaders. In another way, it can be termed as religion - a way of life for these people in today's materialistic world. Politicians, businessmen, human rights activists and academicians speak about development and poverty alleviation all the time ceaselessly. But in reality, the poverty remains intact and untouched ever vulnerable.

Who is not aware that less than 1.2 billion people live on less than a dollar a day? The English daily, The Guardian in its recent report states that nearly 60 million children in the developing world will die needlessly over the next 15 years unless rich countries start to deliver on their promises to increase in international aid spending. The Oxfam, a leading British development NGO, said that the world's richest countries needed to provide an extra US$ 100bn a year - three times more than the current level of assistance - to ensure that the targets of halving world poverty, putting every child into school and reducing infant mortality by two thirds. Otherwise, the ambitious target of reducing world poverty by 2015 will just become rhetoric rather than reality. It further states that, rich countrys' failure to meet the UN target of spending 0.7 per cent of national income on aid will result in millions of child deaths. While analysing on the current global economic recession and political instability it gives very little hope and cause for optimism of increased international aid since several major donors are cutting aid citing these reasons. At this outset, what can be said is that if the poor or less developed countries in the world failed to utilise their own resources properly, it is almost certain that the 'religion of development' will come to a standstill.

Paradoxically, in a world committed to universal democracy, human rights and freedom, it should perhaps come as a surprise that the voice of the majority of the people in the world remains unheard. Those who speak about reducing poverty and thereby providing a sigh of relief to the poor are most of the time unfaithful to their commitment worldwide. The politics in every country in the world means struggle for power between the privileged classes, that is, those who were already in power and those who would like to be in the helm of power. Poor are just marginalised and are being used by the so called self appointed champions of the poor as and when opportunity arises

Although, extreme poverty has diminished, where it was quantitatively greatest such as in Asia - many hundreds of millions of people have begun to achieve secure existence. A modest degree of affluence credit of this goes to the good governance and committed political leadership in these countries and also to the flow of ideas and news from the other side of the developed world which is the spill over effect of globalisation and advancement achieved in the filed of information technology. But in totality, the bridge of inequality between the poor and rich is increasing.

While discussing on the politics of development in Nepal, it dates back to 1950s when it came to Nepal with messianic fervour since it opened itself to the outside world in 1951. Nepal has been a recipient of foreign assistance since then which was directed towards different sectors such as education, health, developing agriculture, transportation infrastructure, and power generation, communications and industry. Until mid-1960s, Nepal depended mostly, if not totally, on foreign grants for all its development projects. There are many international agencies/bodies providing aid to Nepal some in the form of grants some in the form of loan. Such as UN specialised agencies, multilateral lending agencies such as the World Bank/IMF, Asian Development Bank, private agencies for example Ford Foundation, several other international non-governmental organisations and other donor countries offered bilateral assistance.

Under the auspices of World Bank, the Nepal Aid Group was created in 1976 for the development of Nepal and this Aid Group meets in an interval of two years to discuss as how best Nepal can be helped for the overall development of the country thereby reducing the poverty. However, despite all these, 'BIKAS' and poverty remains un-tackled in their true spirit. Nepal has been classified as one of the poorest nations in the world ranking second only to Sierra Leone. More than half of the nation's population live below the poverty line. There has been little achievement in rural development in the country. And with limited investment in the health sector, a large proportion of the population does not have access to health services. The government of Nepal has placed development and eradication of poverty on its priorities since 1950s but there has been a lacklustre and disdain. Why we are not moving a head? Why does it take twenty years time to construct 100 kilometres of road despite pouring in of foreign aid?

The virtual reason to, our dismay, is that those who know better and make policy by virtue of their presence in the government and other high ranking offices of the government are in the business of making money, money which does not come from nowhere, does not fall out of the skies, but is being churned out of the national resources for their personal benefit.

This is the dilemma of development and poverty in Nepal. In the past 12 years of democracy, Nepal has seen many governments and uncountable number of ministers but the weak governments coalitions and their strong engagement in corruption have helped to foster political instability. The frequent changes in the government have had more to do with power-mongering and financial gain than with the national interest. Lacking a clear vision of national unified development and the governments failed to deliver on health, education, poverty reduction and water-resource development as expected by the people. The basic analysis is that people are held back from fulfilling their true potential by economic failure poor education, poverty, prejudice and discrimination pushing country on the verge of total economic collapse and political instability. Tourism is almost dead, and the country hovers on the brink of a protracted civil war with the Maoist insurgents.

Ambitions Step

In order to come out of these problems, our policies should be directed in their truest spirit towards building a nation, that is, a modern, tolerant, outward looking Nepal where power wealth and opportunity are in the hands of many not one. To some extent, the recent initiative taken by the present government to combat corruption, a root cause of the all problems and downside of Nepal, is a milestone on its own. If such an ambitious step is implemented honestly, definitely, Nepal can witness the real development, which will herald a new era in our society.

Small-scale Enterprises In Nepal

By Shradha Dhungana

SMALL-SCALE enterprises constitute the backbone of all economies, regardless of their level of development. Small and medium scale enterprises contribute about 40 to 60 per cent of the total output or value added to national economy, according to Dr. Bishwa Keshar Maskay's work The Small & Medium Enterprises Promotion Through Local Capacity Building (CDG).

Vital Role

Recognising the vital role they play in national economy, the government has taken important measures to promote and foster small-scale enterprises, more particularly in rural areas. This sector is still hit by some specific problems relating to production, distribution and finance, while others are the problems more or less common to all types of enterprises. Some other specific problems exist in Nepal's small industries particularly situated in rural and backward areas like Lubhu, Thecho, Thimi, and Panauti.

Small business enterprises can help a country exploit its local resources and savings, and develop innovative products, thereby generating self-employment opportunities. However, the entrepreneurs in this sector grumble that concerned government agencies have not extended adequate support to them. Overall, small-scale enterprises in Nepal have not been more successful in mobilising the available resources and opportunities more effectively. The main problem could have resulted from one of the causes like finance, production, technology, strategy, management, or marketing, or all of them.

The small-scale sector has been one of the most significant contributors to the industrial development in Nepal. However, the growth of small-scale industries has not been very satisfactory despite the efforts towards developing the entire industrial sector.

The total problems existing in the small-scale enterprises may be divided into two broad categories: Internal and External. The internal problems affecting the small scale industries relate to organisation structure, production channel, marketing and distribution channels, technical know-how, industrial relations, capacity utilisation, strategies, planning, finance, etc. On the other hand, external problems obviously result from factors beyond the control of the entrepreneurs.

Considerations of location, power, water, and communication are also crucial. The decision on location involves consideration of the availability of infrastructural facilities, the cost and tenure of acquisition, the availability of power, labour, water and proximity of markets.

Among the internal factors, finance issues including its types like core capital, working capital, long-term funds and recovery needs to be considered. Lack of adequate funds makes it difficult for the small-scale industries to acquire modern machinery and tools and to maintain well organised and fully equipped factories. For capital accumulation, small-scale enterprises have the difficulty in obtaining credit from commercial and other banks due to inability to provide collateral security demanded by the lending organisations. Due to weak financial situation, they cannot also extend credit sales and liberal credit terms in the sales of their products.

Marketing is one of the major stumbling blocks for the small-scale industries in Nepal as they awfully lack the knowledge of marketing and its importance.

The other problems are government policies on taxation, industrial and financial regulations, inspections as well as raw materials, competition and volatile business environment.

One of the major handicaps is the absence of the latest technology and appropriate management in small-scale enterprises, which put them in a weaker position against large-scale enterprises having the strength of resources of finance and competent manpower. Obviously, the resources of the small-scale sector are limited and management weaker. Small enterprises cannot influence suppliers (of raw materials), customers, and pressure groups nor can have an influential say to government bodies over framing business policies.

They also lack specialisation, standardisation, proper strategy, methodology, and human resource development (HRD) programmes. moreover, they lack management expertise, a key to business success. Problem of lack of human resource development (HRD) should also be solved with proper training, industrial research, and collection and dissemination of related information.

Beyond the external and internal problems, other problems of small-scale enterprises lie in identification, formulation, implementation and evaluation of projects. Having short supply of consultancy and counselling services, small-scale sector is like a creeping child in Nepal; it needs a strong supporting hand.

Entrepreneurship development is another problem of small sectors. It involves development of idea, readiness to take risks, ability to organise and mobilise other factors of production like capital, labour, land, and intangible factors like technology.

High production costs should also be controlled to enable them to compete with imported products. The government should support them by developing infrastructure in the appropriate areas and promote market. Technical and financial assistance at national and regional levels should also boost this sector in Nepal.

The small-scale sectors should come out of the familial business practices and bureaucratic rules and regulations and move towards efficient management styles.

The problems of small industries should be treated as "challenge". There are no simple solutions, and much remains to be done towards creating a favourable environment for a small-scale enterprises. In Nepal, they need to be progressively modernised. Modernisation demands not merely modern machinery and advanced technology but a different management psychology. Not only inside the company, but also the social mind must be made progressively modern and rational. The society ought to exhibit modern attitude, discipline and character. The traditional values and conventional attitudes towards business ought to undergo a radical transformation and abilities systematically be developed to make it the new order of the day.

The greatest obstacle in the way of industrial progress is the paucity of modern management and technical skills and capabilities.

Business education

To ensure effective management in the small-scale enterprises and a conducive social order, new educational system has to be built up on different lines with accent on achievement, innovation and enterprising effort. It helps instil a spirit of acquisitiveness and pride in enterprises and optimism towards innovative change. Proper business education should be formulated to provide the requisite and appropriate impulse and motivation, which in turn will breed industrial entrepreneurship and infuse the service institutions with a sense of purpose and a spirit of achievement. This will build strong entrepreneurial base that ensures expedited industrial progress in the small-scale enterprises too. This is essential if small-scale enterprises were to constitute a key link in the process of socio-economic transformation of underdeveloped socio-economic structures.

Fright In Air

NU

"PILOT, pilot, are we ready to take off?" asks a first-time flyer from a Nepalese village, due to board a Nepalese private airlines owned aircraft.

"Yes" said the pilot.

"Has the plane been filled with necessary fuel and water?, " the rustic asked again.

"Yes we have done all necessary preparations to fly the plane," replied the pilot, who by now was extremely perturbed by the rustic's question. "Why did you ask the question?"

"I asked whether the plane needs to be pushed in the middle of the its flight as we usually do when we travel by our buses!"

The villager's concern seemed to have originated from his deep sense of fright over the flight to be taken in any private airliners of the nation. The rustic may sound foolish because an airplane does not need a push or a tug to restart its engines in the middle of air so that it can be taken off once again. The stoppage of engines in mid-air means a certain crash. Nevertheless, it surely hints at the aspect concerning the flying of our private airlines. The danger of becoming a crash victim remains in the air whenever we fly by these airlines.

These days, the air passengers' moral has been very low while the private airliners fly high. The accident record set by the private sector owned aircrafts' is mind-boggling: seven crashes in past eight months. Thirty-two people have died in the three accidents that occurred in last two months expose how insecure are our privately operated airliners. Altogether, the nation's aviation sector has had 57 air crashes in the last 56 years, where about 576 people have lost their lives. After the private airlines took to the wing a decade ago, about thirteen air accidents have taken place.

Opening of the Nepalese sky for private airlines has opened new vistas in the aviation sector. It broke the monopoly of Royal Nepal Airlines. But along with the increase in number of private airliners, it also brought the apprehension that flight security of our private airliners is not up to the mark. Since the time of granting of the licenses to the private air operators, there has been at least one air crash per year. The reason cited is the difficult topography of Nepal.

This may be one of the reasons when Death danced its ugly dance at the Christi Nachne Chaur in the latest airliner crash near Pokhara, where 15 tourists perished. Death mocked at our air safety measures despite general belief that the ill-fated twin otter was flying the right path before it collided against a hill. Malfunctioning of an altimeter that informs the pilots about the altitude was believed to be the reason of the crash.

The nation with its copious rugged terrains is a "graveyard" for a flyer. The topography here gives a terrible tremble for even to a seasoned flyer.

Our private airlines companies take flight security for granted. From mid air mal-functioning of equipment to human errors on the part of young and inexperienced pilots produce a potent recipe for "flight to death" to the hapless passengers. Security measures are flaunted more when nation experiences nature's wrath. It is a pressure time for airliners. More people, despite skyrocketing airfares, want to travel by air as landslides and floods damage the roads, and at some occasions, terrorists put hindrances to smooth road transportation.

With the sudden spurt in air crashes, those who want to fasten their belts in private airliners may fret now. While they take a peep on the beauteous mountains of the Himalayas from the board of a plane, the pilots inside cockpits might have been fighting hard with their luck to keep the aircraft on the right flying route. In their hope for safe dash to airports, they may flap at the slightest hint that the aircraft due to some snag might fail to cross the right pass of the difficult terrain on a monsoon lashed day. The private airliners may well prove chariots of fire from where passengers may choke to death.