Forest Resources Development
Concerted Effort Needed

By Khilendra Basnyat

NEPAL'S high population growth has compelled greater clearance of forests for settlement, for cultivation and for fuel. Consequently, the land is overexploited, leading to soil erosion and considerable decrease in soil fertility.

In recent years, Nepal's forest has been considerably degraded. Valleys, which were covered with forests in the 1960s, have been cleared in many areas. In these areas, access to input or outside employment made conversion lucrative.

No doubt, the National Conservation Strategy of 1988 and the Forestry Sector Master Plan of the same year included various activities related to the protection and enhancement of forest resources of the country. However, much remains to be done in this regard.

In fact, foreign aid in the form of grants and loans to carry out forest development projects, planned with expatriate assistance, has played a significant role in Nepal. The history of expatriate involvement in Nepal's history has been evident. In the early years, foreign advisors generally encouraged forest resource consumption without emphasis on replenishing it. Later on, they were the first to be alarmed at the dangerous outcomes of deforestation in Nepal.

In the past, many agencies in the Ministry of Forest were set up with foreign assistance.The Community Forestry Programme is funded mostly by external assistance.

Community, Forestry Management is helping to supplement the need of firewood, fodder and timber for the local people. It has also helped to maintain soil fertility and to protect national forest.

Community forestry is seen by many as they key to increasing the supply of forest products. However, local cooperation is essential for successful community forestry.

Although villagers do not have to be skilled as long-term technical planners, they must be able to see that their long-term interest lies in managing the community forests more effectively. They must also know their rights and responsibilities regarding the community forestry so that an increased extention endeavour is needed. The Forest Department needs to be more oriented to provide technical advice and input to villagers since they manage the forests.

In reality, community forestry projects alone cannot solve Nepal's increasing rural energy problems. The outcomes of the community forestry programme cannot keep pace with incremental firewood demand of the growing population.

It has been observed that under the forestry projects there is not adequate increased production from the newly planted forest or existing forests to provide the fireweed and fodder needs of the population. Moreover, community forestry project will not by themselves resolve Nepal's deforestation problems.
Of course, the community management of forests requires trust in the local authorities. However, without strong local leadership this may not be possible.

In some rural communities, where strong leadership has made a commitment to forest management, the community forestry programme has been found to to be successful. However, in many villages, where local leadership is feeble, nothing has been done in regard to the community forestry programme. In areas where the government has exercised little control, the introduction of community forestry has been realised as an unwanted outside intrusion of authority.

Increasing demographic pressure on mountain resources is one of the main threats to the sustainability of Nepal's forests off-farm employment, represented largely by migration, offers an alternative income source to mountain communities and has played a positive role in reducing pressure on marginal land. However, throughout many of Nepal's Middle Mountains, the pressure on forest resources continues to grow. Actually, it is only through community protection that these resources can be kept away from over exploitation.

In recent times, some communities have developed forms of access control in order to guard against forest resource degradation. Undoubtedly, the recent legislation in Nepal provides some authority over the actions of local user groups. However, many of these groups are still unaware of their right and responsibilities under the new laws.

The Forest Department has been facing a challenge in implementing the progressive community resource management policies that have been formulated by the government since 1977. While the department is increasing in size and capacity, training the existing and new staff to work with communities in managing the isolated forest resources remains a challenging task.

Of course, the creation of collaborative agreements between the Forest Department and the forest users group will need intensive work at the local level. Local administrators, foresters and village representatives will require guidance and training if decentralised and resource policies are to result in more sustainable and productive management. However, low pay and an inadequate and uneven recognition of outstanding services impede the effective functioning of officials. These result in an uneven forest management.

It was virtually impossible for the government to manage the forests after nationalisation. The return of formal control of the forestland to local communities represents a change in Nepal's forest policy.
Forest management by rural communities seemed to be the best solution. However, the shortage of trained technical and administrative staff in the Ministry of Forests and Soil Conservation, which is responsible for implementing forest policies, impact the effective functioning of the community forestry programme.

No doubt, foreign aided projects are responsible for the implementation of the community forestry programmes. However, these programmes have been found more successful in producing and distributing seedling rather than at planting forests.

Since the community forestry programme was implemented, it became obvious that many indigenous forest management systems conducted by individual households, extended families and clan groups and settlement clusters are still working.

One of the problems facing the management of forests by the local people is that usually they lack both the experience and operational capacity to manage their resources. However, it is evident that the development of the local people's capacity to support community management systems will require a sustained endeavour for some time to come.

In fact, the problems associated with Nepal's forest resource are interrelated with the problems of population growth, poverty, agriculture and allied activities. To make a significant development in forest resources, concerted effort is needed from the government, international agencies and local people.

Price Fluctuation At NEPSE

PEOPLE think, the safest place to invest your hard earned money these days is an buying/investing in shares. Many people believe that investing in shares is an easy way of earning money. Though, the place does not assure you of profits at all times, there are sometimes greater risk of losing the money invested. The current trend of falling prices proves the fact that it is not always safe and profitable.

Barometer

It has been rightly said that Stock Exchange is the economic barometer of a nation. Though the history of Nepalese Securities Market began with flotation of shares by Biratnagar Jute Mills Ltd & Nepal Bank Ltd. in 1937, it still has a long way to go, when compared with other foreign Sock Exchanges like BSE (Bombay Stock Exchange), NYSE (New York Stock Exchange) and Tokyo Stock Exchange. At present 115 companies have listed their securities making them eligible for trading, however recently 25 companies have been delisted, making it 90 companies ultimately.
In newspapers and other news channels, we often come across the headings like NESPSE (Nepal Stock Exchange)'s index has risen by such per cent or fallen by such per cent. But very few people understand the implication of NEPSE's index. Like other market, demand and supply influence capital market. But, factors like company's performance, government policies, public awareness, economic scenario of the country, political activities etc has direct influence on the price fluctuation of NEPSE. Company's performance determines the profitability ratio of companies. Higher the profitability ratio of the company, more attractive the company's shares will be to invest in. The company might earn more profit but if the government imposes high tax then it will decrease the shareholder's wealth. Different rules and regulations of government can also greatly influence the price fluctuation. At present, Nepalese Stock market is facing the main problem of economic downfall. Like other sector of country, NEPSE has been affected by gamut of different political disturbances like Nepal Bandhs, Chakka jams, strikes and Maoist problems. Terrorism and the global economic slump have also greatly affected Nepalese Stock market. Likewise, slow industrial development limited the opportunites to invest. This can decline the profits of financial institutions that ultimately decline shareholder's wealth. This is the main reason for declining trend of share price.

Market maker concept was introduced to stabilise the price fluctuation. However these concepts failed due to the lack of conductive environment for proper functioning. The main reason for price fluctuation is that there is no fixed pattern of investment. Investment is done on whims and sheer haunches. The market is more rumour driven than information based. Investors don't take the trouble of studying the balance sheet and other financial accounts of the company before investing. Very often, lack of public awareness has been the root cause of price fluctuation in NEPSE. Of course, price fluctuation is the natural phenomena in NEPSE but unhealthy price fluctuation is never good for any economy. Other independent variables such as company's performance, Govt rules, and policies and market intermediaries also influence the fluctuation to a great extent.

The most disappointing thing is that from the very beginning the commercial bank sector has dominated the Nepalese share market. Other manufacturing firms and sector haven't been performing well.

Suggestions

So its high time that all the concerned authorities work together to uplift the share market. Necessary steps should be taken to control market manipulation os as to check unhealthy fluctuations. The competitiveness and expert knowledge of intermediaries affect the price of exchange to large extent. Favourable policies are needed for creating inspiration and enthusiasm. Organisations should be discouraged to window dress their financial statements. And institutional investors should be encouraged to invest. It can't be ignored that stock market is the backbone of nation's economy.

(This article is jointly prepared by Amir Lal Shrestha, Binu Ghimire, Namrata Khadka, Roshani Rawal and Udita Joshi, KU, MBA Students)