Nepal fol­low­ing footsteps of Venezuela?

People's Review - - FRONT PAGE - By Pushpa Raj Prad­han

Last week, the US dol­lar price had es­tab­lished a new record of above 114 ru­pees per unit. Nepal's cur­rency is tied-up with the In­dian cur­rency at 100:160 ra­tio. As In­dian cur­rency has be­come weak, it has af­fected our money mar­ket. Due to the fixed ex­change rate with the In­dian cur­rency, we are lucky to get one US dol­lar at 114 ru­pees or so. If the In­dian cur­rency will be­come fully con­vert­ible, we can­not imag­ine the price of our cur­rency. Nepal's econ­omy is head­ing to­wards a neg­a­tive path. The coun­try is fac­ing se­ri­ous deficit in in­ter­na­tional trade. For the last sev­eral years, Nepal's in­ter­na­tional trade ranks at the ra­tio of 4:96 i.e. we are ex­port­ing goods worth 4 ru­pees whereas we are im­port­ing goods worth 96 ru­pees. Last year, for the first time in the his­tory, Nepal faced deficit in her bal­ance of pay­ment also. Bal­ance of pay­ment shows the real pic­ture of the eco­nomic health of the na­tion. Neg­a­tive bal­ance of pay­ment is an in­di­ca­tion that our econ­omy may crash in the near fu­ture. How­ever, the govern­ment has not been able to in­tro­duce any ef­fec­tive mea­sures to res­cue our econ­omy. The govern­ment is happy to see the in­crease in im­port based rev­enue rather than en­cour­ag­ing ex­ports. Un­til sev­eral decades, Nepal was ex­port­ing agro­prod­ucts but now Nepal has be­come an im­porter of agro-prod­ucts that too worth bil­lions of ru­pees. If the price of petro prod­ucts will con­tinue to in­crease in the in­ter­na­tional mar­ket, very soon, Nepal's for­eign cur­rency re­serve will be fin­ished. The coun­try's de­pen­dency on petro­prod­ucts is in­creas­ing in a hy­per rate but the govern­ment has not been able to in­tro­duce any pol­icy to sub­sti­tute petro-prod­ucts. If the govern­ment would give pri­or­ity on elec­tric­ity op­er­at­ing ve­hi­cles and use of elec­tric­ity for cook­ing food, a re­mark­able size of for­eign cur­rency ex­pen­di­ture can be de­ducted from im­port of petro-prod­ucts. For this, the govern­ment could launch a cam­paign to im­ple­ment hy­dropower projects and also ed­u­cate the peo­ple. Un­for­tu­nately, the govern­ment is en­cour­ag­ing im­ports of lux­ury ve­hi­cles as she re­ceives at­trac­tive amount of tax in im­port of such ve­hi­cles. The govern­ment doesn’t want to lose such a big mar­gin of rev­enue by dis­cour­ag­ing im­ports of au­to­mo­biles. On the other hand, by in­tro­duc­ing seven prov­inces and 753 lo­cal units in a tiny coun­try like Nepal, the govern­ment has in­creased gen­eral ex­pen­di­ture by many folds. The govern­ment, to man­age gen­eral ex­pen­di­ture, has cut down the bud­get in the de­vel­op­ment sec­tor. This is also a sad pic­ture of the na­tion's eco­nomic health. The govern­ment

is spend­ing the en­tire bud­get to feed rep­re­sen­ta­tives of the lo­cal, pro­vin­cial and fed­eral gov­ern­ments and also for their fa­cil­i­ties, in­clud­ing lux­ury ve­hi­cles and other such things. Po­lit­i­cal lead­ers are in­volved in ram­pant cor­rup­tion and mal­go­v­er­nance. Pri­or­ity projects are also ru­ined from po­lit­i­cal level con­struc­tion. Pappu Con­struc­tion is one ex­am­ple. The govern­ment has not been able to take ac­tion against those de­fault­ers. It has be­come nor­mal prac­tice in in­creas­ing project ex­pen­di­ture by de­lay­ing the project works un­der a planned set­ting among the po­lit­i­cal lead­ers, bu­reau­crats and con­struc­tion con­trac­tors. With­out po­lit­i­cal level pro­tec­tion or say share of the po­lit­i­cal lead­ers, those con­trac­tors can­not defy the govern­ment rule. But such acts are pos­si­ble in Nepal due to cor­rup­tion and po­lit­i­cal pro­tec­tion. Cur­rently, the econ­omy of Venezuela is fac­ing se­ri­ous eco­nomic cri­sis. It is be­cause of the wrong pol­icy in­tro­duced by the po­lit­i­cal lead­ers un­der the in­flu­ence of cor­rup­tion and com­mis­sion. The price of a kilo­gram of toma­toes is above 5,000,000 bo­li­vars, above 0.76 USD. If Nepal will con­tinue to fol­low the present eco­nomic trend, it won't be too far to see peo­ple pay­ing Rs 5000 for a cup of tea!

Newspapers in English

Newspapers from Nepal

© PressReader. All rights reserved.