8/17/2019 Let aid do more (Himalayan Times)

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ECONOMICS06

THE HIMALAYAN TIMES

S UN Y , MARCH 9, 2014PERSPECTIVES

investosansar

Reuters

Siddharth PoddarSingapore

Nepal has long been an‘aid favourite,’receivinginterest (and financialcommitments) from a

plethora of internationalagencies and donor coun-tries. In a matter of just threeyears between fiscal year2010-2011 and fiscal year2013-2014, Nepal received aidcommitments of USD 5.46billion from a total of 73donors, of which USD 3.41billion has been disbursed for742 projects across 50 sectors.

These numbers are quitestaggering, parti cularlyconsidering that for most of this period,Nepal has eitherhad an unstable governmentor no government at all.While there is no denyingthat Nepal requiressignificant external assis-tance to bolster its economy,it is important to ask where

this money has been going,especially at a time of near-paralysis of government.

A look below the surface isquite revealing,for the choiceof sectors that have receivedfunding indicates the dilem-ma donors have been facingin Nepal. The sector that hasreceived the greatest amountof disbursements is educa-tion, followed by local devel-

opment and health.These arefollowed by road transporta-tion and electricity, arguablymore important sectors. Thatelectricity and road trans-port have received less assis-tance than education andhealth illustrates the chal-lenges donors face in fundingprojects that require exten-sive state participation and astable political environment.

In Nepal’s context, thepriority areas for fosteringeconomic growth and devel-opment must be the powersector, followed by transportinfrastructure. Not only dothese two sectors have a moresignificant direct impact oneconomic growth, but theirfollow-on development effectsare also greater than that of other sectors.

This is not to suggest thatdonors have got it wrong. In

fact, it only suggests howpoor successive Nepaleseadministrations have beenin creating conditions con-ducive for the development of the electricity, road and otherinfrastructure sub-sectors.Donors are still puttingmoney to work in Nepal, butlargely in sectors that see lessdirect government involve-ment. Essentially, these aresectors in which it is easierfor donor commitmentsto have greater impact.

This shift in focus startedhappening at the turn of the century when politicalinstability in Nepal peakedwith the heightening of ten-sions with the Maoists. Whilethe proportion of funding forsocial sectors vis-à-vis hardinfrastructure has droppedsomewhat, the focus is stillsquarely on the former.

It is a unique predicament

donors find themselves in astheir hands are tied due

to the political environment.On the one hand, they arecriticised for taking theeasy way out and not doingenough to support infrastruc-ture development. On the oth-er, when they occasionally dotry and push for reforms thatcan make it easier for them tocommit to projects in thesesectors, they are accused of trying to push their agendaand impose on governance.It is a lose-lose situation.

If they try and seek ac-countability through the dis-bursement of loans instead of 

grants, they are accusedof burdening a poor country

with further debt obligations.If, on the other hand, theyprovide grants instead of loans, questions relatingto accountability are raised.

Our new government needsto address this issue soon, forgreater donor involvement inthe infrastructure sector willbe a natural catalyst forthe private sector to boost itsparticipation in this sectortoo. For too long now, aidagencies have been blamedfor misplaced focus. It wouldbe good to remember thatcharity begins at home.

Let aid do more PRIORITY AREAS FOR FOSTERING ECONOMIC GROWTH MUST BE THE POWERSECTOR, FOLLOWED BY TRANSPORT INFRASTRUCTURE

The author specialises in the political

economy of South and Southeast Asia 

and is a co-founder of StoneBench

Research and Communications.

He can be reached at 

siddharth@stonebenchasia.com 

Frack cracks

and life

Sharad Koirala Kathmandu

Over the last six years, theproduction of oil andnatural gas has tremen-dously exploded in the

United States. Oil andnatural gas which wereentrapped in the shale rock,had somehow excogitated withthe improvised technology thatis fracking, which became aviable technique to extractthese resources. However, oiland natural gas don’t seem as arenewable resources to many.But some excerpt that, it is anatural gas, an energy thatworks today and has no

evidence of water that has thecontamination from fracking.This is the technology whichused for many years andimportantly, the mining of gas shale still makes senseto most countries.

According to the EIA(Energy Information Adminis-tration), fracking is in practicein more than 28 states in theUSA and has estimated over482 trillion cubic feet, of technically extractable shalegas, which results in a decreaseof three per cent in oil imports.The withered states likeKansas and North Dakotablossomed with huge growth indomestic energy production,creating employment. Argenti-na, China including manyEuropean countries havepotential to frack, whichcould increase their oilreserve 10 times in the nexttwo decades.

The question in my mind — 

how viable is it for theenvironment and can frackingsave the economy?

The consequences are griev-ous; the process of hydraulicfracturing impacts drinkingwater, when it’s drilled deepdown under the land,the highchemical level contained in thefracking fluids (which is undis-closed till date) is leaked toground water that could leadground water contaminatedwith dark coloured grease,sediments and floating debris.Fracturing uses millions of gallons of water which couldbe used elsewhere and thatcould turn those water con-taining chemicals. New York

City is at the top of unfilteredwater supply in the world.However, air is not left out inthis process, where hydrocar-bons and volatile organiccompounds are extracted inthe process which pollutes asignificant amount of air.Earthquakes too have occurredin areas of fracking wells.

So, without leaving any stoneunturned, there is need forstrict regulations, that canprovide the surveillanceauthority to the department of conservation which monitorsair and water quality arounddrill sites and conducts anindependent peer reviewassessments for fracking wells.

Nothing is more importantthan the environment andabove all nothing is more im-portant than life.The economyis important but se condary.Therefore, everyone needsto join hands against thesebarbaric practices.

EVERYONE NEEDS TO JOIN HANDS AGAINST THESE BARBARIC PRACTICES

The author is the assistant manager at the

Research and Development Department of

MEX Nepal. He can be contacted through 

r&d@mexnepal.com 

 Ananta Raj LuitelKathmandu

Two major ruling politi-cal parties — NepaliCongress and CPN UMLare indulged in dispute

unnecessarily over the au-thority of authenticating theConstitution to be promul-gated by the Constituent As-sembly since a week.

Since the first ConstituentAssembly failed to deliverthe Constitution we haveelected the second one,now it is the job of theConstituent Assembly topromulgate a constitution asper the wishes of the people.

This is not only the spiritof the Interim Constitutionbut is also the mandate of the 19-day long people’smovement held in 2005/06that led the country towards

a republican system.As per Article 87 of the

Interim Constitution, a Billpassed by the House shallbecome an Act after it isauthenticated by the Presi-dent. Before the provisionrelating to the Head of Statewas inserted in the Constitu-tion after the country wasdeclared a republican set upand there was a provisionrelating to authenticate anyBill by the Speaker.

Further, Article 165(D)states that Bill means a draftof Constitution or Act intro-duced in Legislature-Parlia-ment or the ConstituentAssembly and proceeded for

promulgating as an Act orthe Constitution.

The procedure of passingthe bill in regard to theConstitution is not differentfrom the procedure relatingto bill of Acts as this is amatter of endorsement bythe CA as done in the parlia-ment, but this is the authori-ty to be exercised by thePresident for authenticatingthe Constitution by givinghis final seal.

The procedure envisionedby Article 70 is the process of passing bills of the Constitu-tion but it is not differentwith the law promulgationprocess therefore citing this

provision opposingthe presidential pow-er for authenticatingthe Constitution isbaseless.

It is the authority of theHead of the State to exercisea ceremonial role commut-ing or remitting any sen-tence imposed by any court,or granting pardon, appoint-ing heads of state organsand constitutional bodieswith recommendation from-concerned agencies andaccepting credentials fromambassadors.

It is not possible foranyone to exercise suchauthority other than the

Head of the Statebecause it is thefinal authority tobe exercised withthe recommenda-tion of concernedauthorities. Socreating confusionon such alreadyset matters

does not help any politicalparty and hinders theconstitution makingprocess.

“This is the basic normthat the President exercisesthe final authority indemocracy,” Krishna JungRayamajhi,former SupremeCourt Justice told THT  Perspectives. “I f we bri ngthe Head of the State intocontroversy for such pettyissues, it will not helpadvance our republicansystem,” Rayamajhi added.

Redundant disputeCEREMONIAL AUTHORITY ALWAYS EXIST WITH THE HEAD OF THE STATE

File Photo / THT

ReutersWashington

US job growth accelerat-ed sharply in Febru-ary despite the icyweather that grippedmuch of the nation,

easing fears of an abrupteconomic slowdown andkeeping the Federal Reserveon track to continue reduc-ing its monetary stimulus.

Employers added 175,000 jobs to their payrolls lastmonth after creating 129,000new position s in January,the Labour Department saidon Friday. The unemploy-ment rate, however, rose to6.7 per cent from a five-year

low of 6.6 per cent as Ameri-cans flooded into the labourmarket to search for work.

“It reinforces the case forthe economy being strongerthan it’s looked for the lastcouple of months,” said BillCheney, chief economist atJohn Hancock Financial Ser-vices in Boston. “It makeslife easier for the Fed andfeeds into continuing thetapering process.”

The report also showed thelargest increase in averagehourly earnings in eightmonths and the payrollscount for December andJanuary was revised up toshow 25,000 more jobscreated during those monthsthan previously reported.

Investors on Wall Street

cheered the report and theStandard & Poor’s 500 indexreached a fresh intradayrecord high before fallingback to trade marginally

lower. The dollar lifted off a four-month low againsta basket of currencies, whilethe yield on the benchmark10-year US Treasury note

 jumped to a six-weekhigh, putting it on coursefor its biggest weekly risein three months.

Interest rate futuresshowed that traders rampedup bets on the Fed raisingrates a bit sooner than hadbeen previously thought.They now point to a 53 per

cent probability of a ratehike in June 2015.

Unusually cold and snowyweather has disruptedactivity in much of the

United States for months,and a few economists hadbegun to speculate that theUS central bank could recon-sider its plan to wind downits bond-buying stimulus.

The eastern and centralUnited States experiencedrecord low temperatures lastmonth, and ice and snowblanketed densely populatedareas during the weekemployers were surveyed forFebruary payrolls.The win-ter storms left Wall Street

bracing for a much weakerreport. Economists hadforecast non-farm payrollsrising by only 149,000 jobs.

The weather, however, did

have an impact. It cut intothe length of the averageworkweek, which hit its low-est level since January 2011and led to a drop in a mea-sure of total work effort. Buteconomists expect a reversalas soon as this month.

“The economy will defrostin the spring and heat up inthe summer,” said MichelleMeyer, a senior economistat Bank of America MerrillLynch in New York. “Weshould see solid gains in job

growth in coming months.”The smaller survey of 

households from which theunemployment rate isderived showed 6.9 million

people with jobs reportedthey were working part-timebecause of the weather. Thatwas the highest readingfor February since theseries started in 1978.

It also showed 601,000people could not get to workbecause of the weather, thehighest level for Februarysince 2010. Economists said

 job growth in Februarywould have been as high as200,000 if not for the weather.

Payrolls averaged about

205,000 new jobs per monthin the first 11 months of 2013,but that figure dropped to

 just 129,000 for December,January and February.

US job growth offers upbeat signEASING FEARS OF AN ABRUPT ECONOMIC SLOWDOWN DUE TO WEATHER 

 Agencies