This Beed received a spate of emails from well wishers abroad when the curfew was clamped on this valley last week. When mobile phones were cut, more worried queries arrived. Then came the state sponsored banda, in the form of a day-long curfew, and people started offering me their homes and advice on why I should leave Nepal. Perhaps it's to be expected that a country that resorts to curfews and disrupting communication lines without explaining why such measures are necessary will produce such a reaction. Regardless, the impact on the economy is starting to tell.
It's a pity, for example, that the tourism industry cannot see three good months in succession. People in power who make decisions that impact the economy do not realise that a single advisory can kill businesses for months. Another classic case is the energy sector. A 3 1/2 -hour blackout schedule has suddenly expanded to 17 hours and experts suggest this may increase again in a month or two.
This is something we will have to live with till Pashupatinath knows when. On one hand there is no way that donors will cough up 'free' money to build generation plants and on the other, no private investor would be willing to take the risk today. Hydropower units require at least four years to be built but Nepal has no plans on the drawing board.
Five years of myopia is starting to show in the form of blackouts. Alongside this shortage of power is a bankrupt NOC (No Oil Corporation). Fuel prices are high and the price of generation from captive diesel plants is double the price of electricity. Political myopia and potentially vested interests have delayed reformist legislation resulting in this cold, dark winter.
With no electricity nor diesel, the Stone Age appears near. Conversely, if we had not experienced such problems over the last decade, our gross domestic product (GDP) could today be closer to $ 10 billion, much of which could have been invested in development. The comparison is not made just to cry over the past but to put into perspective what we have potentially lost in the past decade's conflict.
Higher energy costs and erratic supply of petroleum products also means a direct inflation hit. As inflation touches the double-digit mark and GDP growth turns negative, the economy further suffers. There are many examples in the world of governments being toppled due to inflation, which results in more frustration for the common citizen. The worst scenario of all would see the political exchange rate with India being reviewed downwards, producing spiralling price rises. A depreciated Nepali Rupee is the last thing this economy needs.
While neighbouring economies are growing at a rapid pace, we are seeing stagnation. More frustration will result if our open border, already witnessing a pilot citizen ID scheme, becomes more restricted. This would clamp down the Nepali economy even further.
Common sense suggests that ruling a good economy is always better than ruling a bad one. However, it is not uncommon for common sense to lose out. By the time the political equations are settled, we will have lost more. The Beed has always maintained that giving up the business of war at the cost of the business of peace is always difficult for people who have tasted the fruits of war. We have to look at the larger picture. A country of 25 million depends on it.
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