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#331 12 - 18 January 2007 16 pages Rs 30 Weekly Internet Poll # 331 Q. Is the government addressing basic madhesi grievances? Total votes: 2,339 Weekly Internet Poll # 332. To vote go to: www.nepalitimes.com Q. Were protesters right to disrupt the Prithbi Jayanti celebrations on Thursday? NATIONAL DISUNITY DAY: Supporters of the monarchy marched to the statue of King Prithbi Narayan Shah on Wednesday to prevent it from being defaced by Maoists. KIRAN PANDAY UNMIN, better get used to this Into the fray new acronym ANAGHA NEELAKANTAN under a new secretary general in the spotlight throughout possible 2007 needs a success story after negotiations in 2006 until the light. But it Editorial p2 here’s a name for it now: Rwanda and East Timor, and signing of the peace accord and is also a UN-doing our past UNMIN, the United Nepal may just be it. the tripartite agreement. But the formula that T Nations Mission to Nepal. But if the mission is to help new mission’s mandate will be had to be acceptable to India, The mandate: monitoring ‘arms restore lasting peace it will now restricted by what the seven which didn’t want a management’ and elections to the have to be asked to focus on parties, the Maoists, and Nepal’s precedence for UN peacekeeping constituent assembly. four issues: fighters, not just neighbours want: the almost so close to home. The proposal for UNMIN was weapons, the terms of an obsessive focus on cantonments Full story p4 presented to the Security Council acceptable constituent assembly and containers. on Thursday for budgetary election, potential spoilers such Partly it is theatrics. The UN approval and comes as the UN’s as the situation in the tarai, and will be here to add credibility to High Commissioner for Human pending human rights issues. a dramatic homegrown process Rights Lousie Arbour prepares to Ian Martin and his tiny that is acceptable to the parties visit Nepal this weekend. The UN team kept arms management in and puts the Maoists in the best 2 EDITORIAL 12 - 18 JANUARY 2007 #331 Published by Himalmedia Pvt Ltd, Editor: Kunda Dixit Executive Editor: Anagha Neelakantan Desk Editor: Jemima Sherpa Design: Kiran Maharjan Web: Rupendra Kayastha Director Sales and Marketing: Sunaina Shah [email protected] Subscription: [email protected] For Subscriptions: 5011628/29 Hatiban, Godavari Road, Lalitpur [email protected] GPO Box 7251, Kathmandu 5543333-6, Fax: 5521013 Rethinking growth www.nepalitimes.com Printed at Jagadamba Press, Hatiban: 5547018 An aid splurge by itself can’t propel economic growth UN-DOING OUR PAST harting the course of capitals during the conflict, can public investment? The economic and social now assert a deeper presence. The irony was lost on most who were at the Nepal Army base at historical path that Nepal’s Ctransformation during the Non-government agencies are income per capita has taken (red Panchkhal on Wednesday. At a time when Nepal is readying to welcome the full strength of a United Nations monitoring mission, most violent period in Nepal’s already consolidating and line on graph) can be compared there was the chief of army staff inspecting Nepali soldiers modern history is no small feat. extending their networks. If the with how it would have evolved readying to leave for UN peacekeeping duties in Congo and Haiti. But the Poverty Reduction post-1990 donor behaviour is any if aid had translated fully into No one should have any illusions about the involvement of Strategy Paper (PRSP) has done indication, this energy is likely public investment and the the United Nations in arms management in Nepalís peace just that by showing flexibility to be matched by a commensurate investment rate dictated growth process. The UNís role was the face-saving way to get the in these uncertain times. inflow of aid money. as predicted by theory (blue Maoists and the army to agree to stop fighting. For the guerrillas However, experience has line). Our per capita GDP would it offered an opportunity to lay down arms without making it shown that while an aid splurge be roughly five times what it is GUEST COLUMN appear like it was a surrender. And for an army dragged into a which follows public euphoria now if all the aid we have dirty and unwinnable war, it was a neat way to come out smelling Sailesh Tiwari over peace can stoke the egos of like roses and at the same time save its own lucrative UN received had gone into peacekeeping contract. those in power, and give them investment which in turn had It took a lot of shuttle diplomacy and behind-the-scenes effort A testament to the confidence and a sense of spurred growth. to get the Indians to overcome their hang-ups about letting the UN document’s technical durability international validation, it There is nothing wrong with in. Delhi finally agreed as long the UN was not a ëpeacekeeperí, is the fact that successive cannot by itself, propel economic subscribing to a particular theory but a ëmonitorí. Ian Martinís team is hobbled with a limited governments, starting with pre- growth. One of the PRSP’s biggest or ideology, however defunct. mandate: both for arms management as well as to prevent new regression (Deuba), regression shortcomings was that it placed But the misplaced confidence conflicts from igniting, for example, in the volatile tarai. (Chand and Thapa), partially- inordinate faith in the ability of can’t come at the cost of attention The UN is a popular institution in Nepal, the blue flag has a corrected regression (Deuba), aid-induced public investment to the real drivers of economic good reputation and people have high expectations about its role. deep-regression (Gyanendra) to to generate growth. growth. It is widely accepted, for But this is a conflict we got ourselves into and we must solve it post-regression (Koirala), have For a projected annual growth example, that the 1990s saw the ourselves. The UN can help, but canít force us to shake hands. drawn their economic and social target of 6.2 percent over five best growth performance in Even so, the UN must be allowed to tackle potential spoilers to the peace process. After all the bad press itís got in Rwanda policies entirely from it. These years from 2002-07, it specified Nepal’s recent macroeconomic and East Timor in recent years, the UN needs Nepal as much as governments may have been an investment requirement of Rs history when the private sector Nepal needs the UN. Here is one place where the world body has preoccupied with politics to 609 billion. National savings, capitalised on a liberal trade arrived before things have completely fallen apart. worry about where the economy including remittances, could regime. Yet, the government still There is a lot of cynicism about the UN, especially among was headed. But as at least two of cover Rs 506 billion. Planners bloats its public investment Kathmanduís well-heeled who like to poke fun about how slow it them could have declared the intended to source the remaining portfolio as its primary growth is. What they forget is that the UN is us, it reflects the document void, their inaction from foreign grants and loans. At strategy. inefficiencies and sloppiness of its member states. We mustnít can be interpreted as approval. the macro level, the economics Nepal’s decade-long conflict forget that ëarms managementí is a euphemism for disarmament. Now in its final year of usable motivating this ‘financing gap’ held back both the state and the The containers in the life, the PRSP will approach to development private sector. Now that durable cantonments are feed into a three- planning is the belief that public a step towards peace appears a real possibility, ultimate year interim investment will lead to a the private sector is eager to decommissioning development plan. proportionate growth in domestic rebound. The upcoming and the Despite continued income. development plan would spur renunciation of friction over However this aid-investment greater growth if it focused on violence as a powersharing in growth linkage is generally relieving the policy and political weapon. Kathmandu, the weaker than believed and its institutional constraints which There is no political climate theoretical foundation was shackle the private sector, than going back on over the next abandoned by academics a decade by charging the public sector that, and the UN couple of years is ago. Yet it continues to remain with more than it has proven to is here to help likely to provide a the primary framework of be capable of. The effect of aid on us undo our far more benign analysis for policymakers in past. growth also needs to be re- context for Nepal. calibrated if the country is to economic How much would Nepal’s per reap the peace dividend. z development. The capita income be today if all of state, which had the Rs 260 billion Nepal has Sailesh Tiwari is pursuing a PhD in economics at Cornell University in the been effectively received in aid since 1975 had United States and previously worked for restricted to district translated, rupee-for-rupee, into the World Bank in Nepal. Putting off the future Dismissing the provisional constitution as merely a political text is hypocrisy epalís intelligentsia is too are traditionally recruited by old masters. documents. They establish inviolable regime who still populate state institutions preoccupied with the challenges of When the interim constitution comes principlesófundamental freedoms, for would do well to remember a hallowed N the present. Like most societies in into force, politicians will no longer have to exampleóand set the rules of the political principle of parliamentary supremacy: the a similar predicament, we want to swiftly play that role with respect to the palace.