New Business Age : New Economy

  2 min 47 sec to read

By Bhagirath Yogi

When a group of prospective British investors landed in Kathmandu last month, they were willing to take certain risks by investing in Nepal's hydropower sector. But they had not imagined things could have gone that worse. After reading a front-page news report that Maoist insurgents had repeatedly attacked the 12-MW Jhimruk hydropower plant in the mid-western district of Pyuthan on March 30 and 31st. they decided to put off their proposal to develop Upper Tamakoshi hydel project in the hilly district of Dolakha and flew back to London.
Recent escalation in violence across the kingdom showed the extent of deteriorating law and order situation. As in the conflicts elsewhere, Nepali economy has been the prime victim of the on-going war between the government and Maoist rebels.
The insurgency has had very negative impact on the country’s economy - that has a per capita income of US$ 220. Tourist arrival has declined by almost 50 percent over the last three months. “Up to 70 percent of the business activities has declined in Kathmandu and elsewhere.” said Rajesh Kazi Shrestha, President of Nepal Chamber of Commerce (NCC). the chamber of the capital city Kathmandu with a nationwide network of relations. Officials say, the Maoists have destroyed telecom infrastructure worth Rs 200 million over the last few years resulting into an annual revenue loss of an equal amount of money. Unofficial estimates say the toll on infrastructure since November 2001 alone might have surpassed Rs two billion. Almost every sector of national life has been affected adversely from the on-going insurgency, education, health and other development programs have equally suffered. With very poor socio-economic indicators, Nepal is trying hard to achieve comparable levels of human development in the region. Though corruption. bad governance and acute political stability have not helped the matter. the development partners haven't given up hope. They pledged an annual assistance of US$ 500 million for the next two years during the Nepal Development Forum meeting in February this year.
Such assistance could be put into productive use only if Nepal had peace. The continuing violence has disrupted whatever social services people had access to in remote areas. Health workers have deserted most of the health posts and teachers have fled schools fearing attempts on their lives. The rebels have so far killed nearly five dozen school teachers and physically abused hundreds of others for failing to provide them donations or not obeying their orders.
“Peace and security is vital for the socio-economic development of the country.” said Rabi Bhakta Shrestha, President of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), the apex chamber of the country.
Critics say, with a view to weaken the already fragile economy and aggravate the crisis, the Maoists have been targeting industries, resorting to activities like forced: donations and attacking liquor and beer industries - one of the main sources of the government revenue. On the night of April 15, Maoist insurgents once again targeted the factory of Bottlers Nepal (Terai) Ltd. one of the two Nepali bottlers of multinational brand Coca Cola at Bharatpur damaging a “filling machine” of the factory. It is the second attack at the same factory 

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