Nepal, UN funds for development projects end up in the pockets of government
Kathmandu (AsiaNews) - A month after delivery of the new constitution, Nepal is facing a dramatic economic downturn caused by 12 years of civil war, corruption and excessive state interference in the economy. And this in spite of economic aid of more than a billion Euros, according to 2010 data. At the UN Conference on Trade and Development (UNCTAD), held in Doha (Qatar) April 22 to 26, experts have called on the Nepalese authorities to use aid to develope private enterprise in the country and sustain foreign investment. According to statistics from the Organization for Economic Co-operation and Development (OECD) about 1/3 of the funds should be earmarked for investments in the business sector, but the government uses them mainly to cover its expenses (approximately 26% of ' entire state budget). Only a small portion of funding is provided to the companies.
Maneula Tortora, UNCTAD representative in Nepal says that "no plan or strategy can generate real growth and poverty reduction if it ignores enterprise and trade." He cites the OECD data which shows that the authorities have used the few development funds for technical assistance projects and field studies which failed after a few months. A block on investments, especially foreign, is added to the total absence of infrastructure and local business networks and the total absence of incentives for foreign companies.
Nepal has a very localized and isolated economy compared to other developing countries. About 60% of the population lives on 1.5 US dollars a day. However, the Nepal Planning Commission reiterates that for years the average income of the population has increased. But they did not take into account that the cost of living has doubled in the last five years. The growth of gross domestic product depends largely on remittances of over 7 million migrant workers, representing about 30% of GDP.
But this has created enormous inequalities between urban and rural areas. A recent report by the Central Bank of Nepal says the money from migrants, especially in villages, are used to cover the debts of families and enrich village leaders and members of higher castes, who often live on usury. They invest money in real estate business.
Those who can not find work at home or abroad, always chooses the most dramatic way out of suicide. The cases registered by the authorities are about 4 thousand a year, with an average of 11 deaths per day. The phenomenon is growing and affects young people between 14 and 30 years, especially single mothers.
The UN experts have accused the Maoist party of creating this climate by interfering too often in the economy. In recent years many companies have closed or are in crisis because of strikes staged by the workers supported by the Maoists. Foreign investors have no guarantee and the Maoist State does not offer any refund for the days of no production. In February, the strikes of the powerful All Nepal Trade Union Federation (Antf), sustained by the government, forced the factories of Unilever Nepal, one of the largest corporations in the world, to close for a week. The company lost tens of thousands of dollars a day and will leave the country in case of further strikes.
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