Then, and now

Back in the 2000s, during the height of the Maoist war, Nepal was not synonymous with growth: everything was plummeting, from the GDP and purchasing power to remittances, revenue, agricultural and industrial production, and income from tourism. Today, we are planning to graduate to middle-income status by 2030.

Excerpts of the report published 20 years ago this week in issue #255 8 – 14 July 2005:

It is simple arithmetic: if a country's GDP growth is less than its population growth rate then its citizens are getting poorer. Nepal's population is growing at 2.24 percent a year, GDP growth this year will fall to 2.1 percent.

If the inflation rate, which has climbed from 1.7 percent last year to nearly 6 percent this year, is counted it means sharp erosion in purchasing power. Add to that the drop in investment, fall in tourism, plummeting agricultural and industrial production and it is clear that Nepal is getting poorer by the day.

Finance Minister Madhukar Rana, who is preparing the budget for presentation next week, has an unenviable task of paying for more with less.

Remittances from Nepali workers abroad, which served as a parachute for Nepal's economy, only grew by 3.7 percent this year (compared to 4 percent last year) even though the number of workers went up and money transfer became more streamlined. Nepalis aren't sending their money home and political instability has spurred capital flight.

Tourism revenue is down 33 percent this year, third country exports have fallen by 20 percent and there is a severe shortage of Indian currency to pay for imports. The Rastra Bank chartered a 757 recently to air-freight IRs 4 billion worth of cash from Bombay that it traded for US dollars. Private banks are awash in cash, but they have Rs 3 billion invested in unproductive sectors like housing and consumer lending.

For archived material of Nepali Times of the past 20 years, site search: nepalitimes.com