Cars before roads in NepalAt next week’s Power Summit, let us put finally the horse before the cart
Nepal’s development dilemma has always been that we have got things backwards. Cars were carried over the mountain passes on porter back to Kathmandu before it even had roads.
The people of Pokhara saw aircrafts before they saw automobiles. We set up a university before we built a network of schools. We make plans to distribute wealth before we have found ways to create wealth.
That is perhaps why Nepal’s rulers and politicians are great with populist slogans, but not so great on delivering them. And the media reports unquestioningly on these grandiose plans. King Birendra’s Panchayat Era goal was for Nepal to reach the ‘Asian Standards’ by 2000. We boasted of Nepal’s 83,000 MW hydropower potential over candles and kerosene lamps.
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There was nothing wrong with the slogans, what was missing was the homework, the technical expertise, managerial skills and a real understanding of the market. Today Nepal has many of these ingredients for success in place.
The recent financial closure of the Upper Trishuli Hydroelectric Project hopefully sends out the message that it takes nine domestic and international agencies to work together to build a 200+ MW hydropower plant. Unless we show real growth in the domestic and regional markets, no one will invest, and if no one invests, we cannot open up new energy markets. Both have to be managed like two side of the same coin.
The energy sector is highly compartmentalized -- there are too many agencies that take too long to analyse projects and provide necessary approvals. Nepal’s energy system from idea to market is in the hands of too many people. We need to complete each part of the process, but much more efficiently.
We require a level playing field to scale up the production of affordable and clean hydropower, and the Nepali state needs to step up to use our tax money to absorb many of the costs that have been unfairly piled up on every unit of power generated.
Access roads to potential sites, the evacuation of the generated power and distribution to demand centres are the obvious costs. There are the unjustified costs of building schools, health post, mitigating environmental impacts as well as ‘donations’ to all the ‘gold earring wearing’ political cadre in the locality.
In the same way, the subsidy given to LPG and other fossil fuels must be removed and a pollution tax imposed to support hospitals to take in more people with respiratory health problems. These are all different facets of the energy market. We can start by replacing cooking and driving fuel that pollute and contribute to climate change.
Nepal has a huge fossil fuel import bill that sends money to oil producing economies. The current balance has been maintained by sending young people to work in those countries who send money back home. Hydropower can help break this vicious cycle. We need our young men and women back home.
It will not be easy because it seems that the happiest day in a Nepali’s life is when a visa to the US or Australia gets approved. The government is happy because it does not have to create jobs at home, the banks are glad with the cut they make from all the transactions, and the airlines are happy. Even the person selling plastic covers for passports gets business.
Having readily available and affordable clean source of energy and a young, dynamic population is the best thing going for Nepal. When history books are written a hundred years hence, this could be the milestone when Nepal went from being a poorly-managed country to one of the best-run emerging economies. Norway and Nigeria both have oil, and yet look at where the two countries are: the real variable is governance, not oil.
There is a global trend to elect rich people into public office because they are rich and presumably know how to become rich. In the USA, Chile, Lebanon, Hong Kong and Spain people are sending a clear message from the streets that wealth is important, but is not everything.
Democratic values and principles should not be sidelined by simply pointing at the rising numbers in the stock market. As the Independent Power Producers Association of Nepal (IPPAN) hosts the Power Summit 2019 from 21-29 November in Kathmandu, let us all take this long term and broader view.
Anil Chitrakar is President of Siddarthinc, and his fortnightly column in Nepali Times, ½ Full, looks at Nepal’s potentials.