Editor's Note: "Notes from the Field" is an occasional feature where we let World Bank professionals conducting interesting trade-related projects around the globe explain some of the challenges and triumphs of their day-to-day work. The views expressed here are personal and should not be attributed to the World Bank. All interviews have been edited for clarity.
The interview below is with Ashish Narain, a Senior Economist at the World Bank Group’s Investment Climate Department. He is based in India from where he manages the World Bank Group’s South Asia Regional Trade and Investment Project. He spoke with us about his project, his personal connection with the region, and the evolution of regional trade facilitation in South Asia.
Nepal needs to fix its budget process, remove hurdles to infrastructure development and cut down excess liquidiity.
At first glance Nepal’s economic fundamentals appear sound. Economic growth this year is expected to recover to 4.5%, after a lackluster FY13. On the fiscal and external fronts, indicators are well in the green. This year again, Nepal is likely to be the only country in South Asia to post a budget surplus (0.3% of GDP). Continued growth in revenue mobilization and higher grants will more than make up for the increase in government spending. In FY14, public debt is expected to fall below 30% of GDP, and Nepal’s risk of debt distress may fall from a “moderate” rating to “low”.
Unlike other South Asian countries, Nepal has remained largely unscathed by global monetary tightening, reflecting its limited integration into global financial markets as well as its healthy external balances. Nepali analysts often highlight the growing trade deficit as a cause for concern, but remittances (projected at over 30% of GDP) should push the current account to a comfortable surplus position of 2.4% of GDP.
The only apparent dark spot is inflation, which remains stubbornly high. With inflation close to double digits in January (year-over-year), it appears unlikely that the NRB’s target of 8.5% will be reached.
In short, Nepal appears to be doing well. Many European countries today can only dream of posting similar growth, fiscal or debt numbers. So what is the problem?
More than 1.5 billion people today reside in countries affected by violence and conflict, most - if not all - of which also suffer from inadequate and poor access to basic services. By 2030, it is estimated that about 40 percent of the world’s poor will be living in such environments, where each consecutive year of organized violence will continue to slow down poverty reduction by nearly one percentage point.
A large portion of this group presently resides in conflict-affected parts of South Asia, a region that is home to 24 percent of the world’s population and about half the world’s poor.
Despite such challenging circumstances, research shows that in many settings, development aid is indeed working - albeit with frustrating inconsistency.
The 2011 World Development Report recognizes the strong link between security and development outcomes in fragile and conflict-affected contexts. However, what the evidence is yet to show us is how exactly do you get the job done right?
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"This meeting is going to be different. It’s going to be a turning point from the lofty, theoretical policy deliberation to real action on the ground to save our planet’s green lungs and our global climate." Those were my thoughts last week when I walked into a packed conference room in Brussels, Belgium, where a crowd of about 80 people from around the globe had gathered to learn about cutting-edge proposals from six pioneering developing countries with big, bold plans to protect forests in vast areas of their territories.
Chile, the Democratic Republic of Congo (DRC), Ghana, Mexico, Nepal, and the Republic of Congo came to the 9th meeting of the Carbon Fund of the Forest Carbon Partnership Facility (FCPF) to convince 11 public and private fund participants to select their proposal as one of a small group of pilots intended to demonstrate how REDD+ can work.
Some Observations from Nepal
I've been in Nepal since January helping out with the implementation of a household survey. Throughout February and March, we asked people in two districts – Jhapa, in the south-east of the country on the Indian border, and Tibetan-bordering Sindhupalchok to the north – about their livelihoods, the various taxes they pay, and their relationships with state governance. As part of this research, we've also been carrying out a number of more in-depth qualitative interviews.
When asked about the kinds of taxes that most affect their livelihoods on a day-to-day basis, one of the things that struck me about people's responses was the frequency with which electricity bills were mentioned. At first, I couldn't quite understand why this was coming up so much: that's not a tax, I thought, it's simply a payment made in exchange for a service. In my mind, I began to discount these responses, passing them off as information that missed the points we were trying to get at.
My assumptions were misplaced.
Bangladesh, the most vulnerable country in the world to the impact of natural disasters is also a leader in emergency preparedness and disaster response, particularly for cyclones, tidal surges and floods. This was achieved through 25 years of effort, which was catalyzed through two devastating cyclones, one in 1970 and 1991 that caused the deaths of approximately 500,000 and 300,000 people respectively. Part of what makes Bangladesh so strong at cyclone preparedness and response is the fact that major cyclones seem to hit Bangladesh every 3-4 years. Recurrence of this frequency is quite unique.
On the other hand, major seismic events that lead to major losses occur infrequently. Cities like Dhaka and Kathmandu, which are susceptible to major earthquakes, haven’t experienced a major shake in more than a generation. Unfortunately, a lack of frequency often leads to complacency amongst governments and citizens. Even more problematic is the very rapid accumulation of assets and population in urban environments in South Asia, including Dhaka.
Walking through the streets of Dhaka paints a picture of a city with significant structural vulnerabilities – where poor construction standards, lack of enforcement, and poor maintenance turn many buildings into potential hazards. When a building in Savar collapsed in April 2013 – killing over 1,100 people and injuring thousands more – it was a wakeup call for Bangladesh. The collapse was not triggered by an earthquake, it was the result of catastrophic structural failures, but it was a glimpse into what could happen in the event of a major earthquake.