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Global Economy

Nepal's Paradox: When Good is Not Good Enough

Johannes Zutt's picture

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?

Apr 11, 2014: This Week in #SouthAsiaDev

Liana Pistell's picture
We've rounded up 39 tweets, posts, links, and +1's on South Asia-related development news, innovation, and social good that caught our eye this week. Countries included: Bangladesh, Bhutan, India, NepalPakistan, and Sri Lanka. For regular #SouthAsiaDev updates, follow us on Facebook and Twitter

Apr 4, 2014: This Week in #SouthAsiaDev

Liana Pistell's picture
We've rounded up 18 tweets, posts, links, and +1's on South Asia-related development news, innovation, and social good that caught our eye this week. Countries included: Afghanistan, Bangladesh, Bhutan, India, Nepal, and Pakistan. For regular #SouthAsiaDev updates, follow us on Facebook and Twitter

Mar 28, 2014: This Week in #SouthAsiaDev

Liana Pistell's picture
We've rounded up 27 tweets, posts, links, and +1's on South Asia-related development news, innovation, and social good that caught our eye this week. Countries included: Afghanistan, Bangladesh ,India, NepalPakistan, and Sri Lanka. For regular #SouthAsiaDev updates, follow us on Facebook and Twitter

To Lead Tomorrow, Future Leaders Must Learn to Read Today

Mabruk Kabir's picture


When it comes to primary education, there are many reasons to be optimistic. Enrollment has jumped across the world, and more children are in school than ever before. In the last decade, the number of out-of-school children has fallen by half, from 102 million in 2000 to 57 million in 2011.
 
But is showing up to school enough?
 
According to UNESCO’s Education for All Global Monitoring Report, almost one quarter of the youth in the developing world cannot read a sentence. In countries with large youth populations, this can leave behind a crippling ‘legacy of illiteracy’. Despite almost universal primary enrollment in India – 97 percent – half of second grade students cannot read a full sentence, and almost a quarter cannot even recognize letters.

Reading is a foundational skill. Children who do not learn to read in the primary grades are less likely to benefit from further schooling. Poor readers struggle to develop writing skills and absorb content in other areas. More worryingly, learning gaps hit disadvantaged populations the hardest, limiting their economic opportunities. In Bangladesh, only one in three of the poorest quartile is literate, compared to almost nine out of ten in the richest.

Mar 21, 2014: This Week in #SouthAsiaDev

Liana Pistell's picture
We've rounded up 30 tweets, posts, links, and +1's on South Asia-related development news, innovation, and social good that caught our eye this week. Countries included: Afghanistan, Bangladesh ,India, Nepal, and Pakistan. For regular #SouthAsiaDev updates, follow us on Facebook and Twitter

Mar 7, 2014: This Week in #SouthAsiaDev

Liana Pistell's picture
We've rounded up 20 tweets, posts, links, and +1's on South Asia-related development news, innovation, and social good that caught our eye this week. Countries included: Afghanistan, Bangladesh, India, Nepal, Pakistan, Sri Lanka. For regular #SouthAsiaDev updates, follow us on Facebook and Twitter

“Grow Now Clean Up Later” No Longer an Option for India

Muthukumara Mani's picture

India’s stellar economic performance during the past decade has brought immense benefits to the people. Emmployment opportunities have increased, enabling millions to emerge from poverty.

But rapid growth has been clouded by a degrading environment and a growing scarcity of natural resources. Today, India ranks 155th among 178 countries accounting for all measurable environmental indicators, and almost dead last in terms of air pollution. What’s more, more than half of the most polluted cities in the G-20 countries are in India. The deteriorating environment is taking its toll on the people’s health and productivity – and costing the economy a staggering Rs. 3.75 trillion each year (US$80 billion) - or 5.7 percent of GDP. So, does growth – so essential for development – have to come at the price of worsened air quality and other environmental degradation? Fortunately, India does not have to choose between growth and the environment.

This Week in #SouthAsiaDev

Liana Pistell's picture
We've rounded up 15 Tweets, posts, links, and +1's on South Asia-related development news, innovation, and social good that caught our eye this week. Countries included: Bhutan, Bangladesh, India, Nepal, Pakistan, Sri Lanka. For regular #SouthAsiaDev updates, follow us on Facebook and Twitter

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