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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?

Why should Governments Spend on Sanitation?

Shanta Devarajan's picture

A puzzle:  Sanitation is one of the most productive investments a government can make.  There is now rigorous empirical evidence that improved sanitation systems reduce the incidence of diarrhea among children.  Diarrhea, in turn, harms children’s nutritional status  (by affecting their ability to retain nutrients).  And inadequate nutrition (stunting, etc.) affects children’s cognitive skills, lifetime health and earnings.  In short, the benefits of sanitation investment are huge.  Cost-benefit analyses show rates of return of 17-55 percent, or benefit/cost ratios between 2 and 8.

But if the benefits are so high (relative to costs), why aren’t we seeing massive investments in sanitation?  Why are there 470 million people in East Asia, 600 million in Africa and a billion people in South Asia lacking access to sanitation?  Why are there more cellphones than toilets in Africa?

Young and Eager to Work on Policymaking: A Few Inspiring Examples

Liviane Urquiza's picture

Some preconceptions are universal. Whether  in Europe, South America, East or South Asia, in urban or rural areas, pretty much everywhere I have been I have heard young people explain why they dislike politics, either because it is boring or because they believe all politicians are corrupt. Did they – did you? – ever wonder what the world would be like if there were no policies, and no policymakers? Think about it.

Making policies is not just about sitting at a desk, writing reports and chatting with bureaucrats. It’s also about trying to make tangible positive changes for all.

Why Protecting Elephants From Poaching Matters More Than You Think

Julian Lee's picture


Elephants – in particular the forest elephants of Central Africa – are being poached at unprecedented rates for their valuable ivory. It is estimated that at least 200,000 forest elephants – a whopping 65 percent of the elephant population – have been slaughtered since 2002. Gabon and the Democratic Republic of the Congo (DRC) have been hotspots for the killing.

Now you might ask why we should care--an especially appropriate question to ask as we celebrate Earth Day. As humans, we may be attached to charismatic species such as elephants – but will their extinction affect us directly? The answer is yes.  The intricate interconnections within ecosystems mean that the disappearance of a species has effects that are never limited to just that particular species.  The impact can be broad and deep, affecting other animal and plant species, our water supply, people’s livelihoods, and even – in small ways – the climate.

Enhancing Service Delivery in Conflict Contexts: Lessons from South Asia

Maria Correia's picture

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?

Years of Living Dangerously, Years of Opportunity

James Cameron's picture

Above, watch the trailer for "Years of Living Dangerously" and the panel discussion with Thomas Friedman during the 2014 Spring Meetings. Below, watch the premiere episode. 

Fueled by warmer temperatures and added moisture in the air, a storm system coils like a snake ready to strike. Rising seas stand poised to obliterate shoreline developments and cityscapes. The brown, dry soil of once-verdant farmland threatens food security for millions, all while the number of mouths to feed grows. Wildfires rage and burning peat lands belch black carbon and greenhouse gases into our thin shell of an atmosphere.
 
And that’s how climate change is affecting real people, right now, all over the globe. “Years of Living Dangerously” on SHOWTIME® features an exceptional cast of world-class journalists and celebrity reporters documenting the impact of climate change worldwide. Over nine episodes, we show that climate change is 100% a people story.
 
World leaders just affirmed the latest in a series of reports of the Intergovernmental Panel on Climate Change, the Nobel Prize-winning authority on climate science. These reports are uncompromising in their assessment that climate change is real, it’s us, it's now, it's getting worse, and we’re not prepared. The latest report makes clear we have the clean energy technologies to start slashing carbon pollution at very low cost, much lower than the cost of inaction – but the window to act is closing fast.
 

World Bank Group President Jim Yong Kim and Thomas Friedman at the April 10 event. © Leigh Vogel/Connect for ClimateWorld Bank Group President Jim Yong Kim and Thomas Friedman at the April 10 event. © Leigh Vogel/Connect for Climate
These are the years of living dangerously. But they are also years of hope. We are the first generation to know that climate change is a clear and present danger, and also the last generation that can stop it. World Bank Group President Jim Yong Kim often describes a vision of young children in the future, turning back to their fathers and asking, "Dad, what did you do when you knew?"

The Poor, the Bank, and the Post-2015 Development Agenda

José Cuesta's picture



Something Is Changing


Fifteen years ago, the international community designed the Millennium Development Goals, including that of halving extreme poverty, through a process that mostly took place in New York, behind closed doors. A few years earlier, the World Bank had developed the guidelines of the Poverty Reduction Strategy for Heavily Indebted Poor Countries from Washington, D.C. in a similar fashion.
 
Fortunately, this approach has changed.
 
Today, the process of identifying and consulting on the post-2015 development agenda has been opened to the general public including, importantly, those whom the goals are expected to serve. In fact, the United Nations and other partners have undertaken a campaign to reach out directly to citizens for ideas and feedback on the issues most important to them in the post-2015 agenda. Those who are formulating the post-2015 goals will no longer need to assume what the poor and vulnerable want: they will have a firsthand knowledge of what their priorities are.  
 
The World Bank Group has explicitly stated that our new goals of eradicating extreme poverty and boosting shared prosperity cannot be achieved without institutions, structures, and processes that empower local communities, hold governments accountable, and ensure that all groups in society are able to participate in decision-making processes. In other words, these goals will not be within reach without a social contract between a country and its citizens that reduces imbalances in voice, participation and power between different groups, including the poor.   

How do we Develop a “Science of Delivery” for CDD in Fragile Contexts?

Janmejay Singh's picture

Imagine you are a development practitioner in a country just coming out of conflict and you have just been put in charge of designing a community driven development (CDD) operation there.

After decades of war, you are faced with a country that has crumbling infrastructure, extremely high unemployment rates, weak local governance systems, perhaps even a vast population internally displaced or worse still, exposed to violence. Where do you begin fixing the problem? What would you prioritize? Do you begin by rebuilding and providing public goods, and hope that it would eventually re-establish the broken trust between the state and its people? Or do you directly tackle trust building first? Or perhaps you could do them simultaneously, but how would you go about doing that?


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