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NepalPROBLEMS AND PROSPECTS, NEPAL
Nepal was a resource poor country. Although it had made
some
progress since the 1950s, it still was well behind most
countries
in the world as of 1991. Among the issues it needed to
address were
changes in economic policy, international debt, low labor
productivity, income distribution, and population growth.
In the economic policy area, the performance of public
enterprises needed improvement. Most of the country's
large-scale
firms were in the public sector, and many of these
enterprises
either were protected or subsidized, which inhibited their
efficiency. Most public enterprises also lacked a sound
financial
footing. More than fifty public enterprises dominated
major sectors
of the economy. These enterprises included energy, basic
utilities,
oil, telecommunications, water supply, cement, jute,
tobacco, and
sugar. Some of these enterprises, for example, the
Agricultural
Inputs Corporation and the Nepal Food Corporation,
incurred losses
year after year.
Foreign indebtedness was also problematic. Compared
with many
less-developed countries, Nepal's foreign debts were not
very high.
However, these debts were increasing. At the end of the
1980s, the
value of merchandise imports was more than three times
that of
merchandise exports, a situation that could create future
problems
in the balance of payments. Many analysts believed that
domestic
borrowing for development expenditures would better serve
development.
Labor productivity needed to increase to improve the
well-being
of the people. Nepal suffered, however, from technology
deficits,
as well as from shortfalls in its literacy rate, basic
science
education, and technical training. Although there had been
some
progress in raising the literacy rate, properly trained
technicians
remained in short supply.
Income distribution data on a large scale were not
available.
Nonetheless, some sample studies had been made. In 1990
Dr. B.P.
Shreshtha found that 75 percent of the families accounted
for less
than 35 percent of income. A 1983 study by Blaikie et al.
noted
that more than 50 percent of the family landholdings in
the Hill
Region amounted to less than half a hectare. Only in the
western
Tarai Region were landholdings generally much bigger. In a
country
where 90 percent of the population was largely dependent
on
agriculture, few families had landholdings exceeding four
hectares,
largely because of the shortage of land.
The need for greater agricultural and labor
productivity, as
well as employment opportunities, to offset the demands of
a
growing populace was paramount. Of primary importance,
however,
were increased efforts at controlling population growth.
With an
annual growth rate of 2.6 percent, per capita resources
were
reduced--another obstacle to growth.
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For general background material on the state of the
economy
prior to 1970, Yadav Prasad Pant's Problems in Fiscal
and
Monetary Policy, Rishikesh Shaha's Nepali
Politics, and
Badri Prasad Shreshtha's The Economy of Nepal
provide useful
information. Pierce M. Blaikie et al.'s Nepal in
Crisis
details the status of the economy in the 1970s, although
it focuses
on the western and central parts of the country. Mahesh
Chandra
Regmi's books on Nepal's economic history are valuable for
their
perspective and insight into continuing problems. For more
recent
assessments of the economy, Badri Prasad Shreshtha's
Nepalese
Economy in Retrospect and Prospect, Babu Ram
Shrestha's
Managing External Assistance in Nepal, and the
Far
Eastern Economic Review's annual Asia Yearbook
are
helpful. Shrestha's book also details the extent of
foreign
assistance in Nepal and provides some data on expenditures
in some
of the development plans. Economic Survey, 1987-88
and
Economic Survey, 1989-90, published by Nepal's
Ministry of
Finance, and Statistical Pocketbook, 1988 and
Statistical
Pocketbook, 1990, published by Nepal's Central Bureau
of
Statistics, provide the most current statistical data.
Yadav Prasad Pant and Badri Prasad Shreshtha,
professional
economists from Nepal, have held several posts in the
government
and have also written extensively about Nepal's economy.
Although
the aforementioned texts by Shreshtha and Pant's
Problems in
Fiscal and Monetary Policy are difficult to obtain in
the
United States, they provide useful information. (For
further
information and complete citations,
see
Bibliography.)
Data as of September 1991
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