The Nepal Digest - Feb 22, 1995 (10 Falgun 2051 BkSm)

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The Nepal Digest Wednesday 22 Feb 95: Falgun 10 2051 BkSm Volume 36 Issue 15

  Today's Topics:

          Apologies for no headers due to time constraints.

 ******************************************************************************
 * TND Board of Staff *
 * ------------------ *
 * Editor/Co-ordinator: Rajpal J. Singh a10rjs1@mp.cs.niu.edu *
 * SCN Liaison: Rajesh B. Shrestha rshresth@black.clarku.edu *
 * Consultant Editor: Padam P. Sharma sharma@plains.nodak.edu *
 * TND Archives: Sohan Panta k945184@atlas.kingston.ac.uk *
 * Book Reviews Columns: Pratyoush R. Onta ponta@sas.upenn.edu *
 * News Correspondent Rajendra P Shrestha rajendra@dartmouth.edu *
 * *
 * +++++ Food For Thought +++++ *
 * *
 * "If you don't stand up for something, you will fall for anything" -Dr. MLK *
 * "Democracy perishes among the silent crowd" - Sirdar Khalifa *
 * *
 ******************************************************************************

***************************************************************** Date: February 22, 1995
>From The Editor's Desk:

Dear TND Members:

     Welcome to another issue of TND! Our thanks and goodbye to Ashutosh for taking care of "Discussion Forum" while making TND a thought-provoking platform to share issues concerning Nepal. TND wishes him good luck in his academic pursuits. Welcome to our well-known Rajendra P. Shrestha as TND's News Correspondent. We certainly won't miss worthy news anymore!

     To make TND more informative and stimulating, we would like to hear more views and see more articles from our Nepali women (didi-bahini) counterpart on TND.

     The Nepal Digest (TND) is looking for a volunteer to moderate
"Women's Forum" on TND, preferebly a Nepali woman. The informal responsibilites will include collecting articles related to uplifting of Nepali women and encouraging other Nepali women to freely express their views on TND. The topics are boundry-less ranging from redefining women's role to supporting fellow-women through various means.

     Please send a note to nepal-request@mp.cs.niu.edu or a10rjs1@mp.cs.niu.edu with your interest and ideas. Please feel welcome to add your own suggestions by all means.

     Hoping to hear from you soon,

Rajapl J. Singh Founding Editor/Co-ordinator The Nepal Digest <nepal-request@mp.cs.niu.edu>

************************************************************* From: Ashutosh Tiwari <tiwari@husc.harvard.edu> Subject: An attempt at satire (fwd) To: nepal@cs.niu.edu

        What follows is a piece of satire, or so I hope, published in Kathmandu's SPOTLIGHT weekly of February 25, 1994 -- about a year ago.

        Background: At that time, Krishna Prasad Bhattarai had just lost
'the by-elections to UML's Bidya Bhandari in Kathmandu. And furious, the
"Supreme Leader", Ganesh Man Singh publicly charged that Bhattari had lost due to the antarghatis (saboteurs within the party). Nepali press had a field-day, coming up with various serious interpretations of that word antarghati.

                CAUTION: ANTARGHATISM AT WORK (AND PLAY)

        (Dedicated to Mimi, for her courage and warmth)

        Pure and simple, Bhattarai lost the by-elections because of antarghatis. So charged Ganesh Man -- showing off his Sanskrit to analyse the results. How else could one explain the defeat of the former prime minister? Hear, hear!!

        And who's to disagree with the Supremeo -- the leader of all and master of none? No one, to be sure; lest one be slapped with an antarghati label for merely having a different opinion. For, as the Supremo certainly knows, all the bad and unpleasant things in life have simple and chantable one-word causes: The Ranas. The Panchayat. The Bahuns. The Communists. And now the Anatarghatis.

        But little does the Supreme Leader realize that anatarghatism is a a finely-honed Nepali skill, a uniquely national talent indeed, well-documented in this Shangri-La's myths, histories, politics and development. Just check out the evidences:

        In the days of the Mahabharat, that great Iliad-and-Odyssey-combined- into-one-plus-more epic of the Hindus, Krishna, the God with 1600 wives, was an antarghati par excellence against his cousins, the Kaurabs. Krishna, ever on the sly, helped the Pandabs to destroy his elders -- Bhisma and Dronancharya.

        And who can forget the Kyaikai's antarghat to put Bharat on the throne of Ayodhya by sentencing Ram to a 14-year ban-baas? Once in the jungle, Ram handily crushed both Bali and Ravan, thanks largely to their antarghati brothers -- Sugrib and Bhivishan.

        Medieval Nepal too had its own cast of wily antarghatis. Amsu Verma, a shrewd Thakuri, usurped his Lordship from the Lichhavis, his in-laws. Likewise, to be the King of Gorkha, Drabya Shah easily outran his Ghalay competitors in Liglige by getting them drunk before the all-Gorkha race.

        Why, even the builder of the Modern Nepal, Prithivi Narayan Shah, erected the heart of his House of Gorkhas with pukka Gorkhali antarghatism, sometimes mistaken for pragmatism: Attacking the Newars of Kathmandu on the bacchanalian night of Indra Jatra, he easily lorded over the six Pradhans of Patan -- the greatest antarghatis in Patan's history -- and Bhaktapur's Ranjit Malla, in whose palace he had spent three happy years of his youth.

        It was antarghatism that kept Shah's descendants busy with politicking intrigues. Bhim Sen Thapa, the premier from whom our P.L. Singh
(Kathmandu's current Mayor) has inherited Dharalo and Sundhara, was a victim to Rajendra Bikram's antarghat. Similarly, tearing away, among others, the lushest bugiyals of Garhwal from the Nepali soil, that Sugauli Sandhi still ranks as as THE example of the then bureaucrats' antarghat. And we all know that Jang Bahadur -- that antarghati's antarghati -- assumed more power soon after staging an innocent meeting that ended with opponents hacked to death.

        Against such colorful historical backdrop, little wonder then that today anatarghatism is blossming once more alongside Nepal's "infant democracy". When concerned citizens demand, for example, to have a detailed debate on Arun III, they can be denounced as antarghatis. Similarly, in the face of "hamro apaar jal-sampada" -- a patriotic phrase that we have learnt since Kindergarten -- the NEA basks in an antargti glow by charging us one of the highest rates on the planet on per unit of electricity. Yet, who's to stop te sputtering Vikram Tempos, those smoke-belching rascals that are giving bronchitis to Kathmandu's
"yellow-plated" Pajero-driving Shahebs?

        Amidst all this, it is perhaps fitting that Ganesh Man, our UN human rights award winner, understood his friend Bhattarai's defeat by blaming not a person -- but by tossing up the cliche of antarghati.

        But voters beware: Now widely used by all political parties, the phrase of antarghatism -- disguised under the lofty rubric of leadership, sacrifice, democracy, human rights actually goes like this: "We politicians can never do anything wrong. If something screws up, it's somebody else's fault. And they are the true antarghatis."

        Yeah, yeah!!

written by ashu, with thanks to Keshab Poudel in Kathmandu for the idea.

************************************************************************* Date: 19 Feb 95 20:06:38 EST From: Rajendra.P.Shrestha@Dartmouth.EDU (Rajendra P. Shrestha) Subject: News2/16-19 To: nepal@cs.niu.edu

February 16 Nepal Meets German Foreign and Aid Ministers DPA report

    The foreign minister of Nepal, Mahav Kumar Nepal, held talks in Bonn Thursday with Germany's foreign and aid ministers as part of a five-nation European tour to boost economic ties and aid for his country.

    A meeting with German Foreign Minister Klaus Kinkel concentrated on the domestic political situation in Nepal, a Bonn foreign ministry statement said.

    Foreign Minister Nepal said the democratic reform process in his country - begun in 1990 - was continuing with moves to improve human rights and to liberalize the economy.

    He said his government needed aid to help strengthen democracy, and the constitution in Nepal.

    Kinkel said Germany would continue its aid to Nepal and that Bonn would support Kathmandu in its bid for a cooperation agreement with the European Union (E.U.).

    In talks with Germany's minister for economic cooperation and development, Carl-Dieter Spranger, Nepal said Kathmandu remained interested in German help for its planned Arun III power plant project.

    Spranger said Bonn needed more information from Kathmandu on the project before a decision could be made regarding any German participation.

    "The establishment of market economic and democratic principles is a basic precondition for successful development cooperation...," said Spranger, in a statement after his meeting with Nepal.

      Nepal is on a 12-day European tour, which includes meetings in Belgium, Britain, France and Switzerland, as part of a bid to boost his country's economic ties with Western Europe. dpa lm vc

Tribhuvan University Warns Student Protesters UPI report

    Tribhuvan University warned student protesters Thursday that the administration ''will take stern action to restore the academic atmosphere'' if the students do not end the forced closure of the school. Student supporters of the opposition Nepali Congress party have closed the university since Sunday and detained university Vice-chancellor Kamal Joshi in his office. The students have refused to let Joshi leave the office and have permitted him only limited food rations. The protesters, who are members of the Nepal Students Union affiliated with the Nepali Congress party, allege that Joshi changed the date for student elections without notice. The university denies the allegations and says elections will be held as scheduled on Feb. 26. The contest will be between the Nepal Students Union and another student group supported by the communist government.

 February 17 Road Accident kills 5 Excerpts from Xinhua report

   Fiver persons were killed and 60 others injured in a road accident in sunsari district, eastern nepal, thursday. according to local district police, among the injured, 57 are undergoing treatment at a local hospital and three others have been taken to silguri, india, for treatment. the cause of the accident is under investigation.

February 19 Bus Accident Kills 2 Excerpts from AP report

   At least two persons were killed and 29 others injured when a passenger bus plunged 30 feet (10 meters) deep in the Kathmandu-Pokhara highway, police said Sunday.

   Police said the driver lost control of the vehicle and it broke through the railing of a motor highway near Jogimara, 70 miles (110 kilometers) west of Katmandu.

   The injured are being treated in hospitals in Jogimara and Katmandu. Two of them are in serious condition, police said.

Cabinet Reshuffle Expected Excerpts from UPI report

   Sources close to the ruling UML party say that the party is preparing for a cabinet reshuffle soon. The reshuffle is expected anytime after Deputy Prime Minister Madav Nepal returns from a European tour on Feb. 27. The 15-member cabinet will be expanded to include a woman and redistribute responsibilities of ministers overseeing two or more ministries among newcomers, party sources said.

   In a move aimed at winning support of civil servants, the communist government has nullified action against 961 employees imposed by the Nepali Congress government. The workers had been either warned or had their promotions frozen for taking part in agitation while the congress was in power for 3 years, official sources said.

*********************************************************************************************** From: echo@dolphin.upenn.edu (Elaine A Lander) Subject: Q about USAID in Surkhet To: NEPAL@cs.niu.edu Date: Mon, 20 Feb 1995 11:36:38 -0500 (EST)

Namaste-

I am currently at Penn after living in Nepal (Sept 90- July 93) and am working on a paper for my bioethics class. I am wondering if anybody out there has any information on USAIDs malaria eradication programme in MidWestern Nepal (eg. Surkhet) that went on in the late 60's (I presume). If you know anything about it or have any anecdotes to relate (or are of Tharu descent or whatever), please address correspondance to echo@dolphin.upenn.edu

Thanks in advance for your time and consideration in this matter.

                        -Elaine Lander

******************************************************* Date: Tue, 21 Feb 1995 01:49:44 -0500 (EST) From: Ashutosh Tiwari <tiwari@husc.harvard.edu> Subject: Needed: E-mail or postal addresses To: nepal@cs.niu.edu

Could someone please send me the e-mail or the postal addresses of:

        Tilak Mahato, and
          Richard Bass

Even fax or phone numbers in the USA are fine.

With advanced thanks,

namaste ashu

***************************************************************** Date: Tue, 21 Feb 1995 19:26:21 -0700 From: nrb957802@rccvax.ait.ac.th To: nepal@cs.niu.edu Subject: new membership

The Editor in Chief The Nepal Digest

Dear Editor, I would like to introduce myself that i am a Nepali studying in AIT I would be a reader member of your electronic bulletin THE NEPAL DIGEST Please send me The Nepal Digest regularly in my address. Thank you for your cooperation. Now I have a poem for TND. Could you publish this poem. I will be happy if you are kind to me.

With best regard.

Sincerely Yours shyam Sundar Shrestha

POEM

SADAK MA SADAK KULCHER MALAI HINDI RAHECHHA MANIS MA SADAK KULCHER MALAI HINDI RAHECHHA JINIS MANCHHELAI MAILE BOKNAI PARCHHA KINAKI YO MERO DAYITYO HO, TARA YANHAN KHAI KE BHANUN DHERAI THOKLAI BOKNU PAREKO CHHA DHERAI MANCHHELAI BOKNU PAREKO CHHA MANCHHEKO ANUHAR MATRA BHAYAKA "MANCHHE"-LAI BOKNU PAREKO CHHA

MA SADAK .. MANCHHELE MALAI BANAUCHHAN RA BHATKAUCHHAN PANI

MANCHHELE MALAI SURU GARCHHAN RA TUNGYAUNCHHAN PANI TARA ABIRAL NADI JASTAI BAGNA CHAHANCHHU TARA MA ABIRAL NADI JASTAI DAUDAN CHAHANCHHU MALAI TUNGIN MAN LAGDAIN, MALAI BHATKIN MAN LAGDAIN MALAI TUNGIN MAN LAGDAIN, MALAI BHATKIN MAN LAGDAIN

******************************************************************** Date: Sun, 19 Feb 1995 14:25:00 EST To: a10rjs1@cs.niu.edu From: DGURUNG@CLEMSON.EDU Subject: TIBETIAN RESPONSE TO NEPAL'S DECISION ON MARCH TO LASHA (WTN)

CROSS LISTED FROM WTN

1. Press Statement from New Delhi February 15, 1995 PRESS STATEMENT

The recent statement issued by the Government of Nepal to stop the peace march to Lhasa has deeply disappointed the Tibetan people. Tibetans have great respect to the people and Government of Nepal for granting asylum to some 20,000 Tibetan refugees. It always is our sincere desire not to bring disrespect and bad impression upon the Government of Nepal.

Nevertheless, we believe the Government of Nepal understand that situation inside Tibet is so grave that the very survival of Tibetan civilisation is at risk. With lack of support from the international community, we have no option left but to raise our own voice before it becomes totally inaudible.

The Government of Nepal's reiteration that "We regard Tibet as a part of China" has further dampened the spirits of Tibetan people. Considering the serious situation inside Tibet, we are hoping that Nepal, once a friendly neighbour, would certainly come out to rescue the Tibetan civilisation which is on the verge of extinction.

Further, the statement is in total disregard to the treaty which was signed between His Majesty's Government and independent Tibet in March 1856. The article two of the treaty read "Nepal is to render assistance to Tibet, as far as possible, if she is invaded by a foreign power".

We, therefore, appeal the government of Nepal that it is time now she should provide every possible assistance to save Tibet. The people and government of Nepal cannot remain a mute spectator when its neighbour, Tibet, is slowly being obliterated from the face of this earth.

Lobsang Nyandak Spokesman TIBETAN PEACE MARCH MOVEMENT

***********************************************************************************************

*********************************************************************************************** Date: Tue, 21 Feb 1995 21:27:10 -0700 From: nrb957802@rccvax.ait.ac.th To: nepal@cs.niu.edu Subject: khoj-khabar

I would like to see my sirs Mr. Amulya Ratna Tuladhar and Rajesh Bhakta Shrestha and friends Shanta Raj Jnawali and Shiva Raj bhatta. My e-mail
# nrb957802.

********************************************************************** Date: Tue, 21 Feb 1995 09:41:03 -0500 From: rshresth@black.clarku.edu (RaJesh B. Shrestha) To: nepal@cs.niu.edu Subject: Information about hotels

Cross-posted from SCN:
---------------------

A recent query:

BBB> Hi, BBB> I am taking some of my friends to Nepal for a few days and one of them BBB> is handicap. Can anybody tell me whether hotels in Kathmandu, Pokhara BBB> etc have elevators. How hard is it for a handicap person to go around in BBB> Kathmandu, Tiger Tops places like that? Is it possible to rent a BBB> car or a jeep for a week or one has to rent in daily basis. BBB> I will be glad to hear any information (plus some other helpful BBB> suggestions).

BBB> Thanks in advance. BBB> Bhed Bahadur Bista BBB> e-mail: bbb@shiratori.riec.tohoku.ac.jp

My wife and I were in Nepal last fall, and while neither of us are physically handicapped we met a wheelchair-bound European woman staying at our guesthouse, (the Shiva) in Bhaktapur. She was having a good time. The Shiva doesn't have an elevator (we saw no elevators in Nepal, though the big hotels perhaps have them), but the staff of strong young men got her up and down the stairs cheerfully and without difficulty. I think in general that the lack of facilities for someone like this would be more than offset by the overwhelmingly friendly and helpful nature of the people. There also shouldn't be any trouble finding someone who would be happy to have the job of accompanying you to help with steps, etc. I would simply ask hotel staff for recomendations. Regarding driving, renting a car without a driver is not a good idea - the traffic, parking, etc. is, ah, unusual (but fun if someone else is driving). We went everywhere too far to walk by cab - the "cabs," especially outside Kathmandu, often being simply cars owned by young men. We had nothing but the most pleasent experiences with such folks, and found everyone reliable. Prices are of course negotiable, but shortly you will learn the going rates. Don't haggle too much - you want to be with happy people, and things in Nepal are inexpensive enough as it is. (I totally disagree with the theory that one should avoid
"spoiling" people, thereby ruining the cheap prices for others - that's just another excuse for exploitation. What I did do a couple of times was bargain down to the lowest price I could, just to find out what it might be, and then add a big tip.)

Hope this helps - good luck. Oliver (oliver.seeler@tigerteam.org)

********************************************************************** Date: Tue, 21 Feb 1995 09:44:32 -0500 To: nepal@cs.niu.edu Subject: Here is a MOMO recipe! From: an173960@anon.penet.fi (Silent Do Good)

Recipe for Momo

Before anything else, here is a little etymological background:

Momo: noun, any of several types of meat or vegetable dumplings very popular in Nepal and Tibet. The plural form is MOMOS, not to be confused with Momos, the Greek god of censure and mockery. Although, mighty Momos himself may deign to give you his blessings if you do not follow my Momo cooking directions properly.
        Momo is also affectionately known as Momo-cha. The suffix "-cha" roughly means "I love this cute little thing from the bottom of my heart."
("-cha" takes the same form in Nepalese as the suffix "-ska" does in Russian: Matru-ska, Babu-ska.)

        I can already see saliva dripping from the corners of your mouth, so, without further ado, let me give you the recipe:

1) Simple version:
        Buy a pound or two of ground meat, and mix it with a little salt, a lot of spices, and red chilli pepper to your taste. Make small meatballs, each half the size of a ping-pong ball. (Each meatball is for one Momo, so make as many as you want.)
        Get some Pillsbury dough (if you don't have any Pillsbury dough, any white flour dough will do), and cut the dough into small flat circles the size and shape of a regular-sized chocolate chip cookie.
        Put a meatball at the center of one of the cut pieces of dough. Hold the dough with meatball in it on your left hand, and, using the tips of your forefinger, thumb, and second finger of your right hand, get hold of (or, rather, pinch) a small piece of dough at the outer rim.
        Don't let go of the pinched part yet. Now, working from outside in, while exerting a slight pressure on the meatball with your left thumb to push the meatball in, and at the same time, streching out the outer rim of the dough a little at a time, start enfolding the meatball with the dough using the three right hand fingers.
        I have always considered folding in the Momo dough an art by itself. It usually takes a lots of practice before you can do it really well. In any case case, it really doesn't matter how you do it as long as the meatball is completely inside the dough. The final product should look like Charlie Brown with a false toupee.
        Now that you have completed the most difficult part, pat yourself on the back (of course, after wiping your hands off), and congratulate yourself. Personally, I prefer to drink a little Italian red wine at this stage.
        Ok, I guess you now have lots of small round dough covered meatballs all over the place. The next thing you need to do is boil about 2 quarts of water in an open pot. Let the water boil for a while, and put about five or six dumplings in it. Take out the dumplings after the meat inside is thoroughly cooked (should take around 10 minutes). After you have taken them out, they are ready for serving. While you are hollering friends and family members to come and eat, put more uncooked dumplings in boiling water.
        It is better to serve Momo with some vegetabe soup (usually tomato, with lots of chopped celery, minced onions, and hot sauce). One should have these dumplings completely submerged in soup to bring out their best taste. (Just like Matzo balls, ja?) But remember that Momos taste good only when they are served warm.

2) A little bit more difficult, but more authentic way of making Momo:
        Follow the steps in the previous method except that you now need to add bone marrow in the meat (don't ask me where to get it!)--like about a quarter pound of bone marrow for two pounds of meat--while mixing in spices.
        Bone marrow is the main thing that gives momo its distinct taste, just like oregano in pizza.
        The second different thing that you need to do, instead of throwing in dumplings in boiling water, is to put the dumplings (several at a time) in a vegetable strainer, and put the strainer on top of boiling water--without the strainer actually touching the boiling water.
        Cover the pot tightly, and steam cook the dumplings until they are well cooked. The idea is to cook the dumplings in steam without letting them come into contact with boiling water. You might want to put some vegetable shortening at the bottom of the strainer to avoid it from getting very sticky, and thus tear up the dumplings when you try to remove them.
        Again, put the dumplings in tomato soup, and serve while still hot.
         Final comment: The second of the above methods is about 90% closer to the way they actually make Momo in Nepal. If you are really into making momos, you should ask some one coming from Nepal to bring you back a multi-layered momo making pot. I have also seen some people make vegetable Momos. If you really understood what I wrote, and actually made Momo, please let me know how it turned out. If I get good feed back I might well decide to write more recipes. Bon appetit!
                                                     Silent-Do-Good

*********************************************************************************************** Date: Tue, 21 Feb 1995 11:25:22 -0500 (EST) Subject: Tax Effort and Foreign Assistance (fwd) From: Neal Cohen <ncohen@usaid.gov>

This is the version of an ECON Internal memo that excludes graphs (the full file is over 600kb, so it is hard to transmit). We are willing to snail MAIL copies of the full document. The paper is an outgrowth of some discussions last week on tax effort and foreign assistance dependency.

Taxes and Foreign Assistance Summary

Nepal collects less in taxes (as a percentage of GDP) than any other country in Asia. Only six countries world-wide have a low tax ratio. The new Government estimates that the tax effort ratio will reach nearly 12% this year. It had moved up from 9.2% in fiscal year 1993 to 10.3% last year. At that time it almost met structural adjustment targets. If the new government meets its target it will exceed the structural adjustment targets.

Nepal is also one of the six countries (none in Asia) where total foreign assistance is equal to 70% or more of total government spending. Foreign assistance to Nepal has been highly erratic; it has grown by over 50% some years, and fallen in other years.

Implications

Nepal is one of the countries most dependent on foreign assistance to finance government spending. It appears that foreign assistance budgets may be reduced in a number of countries (the USA and the European Union are two, but it appears the UN system and World Bank might also not have as many resources in the future). At the same time, Nepal has one of the lowest tax effort indexes in the world.

The combination of these does not bode well for Nepal s ability to finance current and future development needs. The new Government has many new spending initiatives that will require substantial resources in the near future. The need is great for a pro-development tax system that collects sufficient resources to fund these and reduce dependency on foreign assistance. Nepal has been fortunate to continue to receive substantial increases in foreign assistance (both in nominal and real terms) over the past decades. As we do not know whether, or how soon foreign assistance budgets for Nepal might be cut, it would be prudent to seek alternative resources quickly.

Introduction

The previous government had begun a process of tax reform with an end to increase government s revenue and reduce its dependence on foreign assistance. The tax reform process was designed to increase elasticity and buoyancy in Nepal s tax system and reduce reliance on taxes alleged to be corrupt (often where collections are often based on negotiation between tax payer and tax assessor). The new government is discussing whether taxes need to be reformed and what form it ought to take. This memo does not go into the alternative forms of tax reform, but rather addresses the issue of tax levels and dependency on foreign assistance.

Recent articles in the International Herald Tribune (some of which appeared in local papers) note the possibilities of decreases in the levels of U.S. assistance (bilateral assistance plus the U.S. contribution to the UN and multi-lateral development banks), and in assistance from the European Union. While the problems addressed in this memo might not occur this year or next, it appears likely they will happen sometime.

Tax Effort

Tax effort can be defined as the ratio of taxes to GDP (gross domestic product - the value of goods produced).

Higher or lower tax efforts do not mean a country is more socialistic or capitalistic, although there is a tendency for socialistic countries to have higher levels of taxation ceteris paribus. The lack of correlation between tax effort and economic growth exists because it is not so much the level of taxation, but how the money is spent that will affect economic growth.

Nepal Over Time

In 1975 domestic revenue was just over 6% of GDP, for the fiscal year that ended last summer tax effort in Nepal increased to 10.3%. This was a major improvement from the 9.2% of fiscal 1992 and reflect the previous government's efforts to increase domestic revenue collections. The Nepali Congress government estimated it would increase to 10.5% this year, the UML government forecasts an increase to 11.7%, the highest it has ever been in Nepal.

The target under Structural Adjustment was for this ratio to increase to 10.6% in fy1994 and to 11.2% during the current fiscal year. The target last year was not met, but the new government s estimates show it expects to meet the target this year.

Nepal Compared

The latest comparative data we have is for 1991, when Nepal s tax effort ratio was 9.2%. Within south Asia (and indeed within Asia as a whole) Nepal has the lowest tax effort index. South Asia has much lower tax effort values than most other low income countries world-wide, where the median tax effort index is 26%. In Thailand this ratio is 21%, in both Malaysia and Singapore it is 28%.

The ratio in the USA is 20%, most west European countries have values in the 30-40% range. For Japan the ratio was 15% in 1991. Sweden, considered a model by some Nepalese as to a liberal socialist economy, the index was 44%.

Of the countries reporting 1991 data, only six had lower tax efforts than Nepal: Yugoslavia, Sierra Leone, Peru, Chad, Madagascar and El Salvador. Many of these had special circumstances such as civil wars which prevented the national government from collecting taxes.

The tax effort is important, especially for a developing country, as government needs resources with which to encourage development. The lack of government resources limits government from providing the level of support needed for necessary infrastructure programs (including maintenance), improved education (funding government s free book program is difficult) or health services (stocking health clinics with medicines and doctors). This does not mean that increased taxes will increase Nepal s development, but the resources would be there for development purposes.

Were Nepal trying to attract foreign investors, or encourage domestic investors through low taxes, then a low tax effort index would make sense. However, as noted in previous memos, Nepal s tax system is not conducive to private sector development because of its lack of predictability and transparency.

Donor Assistance

The most important donors in 1993 were, in order, Japan, the World Bank and the Asian Development Bank. The most important sectors were agriculture/forestry/fisheries (accounting for 16% of all donor resources), followed by transport (roads, 14%), and humanitarian aid and relief (11%).

Donor assistance has been highly variable both in levels and in sectors. The terms have gradually moved toward increased reliance on concessional lending, with less reliance on grants.

Importance to Nepal Over Time

We compare the foreign assistance that goes through the budget with total government spending. We use total government spending as some foreign assistance is used to pay items included in the regular budget as well as the development budget (where most foreign assistance is counted). The foreign assistance included is only that portion that goes through the government budgetary process. Grant foreign assistance that is disbursed directly to NGOs or contractors is often not included.

Over the twenty year period dependence on foreign assistance has grown but been very erratic. It has gone from 38% of government spending in 1981 to 30% in 1983; in 1990 it was 40%, only to fall to 32% by 1992. Since then it has climbed back to 38% for the fiscal 1994. The Nepali Congress forecasted that in the current fiscal year it would be 39%, while UML projects 37%. For the current fiscal year, government s estimate of foreign assistance is equal to 70% of the development budget.

There has not been any reduction in dependency on foreign assistance.

Nepal Compared

Using World Bank data for 1991, we divided total ODA (whether disbursed through the government or not) by total government spending. Within Asia and south Asia no country is as dependent on foreign assistance as Nepal. Total foreign assistance equaled 71% of total government spending in 1991. Bangladesh, the second south Asian country most dependent on foreign assistance, received assistance equal to 45% of government spending. The median for south Asia was 32%, while the median for low-income countries was only 6%.

Only five countries in the world were more dependent on foreign assistance (in order from the most dependent): Nicaragua, Sierra Leone, Madagascar, Guinea-Bissau and Malawi. No Asian country was more dependent than Nepal.

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