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Post |
| sofaking |
Posted
on 29-Jun-04 08:13 AM
Rs 228,039,113,441
That is exactly how much Nepal owes foreign creditors, which comes to Rs 10,000 for every man, woman and child in this country
NAVIN SINGH KHADKA, Time
MIN BAJRACHAYRA
Falling exports and plummeting investment are eating into Nepalýs reserves. But an even bigger crisis is looming: a lot of the interest and principle payments of our foreign loans are nearing their due.
Foreign debt now stands at nearly Rs 230 billion. Servicing it is already eating up the biggest chunk of Nepalýs budget and amounts to 70 percent of our GDP.
Worse, the government doesnýt have a mechanism to calculate exactly how much we owe to whom and how to schedule those payments. In most countries, this is done with sophisticated computer software. Here we depend on the good faith of our donors. When they ask us to pay, we pay.
As more and more of Nepalýs past loans mature, its servicing is biting off an ever larger chunk of our foreign reserves. The Financial Comptroller General Office admits the highest share of the government expenditure went to debt repayment in the last three years.
Last year, approximately 20 percent of the total budget expenditure was spent on servicing domestic and foreign loans. The percentage of regular expenditure is almost 30 percent.
The grace period of Nepalýs major longterm loans have now ended, increasing the debt burden. Between 2000 and 2002, debt servicing increased by nearly 10 percent, depleting the countryýs foreign exchange reserves. ýApart from debt servicing, foreign loans have more than doubled since the 1990s,ý says economist Bishwambher Pyakural.
The alarm bells should be clanging, but in the corridors of the Financial Comptroller Generalýs Office it seems to be business as usual. Officialdom canýt even calculate the amortisation on loans. ýWe donýt yet have a mechanism to calculate and tally what the donors claim as the principle and the interest to be paid,ý one official admitted sheepishly. ýWe have been servicing the debt purely on the good faith of the donors. They send us the bill and we simply pay them.ý
With such blind faith, the comptrollerýs office has ended up paying interest of even those loans whose principles were paid long ago. ýIt has happened many times in the past,ý one Finance Ministry official said.
The Asian Development Bank is trying to equip the government agencies to deal with debt servicing through the Strengthening Institutional Capacity for Effective Public Debt Management Project. It has introduced the Commonwealth Secretariat Debt Recording Management System, a software that helps update debt repayment schedules. The trouble is, no one has been trained to work this software.
ýThere seems to be some problem about training the staff at FCGO,ý Finance Ministry Joint Secretary Krishna Gyawali told us. ýWe are aware that our debt management is not satisfactory.ý
Paperwork on loans received since the 1950s are swathed in dusty cloth and stacked on top of the steel cabinets where insects have been feasting on them for decades. The communication gap between the Finance Ministry and the comptrollerýs office doesnýt help calculate amortisation since donor commitment, the actual disbursement, the interest rate and the negotiated exchange rate all need to be considered.
Yet, Nepali officials exude pride in the fact that Nepal has never defaulted on a foreign loan. ýWe have paid on the dot every time in the last 50 years,ý said one official proudly. The ADB project in a recent study showed Nepalýs loans are highly concessional and the real rate of interest is less than the economic growth rate. ýThat is why such loans are deemed to be sustainable,ý says Bhuvan Bajracharya, team leader of the project at the Finance Ministry.
Luckily, the devaluation of the US dollar has already saved the country some Rs 700 million in repayment of dollar denominated loans in the current fiscal year. The money has been used to offset part of the Rs 77 billion internal debt, officials said.
The IMFýs Nepal resident representative, Sukhwinder Singh, says Nepalýs debt service ratio is still not so bad. ýConsidering the net present value, Nepalýs foreign loan component comes down to 22 percent of the GDP and the loan repayment ratio to the GDP is 3.6 percent which is quite normal by international standards,ý he told us.
But some economists say Nepal canýt afford to service its loan burden and should seek debt relief from donors and join the group of Heavily Indebted Poor Countries (HIPIC) to get the debt relief. ýWe should try to get our loans written off,ý says expert Devendra Raj Pandey. ýEspecially because we know these are loans given to past authoritarian regimes and are now being paid by ordinary Nepalis.ý
But Finance Ministry officials say joining the HIPIC club would be a shame on Nepal. ýWe have never been a
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| thaag |
Posted
on 29-Jun-04 08:19 AM
and that's exactly how much nepali king/politician have in their foreign bank account
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| luckydude |
Posted
on 29-Jun-04 08:55 AM
well said Mr thaag.
No wonder Maoists are rising. Because of these filthy politicians and kings relatives normal people don't even have something to eat. I feel sorry for those Maoists sometimes yet they are on the wrong path.
Peace in Nepal
Luckydude
PS: Communism sounds good on books; not in reality. It just doesn't work.
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| Nattu |
Posted
on 29-Jun-04 09:17 AM
Guys our national debt is not as bad as the US's nationa debt. The current US debt is $7,214,765,625,628.57 (Thanks to Bush) , which means each american citizen owes $24,503.85. Not to mention, we didn't have any goverment last two years in Nepal. Things are looking up in Kathmandu. Jai Nepal...
" Desh le ragat maagey malai Bali chadhaunu. Rudinan meri Upama, Ou Khaandaani ki
Chori"
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| cool_keta |
Posted
on 29-Jun-04 09:27 AM
you mean Rs. 2.28,039,113,441? hehe
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| #$%^*& |
Posted
on 29-Jun-04 09:32 AM
Where can I pay my share of Rs. 10000 and just get rid of it. I don't want bad credit report.
:D
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| Nattu |
Posted
on 29-Jun-04 09:35 AM
A good one #$%^*& :-)
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| #$%^*& |
Posted
on 29-Jun-04 09:59 AM
I am serious nattu....
;)
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| hyaterica |
Posted
on 29-Jun-04 10:18 AM
#$%^*& :-),
why don't you flee to our neighboring country....I don't think they keep credit records...;)
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| golkhadi |
Posted
on 29-Jun-04 09:36 PM
Thats really sad to see how much we owe the foreegn creditors. I seriously think where the money is gone? Does our government have any records we paid how much to us and which PM took how much for their personal use? that is just pathetic.
its very sad to write that we have to think about sell our country and pay it off but is there any one will to pay Rs. 2.28,039,113,441 of nepal?
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