Posted by: M5 April 18, 2006
FILING PETITION AGAINST INDIA SOON.
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Hukka, Mad Dog, I respect your genuine concern and love for Nepal. I am fully aware, and I am sure so are most Nepalis about how Indian policies have affected Nepal. But think about it, where does Nepal really have any absolute or comparative advantage to become an international trade player? What can Nepal sell? What are our resources? 1) Tourism- A no brainer. Nepal is one of the most beautiful if not the most beautiful country on the planet. Home to more than half of the highest peaks in the world, Nepal is a Shangri-La to foreigners. What happened to it? Tourism has been the hardest hit sector due to this decade long conflict and a musical chair type of multi party rule. Where and how can you blame India for this? If the government was really focused and had even an ounce of integrity or vision, Tourism alone could have been a driving force behind bringing Nepal out of the shadows of the "least developed" and into the mix of "emerging market countries." Let me tell you a sad reality of Nepal right now. I was in Kathmandu 3 months ago, visiting, and there were hardly any tourists there. Amongst the ones that were there, the majority was Indians. 2) Hydro-electric power- This is the most hyped and overvalued asset of Nepal. Before chanting its potential blissful rewards we should look at the pros and cons. Numero uno-It is extremely expensive to proceed with such an endeavor. Dams are very costly and a lot of external Project Finance companies have to take a gamble on this. Inputs like fixed costs are very high; variable costs can fluctuate even more. When you do a quick feasibility study of such projects, Return on Investments have too many variables attached to it, meaning a lot of Uncertainty. Nepal's Finance and Banking systems are not sophisticated enough in a way that local banks could partner along with foreign companies by leveraging and hedging away risks through issuance of debt or using financial derivatives. Numero dos- There are no "benchmark" examples of such projects and hydro-electricity production being a trend or being a first alternative to fossil fuels and radioactive metals. Brazil hasn't been notably successful at it. Canada uses it a lot, but it operates in a different economic environment, which brings us to the next point-Who is the buyer? India? They are not price takers and want to buy at a discount. Point number four, even if Nepal was able to pull this off, there are environmental and stakeholder issues here. Toxic waste is a huge by-product of hydroelectric projects and dumping and the flow of waterways can destroy nearby land, its fertility and endanger the health of nearby villagers. There has not been enough innovation in this field to reduce externalities, financing and finding a market whether be it a niche or large scale is going to be difficult when a majority of our government is mainly concerned about power and don't even know how to read and write. What else does Nepal possess as a major marketable asset? I can't really think of one, but if you guys can please pitch it to the forum. Last but not least I think it is a little hypocritical to say we don't need India's help or interference and we are a sovereign proud nation when the majority of Nepalese in the blink of an eye are ready to flock to the US in droves, and the ones already here have no interest in going back.
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