Economic Survey 2009

HIGHLIGHTS

Economy grows at 3.9pc, touches Rs 960b
Manufacturing sector shrinks
Expansion of health services stagnates
3,223 new schools
Inflation high at 12 percent
Food availability shrinks
KATHMANDU, July 12: Even though agriculture and real sectors faltered, Nepal´s economy expanded to Rs 960 billion and GDP per capita touched US$ 473 in 2008/09 -- thanks to increased remittances.

Economic Survey 2009 that the government presented at the parliament on Sunday portrays dismal performances of industries and agriculture -- the mainstay of semi and unskilled rural as well as urban employment.

During the year, agriculture grew by 2.1 percent, contrary to the growth of 4.7 percent recorded last year, says the survey. Non-agriculture sector also expanded at low 4.8 percent, compared to 5.7 percent of last year.

The drop caused the economy to grow at low 3.9 percent, which was mere about half of what the government had targeted to achieve for the year. The growth was also lower than 5.3 percent recorded a year before.

At the grassroots level, low agriculture productions along with sharp rise in commodity prices -- highest of past two decades -- is feared to have raised the incidence of malnutrition in the country.

Still worse, extension of health services too came to a standstill -- the result of worse development spending that occurred due to the political parties´ failure to collaborate and seriously work toward stepping up the investment meant at serving the people, particularly the poor and those from the rural areas.

The number of hospital beds throughout the country stood at 6,944 -- same as last year´s. The number of health centers, sub health posts and primary health centers -- the main health institutions that provide services to the people at the local level but had shrunk due to past conflict -- too remained unchanged at five, 3,104 and 201 respectively.

The flagship annual report of the Ministry of Finance, however, portrays a rosy picture in the education sector.

Despite being hit by the political unrest and weak public investment, the number of schools in the country grew by 3,223 over the past one year. Of the new schools, the number of primary schools grew by 1,704. And those extended services to 6,964 students.

None other sectors, other than real estate and private constructions, boomed as much as telecommunication services did.

As private sector ventured aggressively in the telecommunications sector, 195,258 new telephone lines were distributed in the country during the year. This raised the number of telephone subscribes to 723,648.

Contrary to general apprehension of low development spending, the survey says that the government added up 1,227 km of roads to the national road network during the year. The fresh constructions increased the total stretch of the road network to 19,209 kilometers.

Nepal imported 684 million kilowatt hour worth of electricity from India over seven months of 2008/09, compared to 412 million kilowatt hour of the previous year, as the country failed badly to match electricity production with demand.

While the volume of import still did not prevent Nepalis from the ill-fate of living in darkness, the protracted load-shedding, coupled with labor stirs and general strikes, dragged down contribution of manufacturing sector by 0.50 percent to the GDP.

Poor industrial security drove the new investors away, even as the existing manufacturing industries operated with highly underutilized capacity. This caused the situation of employment in the industrial sector to deteriorate. "Likewise, the lack of commercialization of agriculture too failed to create new employment opportunities in the rural areas," says the survey.

The construction sector, which grew by 5.7 percent, nonetheless, helped to absorb unskilled and semi-skilled workers who joined the labor market during the year.
Contact Email: milan@myrepublica.com

Source: Republica