Investment in hydropower development : For increased export earnings



    Global resources are immense, diversified and scattered. Metallic mines, oil, coal, herbs, water, forest, land are prominent natural resources. However, their distribution is uneven across the globe making a country rich and poor. Among these some are exhausted while others still remain idle. Simplicity, accessibility, economy, easy availability and more weightily the level of socio-economic development are the reason for over and under use of these resources.

    Energy resources are also scattered across the globe with uneven distribution making some countries richer than others. They are of two kinds- renewable (Fuel wood, hydro, wind and solar) and non renewable (coal, oil etc) and are divided into two categories- traditional (fuel wood, animal waste and agriculture residue) and modern (coal, oil and electricity). And hydro, solar and wind is environment friendly.

    Citizens of developed and emerging counties are enjoying optimum level of material well being. Provision of material well being is largely associated with the use of fossil fuel. It implies that any reduction in fossil fuel consumption will reduce the material well being. They have been consumed over 80 per cent of the total global fossil fuel. Fossil fuel consumption emits green house gas (scientist called it the cause of climate change). Greater the fossil fuel consumption bigger is the emission level. Evidently, these economies are the green house gas emitters.

    In a situation at which the world is confronting over the use of fossil fuel that emits green house gas causing the earth to become warmer, countries of the world are attempting to innovate and develop a pollution free and renewable source of energy. Global warming put pressure on developed and emerging economies to reduce their fossil fuel consumption at which their economic progress depends. Any reduction in fossil fuel consumption to reduce emission level would cause to reduce the present level of material well being of people. It slows economic growth thereby making the living standard of people worse than their ancestor. This would be a painful action to be followed. By this reason, they seem reluctant to reduce fossil fuel consumption at the desired level in the short and the long run. So, they are bound to opting. Practices are being placed to invest in clean energy projects as a compensation of rampant use of fossil fuel. It implies that these countries are willing and able to invest in hydropower projects in any part of the globe.

    Nepal, a hydro rich country is seen struggling with sluggish economic activities. It has grown more slowly and with greater inequality. Nepal does not pursue sustainable growth strategy. It fails to recognize its scarce resource which should be put into productive investment because of its political dysfunction. It would be quite relevant to quote here professor Stiglitz that “Political dysfunction makes even worse the problem as conflict over access to resource rents gives rise to corrupt and undemocratic governments”. This makes a great majority of people hopeless and pessimists. From the past two decades economic sluggishness is becoming deeper partly because of power outage. It diminishes output level. Diminishing output level puts a large number of people out of work with the worst impact of enforcing a mass migration abroad in search of livelihood. Immense untapped hydropower potential if used rationally could be a blessing, not a curse to jump into the prosperity. Unfortunately, Nepal’s hydropower remains untapped due to some visible and invisible reasons. Inadequate investment, policy lacuna due to political instability, lack of will, commitment and unclear development vision are some of the visible factors. Water politics, narrow vision on nationalism, self-defeated action, suspicion and mistrust, lack of confidence over its use are some of the invisible factors. Hydropower is a resource on which the prosperity of Nepal depends. It is a tool for achieving anticipated economic growth and more viable marketable commodity to increase export earnings.

    Nepal might have opportunity for mobilizing resources to invest in the development of hydropower potential. This opportunity constitutes a windfall gain for Nepal if it can attract foreign investment for the development of its hydropower potential. Longer the period for its utilization lesser would be the economic growth and employment and hence deeper poverty. To put this opportunity into action, Nepal should have to build national consensus and good relations with its two giant neighbors. A special agreement should be made with its southern neighbor to promote and expand trade facilitation. Investment in large hydropower projects should be encouraged and Nepal needs India as a market to sell the electricity generated. Electricity generated by the companies other than Indian also require the Indian market for selling. Nepal should have to make arrangements to ensure access to the Indian market for exporting electricity generated by third countries in Nepal. However, good governance associated with the political stability is the prerequisite for not losing the running opportunity that investments in hydropower afford.

    Source : The Himalayan Times