Nepal: Straight letter from Denmark to PM BRB


    Ranjan Parajuli

    Aalborg University, Denmark.

    Attention! Honorable Mr. Prime Minister, Government of Nepal.

    How are you and how is our Country? I do not know about your personal well being, but I think the country is suffering. I am not going to talk about the crude political regime of the country but would like to pour some dis-satisfactions along with some opportunities, considering that the country is hospitalized. Our country, Nepal, should be taken out of the bed, where it has been laying in a virtual ‘’economic comma’’ from few decades. I would like to pardon for your attentions and respective fellow members, who are obliged to take care of our ill-economic structure of the country, and who are worried for the human well being.

    Mr. Prime Minister, I hope you need not require worrying personally from the acute power outage and energy crisis prevailing in the country. You might be away from the pains brought due to rampant, unmanaged, and uncoordinated economic paradigm of the country. I am saying this, because I see lack of inter and intra coordination, and connectivity as such among the economic pillars and infrastructures of the country.

    Dear PM Dr. Bhattarai, energy is not only the fundamental and pre-requisite element for economic prosperity of the country but it is just like a salt in food, which is essential for our daily life. I mean to say that it is the principal needs required for every element in the different strata of society, from marginal farmer to high income groups, from kitchen to brick kiln, from tea shop(s) to paradise resorts, from rickshaws to deluxe cars, and from land to water. But, why we are suffocating day by day due to lack of convenient, reliable, affordable, and accessible forms of energy? Should I say, suffocations are because of illusive development plans and lack of strong will power to have a secured energy system in the country? Or it is due to lack of interest for correlating energy and economy of the country? Until and unless, people are not empowered with economic opportunities, none of the political theories can be justified, whether it is the theory of “Karl Marx”or of “Bisweshwor Pd. Koirala” or theory of “Ultra communist economy or Socialist economy”.

    Dear Mr. Prime Minister, I often hear about your so-called ‘’grand economic leap” or revolutionary economic development theory’’, but I am wondering to what parameters you are correlating, while uttering your preach to the tribal people of the country? I am anxious about if those are coupled with necessary inputs and fundamental foundations, such as labor forces and energy, to make them really happen in the real world. What I am sure, is that if economic development is bounded and encircled with the energy development, there is nothing such like impossible to have a prosperous economy. I don’t need to remind you about the economic indicators of the country, but should I remind you do we have energy to support the‘’revolutionary economic jump’’ of the country.  I am certain from my side on the need of ‘’revolutionary development’’, but I urge it should be practical and embodied with the development of energy infrastructures to ensure the “double digits” GDP growth. Furthermore, not only to the double digit economic growth, but if we have to continue with current 3.31% GDP growth, we need massive amount of power, but do we have that power?.  If we don’t have them, then I would definitely say your ‘economic jump theory’’ will only swing in the void air, no one can feel it and taste it. Rest assured Mr. Prime Minister.

    My theory is, to make the country economically strong, and empower people with high degree of sovereignty; our balance of capital should be sovereign. Hence, to make it economically strong, we should carefully look after every penny of our National account, their characteristics of flow, and their momentum taking place. Do we have secured energy systems, which can support in sustaining the National Accounts? I would out-rightly say ‘’No’’! The reason behind this is well known to us, as our export earnings are enormously draining out for draining in the imported fossil fuel, despite having massive hydro power and other sustainable means of energy conversions. Please, note that, during fiscal year 2000/1, petroleum product imports were equivalent to 27% of merchandise exports. With an annual average growth rate of 10 %, spurred by rising load shedding hours, Nepal spent NRs 41.4 billion or 61.5 per cent of its export earnings (equivalent to NRs 67.2 billion) just on petroleum products in 2008/9. This actually exceeded the total export earnings of NRs 40.9 billion from India. Furthermore, estimates show that if oil prices hit US$150 per barrel (up from around US$120 now), then export earnings will have to be doubled just to meet the demand for petroleum products.  Just count the penny, rupees contained in the financial basket of the country. Are you satisfied, are people reading this article satisfied?

    I was excited when I see results from one of my independent studies made, aimed to investigate the economic viability of substituting 20% sales volume of high speed diesel of Nepal, by Jatropha based biodiesel. I was amazed that if considering the time frame of 20 years, inflation in diesel price of 9.15% and discount rate of 10%, the savings due to 20% substitution of diesel is about 4056 million US$, discounted at the current time. In addition, it can potentially generate employment for about 5 million people-days and offers opportunity of utilizing 34856 hectares of un-cultivable land of the country. This is just one idea, there are many, maybe we can discuss more precisely, if you wish. People need working environment, meals for their appetite, and practical actions plans from the Government to ensure these. If leaders are not able to ensure these elements, they should stop the ‘’crude politics’, and stop the ‘fragmentation of ideas spoiling the homogeneity of people’’.

    The country has no choice rather than to increase the production capacity of electricity from hydro power and renewable sources to facilitate the fuel substitution in potential economic sub-sectors. Different sources reveal that about 55% of the total Nepalese populations do have an access to electricity, with the promotion of electricity flowing through the national grid and other decentralized renewable energy technologies such as Solar and Micro/mini hydro power systems. The annual average growth in the electricity consumption supplied from all kind of generation system(s) in the country between 1996 and 2009 is 7.31%, but not any remarkable productions have been built-up to cope the increasing demand. The total electricity consumption in 2009 was 2.3 TWh. To satisfy the total electricity consumption of the country in 2009, the supply capacity of the grid based system was 645 MW, whereas Micro/mini hydro and Solar PV had contributed with the total installed capacities of 21.56 MW and 0.93 MW respectively.

    Dear Honorable Prime Minister, now if we have to couple our energy consumption with the economic development, I would like to draw your attentions on some facts. Our current GDP growth is about 3.31% and to continue with this GDP, the estimated electricity consumption in the country by the Year 2030 will be 7.97 TWh, which is 3.47 times higher than that of the consumption that took place in 2009. To support this economic growth only, the production capacity of electricity should be 2235 MW from the big hydro power and independent power producers, excluding renewable energy technologies. Renewable energy technologies, such as Solar Photovoltaic and Micro/Mini hydro should be able to produce 82 MW, additional. If we want to achieve better GDP growth, let us say about 6.38%, then in this situation the total electricity consumption in 2030 is estimated to increase by 5.71 folds (i.e. about 13 TWh) compared to the 2009. This requires production capacity of 3706 MW. This further entails that both Micro/mini hydro and Solar PV production capacity should be increased by a factor of 4 by 2030 than that of 2009. Now let’s go with the comparatively high GDP growth (10%), it says that the electricity consumption will be increased by 10-folds by 2030 compared to 2009, demanding installed capacity of 6600 MW based on the grid connected system only. All these calculations are statistically tested in my independent study to investigate the nexus of energy with the economy. I am excited and worried when I found these results, which is an expected scenario, if we continue on the basis of current consumption and production pattern. I don’t know how is your“revolutionary economy” developed?.

    Dear Mr. Prime Minister, hence to which GDP growth you are referring in your political speech, to which “revolutionary economic jumps” you are indicating? Choice is yours, you can choose any of the GDP growth, but while choosing please be sure that synergy between energy and economy are established. I have tried to draw your attention with the current consumption, also jot down future requirements.  I think, this kind of situation, whether it is based on my arguments presented here, or if made already by other sincere academicians, should be revisited and considered not only by you, but every responsible persons back home, who are sitting on the platform of energy and resource management and steering the sluggish economic tram of the country. It should also be tailored and educated to all those who are mentoring the tribal people about the socialism, capitalism, federalism, and whatever else. So, isn’t it necessary to think, how we can upgrade our social capital (human forces, academic forces, skilled and unskilled labor forces), financial capital (national accounts, and international assets), political capital (policies, mechanisms and implementation modalities) and natural capital (water resources, forest, agricultural resources, and mines etc.) in the domain of energy and economy? Lastly, I would like to request for cross checking your “economic theory”, and be sure if it is embedded with the fundamental pre-requisites, as I have mentioned above. This is not only for you, but for every development practitioners, decision makers and upcoming Prime Ministers and Ministers, who so ever want to couple the theory of economy with energy. Namaskar!

    Thank you.

    Ranjan Parajuli, Date: February 07, 2013.

    The writer is currently pursuing M.Sc in Sustainable Energy Planning and Management at Aalborg University, Denmark.

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