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and, therefore, it is impera� ve to review in conformity with the principles
of WTO, SAFTA and BIMST-EC. There is also a need to expedite agro-based
and manufacturing exports, FDI and remi� ances with eff ec� ve induc� on
of economic diplomacy through Nepal's diploma� c missions abroad (IFA,
2009). Tourism development and foreign employment are condi� oned to
s� ff compe� � on at regional and global markets that require improving
effi ciency to increase compe� � veness in both sectors. Although Nepal is
rich in biodiversity especially medicinal herbs like yarshagumba and many
other life saving drugs, fl agship and ownership over a single Aaurvedic and
herbal product under TRIPS have not been established so far. Nepal’s thrust
for maximizing benefi ts from WTO, SAFTA and BIMST-EC through promo� ng
regional and interna� onal trade have been disrupted by prolonged transi� on
and poor governance.
The future of Mahakali (Tanakpur-Pancheswar Mul� purpose Project)
Treaty held in 1995 between Nepal and India with a view to generate 6,000
MW of electricity is yet mysterious. This is most unfortunate example of
India's indiff erent a� tude towards Nepal's economic development that
DPR is not at sight even a� er 15 years of ra� fi ca� on of treaty at mid-night
by a two-third majority in the parliament of Nepal. In recent years, despite
stereo-type claim and campaign for profound and tested rela� onship with
neighboring countries, no single mega-project is in opera� on in Nepal in
coopera� on either with India or China. Both India and China, economically
giant neighbors, were premier donor countries to Nepal during 1950s, 1960s
and 1970s but their status have been relegated to its lowest ebb in the group
of donor communi� es in recent years with a combined contribu� on of less
than 6 percent of total external assistance (Dahal, 2008). The fault lies in
us, not with our neighbors, for poli� cal powers failed to capture trickledown
eff ects and galvanize a maximum coopera� on from neighborhood
economies from their miraculous economic progress.
At this cri� cal juncture, Mahakali Treaty with Nepal is not a priority for
India and, therefore, there is also need to reordering of priori� es compa� ble
with sustaining higher growth rates with frontal a� ack on poverty. The total
751 MW electricity including 54.3 MW of thermal and solar produc� on of
100 KW has been generated by the end of FY 2009/10 (Economic Survey,
FY 2010/11). However, electricity produc� on is limited to 400 MW during
the winter and 572 MW during rainy season (Concept of Government and
Future Program, 2010) against the local demand for hydropower es� mated
to be 972 MW as of 3-Year Interim Development Plan, 2010-2012 (appendix
2). Although government aims at producing 2,500 MW of hydropower to
eliminate load shedding by next 4.5 years (Ministry of Energy, 2011), this
is most painful that Nepal with highest per capita hydropower poten� al,
next to Brazil, is facing acute shortage of electricity that plunged the en� re
na� on into darkness and the process of economic development retarded
to its lowest level. In addi� on, not only cost of electricity produc� on is
conspicuously higher but also tariff rates are exorbitant as compared to
other countries in the SAARC region.
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Changing paradigms of aid eff ec� veness in Nepal