Surfing in the dark: Nepal’s need for economic reforms

More than a year has passed since I visited Princeton University in October 2012. I was there to participate in a panel discussion organized by the university. I was among the 40,000 students around the world who had been taking the online ‘Sociology’ course on Coursera and I had been chosen to visit the university and participate in the panel discussion because of my active participation in classes. I still vividly remember the excitement amidst the nervousness that had engulfed me at being on the stage, in-front of faculty members and students of the university presenting about how internet and online courses were helping students from developing countries like me. It was the moment I realized Thomas L. Friedman is indeed right when he says the world is getting flatter. The information communication technology revolution has indeed leveled the playing field for people across developed and developing societies. An Ivy-league education is at the finger tips of students around the world. Economic reforms undertaken by Nepal in early 1990s are also to be thanked for this wonderful opportunity I got. Nepal opened up its economy to the world and liberalized a few sectors (internet and telecommunications being one of them) during the reforms. And thanks to it, today more and more Nepalese have access to telecommunication services as well as the internet. Thanks to the increased competition among telecommunication service providers as well as internet service providers, the cost of access to internet have come down significantly and almost one-fourth of Nepalese are estimated to have access to the internet. I am sure the numbers will go up significantly in future and the day when every Nepalese will have access to internet is not far away.

However, when I look at some other aspects of lives of ordinary Nepalese, I find that the future that I dream of is nowhere as near as I would want it to be. Till date around 63 percent of households in Nepal lack access to electricity. Even the rest who have access to electricity suffer from power cuts during dry seasons lasting up to 16 hours daily. Ironically, Nepal is said to have a potential of generating more than 43000 Megawatt of electricity from hydro-power alone which would be enough to make Nepal a middle-income country through electricity exports. Power sector was among the sectors not addressed by the economic reforms of early 1990s and we still have a state-owned monopoly Nepal Electricity Authority which controls the generation, transmission and distribution of electricity in Nepal. It amazes me how Nepal Electricity Authority manages to incur huge losses despite being a monopoly and how could it hire 11000 plus employees when it has already accumulated so huge amount of liabilities. While 63 percent of our households are reeling in darkness, Nepal Electricity Authority has become a preferred avenue for corruption and nepotism for politicians as shown by the recent arrest of a number of Nepal Electricity Authority officials for their possible involvement in a multimillion-dollar transformer purchase scam.

It has been less than two decades since internet came to Nepal and yet around one fourth of the population already have access to it and the number is increasing rapidly. On the other hand, Nepal got its first hydro-power plant more than a century ago in 1911 in the form of Pharping hydro-power plant. But even after a century later, about two-thirds of Nepalese households do not have access to something as basic as electricity. It infuriates me to see that politicians haggle over who to recruit as managing director of Nepal Electricity Authority or whom to award a certain hydro-power project while general public is suffering under power crisis. I believe Nepal is in dire need of economic reforms, especially in basic utility sectors like hydro-power. There is a need to introduce and encourage competition in this sector which will eventually not only result in better delivery of services but also encourage innovations. The government should break the monopoly of Nepal Electricity Authority and make it more accountable to the consumers it is supposed to serve by opening up the sectors for private players. The government should also restructure the organization under a private-public-partnership model so that it becomes more effective and efficient without losing the sight of its objectives. Only then, we can dream of a day when we will be taking energy as granted like many of us do to internet