Miscellaneous

Sustainability prime concern

As identity dominates the debate over the four-party deal on state delineation, economic viability and sustainability of the proposed provinces are put on the back burner. Sustainability prime concern

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Published at : August 11, 2015

Kathmandu

As identity dominates the debate over the four-party deal on state delineation, economic viability and sustainability of the proposed provinces are put on the back burner.

In the backdrop of local bodies’ overdependence on the Centre for grants, economists and the private sector stress that economic viability should be taken into account while federating the country.

The central government has the authority of collecting major revenues—income tax, customs duty and value added tax, among others.

“In the initial years, provinces will have to spend much on their administrative set-up and institutions without good sources of revenue collection,” said National Planning Commission (NPC) member Chandra Mani Adhikari. “Achieving self-sustainability for the next decade will be challenging for them all.”

Despite relative strengths and weaknesses of each province, all are thought to struggle to sustain on their own for the first few years. Economists have divergent views about it.

But they agree that Province 6 that incorporates the Far West and parts of the Mid West faces the major challenge to sustain itself in the initial phase. As the most underdeveloped region in terms of physical infrastructure and human development, the province will face a resource shortfall despite the abundance of resources.

Spread over 48,512 square kilometres, the largest province ranks lowest in the human development index.

In terms of industrialisation too, this province has the smallest number of industries. But it has a good growth prospect including in hydropower development, medicinal herbs processing and tourism.

This state can benefit

from the development of hydel projects such as the 10,800MW Karnali Chisapani, 6720MW Pancheshwor, 900MW Upper Karnali, and 750MW West Seti.

“If necessary infrastructures are built and good relations maintained with the neighbouring provinces, Province 6 has a bright future,” said economist Keshav Acharya. “It has abundant mineral and natural resources, high value crops and herbs as well as natural beauty for tourism.”

But, the province will require major investments in infrastructure and human capital development to realise its potential. The district headquarters of two districts—Humla and Dolpa—are yet to be connected by road.

Former NPC Vice-chairman Jagadish Chandra Pokharel said that maintaining the large geography of the state is unscientific while it requires dedicated priority and resources in both infrastructure and human development.

“Difficulties may arise also in governance as the province is too large and people from remote areas have no good roads and other means of transport to reach the provincial Capital,” said Pokharel.

For Province, 2 stretching from Saptari to Parsa, the lack of enough natural and mineral resources is the major hindrance. The country’s biggest industrial set-up—Bara-Parsa industrial corridor—lies here apart from the proposed Second International Airport in Nijgadh.

Former finance secretary Rameshore Khanal believes that the common identity of the people in this region could be helpful for the development of the province. “The lack of care for identity within provinces could result in sustained conflict elsewhere. Development cannot happen if conflict persists,” said Khanal. “But Province 2 has the best chance of developing better also due to the fact that it produces a big chunk of the technical human resource.”

The lowest literacy level (41.04pc), particularly among women, and second lowest human development index (0.42) are the other impediments for the province, according to experts. “Administration could emerge as a big problem as the districts of this state have fared poorly in good governance in recent years,” said Pokharel.

Province 1, covering the eastern Hill and the Tarai, has natural resources, tourism destinations, industries and tremendous potential in agriculture. With the Morang-Sunsari industrial corridor, this province could emerge as an industrial hub for export, said Khanal.

The province is considered the country’s food basket with Jhapa, Morang and Sunsari districts contributing 40pc of the total paddy production. This province is also rich in hydropower resources with major projects such as the 900MW Arun-3, 415MW Upper Tamor, 400MW Lower Arun, 335MW Upper Arun, 300MW DudhKoshi and 200 MW Tamor. In Province 3, which includes the national Capital Kathmandu, major business and financial activities take place. This province has good indicators of human development, and physical and social infrastructure. The province is linked with both India and China and has major infrastructure projects such as 456MW Upper Tamakoshi and 1200MW Budhi Gandaki and the Kathmandu-Tarai Fast Track. Two main trade routes with China, Tatopani and Rasuwagadhi are located here. Acharya said infrastructure and connectivity as well as market can make this province prosperous.

Province 4 already has good road connectivity and the highest national literacy (59.33pc) and high human development (0.51). This province is also rich in hydropower with the second largest number of completed and under-construction projects (29). According to Acharya, the presence of many tourism destinations including Pokhara and a large number of hydel projects are a boon for the state.

Province 5 does not have abundant natural resource although it is the region with good infrastructure and human development indicators. The province has the second largest number of industries (884) and relatively decent human development and literacy indicators.

Sikta and Bheri-Babai irrigation projects are here. A lot of cement factories are opening up and the Butwal-Bhairahawa industrial corridor is expanding fast. “The province can transform greatly with the development of Lumbini and the Bhairahawa regional international airport,” said Pokharel.

Province 1

Natural resources, tourism destinations, industries and agriculture potential

Commercial farming flourishing

Morang-Sunsari industrial corridor

40 percent of national paddy production

Province 2

Home to biggest industrial corridor

Proposed Second Int’l Airport

Common identity of people

Biggest producer of technical human resource

Dearth of natural and mineral resources

Poor literacy and human development index