Kathmandu: Speaking at a seminar, held on 19 September in Kirtipur, on “Current Economic Issues”, Prof. Dr. Madan Kumar Dahal, Head of the Central Department of Economics (CEDECON) at Tribhuban University (TU) said from the chair that the seminar had been organized primarily with a view to bring faculty members, teaching economics in different campuses under Tribhuvan University, together for a dialogue on pertinent economic issues. During the seminar two papers were presented viz., on “Monitoring and Evaluation of Development Projects” by Dr. Sharad Kumar Sharma, Professor of Economics at TU and on “Foreign Aid, Exchange Rate and Extra Debt Burden” by Bhanu Raj Aryal and Pramod Pyara Shrestha, Forum for Economic Studies (FECOST).
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When asked by The Telegraph Weekly to comment on the main essence of the papers, Prof. Madan Kumar Dahal expressed his views that monitoring and evaluation of development projects is a crucial determinant to expedite the quantum of foreign aid and spur economic growth and poverty alleviation. He categorically said that the performance of development projects is measured in terms of the size of government spending during the fiscal year, and not in terms of achieving physical targets. The traditional approach to measure performance of development projects is primarily confined excessively to inputs and not to outputs.
He further added that major weakness of monitoring and evaluation of development projects is that its ownership lies with the donors and not with the recipient countries, because the donors directly govern the projects. “The Office of Auditor General (OAG) has frequently revealed its apprehension that the amount received for Technical Assistance (TA) and bilateral assistance in most cases is not transparent. The formidable limitation is that National Planning Commission (NPC/Nepal) is a recommendatory body, which does not have constitutional status to enforce effectively appropriate monitoring and evaluation system for development projects executed by different Ministries and Departments of HMG/N. Answering to the queries of The Telegraph Weekly with respect to the paper on “Foreign Aid, Exchange Rate and the Extra Burden Prof. Dahal observed that foreign aid is an essential component to accelerate economic development in Nepal. However, the prime issue is how to improve productivity of foreign aid from both demand as well as supply sides. He said, “The aggregate outstanding foreign loan was estimated to be 50% of GDP as of FY 2002/03. The maturity period for external borrowing especially for the soft loan is relatively longer and therefore the size of burden will automatically increase in the long run, which further gives rise to increase in the burden of foreign loan attributing to frequent fluctuations (devaluation) in the exchange rate, known as “extra burden”. The major implication of extra burden is that it creates huge pressure on international reserves by increasing debt-servicing ratio with respect to current expenditure resulting in widening fiscal and budget deficits. This might lead economy to decelerating path in the long run”. Prof. Dahal is of the opinion that the exchange rate for Nepalese currency is stable with Indian currency for unknown reason, while the value of Nepalese currency is pegged with dollar vis-à-vis Indian currency.
At the inaugural session of the seminar, the Vice Chancellor of the T.U. Govinda Sharma suggested the teachers attending the seminar that such seminars contribute to enhance the teaching capabilities of the teachers that ultimately benefits the students.
Rector at the T.U. Prof. Mahendra Singh lamented that in Nepal politics overshadows the economy and that this trend have got to be changed or else the country will be pushed to an abyss.
Dr. Hom Nath Bhattarai, University Grant Commission, assured the department that the UGC will do all it can to encourage the scholars engaged in economic research activities.