Insights in Economic Development Of Nepal & Early United States Assistance to Nepal.
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Insights in Economic Development Of Nepal & Early United States Assistance to Nepal.



National planning comission formation, System reforms, US- Nepal relationship

National planning comission formation, System reforms, US- Nepal relationship



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Insights in Economic Development Of Nepal & Early United States Assistance to Nepal. Presentation Transcript

  • 1.  Nepal being a developing Country now, was found to beinterested in economic development even before 1950’srevolution. During the revolution , the Rana’s negotiated POINT FOURPROGRAM with the United States. As a result of which M.P koirala made first request for loanfrom India.(But he was told that, Nepal was required to developset of activities i.e. plans and policies to utilize theloan amount in productive sectors (health,education, and infrastructure development)5/7/2013 2(C) REGMI MILAN
  • 2.  Then, Subarna Sumsher (finance Minister at thattime ) made a comphrensive statement ofGovernment’s assets and plans for development. Deficit were supposed to be partly financed from thereserves of $15.1 million in gold, silver and coins. Finance Minister then said that , the Governmentwill form a planning and development committeeunder the prime minister’s Chairmanship tocoordinate development efforts and projects which iscurrently known as NATIONAL PLANNINGCOMISSION.5/7/2013 3(C) REGMI MILAN
  • 3.  The minister was optimistic about domestic sourcesof funds to finance development in some cases someschemes were productive whereas m some were not. This would be accomplished by raising export dutiesand by abolishing birta i.e. tax free lands, bychanging tax collection methods. Since, there was appreciation in difficulties involvedin income tax collection(lack of IT, Inefficient HR,Mal practices: Tax evasion), The minister suggested that national –savingschemes are beneficial to the nation which can beraised through issuing Government Bonds.5/7/2013 4(C) REGMI MILAN
  • 4.  Discussions and plans centering on economicdevelopment and aid however , were pushed into thebackground by the volatile political situation. And this political volatility isn’t settled yet , that’sthe main reason why Nepal has not been able to reapmaximum benefit from the Point four program, theSwiss technical Aid program, and the Colombo plan. This situation was visualized by D.R. Regmi(Cabinet minister ), which is found to be applicablein todays context as well.5/7/2013 5(C) REGMI MILAN
  • 5.  United states and Nepal doesn’t seem to havesound relation earlier because:a) There was some fear among Nepalese leaders atthat time, that US might be attempting to replaceBritish Influence in Nepal.b) M.P Koirala always outspokenly , said that “TheAmerican designers of war do not wantdemocracy in Nepal”c) He further said “ This plan has failed only becauseof protests from the Nepalese citizens”.5/7/2013(C) REGMI MILAN 6Nepal –US Relationship
  • 6.  Though ambassadors were exchanged, they were notresident in Nepal.a) The Nepalese ambassador in London servedconcurrently in Washington,b) Where as, The United states ambassador to Indiaserved in Kathmandu, Nepal. Such arguments makes clear that , there were notgood diplomatic relations between Nepal andUnited states.5/7/2013(C) REGMI MILAN 7
  • 7.  This conflict between two nations ended when , both thenations signed a “POINT FOUR AGREEMENT” on 23rd Jan, 1951. This program called upon Nepal to coordinate all thedevelopmental efforts involving American assistance.It is not with in the scope of this study to analyze in detail themotives and assumptions of the American Aid, but in generalsome points , which had a greater significance are mentionedbelow:a) The first assumption is about “ rising expectations”, whichhas served as the foundation to the economic developmentof Nepal.5/7/2013(C) REGMI MILAN 8
  • 8.  This was one of the logical concept , which says that “Ifpeople were eager for change, helping the make changes wasrelatively simple” It also advocates that , if the people of underdeveloped areasare unable to fulfill their reasonable aspirations, then thatultimately increases their ground for misery and sorrow’s. The problem in aiding economic development is “know-how”and “show-how”. In other words, if people saw how it wasdone , they would do it themselves.5/7/2013(C) REGMI MILAN 9
  • 9.  was an extension of the concept “Economic and political stabilityare interdependent and together increase the capacity and the will toresist internal and external conflicts and communist aggressions” The maintenance of political stability is dependent upon thecapacity of these countries to improve the productivity and thestatus of the agricultural population. Therefore , the proposed program of economic assistance isdesigned to bring about improvements in the status of theagricultural population. Hence, the problem of political instability can be overcome byassisting economic development as the agricultural sector was morevulnerable now and then. Thus American assistance would befocused on Agricultural sector strengthening and Development.5/7/2013(C) REGMI MILAN 10
  • 10. 5/7/2013(C) REGMI MILAN 11