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06 PERSPECTIVES

ECONOMICS

T H E H I M A L AYA N T I M E S
SUNDAY , M A R C H 9 , 2 0 1 4

US
job
growth
offers
upbeat
sign
Frack cracks
investosansar

EASING FEARS OF AN ABRUPT ECONOMIC SLOWDOWN DUE TO WEATHER

and life

Reuters
Washington

EVERYONE NEEDS TO JOIN HANDS


AGAINST THESE BARBARIC PRACTICES

Reuters

Sharad Koirala
Kathmandu

ver the last six years, the


production of oil and
natural gas has tremendously exploded in the
United
States.
Oil
and
natural gas which were
entrapped in the shale rock,
had somehow excogitated with
the improvised technology that
is fracking, which became a
viable technique to extract
these resources. However, oil
and natural gas dont seem as a
renewable resources to many.
But some excerpt that, it is a
natural gas, an energy that
works today and has no
evidence of water that has the
contamination from fracking.
This is the technology which
used for many years and
importantly, the mining of
gas shale still makes sense
to most countries.
According to the EIA
(Energy Information Administration), fracking is in practice
in more than 28 states in the
USA and has estimated over
482 trillion cubic feet, of
technically extractable shale
gas, which results in a decrease
of three per cent in oil imports.
The withered states like
Kansas and North Dakota
blossomed with huge growth in
domestic energy production,
creating employment. Argentina, China including many
European countries have
potential to frack, which
could increase their oil
reserve 10 times in the next
two decades.
The question in my mind

how viable is it for the


environment and can fracking
save the economy?
The consequences are grievous; the process of hydraulic
fracturing impacts drinking
water, when its drilled deep
down under the land, the high
chemical level contained in the
fracking fluids (which is undisclosed till date) is leaked to
ground water that could lead
ground water contaminated
with dark coloured grease,
sediments and floating debris.
Fracturing uses millions of
gallons of water which could
be used elsewhere and that
could turn those water containing chemicals. New York
City is at the top of unfiltered
water supply in the world.
However, air is not left out in
this process, where hydrocarbons and volatile organic
compounds are extracted in
the process which pollutes a
significant amount of air.
Earthquakes too have occurred
in areas of fracking wells.
So, without leaving any stone
unturned, there is need for
strict regulations, that can
provide
the
surveillance
authority to the department of
conservation which monitors
air and water quality around
drill sites and conducts an
independent peer review
assessments for fracking wells.
Nothing is more important
than the environment and
above all nothing is more important than life. The economy
is important but secondary.
Therefore, everyone needs
to join hands against these
barbaric practices.

The author is the assistant manager at the


Research and Development Department of
MEX Nepal. He can be contacted through
r&d@mexnepal.com

Let aid do more

S job growth accelerated sharply in February despite the icy


weather that gripped
much of the nation,
easing fears of an abrupt
economic slowdown and
keeping the Federal Reserve
on track to continue reducing its monetary stimulus.
Employers added 175,000
jobs to their payrolls last
month after creating 129,000
new positions in January,
the Labour Department said
on Friday. The unemployment rate, however, rose to
6.7 per cent from a five-year
low of 6.6 per cent as Americans flooded into the labour
market to search for work.
It reinforces the case for
the economy being stronger
than its looked for the last
couple of months, said Bill
Cheney, chief economist at
John Hancock Financial Services in Boston. It makes
life easier for the Fed and
feeds into continuing the
tapering process.
The report also showed the
largest increase in average
hourly earnings in eight
months and the payrolls
count for December and
January was revised up to
show 25,000 more jobs
created during those months
than previously reported.
Investors on Wall Street
cheered the report and the
Standard & Poors 500 index
reached a fresh intraday
record high before falling
back to trade marginally

Agencies

lower. The dollar lifted off


a four-month low against
a basket of currencies, while
the yield on the benchmark
10-year US Treasury note
jumped to a six-week
high, putting it on course
for its biggest weekly rise
in three months.
Interest
rate
futures
showed that traders ramped
up bets on the Fed raising
rates a bit sooner than had
been previously thought.
They now point to a 53 per
cent probability of a rate
hike in June 2015.
Unusually cold and snowy
weather
has
disrupted
activity in much of the

Ananta Raj Luitel


Kathmandu

wo major ruling political parties Nepali


Congress and CPN UML
are indulged in dispute
unnecessarily over the authority of authenticating the
Constitution to be promulgated by the Constituent Assembly since a week.
Since the first Constituent
Assembly failed to deliver
the Constitution we have
elected the second one,
now it is the job of the
Constituent Assembly to
promulgate a constitution as
per the wishes of the people.
This is not only the spirit
of the Interim Constitution
but is also the mandate of
the 19-day long peoples
movement held in 2005/06
that led the country towards

a republican system.
As per Article 87 of the
Interim Constitution, a Bill
passed by the House shall
become an Act after it is
authenticated by the President. Before the provision
relating to the Head of State
was inserted in the Constitution after the country was
declared a republican set up
and there was a provision
relating to authenticate any
Bill by the Speaker.
Further, Article 165(D)
states that Bill means a draft
of Constitution or Act introduced in Legislature-Parliament or the Constituent
Assembly and proceeded for

promulgating as an Act or
the Constitution.
The procedure of passing
the bill in regard to the
Constitution is not different
from the procedure relating
to bill of Acts as this is a
matter of endorsement by
the CA as done in the parliament, but this is the authority to be exercised by the
President for authenticating
the Constitution by giving
his final seal.
The procedure envisioned
by Article 70 is the process of
passing bills of the Constitution but it is not different
with the law promulgation
process therefore citing this

people with jobs reported


they were working part-time
because of the weather. That
was the highest reading
for February since the
series started in 1978.
It also showed 601,000
people could not get to work
because of the weather, the
highest level for February
since 2010. Economists said
job growth in February
would have been as high as
200,000 if not for the weather.
Payrolls averaged about
205,000 new jobs per month
in the first 11 months of 2013,
but that figure dropped to
just 129,000 for December,
January and February.

legaleagle

CEREMONIAL AUTHORITY ALWAYS EXIST


WITH THE HEAD OF THE STATE
provision opposing
the presidential power for authenticating
the Constitution is
baseless.
It is the authority of the
Head of the State to exercise
a ceremonial role commuting or remitting any sentence imposed by any court,
or granting pardon, appointing heads of state organs
and constitutional bodies
with recommendation fromconcerned agencies and
accepting credentials from
ambassadors.
It is not possible for
anyone to exercise such
authority other than the

Head of the State


because it is the
final authority to
be exercised with
the recommendation of concerned
authorities.
So
creating confusion
on such already
set
matters
does not help any political
party and hinders the
constitution
making
process.
This is the basic norm
that the President exercises
the final authority in
democracy, Krishna Jung
Rayamajhi, former Supreme
Court Justice told THT
Perspectives. If we bring
the Head of the State into
controversy for such petty
issues, it will not help
advance our republican
system, Rayamajhi added.

PRIORITY AREAS FOR FOSTERING ECONOMIC GROWTH MUST BE THE POWER


SECTOR, FOLLOWED BY TRANSPORT INFRASTRUCTURE

File Photo / THT

this money has been going,


especially at a time of nearparalysis of government.
A look below the surface is
quite revealing, for the choice
of sectors that have received
funding indicates the dilemma donors have been facing
in Nepal. The sector that has
received the greatest amount
of disbursements is education, followed by local devel-

have an impact. It cut into


the length of the average
workweek, which hit its lowest level since January 2011
and led to a drop in a measure of total work effort. But
economists expect a reversal
as soon as this month.
The economy will defrost
in the spring and heat up in
the summer, said Michelle
Meyer, a senior economist
at Bank of America Merrill
Lynch in New York. We
should see solid gains in job
growth in coming months.
The smaller survey of
households from which the
unemployment
rate
is
derived showed 6.9 million

Redundant dispute

Siddharth Poddar
Singapore

epal has long been an


aid favourite, receiving
interest (and financial
commitments) from a
plethora of international
agencies and donor countries. In a matter of just three
years between fiscal year
2010-2011 and fiscal year
2013-2014, Nepal received aid
commitments of USD 5.46
billion from a total of 73
donors, of which USD 3.41
billion has been disbursed for
742 projects across 50 sectors.
These numbers are quite
staggering,
particularly
considering that for most of
this period, Nepal has either
had an unstable government
or no government at all.
While there is no denying
that
Nepal
requires
significant external assistance to bolster its economy,
it is important to ask where

United States for months,


and a few economists had
begun to speculate that the
US central bank could reconsider its plan to wind down
its bond-buying stimulus.
The eastern and central
United States experienced
record low temperatures last
month, and ice and snow
blanketed densely populated
areas during the week
employers were surveyed for
February payrolls. The winter storms left Wall Street
bracing for a much weaker
report. Economists had
forecast non-farm payrolls
rising by only 149,000 jobs.
The weather, however, did

opment and health. These are


followed by road transportation and electricity, arguably
more important sectors. That
electricity and road transport have received less assistance than education and
health illustrates the challenges donors face in funding
projects that require extensive state participation and a
stable political environment.

In Nepals context, the


priority areas for fostering
economic growth and development must be the power
sector, followed by transport
infrastructure. Not only do
these two sectors have a more
significant direct impact on
economic growth, but their
follow-on development effects
are also greater than that of
other sectors.

This is not to suggest that


donors have got it wrong. In
fact, it only suggests how
poor successive Nepalese
administrations have been
in creating conditions conducive for the development of
the electricity, road and other
infrastructure sub-sectors.
Donors are still putting
money to work in Nepal, but
largely in sectors that see less
direct government involvement. Essentially, these are
sectors in which it is easier
for donor commitments
to have greater impact.
This shift in focus started
happening at the turn of
the century when political
instability in Nepal peaked
with the heightening of tensions with the Maoists. While
the proportion of funding for
social sectors vis--vis hard
infrastructure has dropped
somewhat, the focus is still
squarely on the former.
It is a unique predicament

donors find themselves in as


their hands are tied due
to the political environment.
On the one hand, they are
criticised for taking the
easy way out and not doing
enough to support infrastructure development. On the other, when they occasionally do
try and push for reforms that
can make it easier for them to
commit to projects in these
sectors, they are accused of
trying to push their agenda
and impose on governance.
It is a lose-lose situation.
If they try and seek accountability through the disbursement of loans instead of

grants, they are accused


of burdening a poor country
with further debt obligations.
If, on the other hand, they
provide grants instead of
loans, questions relating
to accountability are raised.
Our new government needs
to address this issue soon, for
greater donor involvement in
the infrastructure sector will
be a natural catalyst for
the private sector to boost its
participation in this sector
too. For too long now, aid
agencies have been blamed
for misplaced focus. It would
be good to remember that
charity begins at home.

The author specialises in the political


economy of South and Southeast Asia
and is a co-founder of StoneBench
Research and Communications.
He can be reached at
siddharth@stonebenchasia.com