Nepal Energy and Security

Nepal Energy and Security

Economy and energy

Nepal is one of the least developed countries in the world, according to the ranking drawn up by the United Nations. Poverty is widespread, so much so that in 2010 – the latest data available – 15% of the population lived on less than a dollar a day. Although poverty is decreasing (in 1995 the estimate was double), the improvement in living conditions is accompanied by an increase in inequalities, as shown by the increase in the Gini coefficient in the last ten years (32.8 in 2010).

The earthquake that hit the country in 2015 added to the factors that have had a negative impact on the economy in recent years: the ten-year civil war and political instability. The agricultural sector, which contributes about one third to the GDP of the country, was the most damaged, also due to the unseasonal monsoons and rains that hit the country in 2015. The mining industry is relatively developed thanks to the considerable primary resources, such as lead, zinc, iron, limestone, marble, petroleum. The industrial sector, already underdeveloped in itself due to a lack of infrastructure, skills and capital, was further challenged by the earthquake, as was the tourism sector. A sector, the latter, which was also negatively affected by the strike proclaimed by the Sherpas of Mount Everest in April 2014 following the death of some colleagues, caused by avalanches.

The country continues to depend on international aid, which has grown from 430 million in 2004 to 870 million in 2013, although institutional weakness and widespread corruption reduce its effectiveness. Remittances also represent an important resource, so much so that in 2008 they contributed 20.7% of GDP. According to estimates, Nepalese working abroad are one million in India and more than one million in other countries; foreign investments, on the other hand, are small, if we exclude the huge Chinese and Indian investments.

India is by far Nepal’s largest trading partner (more than 50% of imports and exports). The country also has trade relations with the United States. However, the exchange is made difficult by the geographical location. The country’s traditional trade deficit worsened further following the earthquake, which caused a decrease in exports and a parallel increase in imports.

In terms of energy, according to indexdotcom, Nepal depends on traditional sources such as wood (which satisfies 76% of energy needs) and organic residues. Oil and coal, on the other hand, have smaller shares in the energy mix. Electricity is mainly produced through hydroelectric power plants, a source for which various upgrading projects are underway, despite the fact that the river flows are highly variable.

Defense and security

There are no direct threats to the territorial integrity of the country and the mountainous territory constitutes a natural defense. Defense spending is very low, around 1.5% of GDP. The army is made up of over 95,000 soldiers of the ground forces, while there is no navy and air force. The Peace Treaty of November 2006 provided for the inclusion of about 19,000 former guerrillas of the People’s Liberation Army in the regular national formations within six months of signing, but the issue met with strong resistance and could only materialize in August 2013. The UnminThe UN Mission in Nepal that monitored the disarmament of the guerrillas, ended in January 2011. Supporter of multilateralism, Nepal has contributed to several missions of peacekeeping of ‘ A, sending the world more than 50,000 soldiers by 1958 today. To date it is present in Mali, Lebanon, Sudan and South Sudan, the Democratic Republic of Congo, Haiti, Iraq, Liberia, Haiti and on the border between Syria and Israel.

A devastating earthquake

On 25 April 2015, a violent earthquake with its epicenter in the Lamjung district struck Nepal. The earthquake, graded 9-10 on the Mercalli scale, caused the confirmed death of more than 8000 people, although the estimates speak of at least 11,000 victims. The earthquake also caused an avalanche on Mount Everest which killed at least nineteen people. A second earthquake hit the country on May 12 of the same year, killing another 200 people and injuring more than 3,500.

In addition to the heavy toll in terms of human lives, the damage to buildings, infrastructures and historical-artistic sites was enormous. The Nepalese economy, not in itself in a rosy situation, was brought to its knees by the earthquake. It is estimated that it will take several years to emerge from the crisis triggered by the catastrophe, despite the huge aid promised by numerous international donors who attended the reconstruction conference, organized by the country in June 2015.

Nepal Energy