Sunday, November 21, 2010

Book Review -- The Maoist Insurgency in Nepal: Revolution in the Twenty-First Century

A book review of The Maoist Insurgency in Nepal: Revolution in the Twenty-First Century published in Journal of South Asian Development, October 2010 5:300-303.


[Mahendra Lawoti and Anup Kumar Pahari (eds). 2009. The Maoist Insurgency in Nepal: Revolution in the Twenty-First Century. New York: Routledge. 354 pp. $150. ISBN 978-0-415-77717-9 (HB). DOI: 10.1177/097317411000500208]

The book aims to explain the dynamics and growth of the violent decade-long insurgency, led by the Communist Party of Nepal (Maoist), which started in 1996 from rural districts in Nepal. Various aspects of the rebellion are explored in an attempt to provide a diverse picture of the nature of the insurgency, its modus operandi, and success in recruiting and keeping intact a sizeable support base.

There are 15 chapters, with contributions ranging from the Maoists’ tactics in recruiting cadres by mobilising a plethora of means such as cultural programs, indoctrination, and political education, the governance of a growing parallel bureaucracy, the role of ethnicity in inciting conflict to the comparison between the PLA and the security forces in flaring up the violent movement. The role and consequences of external actor’s engagement and the quest for identification of causes behind the growth of insurgency are also explored. The two editors of the book, Lawoti and Pahari, delve into what is at stake for the nation and the CPN-M in the post-insurgency era, that is, after the successful revolution in 2006 that culminated in the end of the two-century long monarchy and signing of the Comprehensive Peace Agreement (CPA) with democratic parties. Given the breadth of issues explored by the authors, from various perspectives, the book is not only useful to researchers interested in the nature, causes and consequences of a home-grown insurgency but also to a general audience having interest in conflict studies and conflict resolution professionals interested in understanding and solving ideology-based insurgencies.

Despite presenting rich information, the contributors of Part II, which deals with the extensive use of indoctrination and political education, cultural programmes, the use of student unions and the mobilisation of landless rural poor against elites to generate popular support for the insurgency, fall short of making their point convincingly. There is little analytical rigour in their analysis as all of them are informational and interpretive in nature. Readers would have benefited tremendously had there been analytical examination of the Maoists’ tactics and the level of success in methods used to recruit insurgents and enhance the support base.

While attempting to explain why the Maoists were successful in recruiting rebels through indoctrination of Maoists ideology, Eck just explains the modes of indoctrination while failing to convincingly explain why indoctrination was successful and to what extent it contributed to the growth of Maoist support bases in rural areas. Eck’s claim that the focus on ‘local knowledge and the understanding of local grievances’ (p. 45) was the main reason for enticing recruits is partially refuted by Acharya, who shows that grievances, caste and ethnic divisions and ideology are insignificant variables (pp. 264–84). In fact, using econometric analysis, Acharya shows that the main cause of longevity of the insurgency and its mass appeal are incentives, that is, the opportunity cost of joining the rebellion is low due to limited employment opportunities, difficult physical geography and personal security amidst the absence of state. Meanwhile, Tiwari asserts that initially development inequalities and poverty increases the likelihood of conflict, but once conflict kicks in, the intensity is guided more by social variables, that is grievances are not primary causes (pp. 243–57).

Mottin’s contribution on the use of cultural programmes such as dance, theatre and songs that circulate through tapes, CDs and videos to keep cadres intact and tempt more people to join the rebellion is largely based on observations and anecdotes from fieldtrips in the Maoists’ strongholds. Mottin, however, falls short in explaining how the Maoists’ songs and dance were any different, if they really were, from that of the United Marxist-Leninist (UML), which were once very popular among the rural impoverished masses. In Chapter Four, despite providing valuable insights into the evolution and contribution of the Maoist student’s union in raising awareness about its parent party’s rebellion, Snellinger struggles to justify how the All Nepal National Independent Student Union-Revolutionary (ANNISU-R) is a ‘scientific organization’. By blindly following the CPN-N’s ideology, restricting the upward mobility of competent members in the management body of ANNISU-R and using violence to put forward their demands contradicts the author’s claim that the student body is a scientific organisation.

In the next chapter, Joshi looks at the tussle between poor landless people and rural elites, and the effect of liberalisation on rural households. Joshi’s claims that the insurgency is mostly related to the grievances of rural landless poor and the apathy of the political establishment in reforming the feudal economic system that only benefited the ‘landed elites’ are not fully backed by convincing evidence. Nepal has been feudal since its inception as a sovereign state. Why the revolution after two centuries of the existence of feudalism? Plus, it is quite wrong to attribute the continuation of feudal land holdings as a trigger. Unequal distribution of land cannot be solely attributed for the disgruntlement among the poor during and after the insurgency in Nepal. Nepali people are fiercely individualistic in nature, which is evident from their dissatisfaction with collective production units and communes in the Maoist’s model village, which were considered as breeding grounds of the Maoist insurgency. Not even in the Maoist’s model village—Deurali—were residents satisfied with collective production units and communes, as is shown by Lecomte-Tilouine (pp. 116–32). They were forced to follow the Maoist’s utopian model of governance that consisted of Marxist education in schools, communes and kangaroo courts.

Examining the trajectory of insurgency with the participation of indigenous groups and the role of the Madhesi community during and after the insurgency, Lawoti and Kantha do an excellent job to fill the void on the ethnic dimension of the insurgency. The Maoists raised issues such as language equality, secular state and self-determination rights, and incorporated proportionally high indigenous representation in their organisational structure, leading to an increase in support from the indigenous people. In fact, the insurgency began from the land of one of the indigenous groups, the Kham Magars. By comparing Maoist movement in Nepal with that of Peru and India, Lawoti shows that the latter countries’ inclusive policies helped blunt the growth of insurgencies. One important implication of this finding is that alienating and excluding ethnic groups is a recipe for disaster. This is further confirmed by Kantha, who argues that due to the Maoist’s hostile attitude towards the Madhesis’ interests, especially on instituting a single Madhes state with a right to declare autonomy and their pro-India stance, they could not garner popular support in the Terai region. Kantha, however, fails to explain whether the leaders of Madhes, most of whom once belonged to mainstream political parties that ignored ethnic minorities’ rights, are genuinely interested in securing the rights for Madhesi people or are they simply seizing the political opportunity and creating a niche for ethnic politics? The higher echelons of the newly formed Madhesi parties are virtually void of lower caste people, which indicate more of a repackaging rather than a genuine push for empowerment of marginalised Madhesis by the upper caste Madhesi elites.

On the military dimension, comprehending the inability of a large, well-trained and equipped state army to contain effectively an insurgency is always intriguing and surprising. Mehta and Lawoti fault the fickle political situation; the coup in

2005 leading to withdrawal of support to the security forces by India, the United Kingdom and the United States; and the inability of the army to win the support of the public for the weakness of the state army. The Maoists emerged triumphant due to their ‘political foresight and strategies and not through military victory’ (p. 191). They, however, do not talk about the moral and material support pro- vided by India to the Maoist insurgents. They also do not talk about the political will, which was at best halfhearted, to fight the Maoist insurgency. Pahari compares the Maoist movement in India and Nepal and argues that the Maoists gained an upper hand because of the extreme centralisation of political, administrative and governance powers in Kathmandu. Upreti looks at another important dimension of the conflict—the role of external actors, who showed ‘inconsistency and duplicity’ while dealing with the government and security forces. The international actors severely criticised the state for violating human rights during the insurgency. Meanwhile, they also supported the security forces by supplying arms, logistics and training before the royal takeover and imposition of state of emergency.

Most analysts were surprised when the Maoists gained the largest number of seats in the 2006 CA election. In a forward-looking chapter, Lawoti unravels the causes of this surprising election victory—projecting themselves as the only agent for change; creating an environment where other parties could not freely and fairly seek votes; and the undemocratic intra-party culture among the democratic parties (pp. 287–303). This strategy worked once, however, if the Maoists employ the same strategy again in future elections, then ‘democracy, freedom, and the Nepali people will be victims’ (p. 301).

Despite populist talks, the Maoists have not formulated policies for economic transformation. The economic policies they formulated when they were in government backfired because the economy saw a negative growth in manufacturing sector. Meanwhile, domestic and foreign investment nosedived. Several factories closed down due to threats from the Maoist-affiliated militant youth wing and trade unions. Looking at the Maoists’ method of operation even after their emergence as the largest party in the parliament, there is very little evidence that the Maoists will reform and do things differently. From the Maoists’ perspective, it however makes little sense to do things differently, when their current modus operandi is paying hefty political dividends. The book does not include studies on crucial issues such as the economic cost, the stagnation of income growth and the effect of Maoists ideology on private sector investment and growth during the insurgency.

[Reviewed by Hari Bansha Dulal, The World Bank, Washington DC, USA, and Chandan Sapkota, Carnegie Endowment for International Peace, Washington DC, USA.]


Nepal’s fiscal budget 2010-2011

Here is the skeleton of Nepal’s fiscal budget 2010-2011 presented by Finance Minister Surendra Pandey today after yesterday’s Maoist party’s inexplicable drama.

Budget for FY 2010-1011 
Rs, billion Percent of total budget Percent increase from last FY
Total expenditure 337.9 100 30.4
Recurrent  190.32 56.3 25.8
Capital 129.54 38.3 44.8
Principal repayment 18.42 5.4
 
Development programs 178.61 52.9
General administration 159.29 47.1
 
Projected total revenue 281.99
Revenue 216.64
Foreign grants 65.34
Deficit 55.91
 
Deficit financing 55.91
Foreign loans 22.23
Domestic borrowing 33.68

 FY 2010-11 full annex

Even though Mr. Pandey claims that this budget is in line with the Three Year Plan (2010-2013), which I think is not, politically, thanks to the Maoist party, he is restricted to bring a budget that will more or less be in line with the plan.  He is constrained by other parties’ reluctance to add new development programs. So, pretty much everything looks like a continuation of the ongoing programs.

Specifics:

  • Infrastructure: construction and reconstruction of roads, bridges, highways, Tamakoshi Hydropower Project, irrigation projects in Karnali
  • Transport: Rs 2.52 billion for regular and periodic repair and maintenance of roads (my take: the sum is too little to tackle the binding constraint to economic growth); construction of railway, metro, cable cars and water ways (my take: forget these and divert money to constructing roads and building hydropower; link up villages and markets first, where there is the highest marginal rate of return on public investment); upgrading and construction of bridges over roads and those linking highways; 4 six lane highways
  • Hydropower: budget for completion of Trishuli III “A” (60 MW), Kulekhani III (14 MW), Chameliya (30 MW), and Rahughat (30 MW); at least one large and medium sized reservoir projects in each development region-- Budhi Gankadi (66 MW), Naushyalgad (400 MW), 300 Tamor (300 MW) and Aandhikhola (175 MW) projects to be brought into operation; micro hydropower production to be encouraged; national grid expansion and construction of inter-country transmission line of high capacity (my take: Good one. But, let us also ensure that they happen on time. It would have been better to put a time horizon for completion of these projects and institute a proper governance body to ensure that they are completed on time)
  • Tourism: NTY 2011 promotion to bring in one million tourists; Rs 5 lakhs for any organizer bringing in more than 100 foreign passport holders via air; Lumbini, Pokhara, Janakpur to be promoted; airport infrastructure to be upgraded (my take: the cash incentive could divert some of the regional conferences to Kathmandu; good for the economy!)
  • Private sector development: black topped roads reaching premises of manufacturing units employing more than 100 people; tax payment days reduced by 12 working days; sub health post staffed with health workers to any productive industry employing more than 500 Nepali workers; a police post of 5 police personnel near any manufacturing firm employing more than 500 Nepali workers; direct purchase of diesel from NOC at dealer’s price for manufacturing industries and hotels; along with 25% tax exemption, 2% of incentive in NRs to exporters on submission of bank document that they have received convertible currencies earned from exports; 3% and 4% tax tax incentive, along with 25% income tax exemption, if value addition in exported commodities exceeds 50% and 80% respectively; safeguard economic protection of industrial workers who have contributed to Social Security Fund; high priority to completion of road construction and electricity transmission lines to encourage cement industries in Udayapur, Makawanpur, Dhading, Rolpa, and Dang; grants for registration of collective trademarks for tea and coffee in the international market; price carteling and syndication to be illegal; Youth Self-employment Program (my take: Good incentives, but unsure how much of it will be picked up by the private sector, for whom any amount of incentive by this resource-strapped nation is insufficient; I like the idea of constructing roads up to premises of manufacturing units if they employ more than 100 people. It would better if this is used in as carrot-and-stick style, i.e. if firms employ more than 100 just to get roads to their premises, and fire 50 percent employees after getting the roads built for free, then they should be held liable for the costs incurred in constructing the roads. There should be hooks to this incentive. Also, let us start with breaking up the syndicate in transport sector. Consumer surplus is being deliberately squeezed by unfair pricing by syndicates and cartels. Also, export promotion measures are laudable. We’ll have to see how much risk abatement there will be with these tax incentives.)
  • Financial and capital markets: capita restructuring of NBL and RBB; Infrastructure Development Bank; NRNs allowed to invest in capital market (my take: Why not totally reform and privatize NBL and RBB? What is the point in resuscitating them time and again? Let us make infrastructure development bank a reality. First, increase funding for it. Also, how about selling infrastructure bonds with relatively attractive high long-term interest rates?)
  • Social security: social security allowances (distribution to be initiated through banking system), child protection grant for poor-Dalit families in Karnali, human development of backward and marginalized groups, one percent income tax as social security tax
  • Women empowerment: 17.9% of total budget allocated for women empowerment, including campaign against gender based violence, legal expenses of small girls and teens rape cases to be covered by the state treasury
  • Sports: incentives for medal winners at international events, development of sports infrastructure, construction of regional sports complexes, construction of cricket grounds of international standard at Mulpani, Kathmandu and Bhairawa, Rupendehi (my take: We badly need it. Let us boost our athletes’ morale)
  • Targeted poverty alleviation: social mobilization, income generation, self-employment, small community infrastructure development, skill enhancement and creative programs through PAF; target groups are Dalit, Madhesi, ethnic groups and backward groups BPL; Karnali Employment Program
  • Reconstruction, Rehabilitation … : monthly allowances and livelihoods for combatants (my take: if they are really in a combative mood and support their parent party in any moves, then why pay them with taxpayer’s money? I hate to think of giving hard earned tax rupees to idly sitting, potentially destructive and politically indoctrinated militants!)
  • Agriculture: livestock development by concessional loans to be self sufficiency and to promote exports of meat (my take: its fine to aim for self sufficiency, which I doubt, but don’t aim for exports as of yet because we hardly meet international sanitation standards; it is a useless chatter to show that something is going to happen); Karnali Zone Special Agriculture Development Program, which is an extension to last year’s program, with provision of transportation of fertilizers, seeds, small scale irrigation, training… all aimed at reducing food scarcity; Rs 2.75 billion subsidy to farmers on chemical and organic fertilizer; 50% capital subsidy to cooperative of small farmers to purchase machinery and equipment for processing of cardamom, ginger, tea, coffee and honey; R&D; incentives for cooperative farming; 50% subsidy to insurers on the premium they pay for agriculture and livestock insurance (my take: I like these calibrated incentives, but think that they are not enough to bring about a substantial change; though it is tiny amount, it is better than nothing) 
  • Irrigation: Rs 9.01 billion allocated for irrigation facility in additional 81,475 hectares of land in this fiscal year; construction of irrigation projects in Bara and Bardiya; continuation of People’s Embankment Program
  • Land-use: Land to be classified into six categories -- agricultural, industrial, forestry, commercial, residential and public community
  • Education: Rs 57.65 billion (17.1% of total budget) allocated,an increase of 24.5% over last year’s education budget; teacher-student ratio mapping; internet facilities in every community school; 5400 schools to be handed over to communities during this fiscal year; girls’ toilet mandatory in each community school; a total of Rs 1 billion for teaching grant for schools facing scarcity of teachers
  • Health: Rs 24.51 billion allocated; expansion of free of cost maternity service; free basic health services; promotion of infant and maternal health
  • High-Level Public Enterprises Management Board proposed to reform overall management of public enterprises (my take: why another bureaucratic board? We know the problem. We know the solution. Let us privatize some, offer public shares of some, and have PPP models for some. No point perennially pumping in money in the loss making public institutions.) 
  • Rs 150 million for periodic review of both physical and financial performances of projects outlined by the budget; Finance Minister to chair the high level committee (my take: I really would like to read the final assessment report of not only the projects, but also how this committee spends the proposed sum)

Tax policy and incentives:

  • Permanent Account Number for all employees
  • Compulsory VAT registration for educational consultancy, discotheque, health club, catering, party palace business, mechanically operated dry cleaning service and restaurant with bar operating in municipality areas and other areas specified by IRD
  • 40% tax exemption in income accruing from investment in construction and operation infrastructure development sectors like roads, bridges, airports and tunnels
  • 25% rebate tax for people earning money out of exports of goods produced by using local raw materials
  • 50 tax exemption for software development, data processing, cyber-cafĂ© and digital mapping industries located within technology, biotech, and IT parks
  • Tax incentives to facilitate merger of banks, finance and insurance companies
  • 50% exemption on land registration tax for purchase of land by firms giving direct employment to 300 or more Nepali workers
  • 30% exemption on land registration tax on land transferring ownership to women in rural areas
  • An advance lump sum payment of land and house taxes for 5 years at existing rates

For this fiscal year, on July 12, 2010, Mr. Pandey was allowed to present a budget that was equivalent to one-third of last fiscal year’s actual expenditure. This barely sustained expenditures for the first four months of this fiscal year. During this period, revenue growth decelerated primarily due to low economic activities caused by budgetary uncertainty. Rural economy suffered. Government had to borrow from budget allocated for principal repayment as fiscal crunch got severe.

Nepal’s economic policy should focus on narrowing down trade deficit, achieving high economic growth, enhancing efficiency of public institutions, reducing poverty, lunching efficient public workfare programs for the rural poor, curbing corruption, reducing inflation, and maintaining fiscal stability. This year’s budget aims to lead the country to “industrialization by developing sustainable, self-sufficient and self-reliant economy through optimum mobilization of domestic resources”. Good luck!

Saturday, November 20, 2010

Animal spirits of the Maoist party in Nepal

No, it is not consumer confidence that brings forth investment and prosperity-- referred by JM Keynes as “animal spirits”. I am talking about the real animal destructive spirits of the Maoist party in Nepal. Even after stepping into the political mainstream, they (not only the brainwashed, duped and indoctrinated cadres, but also the political brass) are as unruly as they were during those decade-long days in jungle. Definitely, some habits are hard to go by! The Maoist movement sustains through deception and constant bashing (and intimidation) of the population--“elite and feudal”. The Nepali Maoist party is an epitome of that outdated strategy.

Now, Keynes wondered the mystery of sudden entrepreneurial instincts (animal spirits) that drives innovation and all the goodies (and sometimes bad consequences) that come with it: "the thought of ultimate loss which often overtakes pioneers, as experience undoubtedly tells us and them, is put aside as a healthy man puts aside the expectation of death". No amount of political cajoling will revive animal spirits in entrepreneurs. It just happens when entrepreneurs feel that it is the right time. Alas, thanks to the Maoist party’s hostile attitude and policies toward businesses, Nepali people have not seen that time lately.

Robert Shiller explains:


The term "animal spirits," popularized by John Maynard Keynes in his 1936 book "The General Theory of Employment, Interest and Money," is related to consumer or business confidence, but it means more than that. It refers also to the sense of trust we have in each other, our sense of fairness in economic dealings, and our sense of the extent of corruption and bad faith. When animal spirits are on ebb, consumers do not want to spend and businesses do not want to make capital expenditures or hire people.


Well, that is the economic side of animal spirits, which is usually good. We can only hope that Nepali people will experience those spirits very soon.

What the Maoist politicians did yesterday night was the result of the unleashing of real animal/jungle spirits. By preventing (and publicly fighting) the finance minister to announce the budget, they exhibited something that is very uncommon in Nepal’s parliamentary history. (btw, something like that happened in Ukraine’s parliament in April 2010, and in Taiwan as well; but they weren’t related to budget speech).

The Maoist party has been constantly changing positions and commitments despite multiple rounds of meetings and agreements with other parties. After all, what could be the best strategy to politically survive (with deception) than to be fickle to the extreme—divide and rule!  They change their political commitments and positions at the eleventh hour, holding hostage the economic future of the whole nation.

The country would have been a different place in a matter of just few years if the Maoist party had encouraged Keynes’s animal spirits. Alas, that won’t come true because if it did, then the Maoist would run out of reasons to dupe and brainwash the public to sway political tide their way. Instead, what we are getting is the real animal/jungle spirits time and again unleashed by the entire echelon of the Maoist political structure, jeopardizing economy, development, livelihoods, and future of millions of Nepali people who do not conform to the outdated ideology of the Maoist party. Political wrath aside, let me give a taste of how the delayed budget and the Maoist party’s hostility toward any progressive economic activity will hamper our economy:

  • Few economic activities and no new development works. It is already being put in the back burner for a year now. Think of no new roads linking rural villages, no public healthcare, no salary for teachers in public schools, no subsidies and cash transfers to needy ones, dysfunctional local administration (VDCs), and above all pay freeze of government employees.
  • Slowdown in private sector activities. A substantial portion of demand in the private sector comes from government contracts. With delayed budget and no development related activities included in it, private sector will lose demand. This has many consequences. First, many jobs are hinged on the government demand for services from the private sector. They will perish. Second, private sector takes loans to purchase raw materials and other accessories need to meet government demand. Usually, payment occurs after delivery of services demanded by the government. So, with no payment from government due to budget complexities, private sector will not be paid on time. They will in turn likely default on bank loans, dragging down and squeezing the very conduit that funnel money from one sector to another. It will bring the economic activity engine of the nation to a grinding halt.
  • The negative multiplier will potentially be very high. This means that Rs 1 investment will yield less than Rs 1 outcome. It will lead to an inefficient allocation and reallocation of resources.
  • The destructive activities of the Maoist party will create a strike-unemployment cycle. The impact of obstruction and destruction created right now will not end when the “jungle spirits” end. It drags on for quite some time as investors take time to rebuild confidence. Read this blog post to see how much the country bleeds if economy activities are  halted for a day. The jungle spirits of the Maoist party will potentially make Nepali people even more poorer in real terms, encourage brain drain, promote increasing migration to the Gulf countries for labor, erode business confidence, mock rule of law, create shortages… (you put the rest!)
  • There will be dire macroeconomic consequences. Already, our macroeconomic situation is going real bad. Balance of payments is in deficit. Industrial activity is down, exports are declining and imports are surging up. FDI has tanked. Private investment in critical infrastructure is hindered. Investments to relax binding constraints to growth are being blocked. Growth rate has stagnated below four percent. Inflation rate is double-digit. Daily consumable goods are getting expensive day by day. Major construction and rebuilding projects are being taken by political party affiliated organizations. Land price has shot up the ceiling. Donation campaigns are terrorizing business community. Businesses flourish only if they have blessing of the most militant youth wings, trade unions and politicians.
  • I can go on and on. The bottom line: the Maoist party’s activities have pushed development backward, contributed to making macroeconomic situation worse, stymied investment, halted employment opportunities, deadlocked political and economic future of the nation, deprived over 28 million citizens of some of their basic constitutionally and universally guaranteed rights, and basically made our lives worse.
  • When will we see the Maoist party’s “animal/jungle spirits” transform into JM Keynes’s “animal spirits”?

Friday, November 19, 2010

Dietary energy consumption in South Asia

Consumption of 9 major vegetal foods (2003-2005) 
FAO Stat 2009 DIETARY ENERGY CONSUMPTION (kcal/person/day)
COUNTRIES Rice Wheat Maize Pulses    Sugar    raw eq.  Potatoes Soybean oil Palm oil Rape & mustard oil
Bangladesh 1,580 172 30 41 51 42 39 78 16
India 699 498 39 108 172 28 45 67 40
Nepal 831 349 382 77 41 88 27 80 47
Pakistan 160 876 90 62 253 19 13 149 24
Sri Lanka 925 343 53 66 287 13 1   0

Apparently, Bangladeshis get the highest amount of calorie per day from rice. It is also true in India, Nepal and Sri Lanka. However, Pakistanis get the highest calorie per day from wheat. Rice is relative more popular in Bangladesh, wheat in Pakistan, maize in Nepal, pulses in India, sugar in Sri Lanka, potatoes in Nepal, soybean oil in India, palm oil in Pakistan, and rape & mustard oil in Nepal. The people in the Indian subcontinent have different tastes. (Source: FAO Statistical Year Book 2009)

Wednesday, November 17, 2010

Links of Interest (2010-11-17)


Climate Change, Agriculture and Poverty

Although much has been written about climate change and poverty as distinct and complex problems, the link between them has received little attention. Understanding this link is vital for the formulation of effective policy responses to climate change. This paper focuses on agriculture as a primary means by which the impacts of climate change are transmitted to the poor, and as a sector at the forefront of climate change mitigation efforts in developing countries. In so doing, the paper offers some important insights that may help shape future policies as well as ongoing research in this area.


How do governments respond to food price spikes? Lessons from the past

Food prices in international markets spiked upward in 2008, doubling or more in a matter of months. Evidence is still being compiled on policy responses over the following two years, but lessons can be learned from the price spike in 1973, the magnitude and speed of which were similar to those experienced around the 2008 spike. In developing countries, policy responses to the earlier spike lowered the (negative) nominal assistance coefficient for agriculture by one-third between 1972 and 1974 before it was returned to the same level by 1976. That was twice the extent of the fall and recovery of the (positive) nominal assistance coefficient for high-income countries. However, the trade and welfare effects of those changes were much less for developing than high-income countries, suggesting the dispersion of distortion rates among farm industries decreased in developing countries. The adjustments were virtually all due to suspension and then reinstatement of import restrictions, with changes in export taxation by developing countries playing an additional (but minor) role during 1972-74. This beggar-thy-neighbor dimension of each government’'s food policies is worrying because it reduces the role that trade between nations can play in bringing stability to the world’'s food markets. More effort appears to be needed before a multilateral agreement to desist can be reached.


The Economic Consequences of “Brain Drain” of the Best and Brightest

Brain drain has long been a common concern for migrant-sending countries, particularly for small countries where high-skilled emigration rates are highest. However, while economic theory suggests a number of possible benefits, in addition to costs, from skilled emigration, the evidence base on many of these is very limited. Moreover, the lessons from case studies of benefits to China and India from skilled emigration may not be relevant to much smaller countries. This paper presents the results of innovative surveys which tracked academic high-achievers from five countries to wherever they moved in the world in order to directly measure at the micro level the channels through which high-skilled emigration affects the sending country. The results show that there are very high levels of emigration and of return migration among the very highly skilled; the income gains to the best and brightest from migrating are very large, and an order of magnitude or more greater than any other effect; there are large benefits from migration in terms of postgraduate education; most high-skilled migrants from poorer countries send remittances; but that involvement in trade and foreign direct investment is a rare occurrence. There is considerable knowledge flow from both current and return migrants about job and study opportunities abroad, but little net knowledge sharing from current migrants to home country governments or businesses. Finally, the fiscal costs vary considerably across countries, and depend on the extent to which governments rely on progressive income taxation.


Climate Change 101: Know The Jargon

These are some climate change jargon that are in use all the time. Since climate change is a hot button issue these days and will be in the future, it is good to at least know what they are exactly talking about. These definitions are sourced from BBC News website.


Adaptation Action that helps cope with the effects of climate change - for example construction of barriers to protect against rising sea levels, or conversion to crops capable of surviving high temperatures and drought.

Adaptation fund A fund for projects and programmes that help developing countries cope with the adverse effects of climate change. It is financed by a share of proceeds from emission-reduction programmes such as the Clean Development Mechanism.

Annex I countries The industrialised countries (and countries in transition to a market economy) which took on obligations to reduce their greenhouse gas emissions under the Kyoto Protocol. Their combined emissions, averaged out during the 2008-2012 period, should be 5.2% below 1990 levels.

Annex II Countries which have a special obligation under the Kyoto Protocol to provide financial resources and transfer technology to developing countries. This group is a sub-section of the Annex I countries, excluding those that, in 1992, were in transition from centrally planned to a free market economy.

Anthropogenic climate change Man-made climate change - climate change caused by human activity as opposed to natural processes.

Aosis The Alliance of Small Island States comprises 42 island and coastal states mostly in the Pacific and Caribbean. Members of Aosis are some of the countries likely to be hit hardest by global warming. The very existence of low-lying islands, such as the Maldives and some of the Bahamas, is threatened by rising waters.

AR4 The Fourth Assessment Report produced by the Intergovernmental Panel on Climate Change (IPCC) published in 2007. The report assessed and summarised the climate change situation worldwide. It concluded that it was at least 90% likely that the increase of the global average temperature since the mid-20th Century was mainly due to man's activity.

Atmospheric aerosols Microscopic particles suspended in the lower atmosphere that reflect sunlight back to space. These generally have a cooling affect on the planet and can mask global warming. They play a key role in the formation of clouds, fog, precipitation and ozone depletion in the atmosphere.

Bali action plan A plan drawn up at the UN Climate Change Conference in Bali, in December 2007, forming part of the Bali roadmap. The action plan established a working group to define a long-term global goal for reduction of greenhouse gas emissions, and a "shared vision for long-term co-operative action" in the areas of mitigation, adaptation, finance and technology.

Bali roadmap A plan drawn up at the UN Climate Change Conference in Bali, in December 2007, to pave the way for an agreement at Copenhagen in 2009 on further efforts to reduce greenhouse gas emissions after the expiry of the Kyoto Protocol. The roadmap gave deadlines to two working groups, one working on the Bali action plan, and another discussing proposed emission reductions by Annex I countries after 2012.

Baseline for cuts The year against which countries measure their target decrease of emissions. The Kyoto Protocol uses a baseline year of 1990. Some countries prefer to use later baselines. Climate change legislation in the United States, for example, uses a 2005 baseline.

Biofuel A fuel derived from renewable, biological sources, including crops such as maize and sugar cane, and some forms of waste.

Black carbon The soot that results from the incomplete combustion of fossil fuels, biofuels, and biomass (wood, animal dung, etc.). It is the most potent climate-warming aerosol. Unlike greenhouse gases, which trap infrared radiation that is already in the Earth's atmosphere, these particles absorb all wavelengths of sunlight and then re-emit this energy as infrared radiation.

Boxer-Kerry bill The Clean Energy Jobs and American Power Act, now in the US Senate, also known as Waxman-Markey from 2007-2009 as it passed through the House of Representatives. This bill aims to reduce emissions by about 20% from a 2005 baseline by 2020. The bill would create a US-wide carbon market, which in time would link up with other carbon markets, like the EU Emission Trading Scheme. The bill is not expected to get Senate approval until 2010.

Business as usual A scenario used for projections of future emissions assuming no action, or no new action, is taken to mitigate the problem. Some countries are pledging not to reduce their emissions but to make reductions compared to a business as usual scenario. Their emissions, therefore, would increase but less than they would have done.

Cap and trade An emission trading scheme whereby businesses or countries can buy or sell allowances to emit greenhouse gases via an exchange. The volume of allowances issued adds up to the limit, or cap, imposed by the authorities.

Carbon capture and storage (CCS) The collection and transport of concentrated carbon dioxide gas from large emission sources, such as power plants. The gases are then injected into deep underground reservoirs. Carbon capture is sometimes referred to as geological sequestration.

Carbon dioxide (CO2) Carbon dioxide is a gas in the Earth's atmosphere. It occurs naturally and is also a by-product of human activities such as burning fossil fuels. It is the principal greenhouse gas produced by human activity.

Carbon dioxide (CO2) equivalent Six greenhouse gases are limited by the Kyoto Protocol and each has a different global warming potential. The overall warming effect of this cocktail of gases is often expressed in terms of carbon dioxide equivalent - the amount of CO2 that would cause the same amount of warming.

Carbon footprint The amount of carbon emitted by an individual or organisation in a given period of time, or the amount of carbon emitted during the manufacture of a product.

Carbon intensity A unit of measure. The amount of carbon emitted by a country per unit of Gross Domestic Product.

Carbon leakage A term used to refer to the problem whereby industry relocates to countries where emission regimes are weaker, or non-existent.

Carbon neutral A process where there is no net release of CO2. For example, growing biomass takes CO2 out of the atmosphere, while burning it releases the gas again. The process would be carbon neutral if the amount taken out and the amount released were identical. A company or country can also achieve carbon neutrality by means of carbon offsetting.

Carbon offsetting A way of compensating for emissions of CO2 by participating in, or funding, efforts to take CO2 out of the atmosphere. Offsetting often involves paying another party, somewhere else, to save emissions equivalent to those produced by your activity.

Carbon sequestration The process of storing carbon dioxide. This can happen naturally, as growing trees and plants turn CO2 into biomass (wood, leaves, and so on). It can also refer to the capture and storage of CO2 produced by industry. See Carbon capture and storage.

Carbon sink Any process, activity or mechanism that removes carbon from the atmosphere. The biggest carbon sinks are the world's oceans and forests, which absorb large amounts of carbon dioxide from the Earth's atmosphere.

Certified Emission Reduction (CER) A greenhouse gas trading credit, under the UN Clean Development Mechanism programme. A CER may be earned by participating in emission reduction programmes - installing green technology, or planting forests - in developing countries. Each CER is equivalent to one tonne of carbon dioxide.

CFCs The short name for chlorofluorocarbons - a family of gases that have contributed to stratospheric ozone depletion, but which are also potent greenhouse gases. Emissions of CFCs around the developed world are being phased out due to an international control agreement, the 1989 Montreal Protocol.

Clean coal technology Technology that enables coal to be burned without emitting CO2. Some systems currently being developed remove the CO2 before combustion, others remove it afterwards. Clean coal technology is unlikely to be widely available for at least a decade.

Clean Development Mechanism (CDM) A programme that enables developed countries or companies to earn credits by investing in greenhouse gas emission reduction or removal projects in developing countries. These credits can be used to offset emissions and bring the country or company below its mandatory target.

Climate change A pattern of change affecting global or regional climate, as measured by yardsticks such as average temperature and rainfall, or an alteration in frequency of extreme weather conditions. This variation may be caused by both natural processes and human activity. Global warming is one aspect of climate change.

Commitment period The time frame given to parties to the Kyoto Protocol to meet their emission reduction commitments. The first Kyoto commitment period runs from 2008-2012, during which industrialised countries are required collectively to reduce emissions to a level 5% below 1990 levels. Some countries would like the Copenhagen conference to prolong the effective life of the Kyoto Protocol by agreeing explicitly on a second commitment period.

COP15 The official title of the Copenhagen conference, which takes place from 7-18 December 2009. Alternatively, it can be called the 15th Conference of the Parties to the United Nations Framework Convention on Climate Change (UNFCCC).

Country in transition Broadly speaking, any ex-Soviet bloc state. At the time the Kyoto Protocol was adopted in 1997, these countries were on the path from a Communist planned economy to a market economy. Many of them would now be categorised as market economies. Countries in transition to a market economy are grouped with industrialised countries in Annex I of the Kyoto Protocol, so they have emission reduction commitments to meet in the 2008-2012 period. In some cases their industrial base collapsed to such a degree in the early 1990s that they will have no difficulty meeting these commitments.

Dangerous climate change A term referring to severe climate change that will have a negative effect on societies, economies, and the environment as a whole. The phrase was introduced by the 1992 UN Framework Convention on Climate Change, which aims to prevent "dangerous" human interference with the climate system.

Deforestation The permanent removal of standing forests that can lead to significant levels of carbon dioxide emissions.

Emission Trading Scheme (ETS) A scheme set up to allow the trading of emissions permits between business and/or countries as part of a cap and trade approach to limiting greenhouse gas emissions. The best-developed example is the EU's trading scheme, launched in 2005. See Cap and trade.

EU Burden-sharing agreement A political agreement that was reached to help the EU reach its emission reduction targets under the Kyoto Protocol (a reduction of 8% during the period 2008-2012, on average, compared with 1990 levels). The 1998 agreement divided the burden unequally amongst member states, taking into account national conditions, including greenhouse gas emissions at the time, the opportunity for reducing them, and countries' levels of economic development.

Feedback loop In a feedback loop, rising temperatures on the Earth change the environment in ways that affect the rate of warming. Feedback loops can be positive (adding to the rate of warming), or negative (reducing it). The melting of Arctic ice provides an example of a positive feedback process. As the ice on the surface of the Arctic Ocean melts away, there is a smaller area of white ice to reflect the Sun's heat back into space and more open, dark water to absorb it. The less ice there is, the more the water heats up, and the faster the remaining ice melts.

Flexible mechanism Instruments that help countries and companies meet emission reduction targets by paying others to reduce emissions for them. The mechanism in widest use is emissions trading, where companies or countries buy and sell permits to pollute. The Kyoto Protocol establishes two flexible mechanisms enabling rich countries to fund emission reduction projects in developing countries - Joint Implementation (JI) and the Clean Development Mechanism (CDM).

Fossil fuels Natural resources, such as coal, oil and natural gas, containing hydrocarbons. These fuels are formed in the Earth over millions of years and produce carbon dioxide when burnt.

G77 The main negotiating bloc for developing countries, allied with China (G77+China). The G77 comprises 130 countries, including India and Brazil, most African countries, the grouping of small island states (Aosis), the Gulf states and many others, from Afghanistan to Zimbabwe.

Geological sequestration The injection of carbon dioxide into underground geological formations. When CO2 is injected into declining oil fields it can help to recover more of the oil.

Global average temperature The mean surface temperature of the Earth measured from three main sources: satellites, monthly readings from a network of over 3,000 surface temperature observation stations and sea surface temperature measurements taken mainly from the fleet of merchant ships, naval ships and data buoys.

Global energy budget The balance between the Earth's incoming and outgoing energy. The current global climate system must adjust to rising greenhouse gas levels and, in the very long term, the Earth must get rid of energy at the same rate at which it receives energy from the sun.

Global dimming An observed widespread reduction in sunlight at the surface of the Earth, which varies significantly between regions. The most likely cause of global dimming is an interaction between sunlight and microscopic aerosol particles from human activities. In some regions, such as Europe, global dimming no longer occurs, thanks to clean air regulations.

Global warming The steady rise in global average temperature in recent decades, which experts believe is largely caused by man-made greenhouse gas emissions. The long-term trend continues upwards, they suggest, even though the warmest year on record, according to the UK's Met Office, is 1998.

Global Warming Potential (GWP) A measure of a greenhouse gas's ability to absorb heat and warm the atmosphere over a given time period. It is measured relative to a similar mass of carbon dioxide, which has a GWP of 1.0. So, for example, methane has a GWP of 25 over 100 years, the metric used in the Kyoto Protocol. It is important to know the timescale, as gases are removed from the atmosphere at different rates.

Greenhouse gases (GHGs) Natural and industrial gases that trap heat from the Earth and warm the surface. The Kyoto Protocol restricts emissions of six greenhouse gases: natural (carbon dioxide, nitrous oxide, and methane) and industrial (perfluorocarbons, hydrofluorocarbons, and sulphur hexafluoride).

Greenhouse effect The insulating effect of certain gases in the atmosphere, which allow solar radiation to warm the earth and then prevent some of the heat from escaping. See also Natural greenhouse effect.

Hockey stick The name given to a graph published in 1998 plotting the average temperature in the Northern hemisphere over the last 1,000 years. The line remains roughly flat until the last 100 years, when it bends sharply upwards. The graph has been cited as evidence to support the idea that global warming is a man-made phenomenon, but some scientists have challenged the data and methodology used to estimate historical temperatures. (It is also known as MBH98 after its creators, Michael E. Mann, Raymond S. Bradley and Malcolm K. Hughes.)

IPCC The Intergovernmental Panel on Climate Change is a scientific body established by the United Nations Environment Programme and the World Meteorological Organization. It reviews and assesses the most recent scientific, technical, and socio-economic work relevant to climate change, but does not carry out its own research. The IPCC was honoured with the 2007 Nobel Peace Prize.

Joint implementation (JI) An agreement between two parties whereby one party struggling to meet its emission reductions under the Kyoto Protocol earns emission reduction units from another party's emission removal project. The JI is a flexible and cost-efficient way of fulfilling Kyoto agreements while also encouraging foreign investment and technology transfer.

Kyoto Protocol A protocol attached to the UN Framework Convention on Climate Change, which sets legally binding commitments on greenhouse gas emissions. Industrialised countries agreed to reduce their combined emissions to 5.2% below 1990 levels during the five-year period 2008-2012. It was agreed by governments at a 1997 UN conference in Kyoto, Japan, but did not legally come into force until 2005.

Major Economies Forum on Energy and Climate A forum established in 2009 by US President Barack Obama to discuss elements of the agreement that will be negotiated at Copenhagen. Its members - Australia, Brazil, Canada, China, the European Union, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, South Africa, South Korea, the UK and the US - account for 80% of greenhouse gas emissions. The forum is a modification of the Major Economies Meeting started by the former President George Bush, which was seen by some countries as an attempt to undermine UN negotiations.

Methane Methane is the second most important man-made greenhouse gas. Sources include both the natural world (wetlands, termites, wildfires) and human activity (agriculture, waste dumps, leaks from coal mining).

Mitigation Action that will reduce man-made climate change. This includes action to reduce greenhouse gas emissions or absorb greenhouse gases in the atmosphere.

Natural greenhouse effect The natural level of greenhouse gases in our atmosphere, which keeps the planet about 30C warmer than it would otherwise be - essential for life as we know it. Water vapour is the most important component of the natural greenhouse effect.

Non-annex I countries The group of developing countries that have signed and ratified the Kyoto Protocol. They do not have binding emission reduction targets.

Per-capita emissions The total amount of greenhouse gas emitted by a country per unit of population.

Pre-industrial levels of carbon dioxide The levels of carbon dioxide in the atmosphere prior to the start of the Industrial Revolution. These levels are estimated to be about 280 parts per million by volume (ppmv). The current level is around 380 ppmv.

REDD Reducing Emissions from Deforestation and forest Degradation, a concept that would provide developing countries with a financial incentive to preserve forests. The Copenhagen conference is expected to finalise an international finance mechanism for the post-2012 global climate change framework.

Technology transfer The process whereby technological advances are shared between different countries. Developed countries could, for example, share up-to-date renewable energy technologies with developing countries, in an effort to lower global greenhouse gas emissions.

UNFCCC The United Nations Framework Convention on Climate Change is one of a series of international agreements on global environmental issues adopted at the 1992 Earth Summit in Rio de Janeiro. The UNFCCC aims to prevent "dangerous" human interference with the climate system. It entered into force on 21 March 1994 and has been ratified by 192 countries.

Waxman-Markey bill Another name for the Boxer-Kerry bill, which aims to reduce US greenhouse gas emissions. See Boxer-Kerry bill.

Weather The state of the atmosphere with regard to temperature, cloudiness, rainfall, wind and other meteorological conditions. It is not the same as climate which is the average weather over a much longer period.


Tuesday, November 16, 2010

Impact of Climate Change in South Asia

The impact of climate change in South Asian counties are listed below. It is sourced from WB’s South Asia Climate Change Strategy 2009, pp. 56-59.


Afghanistan
  • Exposure of agriculture (pasture), ecosystems and water resources to drought and desertification
  • Flooding from glacial melt and long run vulnerability of depletion of water supplies of glacial-fed rivers
  • Water and food insecurity, malnutrition and possible migration
    and conflict


Bangladesh
  • Combined impacts of sea level rise and glacial melt lead to increased incidence of flooding and land loss
  • Drought in some areas
  • More intense cyclones
  • Lower agricultural output through diminished yields and loss of land
  • Increased incidence of heat-related illnesses, water-borne diseases, poverty, child and infant mortality; lower access to safe water and sanitation and possible migration
  • Loss of biodiversity in coastal ecosystems – Sunderbans at high risk
  • Mitigation Issues: Increased coal dependence (risks of early transition to coal)


Bhutan
  • Damages from glacial melt
  • Impact of increased temperature on rangelands and agriculture
  • Potential loss of forest biodiversity due to vegetation shift and increased incidence of forest fire due to temperature increase


India
  • Exposure of agriculture, water resources, and ecosystems to extreme weather events and more variable precipitation
  • Impact of glacial melt on water resources quantity, biodiversity and low-lying agriculture
  • Increased heat-related illnesses and water-borne diseases and changes in epidemiological patterns
  • Impacts on urban infrastructure including drainage, water and sanitation
  • Vegetation shift in forests and biodiversity, regime shifts in rangelands, decreased agricultural yields in tropics and subtropics
  • Increased exposure to sea level rise
  • Mitigation issues:
    • Increased emissions from energy production and transformation, transport, urban, agriculture, industrial and residential sectors due to economic growth and urbanization
    • Impact of climate change upon carbon sequestration capacity of forest ecosystems, other biomass and soils


Maldives
  • Ecosystem damages and loss of protection afforded by coral reefs
  • Inundation of islands due to sea level rise and physical damages from flooding
  • Increased salinity of groundwater resources
  • Possible migration and large scale relocation


Nepal
  • Decline in agricultural production in some areas
  • Glacial lake outburst floods (GLOF) and future desiccation of water resources due to rapid glacial melt and impact on dependent ecosystems and agriculture
  • Impact of vegetation shift to forest biodiversity
  • Likely outbreak of malaria and similar diseases
  • Mitigation issues:
    • Impacts on carbon sequestration of vegetation shifts and forest productivity changes
    • Land-use changes due to future development
    • Slash-burn agricultural practices


Pakistan
  • Increased intensity and frequency of drought and effects on agriculture (pasture), water resources and ecosystems (wetlands)
  • Initial flooding and future drying of water resources due to glacial melt and impact on water consumption
  • Damages of sea level rise
  • Outbreak of heat related and insect-transmitted diseases, malnutrition, food and water insecurity, migration and conflict
  • Mitigation issues:
    • Increased emissions from energy, transport and urban sectors
    • Emissions from agriculture and rangeland degradation


Sri Lanka
  • Reduced crop yields due to temperature increase
  • Sea level rise - damages upon settlements, industries and livelihoods in coastal areas
  • Salt water intrusion in agriculture, freshwater and groundwater
  • Ecosystem degradation and biodiversity loss in coastal and marine ecosystems
  • Mitigation issues:
    • Release of stored forest carbon due to land-use changes
    • Increase in thermal power