NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Friday, June 24, 2005

Poverty reduction, an agenda of the first quarter of the twenty-first century, is the main development goal of all developing countries. High economic growth rate is desirable to bring the dream of the goal of poverty reduction into reality. However, experiences have proved that high economic growth rate alone is not sufficient to eradicate poverty.

Failures to achieve the national development goal are attributed to the declination of the policies as to how and where the resources of the country are distributed and for whom they are designated. Widespread poverty will lead to disaster in the functioning of the balanced development approach.

Development of water resources in Nepal is a precondition for enhancing economic growth and sustaining poverty reduction.

Rational and efficient use of water would enhance economic growth and help reduce poverty. However, maintaining and developing of water resources requires significant public and private investment. Since resources are scarce, right investment decisions should be made from an economic point of view. Interventions on water resource development among other sectors should be as efficient as possible and it should maximize benefits and minimize the costs. Careful consideration must also be given to ensure as to which part of the population will be the ultimate beneficiaries of the investment. In such a situation, investors will invest their capital only when they are sure that they will get reasonable profit margins in association of the recovery of fixed cost in a given period of time. An economic analysis of water related projects have an important role in making these decisions.
Opinion found here.