DFID's Programme in Nepal - International Development Committee Contents


Examination of Witnesses (Question Numbers 80-102)

DR MARY HOBLEY AND PROFESSOR MICK MOORE

12 JANUARY 2010

  Q80  Andrew Stunell: If you were in charge, you would say that the UK's collective input—not necessarily DFID's—should be on getting that constitutional settlement PDQ.

  Dr Hobley: Absolutely. Definitely. Also, helping to inform that settlement by getting very, very clear vision and understanding at the more local levels about what forms of governance do people really want; just trying to get that understanding at the district, whatever level it is. However, that dialogue is not sufficiently in place, so what you are getting instead is these political parties trying to control those spaces without a bigger decision about what local government, local governance, local structures should be. For me, I think this is a real role for something like DFID, and, particularly with their support to the local government community development project, this is an opening. However, there is a real lack of vision at those lower levels about what this could be, and an informed understanding and challenge to the parties to help open up that space at the local levels. I would be very, very keen to see that happen.

  Q81  Andrew Stunell: Does that suggest that DFID should be investing some time and effort in educating or, at least, conversing with the political parties?

  Dr Hobley: Yes, but at lower levels as well as at the Kathmandu level; so getting down there. Also, just opening up debate, more sort of town hall debates about what is the future of Nepal at the local level, so that it is not just all happening in Kathmandu.

  Chairman: Corruption is also a problem, which I guess requires a settlement.

  Q82  Mr Lancaster: Yes it is endemic in Nepalese society, so I suppose the obvious question is where do you think it is at its worst, and how can donors such as DFID engage to try and tackle it? Certainly when we went on our visit there was a stated political will to try and deal with it, although whether or not that has actually seen much action in reality is a different matter. What can we do to try and help tackle it?

  Professor Moore: I have rarely seen as corrupt a country as Nepal, in the broad sense of the term. That is partly just people stealing money but I also mean, when I say that, the extent to which it is a very exclusionary political system and there are small numbers of people who steal money, and they are setting the system up so they can stay in power to carry on stealing money. So it is awful at the local level. I think my pragmatic attitude to this—I think it is pragmatic—will be to say that, frankly, there is very little we can do. We have to do certain things, as I understand DFID is trying to do at present, which is to say: "You are not stealing our money". We have to try and protect the British aid programme. I was told the stories there (Mary probably knows many more) about more or less direct intimidation over tenders and contracting, etc., and real attempts to do something about that. My own view is that given the size of the security and order problems, generally speaking, to really try to tackle corruption, at this stage, would be a waste of effort. I think there is very little we can do about it. What we need is a little more order and, hopefully, with a little more order if the Indian economy carries on growing the general economic environment will get better and I think it will be much easier to tackle that somewhere down the road, but not at present as a major concern. That would be my view.

  Dr Hobley: I think that is probably a very sad reflection on the truth. It is very interesting and you often hear—and I do not know true this is—some people say that corruption has been important in maintaining the peace and, in a way, it buys off particular groups and people who may cause more problems. I am not sure I subscribe to that but maybe there is a short-term period in which corruption has to be accepted but managed, and it is only when some of these other, bigger parts of the state are in place that it can really be dealt with. For me, when corruption hits at the lowest level and for the poorest people I do find it very difficult to say: "Yes, let's just turn a blind eye to it". We are back, again, to these issues of how you begin to build more accountable systems at the local level. Again, I think, even though the political settlement is not properly in place, there is still a moment now to be building the right types of accountability at the local level in order to start addressing some of these issues around corrupt practice so that it is not allowed to embed. I have seen in other countries where corruption has been allowed to foster and to build that it embeds itself so deeply in the system (Cambodia is a very good example of this) that it is almost impossible to unpick it when the state becomes more stable. It becomes the way the state and citizens expect services—everything—to be delivered; you have to pay, you have to do this. For me, in Nepal, yes, corruption is very bad but let us try not to embed those structures that are already being developed at the moment and look at how we can start pushing back and making sure that we get the right forms of local government accountabilities in place, even at this very early stage, to try and start pushing back up the system.

  Professor Moore: Could I just add one thing there, Mr Chairman? I think a very good short-term target would be that more of the corrupt money actually goes into the central coffers of political parties rather than into the pockets of individual politicians, because the more parties we have with a decent amount of resourcing, who can actually employ staff and campaign, the better politics will be. One of the very unpleasant features of so much that goes on in Nepal at present is that corruption really does go into the pockets of individuals; politics is very "fashionalised"; people join parties and leave parties very quickly.

  Q83  Mr Lancaster: Just picking up on one thing you said, can we be confident that British taxpayers' money is not involved in this? You are smiling, which I sense means that we cannot be confident. When DFID is running its programmes, you hinted that you thought that, perhaps, DFID money was—not intentionally but as part of the culture—being siphoned off and heading elsewhere.

  Professor Moore: Mary, you should answer this in more detail, but I know that this is a major concern, at least it has been in the DFID office. I talk to people, and a lot of effort is going in to trying to make sure it does not happen, in terms of auditing—I had descriptions of attempts at intimidation on tenders for DFID projects and how they tried to circumvent that. So this is something that DFID are concerned about for very understandable reasons.

  Q84  Mr Lancaster: So the short answer is yes, or historically yes.

  Dr Hobley: And very, very difficult to know exactly where every single bit of money is going; really difficult to track it. As Mick says, a huge amount of effort is going in to making sure that money is being correctly used and is going to the right places, but it requires an enormous amount of monitoring to do it. All the donors are really concerned about this and I think DFID has done a huge amount to try and address these problems, but you hear the Swiss, everybody—they are all looking at how they can better track the way money is being used. It is not just money; it is who the services go to, what the money is buying and who actually benefits from this? You see so much corruption in that way as well where money is supposed to go to the very poorest groups; you go down to the villages, they are not getting it, it is going to another group because of the way the patronage system works at that level. Unless you have incredibly able, independent and politically removed people facilitating these processes it is very difficult to erase those forms of corruption, where services are directed to a particular group of people away from another group. So, yes, I think you can do as much as is possible to protect but, again, unless at the local level you are building systems where accountability can really be built in a more democratic process then it is going to be very hard to challenge, at those local levels, who gets the services and who does not, and who is included and who is excluded.

  Q85  Chairman: We have talked briefly about the lack of local government. Those of us who were in Baglung had a couple of examples—and those were really a positive feedback about the desire for it—first of all, I think, in the forest community where, particularly the women, were saying: "We used to have a jolly good local chairman of the local council who was a woman, who we could turn to and now there is nobody local". The agent who was effectively charged with delivering services locally commendably said: "I am here on behalf of the government to do this, but my problem is I am not accountable or responsible." So he was anxious to say: "I would like to have a locally accountably and a locally elected body". What are the chances of this happening and what can donors do to bring it about?

  Dr Hobley: Unfortunately, a lot of it is still dependent on getting the constitution in place by May 2010, and that will then determine the structure of the state and then determine when the local government elections can happen. In the interim there is, at the very local level, a committee of political parties and other interested people who are supposed to provide this initial form of decision making, accountability and local development planning and budgeting. There is, as you know, through the local governance programme and now through government, large amounts of money going down to the village development committees, which are for planning local development activities. So there is now an active process of trying to re-engage government and citizens at that local level. In a sense, the more that can be done to strengthen that and to occupy it in a way that is not going to lead to greater patronage, I think, is a very important thing, because this is what it is demonstrating to people what the future of Nepal may be. This is now where they are beginning to feel: "Okay, local government is coming back into place". I think the work that DFID is doing with the other donors in the national programme around local governance and community development is very important, but it does come back, again, to needing to build this understanding of what local government should be like and not what local government has been even during the civil war and was previous to the civil war, where a lot of the local government experience was still around highly patronage-based politics. So how we reconstruct that understanding of local government at that local level, to me, is critical to how people take Nepal into the future. So, yes, the constitution is essential but building the blocks underneath is really, really critical, and some of the things I was seeing recently were around how, again, the political parties are trying to control the different projects and services that are coming down, and are trying to allocate those to their party members or co-opt particular local groups—forestry groups, mothers groups, whatever it is—to those particular political parties. These are the future vote bank so there is a huge amount of effort going in by the political parties to start really positioning themselves to control the space. So I think this is a very, very important moment in time. This next year/two years are really critical for Nepal looking forward into a future where it has a different form of political process. It is obviously going to take a long time to embed it but what I think we do not want to do is reinforce what was there in the past and people's expectations of the past.

  Q86  Andrew Stunell: Dr Hobley, you have given us evidence to show that, if you like, the community-based organisations are a somewhat ambiguous concept and you have mentioned the political parties' influence on them, and it is not all Age Concern and CAB[3] when it gets down to the village level; it is perhaps something which the community based organisations convey that might not quite translate well. Can you say something about the balance of the provision that they make and the influence and advocacy that they have against the risks there are to having the kind of independent local government system you have got? If I could just press you a little bit on that, is it perhaps a little bit naive to think that you could have a local government structure where the local politics was essentially removed?

  Dr Hobley: It is impossible to have local politics removed, but what I think you would hope to see is some balance to the way politics are being used at the local level. Obviously, that is around, again, how you build people's ability to engage in these political processes. At the moment, in a lot of villages, not all, there are a lot of community-based organisations which do a variety of things. The forestry ones are interesting because they have a resource, they have money and they have a large number of members. Because of that they can actually act in a way like a local government; they can decide who gets access to the resource, they can decide who gets access to funds, and a lot of very positive things have happened from that process. Also, what they are tending to do now is to occupy what should be the local government space because they have funds, they have services and all the rest of it, which, during the period of conflict was important; they did deliver and they did maintain a level of social cohesion that I think was quite critical. Again, I think what we should now be looking at is how you balance those dangers and the positive sides of these community-based organisations with their relationship with an emerging local government and how you can balance the power of that so that the decisions that are being made about who gets access to services are not ones that just remain the very patronage-based ones which generally they are (particularly in the Tarai areas they very much are), but are based much more on careful exploration of who really requires the services and why they are getting them. So how that interface between over 400,000 more of these community organisations plus local government is developed is critical to make sure that local government itself has the power, the space and the authority to start making decisions for the whole citizenship and not for an interest group based on forestry or an interest group based on water or on mothers' health, or whatever else it is, but is looking across the whole populace. At the moment, there is a real issue of these different groups dividing up territory within the local area, and if you are not in a group you do not have a voice and you do not have access to services. For the very poor there are very high transaction costs to being involved in all these different groups to get access to services and often they both do not go into them because of the high transaction costs but, also, they are excluded because of their own social conditions. So local government should be sitting over this and should be able to take a whole overview of all the systems that are within that. The problem we have and the one we need to guard against is to avoid the community-based organisations remaining and the de facto way in which decisions are taken about who gets access to services and who does not. So it is redressing that balance that is going to be crucial in getting local government into a position and at a sufficiently high level as well as local level to be able to take decisions that are not influenced by politics or by patronage. Of course it will continue to happen but we need to be aware and understanding of how to try and prevent that.

  Q87  Andrew Stunell: Can I take you just a little bit further on that? We visited a forest management project and we were given the impression that that, also, encompassed the fact that a school was being built, water and sanitation, bio-gas—a whole lot of projects seemed to be integrated there. Are you saying that that is a pretty unusual case?

  Dr Hobley: It is not unusual. A lot of the forestry groups have, over the years, taken on a local developmental role and not just a forestry role, for good reason: they did have the funds and there was a real belief that this was a way of trying to get local development going. I do see considerable dangers in that becoming a reasonably unaccountable form of decision-making about who gets what, and I am not sure that for the future of Nepal this is necessarily the way to continue. I would like to see some of those activities moved into the local government space and not remain within these forestry groups where the levels of accountability are not very great and you have either a strong voice within it or no voice within it. Definitely for a lot of the groups where they are very poor people, although they may be members, they do not necessarily have access to the facilities.

  Q88  Andrew Stunell: I would just comment on that that if I was on the village committee or the forest management group and local government was set up in my area I would want to be on that local government. So I think, actually, you would see quite a transfer across. I would also comment that we were told and introduced to people who were members of the Dalit community who had apparently benefited from that. Could I possibly take you off in a completely different direction for a moment?

  Professor Moore: Can I go back to an earlier point, Mr Chairman, before we go there, which was what can donors do? I would like to say I think there is one thing donors could do in terms of local government which is they could provide more active encouragement for setting up a reasonable urban property tax system to give at least urban governments and local governments a financial basis. They do not have one, at present. I think we are a long way away from—

  Q89  Chairman: We are back to this country, again!

  Professor Moore: They also do not have a system of central fiscal transfers from Kathmandu, so really sub-national governments have very little funding. It is not actually that difficult to do these days, and I think that would be one very positive thing that donors could encourage.

  Q90  Andrew Stunell: The point I was going to make is that drawing on the experience of visiting one project during our visit, obviously, I am a world expert on this! However, it seemed as though the provision of services was being reasonably well integrated; it seemed as though it was being provided or, at least, made available to all members of the community including Dalit members, and so on. Indeed they seemed to have census figures and a very clear perception inside the village of who were high-paid, low-paid, Dalits, etc, etc. So that looked like a good model. Can I just test you on another project that we visited, which was relating to the retired Gurkha village development project? You have expressed concern that, maybe, aid and projects are not getting to those at the bottom of the pile. Would it be your judgment that in the case of the retirement projects that is happening, or is there a selection of villages and, maybe, people within villages there which is not pro-poor?

  Dr Hobley: I think it is quite difficult for me to comment on because I do not know the project at all. It is very interesting if you do not look at projects but you look at people, and you go and spend time with people and say: "Okay, what are you doing? How are you getting your livelihood together? What services are you getting? What credit are you getting?" They will reel off, maybe, 10 groups that they are members of to get access to water, to get access to education, to get access to different types of credit, and they will tell you how many hours they spend in each of these groups and different types of meetings. For some people it is a huge amount of time. Then you start looking at who these people are, and what you find is that those who are more capable are able to spend more of their time accessing these groups and accessing services, and also what you find is that those who are generally the wealthier or were former patrons within the village often control most of these groups and control access to them as well. So what it is is a very conditional way in which development is allowed to people. If you go further down the system to extremely poor or to particularly marginalised groups, the forestry programme has been very good at trying to get the Dalits involved but this is not the case across all projects. Even though people talk about it, actually when you go down there and look what you find is that a clustering of people who get access to services are generally those who are more able, and a clustering of those who are extremely poor who really get access to very little at all. Often they would also be in the most dire situation and a lot of them will have to migrate for the very poor labour services; there is very little agricultural labour left because of the change to the Land Reform Act in 1997, which meant that the tenancy arrangements there changed a lot. So, again, there is a lot of agricultural land that is not being properly used now, so local labour opportunities are very limited. In the absence of that these people are looking for daily labour—that is what they spend their days doing—and trying to get into these groups is very difficult for them; they do not have the time, they actively exclude themselves and they are, also, passively excluded by the groups because they cannot pay regular amounts of money on credit, which is usually a requirement to be part of that group. So there are lots and lots of barriers, why projects are causing further exclusion, and lots of reasons why they do that, and it is not until you start looking at people, rather than projects, that you start to see this. If you look at one project it actually looks quite successful but if you look at the people in that area and look at all the projects that they are involved with, actually there is a large number who are not in any of these projects, and you start seeing a very different story. It is interesting, once we start getting these questions going, that lots of projects have started asking the same questions and found the same answers across much of Nepal, that what looks good from a project perspective is not so good when you look at it from an individual household perspective instead of from a project eye.

  Q91  Andrew Stunell: Is there a way of dealing with that? Could the donors, and DFID in particular, take a different approach which would overcome that problem or mitigate it?

  Dr Hobley: Yes, moving away from projects, obviously (and DFID has been good about trying to reduce the use of projects), and, again, looking into the future around how you get more sub-national budgeting which allows decisions to be made at the more local level for all the citizens rather than on a highly-projectised basis approach where you do X project delivering X services, where, again, the accountabilities are very clear. When you ask people where that money has come from and who are you going to hold to account, it is the NGO that has delivered the project or it is a donor that has delivered the project—it is not government. They are not putting pressure on local government or the district or central government and saying: "Why are you not doing this"; they are putting pressure back on to the project: "Why are we not having more of this? Why are we not having more of that?" Again, how do you reconstruct relationships where people are looking into the government, into the local government and into those that should be providing the services to push there for greater accountability? The projects, because of the conflict, have really got in the way of that.

  Q92  Andrew Stunell: My point about Gurkha retirement villages?

  Dr Hobley: I have only been to one and that was on a casual walk-through, so I cannot answer you. I am really sorry. If I had been there and looked at it more carefully I could answer.

  Q93  Mr Lancaster: I am going to embarrass you, actually, Mary, and say that apparently you describe yourself as one of the main international commentators on community forestry, which I am sure is the case, so can I ask you, perhaps, to comment on the effectiveness of DFID's forestry programmes? In particular, they claim that for every £35 spent on the LFP one person is permanently taken out of poverty, which sounds fantastic. Is that what you would expect? Is that realistic, or are they perhaps being a touch—well ...

  Dr Hobley: I think they are being a touch optimistic there. Currently, they are about to do some longer-term evaluations in looking at exactly these issues and to look at their poverty impacts. I think, hopefully, those will provide a more systematic and more careful analysis. That was a fairly quick study. Actually, the forestry programme is very interesting in DFID because this is an example of where DFID has committed over a very, very long period to one sector (we are talking 20, 25 years) and what we are seeing in many ways is the good harvest of that investment. If you are looking at it in terms of forests, so environmental impact, it is massive: there are trees now where there were never trees and there is huge change across the hills of Nepal. If you are looking at in terms of people's access to forest resources who are members of forest user groups, it has changed. The question always is: who has it changed for and by how much has it changed? My life started out in community forestry and most of my work was in community forestry—I was a great believer in it—but, as I have been saying, one of the things I am very concerned about is how it forms interest groups rather than forming a political process where everybody has a chance to make decisions about how resources are allocated. So I think, for the future of community forestry and the future of DFID's involvement, it is how it looks wider than just forestry and it looks at these interfaces between the groups that are being formed and the local government processes that are being put in place, and that is where I think it should be shifting. In terms of investment, in building a huge network of organisations that are able to mobilise and to manage resources, it is an extraordinary success. If you look at the Tarai, however, it is nowhere; you have very valuable forest resources, government will not hand them over to communities, they are a source of large corruption, they are a source of huge amounts of money and they are now also a source of huge political tension because they are areas where the Maoists are pushing land encroachments for landless peoples. So forests in the mid-hills are an easy story; there was already a very strong informal structure there. Forests in highly contested areas are very difficult, and I think, again, for the future for DFID, how it deals in the Tarai in forestry is going to be a very critical element of how peace or conflict starts to continue within the Tarai. The Madhesh issues, the indigenous issues around the forests are huge—really, really huge. The questions around land and those forests are also very big. Yes, success after a huge amount of long-term investment (and I think that also is interesting in the sense of how much time do you have to invest to bring success), but also the very, very big thorny questions that even over these 20 years DFID has not been able to address in the Tarai, which are going to grow even more.

  Q94  Mr Evans: How difficult is it to encourage more private businesses to set up in Nepal?

  Professor Moore: One thing that was quite striking to me was in 2008 when the Maoists were about to come into power and came into power. The private sector actually was not terrified, and you think they would have been, but they seemed to be relatively happy. The biggest problem the private sector face is not particular political parties or particular policies, it is just the general insecurity and everything that goes on around it—the extortion, etc. All the surveys and talking to business people just give you the same answer: if they had a government that could actually keep order and deliver on what it said it was going to deliver, frankly, I do not think they would care which party or which combination of parties was in it. The other very big issue over this is because most economic activity in Nepal is in the Tarai, not far from the Indian border, there is so much cross-border activity that it is very hard, often, to say if you are talking about the Nepali economy or the Indian economy. There are lots of reasons for businesses to shift both sides of the border. So I think there is every reason to think that with a reasonable amount of political order the private sector would be okay. It is interesting, the rate of private investment in Nepal. If you look at success stories, it has gone up in the last 10 years quite appreciably as a proportion of national income, even during the course of the civil war. So, clearly, the private sector sees profit opportunities here; this is not regarded as a hopeless case.

  Q95  Mr Evans: Is this something that you think donors can help in trying to support?

  Professor Moore: My sense is that because the primary problem is the security there is nothing that donors can do directly about that. There are all kinds of little things that need to be done about the investment climate, but I think they are only secondary at present, and they are the kind of things—small changes in legislation—that could take place later. I do not think donors need to do more than give the right signals. I would also add on that that much to my surprise I do not see that the Maoist party, even, is anti-private sector. What is quite interesting about the Maoists is that they controlled enough of rural areas for long enough that they learnt how you tax people, and they realised that a thriving private sector is good for them and good for everyone else. So although there is a lot of rhetoric, of course, at one level, I think in reality there is no big problem here.

  Q96  Mr Evans: What could they do? You mentioned taxing. What more could they do to strengthen the taxation system to get the revenues in and to have better public finance management?

  Professor Moore: The Maoist finance minister claims—I cannot remember whether it was in the first six months he was finance minister—he increased tax revenues by something like 30%, I think (I cannot remember the exact figure). However, there is a tremendous amount of leakage, and that is partly because the dominant source of tax revenue is the border with India, and that is where its import duties and VAT—most taxes—are levied, and that is a very corrupt operation. My understanding is that they raised more taxes just because there was more oversight of what was going on and probably a lot people were frightened of carrying on with the previous corruption. So my sense of this is that it is not that you need major reform of the tax system; it is just improving the current system and making sure there is less leakage and corruption and you would be okay. The government of Nepal is not big enough or competent enough to spend much more money very quickly. You would not actually want them to have masses of money. I do not think there is a sort of fundamental fiscal problem there.

  Q97  John Battle: If I can ask a brief question about employment. You mentioned that the economy of Nepal is a function of the development and growth in India, but we met people that wanted to know where are the jobs for young people, particularly, and DFID, again, have made that a priority. There is some suggestion that jobs can be generated in agriculture, in tourism and, indeed, in renewable energy and water for the region. Are there realistic prospects there? Should DFID be involved in employment generation at that level?

  Professor Moore: I think there are a lot of realistic prospects. Agriculture in Nepal has done very badly over the last 30 years or so—surprisingly badly when you compare it to India next door where agriculture, on the whole, has been booming. As the Indian economy grows India is going to run short of labour and they are going to want to import agricultural commodities from Nepal. So I think there are real prospects and people have all kinds of ideas—bio-tourism, and many other things. There are real possibilities. Whether DFID can actually do much at this level I am a bit sceptical. I think it is right, Mary (and you know more than me), that the big donor investments in agriculture in Nepal, as opposed to forestry, have ended up not terribly successful.

  Dr Hobley: No.

  Professor Moore: There is just a sense now that the country does not have the agricultural extension experts, the researchers and everything else that they would really need. I do not see any kind of "big bang" here in the agricultural sector. One thing the other donors could do, we have in India now the National Rural Employment Guarantee scheme, which does mobilise large numbers of people on public works—roads etc. There is quite a lot of expertise in that region, especially in India, in running these things in a not-too-corrupt fashion, and Nepal could do that. I think from the political point of view there is a lot that will be very advantageous for any government in Kathmandu to have one flagship programme saying: "Look, we're generating a lot of employment", and there is something very visible. If you could get a decently designed scheme and DFID were willing to fund it, that would be fine.

  Q98  John Battle: What has come across very clearly in this session, as Mary puts it, is the need for these bigger questions politically (in the full sense of political not party political) of governance to be right up there and tackled first or we are getting nowhere.

  Dr Hobley: One of the things around employment, one of the things I found really startling, going round the villages, is how few young men there are between the ages 18 to 40; it is almost like an absent generation. You ask questions where they are; they are in Malaysia, they are in the Gulf, they are in India. You ask young men before the age of 18: "What do you want to do?" and the last thing they want to do is stay in the villages in agriculture. They said it is a complete waste of time; there are no markets, it is drudgery—they are not interested. I have seen (again, on small scales) interesting things around developing the skills for people to migrate, which is a dreadful thing to do, and, basically, Nepal has been a migration remittance country for generations, but that is what it does to be able to help them migrate more effectively. There are problems now, of course, with the Gulf and the downturn and all of that. What you do see is a lack of willingness for people to stay. Or, if they do stay, they want service jobs; they do not want to be in agriculture.

  Q99  John Battle: It will be controversial to say it but I was quite strangely disturbed over the break when Gurkhas that can now come to Britain came to see me at my advice surgery in inner city Leeds to tell me they are very disappointed in Britain because their jobs and cars were not there. I said: "And you were expecting to get straight to a job?" Partly it was: how could they get a licence, could they drive a car and what jobs could they get? So sometimes the expectation is part of the problem.

  Dr Hobley: Very definitely. This is a new generation that has those expectations; they have different exposure now and they are not prepared to accept what was there before.

  Q100  John Battle: Sadly, they were asking could it be arranged for them to go back, having just arrived, because they felt that they had been misled into expectations. So balancing the expectations and impressions (I think was the word you used earlier on) is very difficult, internationally as well.

  Professor Moore: Could I just add one other point on the private sector? The big thing in Nepal is hydropower. The potential is enormous. No one wants to risk their money at present, for very good reasons. India, once again, is key to this—it is going to be Indian capital that does this. If you got significant Indian private money in hydropower you really could flip expectations in a major way in the country.

  Q101  John Battle: You control the water table.

  Professor Moore: Yes. It could do extremely well.

  Q102  Chairman: Thank you both very much indeed. We have found the whole experience of Nepal a bit different from other developing countries, fascinating and interesting. There are a lot of good stories but, obviously, the political settlement is key to the future. We are very grateful for the background experience you have and for sharing it with us. Thank you very much indeed.

  Professor Moore: Thank you.

  Dr Hobley: Thanks.





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