Hseb Notes - Economics XI - Natural resources of Nepal

Natural resources of Nepal

The natural resource plays an important role in economic development of a country. The prosperity in natural resources and their proper utilization makes a country rich. Nepal is rich in terms of natural resources. The major natural resources of Nepal are: water resources, forest resource, mineral resources, soil, etc. These resources are important for the development of agriculture, industry and trade. But these resources have not been properly utilized in Nepal.

Major Natural resources of Nepal

I. Water resources:

Nepal is one of the richest country in water resources in the world. It stands in the second position after Brazil in water resources. But economic development of Nepal largely depends on the development of water resources. There are more than 6000 rivers in Nepal. The water resources can be utilized in the development of agriculture, industry and trade.

Importance of water resource in economic development:

Water resource is very important in the overall development of Nepal. Water resource can be used for electricity generation, irrigation purposes and drinking purposes as well. It is regarded as the basic source of energy. The importance of water resources are as follows:

I. Development of Agriculture:

Nepal is an agricultural country. Agriculture is the backbone of Nepalese economy. The agriculture sector can be developed only with the adequate provision of irrigation. Irrigation helps in crop diversification, increase in production and modernize agriculture.

II. Development of transport and communication:

The development of transport and communication are pre-requisites of economic development. The means of transport like ropeway, cable car, railway, trolley bus can be developed only with the aid of electricity. It also helps to develop means of communication like radio, television, computer, fax, e-mail, internet, etc. These means of communication can be develop with help of hydroelectricity.

III. Development of Industries:

The development of hydroelectricity is the basis of industrialization. One of the obstacles of industrialization in Nepal is inadequacy of electricity. The medium and large scale industries need heavy machinery, which cannot be operated without electricity. Therefore, water resource helps to accelerate the pace of industrialization in the country.

IV. Development of Tourism Industry:

Tourism is major sources of foreign currency of Nepal. The water resource helps in development of tourism industry through the provision of hydroelectricity. Similarly, rivers, waterfall, natural spring, lakes, etc. add the natural beauty of the country. It would help to promote tourism industry by providing the facility of rafting, boating, swimming, fishing, etc.

V. Preservation of forest resource:

At present, Nepal is facing the problem of deforestation. The development of hydroelectricity substitutes the use of firewood. Therefore, the development of electricity helps to preserve forest resource.

VI. Generation of employment opportunities:

Nepal is facing the problem of unemployment and underemployment. The development of water resources may create direct and indirect employment opportunities. It is because hydroelectricity has to develop agriculture industry, trade, tourism, etc. The economic activities increases in the country.

VII. Use of modern amenities:

The development of hydroelectricity facilitates the use of modern amenities like heater, fan, TV, washing machine, computer, radio and so on.

VIII. Source of foreign currency earning:

There is greater prospect in the generation of hydroelectricity in Nepal. If we could generate electricity, it would be highly beneficial because we will be able to earn large amount of foreign currency through its export to neighbouring countries. Therefore, water resource is supposed to be white gold of Nepalese economy.

Potential of Hydroelectricity in Nepal:

Hydroelectricity is the main source of energy in Nepal. Nepal is a mountainous country. Most of the rivers of Nepal flow from high hills and mountains with great speed. There are more than 6000 rivers in Nepal. Therefore, the hydroelectricity power potential of the country is great. The theoretical hydro power potential of the country is 83000 MW out of which 42000 MW is economically feasible. The hydroelectricity potential of the country has been shown in the following table:

River System	Hydroelectricity Potential
1. Gandaki	21000 MW
2. Koshi	22000 MW
3. Karnali	32000 MW
4. Others	8000 MW
Total	83000 MW

Current uses of Water Resources:

Water resources available in Nepal can be used for generating hydroelectricity, providing irrigation facility and supplying sufficient drinking water to its people. The present situation and utilization of water resources in Nepal has been presented below:

a) Hydroelectricity:

The main use of water resource in Nepal is hydroelectricity generation. There is greater potential to generate hydro-electricity in Nepal but by the end of 10^th plan the total installed capacity of hydro-electricity reached about 600 MW which is only 0.6% of the total potential. The hydro-electricity has supplied only 1% of the total energy consumption of the country. About 40% of the total population has access to electricity facility in Nepal.

b) Irrigation facilities:

Irrigation is the second important sector where water resources can be used for the development of agriculture sector. Various efforts have been made for the development of irrigation since the 1^st plan in the country. But about 45% of the total arable land has got irrigation facility in Nepal.

c) Drinking Water:

The pure drinking water is the basic need of the people. Nepal is rich in water resources but the majority of people do not get pure drinking water. By the end of 10^th plan about 75% of the population has got drinking water facility in Nepal.

Problems of Water Resource development in Nepal:

There are various problems for the development of water resource in Nepal which are as follows:

Lack of capital:

The development of water resources requires large amount of capital for constructing hydro-electricity projects, irrigation projects and drinking water projects but Nepal is a poor country. Majority of Nepalese people are poor they have no capacity to save and invest. Thus, there is lack of capital for the development of water resource in Nepal.

Lack of technical manpower:

The development of water resource needs high level technology and technical manpower but there is lack of such high level technology and technicians in Nepal. Therefore, Nepal is compelled to import expensive technicians from abroad to operate the projects of hydroelectricity and irrigation.

Lack of Modern Equipments:

The development of water resource needs modern machines tools and equipments. But there is lack of such equipments in Nepal. We have to import these equipments from foreign countries but there is lack of capital for this purpose.

Lack of transport facility:

Most of the hydroelectricity projects lie in the hilly region without transport facilities. The transport facilities will have to be developed before launching the projects. This increases the project cost significantly.

Lack of market:

The domestic market of the country is very limited. The purchasing power of the people is very low. The only exportable market is India. But the Indian attitude is not favourable. Thus, lack of market is another problem for the development of hydroelectricity in Nepal.

Defective government policy:

The government policy is defective for the development of water resource because of political instability. There is defect in formulation and desire of water resource projects. There is lack of adequate statistical data.

Forest Resource:

Importance of forest resource:

Forest is another important natural resource of Nepal. This resource has an important contribution in the economic and social development. Forest resource is the renewable natural resource. Therefore, appropriate scientific management and utilization of this resource can accelerate the pace of economic development of the country. The importance of forest resource in economic development are as follows:

1. Source of energy:

Forest is the main source of energy in Nepal. It provides fuel, wood to meet the daily necessity of people. About 86% of the total energy consumption is supplied by the forest resource.

2. Source of raw materials:

It provides raw materials for forest based industries like paper, medicines, plastics, matches, furniture, etc. Therefore, forest resource is the source of raw materials required for various industries in Nepal. Similarly, there are about 700 species of medicinal herbs in the forest of Nepal.

3. Source of fodder and animal habitat:

Forest supplies fodder grasses to the cattle. It also provides grazing ground to the cattle. Thus, it helps in livestock development. Similarly, it is the habitat of wild animals live tiger, lion, bear, elephant, rhinoceros, rare birds and insects.

4. Control of soil erosion and landslide:

Forest helps to control flood, landslide and soil erosion. The fertility of land declines in the absence of the control of soil erosion. Therefore, forest is regarded as the natural insurance against flood, landslide and soil erosion.

5. Source of water:

Forest helps to maintain constant flow of water in rivers, canals and taps. Forest is the main source of drinking water. Larger the forest area larger is the rainfall.

6. Tourism development:

Forest enhances the natural beauty. The rare wild animals and birds get shelter in the forest. It also provide hunting spot. Therefore, forest helps to develop tourism sector.

7. Source of public revenue:

It is the main source of public revenue in Nepal. The government exports various herbs and timber to foreign countries to earn foreign currency.

8. Ecological balance:

Forest resource helps in environment protection and ecological balance. The environmental degradation has serious effects on human beings, animals and birds, agriculture and industries. According to forest sector expert at least 43% of the total area should be forest area for ecological balance.

Causes of Deforestation:

At present Nepal is facing the problem of deforestation. There are various causes of deforestation which are as follows:

I. Source of energy:

The alternative source of energy hasn’t been developed in Nepal. Fuel wood is the main source of energy in rural Nepal. About 75% of the energy consumption is supplied by wood and fuel wood in Nepal. Due to this reason deforestation is increasing in Nepal.

II. Supply of construction materials:

The wood and timber is essential for the construction of house, bridge, industries and furniture industry. In rural areas, forest area are destroyed to meet the need of agricultural tools and use as a fodder for cattle this has increase deforestation.

III. Lack of employment opportunities:

The problem of unemployment and underemployment can be found in rural areas. Generally, the farmers are unemployed during the winter season. There are no alternative employment opportunities outside agriculture. Therefore, rural people illegally sale wood and fuelwood for extra income. This has also increased deforestation.

IV. Migration:

Deforestation is also caused by internal and international migration. Migration from hills to Terai and from India is also responsible for deforestation because they use forest land for settlement and construction of houses. This also has increase deforestation.

V. Demand for raw materials:

The forest-based industries are increasing in Nepal. Thus, there is increase in demand for raw-materials for forest based industries like matches, paper, furniture, etc. As a result deforestation is increasing in Nepal.

VI. High population growth rate:

The population growth rate is high in the country. There is high pressure of population on agriculture. There is little development of non-agricultural sector. Therefore, people are compelled to cultivate even in forest land. It also has increase deforestation.

VII. Uneducated people:

The rural people are mostly uneducated. They are not aware of the future problem of deforestation like landslide, soil erosion, lack of rainfall, etc. They are only worried about the present need. So, they carelessly cut the trees. As a result, deforestation is increase in Nepal.

VIII. Defective government policy:

The government policy regarding preservation and development of forest is defective because it changes frequently and it is less effective in nature. There is lack of people’s participation in afforestation and preservation of forest resource.

Consequences of deforestation:

Among various natural resources forest is the main natural resource. But at present, Nepal is facing the problem of deforestation. Deforestation influences people directly or indirectly. It has serious consequences on economic and ecological condition of the country. The major consequences of deforestation are as follows:

Environmental deterioration:

Deforestation brings environmental degradation which has serious effects on plants and all living beings. It brings ecological imbalance, soil erosion, flood, drought and landslide. It created desertification in the country.

Shortage of forest-based products:

Deforestation brings the shortage of supply of raw materials for forest-based industries. As a result, various forest based industries will be close down. Deforestation directly affects herbal industry, paper industry, furniture industry, etc. Therefore, deforestation results in the shortage of forest-based products.

Decrease in livestock rearing:

Livestock is also based on forest resource. Deforestation directly effects the livestock rearing because there will be lack of food required for livestock due to deforestation. As a result, there will be decrease in livestock rearing.

Effects on Agriculture:

The deforestation causes soil erosion and soil erosion adversely effects on agricultural productivity. Due to soil erosion the agriculture manure become deficient. As a result, the agricultural productivity and production decline.

Effects on tourism:

Deforestation destroys the natural beauty and climate of the country. Similarly, it destroys rare wild animals and birds. As a result, the tourism industry will be adversely affected.

Brings natural disaster:

The flood, landslide, soil erosion, deficiency of rainfall frequently occur due to deforestation. This effects the wealth and life of people.

Shortage of construction materials:

Various construction materials in Nepal are based on the timber obtained from the forest. Due to deforestation people are facing the problem of construction houses, bridges, factories, etc. Therefore, deforestation results in the shortage of construction materials.

Mineral resources:

Importance of mineral resources in economic development:

The mineral resource plays an important role in the economic development of a country. The mineral resource helps in the development of agriculture, industry and trade. In the absence of mineral resource the country will have to depend on import. The Arab countries are economically strong due to large quantity of oil reserve. The importance of mineral resource in economic development are as follows:

Development of industries:

Mineral resources have important role in the development of industries in the country. The heavy machinery and equipments needed for industries are made from mineral resource. Similarly, energy needed for industries are supplied by mineral resource such as petrol, diesel, coal, etc. Therefore, mineral resource is important for industrial development.

Source of employment:

At present, Nepal is facing the problem of unemployment due to high population growth. The existence of mineral resources and their proper utilization provides employment opportunities to the people. The mineral resource provides direct as well as indirect employment opportunities.

Source of energy:

The mineral resource is the major source of energy. It provides energy like coal, petrol, diesel, etc. which are essential for industrial development. The existence of this energy in the country saves foreign currency.

Source of government revenue:

The mineral resource and mineral based industries are the important source of government revenue. The government can receive royalty from mineral. Similarly, the government can earn foreign currency from the export of mineral products.

Development of transport sector:

The energy is an important input in the development of transport sector. The different means of transport like bus, truck, train, aeroplane, etc. need energy to run.

Supply of construction materials:

The construction materials can be supplied cheaply and adequately if there are mineral resources in the country. This accelerates the pace of economic development in the country.

Increase in national income:

The optimum utilization of available mineral resources within the country would generate more employment opportunities in all sectors of the economy. It helps to increase the amount national income of the country.

Current Situation of Mineral Resources in Nepal:

Nepal is a mountainous country. So, there is a greater prospect of developing mineral resources. The main mineral resources identified in Nepal are as follows:

Iron:

Iron is an important mineral resource. Nepal has great prospect of iron mines. The mine phul choki is regarded as the biggest iron mine of Nepal. The other mines are Labdi khola, kulakhani, pharping, Godabari, bhaise, etc.

Copper:

Nepal has great prospect of copper mines as well. The large cooper mine has been identified in Bhutkhola. The other copper mines identified are Gyaji, Baglung, Barabise, Kulekhani, etc.

Mica:

The mica is used in electrical works. It is estimated that mica is also found in large quantity in Nepal. The mica mines have been identified in Bhojpur, Chainpur, Sundarijal, etc.

Limestone:

Limestone is essential for cement products. The high grade limestone has been found in Godawari, Markhu, Chovar, Bhaise, etc.

Slatestone:

Slate mines have been identified in Bandipur, Trisuli, Dolakha, etc.

Coal:

It is estimated that coal mines can be found in the areas such as Sibaling of Dang, Kathmandu Valley, Kagbeni and Thimika village of Mustang district.

Lead and Zinc:

The lead and zinc mines have been identified in Arkhaule, Gallkot, Ganesh Himal of Rasuwa district, etc.

Problems of Mineral Resource Development:

There are various problems for the development of mineral resources in Nepal which are as follows:

Lack of capital:

The exploration and exploitation of mineral resources need large amount of capital. But Nepal is a poor country. Therefore, there is lack of capital for the development of mineral resources. Similarly, Nepal has not been able to receive foreign assistance for mineral exploration and exploitation.

Lack of modern machinery and equipments:

The mineral resource exploration needs expensive machinery and equipments. These machinery and equipments will have to be imported from foreign countries. But there is lack of capital for these purposes.

Insufficient infrastructures:

The mineral resources of Nepal are largely located in remote hilly areas. These areas do not have access to transport, communication and electricity facilities. This is also one of the obstacles for mineral resource development.

Lack of technical manpower:

The mineral resource exploration and utilization needs specialized technical manpower. But there is lack of such manpower in Nepal.

Lack of appropriate government policy:

There is lack of appropriate government policy for the development of mineral resources. The government of Nepal has not been able to adopt appropriate mineral policy. Similarly, the mineral acts are either vague or inadequate.

Inadequate research:

There is inadequate research in the field of mineral resource in Nepal because there is lack of experienced human resource modern technology and equipments.

Lack of courageous entrepreneurs:

The development of mineral resources requires lots of industries of various scales. Establishment of these industries need large amount of capital investment and courageous entrepreneurs. But there is lack of such entrepreneurs in Nepal.

Environment and Natural Resource Management:

The combination of various natural elements found in the earth surface is called environment. In other words, environment is the sum of total of the natural resources. In economics various factors like soil, air, water, plants, minerals, living things, geographical structure, etc. come under environment.

However, this environment has been damaged by the activities of man. The wide spread environmental degradation has created many problems like air pollution, water pollution, soil pollution, deforestation, loss of biodiversity, etc. This shows the need of natural resource management because natural resource plays an important role for sustainable development.

Causes of environmental pollution:

Environmental pollution is growing in both developed and developing countries. But it has become more, serious in developing countries like Nepal due to the following reasons:

High population growth rate:

The high population growth rate is one of the major problems of natural resource management. High population growth directly contributes to environmental degradation because in order to fulfill the needs of growing population natural resources are to be utilized.

Wide-spread poverty:

The wide-spread poverty leads to the overuse of natural resources because the poor people use natural resources to fulfill their basic needs.

Inadequate public awareness:

Most of the people of Nepal of rural areas are still uneducated. They are ignorant about the scientific use of available resources. Therefore, they use resources available to them in their own way which may cause environmental pollution.

Use of unnecessary chemicals:

Use of unnecessary chemicals in agriculture is another reason for environmental pollution. Nepalese farmers don’t have adequate knowledge about the scientific use of harmful chemicals in their farm.

Use of traditional skills and technology:

The traditional skill and technology leads to excessive use of natural resources. Therefore, traditional skills, knowledge and technology should be modified.

Lack of natural resource management:

There is lack of natural resource management practice in Nepal. Most of the people are not aware of the benefits of natural resource management.

Consequences of environmental pollution:

At present, Nepal is facing the problem of environmental pollution. The growing environmental pollution cause many adverse effects in our environment. The major consequences of environmental pollution are as follows:

Air pollution:

Air pollution is mostly urban areas of Nepal. Air pollution from Vehicles and industries have resulted air-borne diseases. It adversely affects the working capacity of people and reduces the average life expectancy as well.

Soil pollution:

Soil pollution has been growing rapidly in Nepal due to the unscientific use of chemical fertilizers in agriculture. It has increased acidity in soil, reduce fertility of soil and accelerate the process of desertification in the country.

Water pollution:

Water resources are being polluted due to the mix up of industrial wastes and drainage with drinking water pipes which is responsible for many water-borne diseases.

Noise pollution:

Growing noise pollution from the means of transport in urban areas is one of the major problems of Nepal. Particularly, noise pollution has adversely affected the lives of the people of Kathmandu, Pokhara, Birgung and Biratnagar.

Atmospheric change:

The unscientific use of natural resources like water, forest and mineral has resulted many problems in the earth surface. The atmosphere is being polluted due to the global warming, green house effect, increase in the quantity of carbon monoxide and decrease of ozone layer in the atmosphere.

Natural calamities:

The rapid deforestation has resulted uneven, unnatural irregular and scarcity of rainfall. As a result, floods, landslides and storms have become very common in the country like Nepal.

Labour Productivity:

Growing environmental pollution directly affect the life of human beings. Weak and unhealthy human resource cannot produce more goods and services as a result there will be low production and productivity.