Wednesday, October 19, 2016

Nepal, China sign MoU on consumers’ rights, trade and commerce

Nepal and China today signed a Memorandum of Understanding (MoU) on the bilateral exchange of information on the areas of consumers’ rights protection, trade and commerce relations.
The MoU was signed by supplies minister Deepak Bohara and Minister of State Administration for Industry and Commerce of China Zhang Mao on behalf of their respective governments.
“The understanding is intended to initiating bilateral exchange of information on the areas of consumers’ rights protection, further stepping up of the implementation of existing rules and regulations in the areas, help create competitive market environment and more particularly, accentuate the trade relations between the two countries,” the ministry said in a press release.
The important areas of cooperation include, among others, the mutual exchange of information on newly effected rules and regulations, routinely hold consultations by officials on the matters of common concerns, information sharing on new practices of trade and commerce and periodic exchange visits by government officials, trade experts and consumer’s rights activists.
“The MoU would be a milestone in strengthening trade relations between the countries," said Bohara after signing the MoU. He further added that the Government of Nepal is consistently making efforts in protecting consumers ‘interests'.
Minister of the People’s Republic of China Zhang Mao, on the occasion, said that the MoU would reinforce traditional trade, and commerce relations between Nepal and China, and help protect interests of consumers of both the countries.
During the programme secretary of the Ministry of Supplies Prem Kumar Rai also opined that the MoU would be instrumental in underpinning trade and commerce relationship between the two friendly countries.

Tuesday, October 18, 2016

Nepal asks US to promote bilateral trade

Nepal has requested the US to increase investment in promoting trade between the two countries.
During a meeting held at the Commerce Ministry today, commerce minister Romi Gauchan Thakali asked US Ambassador to Nepal Alaina B Teplitz to increase investment in promoting bilateral trade as strengthening trade and business relations would be beneficial to both countries and their people.
He also called on the US side to extend investment, along with transfer of technology, in Nepal so as to increase the production and productivity of those products which have high export potential in the US market.
With the promulgation of the constitution by the Constituent Assembly last year, Nepal has embarked on the path of economic revolution, he said, adding that Nepal requires support from its development partners, including the USA, to expedite its economic growth and prosperity.
As new constitution adopts a liberal economic policy as the state’s main directive principle for economic advancement, Thakali called on US investors and entrepreneurs to capitalise Nepal’s conducive economic environment as ensured by the constitution.
Recalling some of the recently enacted acts and regulations, such as the Labour Act, the Industrial Enterprises Act, the Special Economic Zone Act, the minister said the present government was very much determined to create an investment-friendly environment and protect the interest of investors under all circumstances.
He urged the US to enhance its investment in the tourism, hydropower and agro-processing sectors which had ample potential for producers and exporters wishing to invest in those sectors. Thakali also urged the US ambassador to enhance US support to the government in implementing some of the key projects as envisioned in the recently-launched Nepal Trade Integration Strategy (NTIS) 2016 and the Nepal Trade Policy 2015.
He also expressed hope that the US would continue its support to Nepal for its development and help Nepal achieve its goal of graduating from the LDCs status by 2022.
Recalling understandings made at the second TIFA Council meeting held in Washington, DC, in June, he extended an invitation to the US side to participate in the third TIFA Council meeting scheduled to take place in Kathmandu next year.
Teplitz, on the occasion, expressed hope that bilateral trade and investment relations between the two nations would be further enhanced during her tenure. Mentioning that the US-Nepal friendship was based on trust, goodwill and mutual cooperation, Teplitz said the bond of mutual ties between the two countries had tremendously grown over the years.
Welcoming Thakali’s statement at the BIMSTEC Business Summit held in New Delhi on October 14, Teplitz also noted that the BIMSTEC process would be helpful for Nepal to enhance its connectivity and trade to other members of the region.
“The US stands ready to support Nepal in its development efforts,” she said. Calling TIFA a milestone document, Teplitz said that she hoped it would bring tremendous opportunities for businessmen and entrepreneurs from both sides in the days to come.
The ambassador expressed some of her government’s concerns, including the establishing of a one-stop service – single window – for investors, clarity on area of investment to be made by foreign investors, and the possible amount of return that can be taken back by the investors, among others, to be well-reflected in the proposed legislation of Foreign Investment Act being prepared by Nepal.
She also assured Thakali that she would convey his message to American investors and entrepreneurs about increasing their investment in tourism, hydropower and agro-processing industries. She said her country’s interest in extending support in value chain in the agriculture and intellectual property, among others.  
Commerce secretary Naindra Prasad Upadhaya and other senior officials from the ministry, and the Economic and Commercial Officer at the US Embassy in Kathmandu Kevin C Price were also present at the meeting.

Monday, October 17, 2016

Sebon directs Reliable to launch rights issue before getting acquired

Securities Board of Nepal (Sebon) – the capital market regulator – has asked Reliable Development Bank to launch rights issue before it is acquired by the Global IME Bank.
Reliable's 10th Annual General Meeting (AGM) held on July 1 had approved 1:1 rights shares and 10 per cent bonus share from the net profit earned in the last fiscal year.
Instead of launching rights issue, the development bank, however, had signed a Memorandum of Understanding (MoU) for its acquisition by the Global IME Bank.
"The beginning of acquisition process without distributing rights shares would hurt investors," Sebon said in a statement issued today.
The regulator also directed the national-level development bank registered in Kathmandu to launch rights issue before the acquisition as failure to do so would be against the interest of investors who bought the development bank's shares in anticipation of rights and bonus shares.
"Since the decision was price-sensitive and approved by the AGM, Reliable Development Bank cannot avoid its AGM's decision," the Sebon said in the statement.
Earlier on October 1, Global IME Bank chairman Chandra Dhakal and Reliable chairman Radhe Shyam Agrawal had signed the MoU on behalf of their respective organisations to complete the acquisition process within three months.
The Board is also planning to enforce a regulation that will bar listed companies from taking multiple corporate actions at once to rein in activities that could influence the capital market and hurt the interest of investors.
"If implemented, this regulation will prevent listed companies from reversing some of the crucial decisions made in the past," according to the capital market regulator that is mulling over introducing such a provision after a number of listed companies jumped in to roll out future plans without accomplishing the ongoing task.
According to the Sebon spokesperson Niraj Giri, the move is aimed at safeguarding the investors’ interest. "Sebon is also planning to enforce a code of conduct to discipline companies engaged in insider trading," he added.

Sunday, October 16, 2016

FNCCI holding special general meeting on October 20

The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) is holding its special general meeting on Thursday to amend its statute.
With the term of the incumbent executive committee completing in mid-April, the FNCCI is amending its statute to automatically promote the senior vice president to the post of president.
As per the existing provision in the FNCCI Statute, FNCCI election, which is held every three years, elects the president, three vice-presidents – from Commodity, Districts and Associated sectors – and the executive committee. The senior vice president is elected by the executive committee from amongst the three vice presidents. But according to the amendment proposal, senior vice president will be directly elected like the three vice presidents, and s/he will be anonymous for president for the next term.
However, districts and municipal chambers have expressed reservations on the proposals.
They have been lobbying for the directly elected president as per the existing statute.
If the amendment proposal is approved by the special general meeting, incumbent senior vice president Bhawani Rana will become the 18th president of the FNCCI. She will also be the first women president to lead the umbrella organisation of the Nepali private sector.
The election in April will concentrate on the senior vice president, if the amendment is approved, according to FNCCI sources.
Incumbent president Pashupati Murarka unanimously became the 17th president of FNCCI on July 1, 2015 – for the remaining tenure of Pradeep Jung Pandey, who was elected president but had to step down due to legal cause – after other two candidates Bhaskar Raj Rajkarnikar and Bhawani Rana pulled out from the race. 

Friday, October 7, 2016

Himalaya Airlines to start regular flights to Yangon

Himalaya Airlines, a joint venture between Nepal and China, is planning to start direct flights from Kathmandu to Burma soon. The airline is planning to start the Kathmandu-Yangon flight by December.
Currently, around half million Nepali-speaking people live in Burma.
If domestic preparations and permit process goes as planned, the company will start operating flights from December, , according to an official from the airline. "This will help promote tourism industry in Nepal."
According to him, Yu Lu Bin, Myanmar ambassador to Nepal and vice-president of Himalaya Airlines Bijaya Shrestha recently discussed about the flight. "The company is ready for Kathmandu-Yangon flight,” the official said, adding that new aircraft would be added for direct flights.
Two weeks earlier, Ambassador Yu had said he would urge minister for Culture, Tourism and Civil Aviation Jeevan Bahadur Shahi to take the initiation for operating direct flights between the two countries.
Nepalis going to Burma for meditation and to be monk and Burmese coming to visit Lumbini are expected to be immensely benefited after direct flights come into operation.
Earlier, the airline had successfully launched its maiden flight to Colombo, Sri Lanka on October 1 carrying passengers directly to the destination.
The direct flight to Colombo that resumed after almost three decades flies twice a week, according to Shrestha. "We consider this to be another milestone for us as this will make Himalaya Airlines the only airline with scheduled flights to Colombo from Kathmandu,” he said, adding that the company anticipates that majority of the passengers will be businessmen and tourists from the two countries.
Himalaya’s third destination will be India’s capital New Delhi, according to the company.
The airline is preparing to fly to Delhi from October 30.
Himalaya Airlines, a full-service carrier, was established in August 2014. It had started scheduled flights from May 31, flying directly to Doha, Qatar. Apart from the opening of the Kathmandu/Colombo/Kathmandu route, the airline plans to operate regular flights to other destinations: Delhi, Yangon, Dammam, Beijing, Lhasa, Chengdu, Bangkok, Hong Kong and Dubai.
The airline currently uses 158 seat capacity aircraft A320-214 series for its flight.
HIF Aviation Investment and Yeti World Investment Pvt Ltd have invested on Himalaya Airlines that has got permission to fly to 14 countries. Nepali company has 51.01 percent and Tibet Airlines has 48.99 percent investment in Himalaya Airlines.

Wednesday, October 5, 2016

Chilime-Trisuli Transmission Line construction starts

The construction of 220 kV Chilime-Trishuli Transmission Line project has been launched officially today.
"The construction of the Chilime-Transmission Line is an important pilot contribution to the national grid," ambassador of the EU to Nepal Rensje Teerink said during the formal launch programme of construction project – of 65-million euro project (equivalent to Rs 7.67 billion) spans 27 km – in Kathmandu today.
"It will bring light and energy to homes, households and school children across the country," she added.
"Accelerated development in Nepal needs to keep clean energy as a top priority," she said, adding, "With a real sense of urgency, collective efforts should transform enormous potential into tangible reality."
"The South Asian region as a whole would benefit from the supply of clean energy, if regional cooperation projects could be put in place to harness this potential," she added.
The project is a joint undertaking of the European Union (EU), German Development Cooperation/KfW, European Investment Bank (EIB) and the government.
Energy Minister Janardan Sharma, on the occasion, said that the construction of the state of the art 220 kV double circuit transmission line is an excellent example of a strong partnership and collective efforts of Nepal government, the German Development Cooperation/KfW, the EU and the European Investment Bank (EIB).
The 220 KV Chilime-Trishuli Transmission Line project will include the construction of the 220/132 kV Trishuli 3 B Hub Substation, the construction of the 220/132 kV-Chilime Substation and the construction of the Chilime-Trishuli 220 kV double circuit Transmission Line (27 Km).
The transmission line project will be complemented by the construction of the Samundratar-Trishuli 3B Hub Transmission Line and Substation, at a cost of 270 million euros to which the EIB will contribute 95 million euros.
"In a holistic approach, the project focuses both on power generation and transmission from the Trishuli river basin,” minister Sharma said, stressing on the importance of completing the project in a timely manner for the benefit of Nepali people.
According to the press statement issued by the Delegation of the EU to Nepal, deputy chief of Mission and head of Cooperation at the German Embassy Jacqueline Groth highlighted Germany’s continued commitment to the Nepal's energy sector. Apart from its contribution to the transmission line project, German Development Cooperation will also support the upgrading of the Load Dispatch Centre in Kathmandu.
The upgrading will result in increase of supply of electricity fed into the national grid. It will reduce transmission losses and increase the reliability of the grid. As a result, the framework conditions for economic activities in Nepal will be improved especially for the industrial sector and small and medium enterprises.

Tuesday, October 4, 2016

Economic growth projection for Nepal – IMF: 4 per cent, ADB: 4.8 per cent and World Bank: 5 per cent against government target of 6.5 per cent

The International Monetary Fund (IMF) today projected 4 per cent economic growth for Nepal, whereas the World Bank (WB) projected 5 per cent for the current fiscal year.
The IMF and the World Bank forecast comes almost a fortnight after another multilateral development partner – the Asian Development Bank (ADB) – projected a growth of 4.8 per cent for the current fiscal year for Nepal.
However, the government has targeted to achieve an economic growth of 6.5 per cent in the current fiscal year.
Releasing the World Economic Outlook (WEO) today in Washington, DC, amid a press meet, the IMF made a forecast that Nepal’s gross domestic product (GDP) will rebound by 4 per cent only.
IMF has further lowered the economic growth forecast by 0.5 percentage points to 4 per cent from its April forecast, when it had claimed Nepal’s growth would rebound by 4.5 per cent in 2017.
The Fund had projected the Nepal economy to grow only by 0.5 per cent in the last fiscal year 2015-16, when the World Bank had estimated Nepal's growth at 0.6 per cent.
However, the Central Bureau of Statistics (CBS), has estimated Nepal saw an economic growth of 0.77 per cent in the last fiscal year, experiencing its slowest growth in the last 14 years.
In April, the IMF officials had said that they expected there was a good chance for growth to pick up once reconstruction started in earnest and border conditions normalised. The devastating 2015 earthquakes and economic blockade imposed by India had pushed down Nepal’s economic growth by 0.77 per cent in the fiscal year 2015-16.
However, IMF’s downward revision of growth forecast comes at a time when reconstruction has failed to gather momentum as expected. "Weak capital spending, slowing remittances, political uncertainty and other number of head winds that we see in Nepal have led us for the conservative projections,” a deputy director at the Research Department of IMF Gian Maria Milesi-Ferreti said.
Meanwhile, the World Bank was a bit more optimistic about Nepal’s economic growth in a separate report by the World Bank released today, the multilateral development partner projects an economic growth of 5 per cent in the current fiscal year. The World Bank has attributed improvement in the agriculture, construction and reconstruction to cause a rebound in the growth rate.
"Agriculture and construction are expected to improve on the account of a good monsoon as well as increased disbursements of housing reconstruction grants, the report '‘Investment Reality Check’ reads. "Coupled with increased government spending, this is expected to push the fiscal year 2016-17 growth to 5 per cent and to remain in line with potential thereafter."
"The rebound in growth is on the back of a normal monsoon that will boost agricultural output and supported by increased investment – both public and private – as the political process stabilises and earthquake recovery gathers speed. "Manufacturing in particular is expected to get some boost starting from the current fiscal year with the apparels and garment industry getting a duty free access in the US market,” it adds.
Nepal has had a difficult year due to the earthquake, border disruptions with India, and reduced remittances, the World Bank noted.
However, Nepal’s projected growth rate is far below the growth rate projected for the South Asia region. Led by solid performance in India, the economic growth is expected to gradually accelerate to 7.3 per cent in the current fiscal year from 7.1 per cent in the last fiscal year, according to the World Bank report.
According to the twice-a-year South Asia Economic Focus, the region remains a global growth hotspot and has proven resilient to external head winds such as China’s slowdown, uncertainty around stimulus policy in advanced economies, and slowing remittances. The main challenges remain domestic, and include policy uncertainty as well as fiscal and financial vulnerabilities.
“A reality check reveals that private investment – a key future growth driver across South Asia – is yet to be ignited to sustain and further increase economic growth,” said World Bank South Asia Region’s vice president Annette Dixon. "Countries will need to activate the full potential of private investment and exports to accelerate economic activity further, reduce poverty and boost prosperity."
Given its weight in the region, India sets the pace for South Asia as a whole. Its economic activity is expected to accelerate to 7.7 per cent in 2016-17, after maintaining a solid 7.6 per cent in 2015-16. "This performance is based on solid growth contributions from consumption, boosted by normal monsoon and civil service pay revisions. Over the medium term, accelerated infrastructure spending and a better investment climate may help increase private investment and exports.
A reality check on the state of private investment in South Asia shows that the region has fallen short of expectations. Mobilising domestic savings remains key at the aggregate level.
However, remittances and foreign direct investment prove very effective on a per-dollar basis, and the region should make the most of them.
India can further rely on public infrastructure to crowd-in private investment, while finance may constrain investment in Pakistan. The business cycle matters all across the region, providing a potential accelerator from GDP growth to investment growth. Ultimately, the investment climate sets the broader stage. “Alas, most South Asian economies suffer from a challenging business environment and some are subject to broader uncertainty and insecurity, which is detrimental to investor confidence,” it said.  
“Political economy risks are widespread across South Asia, and uncertainty will need to be managed, particularly with a view to creating an attractive environment for domestic and foreign investment alike,” World Bank South Asia Region’s chief economist Martin Rama, said. "Delivering the necessary energy, infrastructure, and regulatory improvements remains critically important to increasing private investment, thus boosting job creation and reducing poverty."