Saturday, October 30, 2010

Country gets new gas industry

At a time when investors are complaining about lack of investment climate, the country is ready with the 27th cooking gas industry — Sugam Gas Industry.
"Sugam Gas Industry -- with Rs 250 million investment -- is planning to distribute its gas in the market from November 1," said the chairman of the company Shiva Prasad Ghimire.
"Out of the total investment Rs 120 million is loan from Himalayan Bank Ltd," he added.
Learning the lessons from the past strikes and high-way bandh, the industry is located at the distance of 14-km at Khanikhola, Dhading from Thankot, the entry point of the Kathmandy Valley. "The industry targets to serve the Valley and surrounding areas," he said.
"If operated smoothly according to its capacity, the industry will contribute Rs 30 million to the government coffer in a year," according to Ghimire.
The country has imported 141,171 metric tonnes of LPG -- popularly known as cooking gas -- in the fiscal year 2009-10, whereas it had imported 115813 metric tonne of gas In the fiscal year 2008-09, according to the Nepal Oil Corporation (NOC).
There are around five gas industries still in pipeline as the demand of cooking gas in increasing.
With increasing population, the Valley consumes 1,00,000 cylinder of gas in a month and out of the total consumption, around 60 per cent is consumed in the Valley alone, he said, adding that the industry plans to provide the Valleyiets with regular supply of cooking gas in safe cylinder from its industry that has the latest technology.
"We have given much priority to security -- from before filling the gas cylinders till it reaches to the consumers' household -- and regular supply, Ghimire said, adding that the industry has also insured the largest amount of Rs 1.5 million for the consumers in case of gas cylinder related accident.
The industry with the storage capacity of 1,650 metric tonne -- the largest storage capacity among the gas industries -- including cylinders is spread in 20-ropani area of land, it claims. "The industry that aims to serve around 25 per cent of the market -- employes 100 people directly and around 500 indirectly."

Friday, October 29, 2010

Delay in budget to affect development assistance

Delay in budget might affect assistance of the donor agencies hurting the development activities.
"If the current impasse continues, it will hit the development activities in the long-run," said Sultan Hafeez Rahman, director general, South Asian Department at the Asian Development Bank (ADB) talking to the journalists here today.
"The delay will not only slow down development activities, new projects could also not formed," he said, adding that this is not the situation that will help the country to go forward.
Though, ADB -- that contrbutes to around $270 million to $300 million to Nepal makin it one of the largest donors -- has not yet figured out the magnitude of serious consequencies, it is hopeful that "the leaders will understand the urgency. Nepal has no luxury of time, and everyday lost is a loss of livelyhood of people and economy."
At a time, when ADB has doubled the assistance, the government has not been able to bring budget that can propel the development activities.
However, Rahman is still hopeful that the economy can take off. "Despite uncertainties economic activities have been continuing after the Comprehensive Peace Accord in 2006," he said, adding that Nepal didnot face recession and the growth rate has been hovering around three to four per cent that is satisfactory. He, though, termed the growth as a 'conflict-rate of growth'.
"Agriculture and construction will continue to do well," he said, adding that manufacturing and energy sectors have been however sluggish. "Exports needs to be revived and macroeconomic situation has to be managed well."
He blamed the manetary expansion in last few years for escalating inflation. "However, it is not overly alaming," Rahman -- who used to head ADB Resident Mission in Nepal during 2003-2006 -- said, "Lack of monetary discipline is the cause of inflation."
The condusive political climate and good macro-economic management can fix these problems, he observed.
The ADB is also planning to help Nepal improve mobility to make the economy more competitive and easy movement of goods and services. "North-South connectivity can help increase the movement by bridging the gap between produces and market," he added.
"The international community has a tremendous good-will for Nepal," he said appreciating the peace process that has been going on despite difficulties. "The ADB will continue to work closely with Nepal and its stakeholders in helping to reduce poverty and promote inclusive growth."
ADB's commitment to assist Nepal is line with its Country Partnership Strategy 2010-2012 for Nepal that is anchored in the four pillers of broad-based inclusive growth, social development, governance and capacity building, and climate change.
Rahman is on Nepal visit from October 27 and is consulting the government agencies and development partners.

Thursday, October 28, 2010

Microfinance helps achieve MDGs

Microfinance institutions (MFIs) have helped achieve some of the Millenium Development Goals (MDGs).
"Nepal has acheived some of the MDGs due to the MFIs," said National Planning Commission (NPC) vice-chairman Dr Jagdish Chandra Pokharel inaugurating the Microfinance Vision -2015 conference here in the Valley today.
"Though the poverty has reduced to 25.4 per cent -- according to the Labour Survey -- around seven million Nepalis are still under poverty line," he said, adding that due to the large number, its difficult for the government agencies to reach out to them. "Thus, the role of the MFIs is key in reaching them," he added.
Shankar Man Shrestha, chief executive officer of Rural Microfinance Development Centre (RMCD) -- that has organised the Microfinance Vision -2015 conference to formulate a medium-term vision for the coming five years -- also agreed that only the MFIs can reach to the grassroot level.
The two-day conference that kicked off today encourages all the partner MFIs of RMDC to formulate their individual visions for the next five years. "The Centre will consolidate all the visions into one and formulate the National Microfinance Vision-2015 with well-defined strategies and action plan," Shrestha added.
There are around 90 microfinance institutions in operations currently. Out of the them, 86 are associated with the RMDC that provides wholesale credit, institutional strengthening and capacity building supports to MFIs, and training supports to the ultimate borrowers through the concerned MFIs.
"The MFIs need to take help of technology to reach out the people," said Ashoke Shumshere Rana, chairperson of the Board of Directors (BoD) of RMDC.
MFIs have been helpful in creating a just society with women empowerment and economic empowerment.
RMDC’s primary objective is to provide microfinance access, via microfinance institutions, to rural poor households, especially to women. The clients can then undertake viable farm and off-farm economic activities and improve their quality of life.
"Despite success of MFIs and NGOs, we need to take co-ordinated approach to help them reach the poorest of the poor," vice-chair of the national think-tank said, adding thatPoverty Alleviation Fund (PAF), MFIs and Coops should go in an integrated way to penetrate the high level poverty striken areas in the regional and ethnic level, and pocket areas. "Thus the strategy hs to be planned accordingly."

ADB assistance for connectivity, boost trade

Nepal -- with assistance from the Asian Development Bank (ADB) -- is to step up road improvements and customs systems enhancement to link remote, rural communities to markets and services, and to boost cross-border trade.
ADB's Board of Directors (BoD) approved loan and grant assistance totaling $49 million for the Subregional Transport Enhancement Project (STEP). "This initiative will promote economic development in the remote northeastern hill country and help increase trade along major international corridor routes," said Hiroaki Yamaguchi, principal transport specialist in ADB's South Asia Department.
Poor road connections that limit access by remote communities to markets, economic opportunities and social services are a major cause of poverty in Nepal, where more than a quarter of the population live below the government poverty line of $140 per year. They also undermine opportunities for foreign trade. The northeast of the country has great potential for increased production and exports of herbs, spices, garments and vegetables, but is being held back by the low quality roads and overburdened border customs posts.
The project will upgrade about 195-km of roads, enhancing road capacity of major international trade routes and providing rural communities in the northeast with a north-south link to the east-west highway, one of Nepal's main trade corridor routes. This north-south link could eventually become a major transit route connecting India to thePeople's Republic of China.
"Better roads will make it easier for farmers to get their products to neighbouring markets, increasing their incomes and generating more rural jobs, which is critical in a region with high levels of poverty," said Yamaguchi.
Customs clearance systems will be upgraded and modernised to help ease congestion at border posts and capacity building support will also be given to sector oversight agencies to improve their capabilities and expertise in road asset management and the use of modern road technologies.
The loan and the grant each total $24.5 million equivalent, and come from ADB's concessional Asian Development Fund. The loan has a term of 32 years, including a grace period of eight years carrying an interest charge of one per cent per annum, which rises to 1.5 per cent for the balance of the period. The government is financing the remaining $26.9 million for a total project investment cost of $75.9 million.
The Ministry of Physical Planning and Works is the executing agency for the project, which is expected to be completed by December 2014.

Wednesday, October 27, 2010

LDCs meet to improve productive capacities of the poorest countries

Making the array of the goods and services a country produces broader and more sophisticated creates higher-paying jobs and improves living standards of citizens.
What can be done to help the planet’s 49 poorest nations improve their productive capacities will be the subject of an UNCTAD-sponsored meeting held from October 27-29 in Geneva , Switzerland.
The gathering is one of series of 'pre-events' staged by various United Nations (UN) agencies and intended to channel ideas and momentum into the Fourth United Nations Conference on Least Developed Countries (LDC-IV) to be held in Turkey from May 30 to June 3, 2011.
The meeting's theme 'Building productive capacities in Least Developed Countries (LDCs) for inclusive and sustainable development' reflects UNCTAD's research and policy advice that poverty is most extensively and sustainably reduced through broad economic progress. UNCTAD economists say that the impact of the global recession on LDCs has made such balanced growth more essential than ever – indeed, today the LDC group has twice as many members as it did in 1997. An additional factor that undoubtedly contributed to this increase are the missed opportunities to improve economic specialisation, make sufficient infrastructural investment, and develop science and technology capacities.
Participants will examine how the focus on developing productive capacities affects the design of national policies to promote development and poverty reduction in LDCs, as well as the design of international support measures for LDCs by their development partners. They will review government policies and international technical and financial assistance measures that can help LDCs modernise their economies, strengthen institutional capacities, better benefit from global trade in goods and services, and make use of science, technology and innovation (STI) for economic development.
An area of focus will also be measures for attracting increased domestic and foreign investment of the sort that leads to widespread job creation and more value added in goods and services produced, so that salaries are higher and are spent domestically, thus spurring greater economic demand and the creation of still more jobs. LDCs are characterised by high levels of poverty, including extreme poverty; by health problems such as high rates of malnutrition; and by economies that are heavily dependent on basic agriculture and on the export of basic commodities and raw materials.
UNCTAD has long maintained that durable progress in these countries requires structural transformation of their economies so that commodities exports -- which often bring limited economic benefits and are subject to pronounced price swings -- are supplemented by industry and services that create and sustain domestic demand and enable LDCs to compete more effectively in international markets.
A basic aim of the pre-event will be to contribute to building political consensus and analytical basis for thinking about a new generation of international support measures for LDC which focus on the development of productive capacities. Such measures should dovetail with national policies and work more effectively to achieve sustained growth, productive employment generation and poverty reduction.

Tuesday, October 26, 2010

Delivery of smart passport to delay due to lack of budget

Delivery of the much-awaited Mechine Readable Passport (MRP) might be delayed due to lack of budget.
The first lot of the MRP is expected to arrive on November 7, according to a finance ministry source. "On the day of arrival Ministry of Foreign Affairs (MoFA) needs to pay its due," the source said. The ministry will ask the central bank to make the payment for MRP, the source said, adding, "Thus the budget should be brought by November 1 for take the delivery of MRP otherwise it will be delayed as the central bank could not pay as the central bank had opened the Letter of Credit(L/C) for the MRP on zero margin on the request of government."
After missing the two deadlines, the Ministry of Foreign Affairs (MoFA) had signed an agreement with a French company Oberthur Technologies in July to supply MRP according to the country's commitment with the International Civil Aviation Authority (ICAO).
The Montreal-based UN body-ICAO -- after the government's request
-- has extended the MRP deadline till January 1, 2011, after th date the MoFA cannot distribute the present passport.
"The government has only Rs 10 billion left for the regular administrative expenses from a total of Rs 49.71 billion set aside for administrative expenses in the Special Budget," reads a letter sent to the Constituent Assembly (CA) chair Subash Chandra Nemwang today by the Finance Ministry.
"The amount will not be sufficient for even the salary of the month of Kartik (that ends on November 16) for all the government staffers," according to the finance ministry.
The finance ministry had under the special provision brought the Special Budget -- due to resignation of Prime Minister Madhav Kumar Nepal in June -- of Rs 110.21 billion for the regular expenses for the one third of the fiscal year.
The situation could be more serious as the government could also not supply the excise duty-paid sticker that is a must for major revenue generating items.
On one hand growth rate of revenue has dropped to 9.4 per cent by the end of the month of Ashwin (mid-October) against the increase of 53.7 per cent in the same period last fiscal year and on the other, the shortage of excise duty-paid sticker will hit the government coffer hard.
"The CA chair today presented the letter from finance ministry to the Business Advisory Committee of the Legislature Parliament but it could not be discussed," according to UCPN-Maoists vice-chairman and CA member Narayan Kaji Shrestha. The Committee has to approve the date for the announcement of the budget.
Meanwhile, the caretaker Prime Minister Madhav Kumar Nepal also conferred with CA chair Nemwang today and asked him to create a favourable environment for the government to present budget in the Legislature Parliament.
During the meeting with Nemwang, Nepal mentioned the economic crisis the country could face, if the full-fledged budget is not presented within November 1.
However, CA chair Nemwang suggested him to take the main opposition UCPN-Maoists into confidence and reach political consensus before presenting the budget.
But the UCPN-Maoists has been maintaining that the caretaker government has no moral and constitutional right to bring full-fledged budget.
Yesterday, Finance Minister Surendra Pandey has also met CA chair to request him for the date to present budget in the Legislature Parliament.

Monday, October 25, 2010

BP Koirala's economic thoughts still relevant

The revolutionary advances in technology and its growth could raise the living standard of the people of under-developed countries without lowering the standard of living of peoples of the advanced countries, the then Prime Minister and the president of Nepal Congress BP Koirala said, while addressing the 15th session of the UN General Assembly.
Launching the book on 'BP's Economic Thought' here today, speakers remembered him as a visionary socialist thinker, who was aware of rising rich-poor gap that could be the source of much friction and tensions.
"His visions are still relevant," said newly elected NC president Sushil Koirala after launching the book. "BP was the world renowned socialist thinker," he said adding that democracy is indespensible for the development.
"BP has always been seen as a politician only but he also had economic vision on how to develop Nepal into a prosperous and just country," said economist Dr Chiranjibi Nepal, the author of the book. "BP's economic thoughts will prove to be a mile stone for today's youth to lead a better nation," he added.
Blaming BP’s own party for misinterpreting Democratic Socialism that BP believed on, Prof Dr Bishwhambher Pyakurel said that BP’s discipals have misled the country.
“BP believed in individual's ability to grow, and entrepreneurship that's why he is democratic," said former finance minister Dr Ramsharan Mahat. "And his belief that there should be equality in the society made him a socialist," he said, adding that capitalism is the first stage towards socialism. "For equality, BP imphasised on increase of production."
Government alone cannot help increase production, thus BP believed on private sector's role in increasing the production, according to Mahat. "BP believed in capitalism with a human face."
“BP believed that Nepal lives in village and only village can become the centre of the economic transformation.”
Defending his liberal policy during NC's rule over one-and-a-half decade, Mahat claimed that he has always followed BP's economic vision. “Following BP's vision, NC has always emphasised on resource allocation to village where majority of Nepalis live."
"The indiscipline, lack of law and order situation and corruption were the major hurdles in fulfiling BP's economic dreams," he claimed

NAC gounds one of its Boeings

The national flag-carrier has grounded one of its Boeing 757s reducing international flights by a half at a time when Nepal Tourism Year 2011 is only two months away.
This is the second time since August that Nepal Airlines Corporation has grounded its aircraft.
On January 14, the ambitious NTY 2011 — aiming to attract one million tourists — will kick off. But just when NAC needs to add to its fleet, it has had to ground one of its two aircraft. Something that certainly doesn’t bode well for tourist arrivals.
NAC has been forced to reduce its international flights by half due to a crack in two of the 70 Outlet Guide Vanes in the engine of the 9N-ACB aircraft. The crack was discovered during regular check-up that is conducted after a 500 hours of flight of an aircraft.
“The aircraft has been grounded since Saturday,” said a highly placed NAC source. This has forced NAC to cut down on lucrative destinations.
Normally, NAC makes one flight everyday on the New Delhi route. It also flies thrice a week on the Bangkok and Hong Kong routes, and four times on the Dubai-Doha route, with both aircraft. “Though we will decide how many international flights to reduce tomorrow, we have not flown on the New Delhi route for two days,” the source said, adding, the flights on the Bangkok, Hong Kong and Dubai-Doha routes had already been reduced to half.
“We are in touch with the Boeing company and the engine-maker Rolls Royce to fix the problem,” he added.
“Unlike last time, we will not suspend flights to New Delhi, though we are planning to reduce them to a half,” the source said. Although NAC desperately needs new aircraft, all aircraft purchase deals have been controversial. NAC had decided to buy a wide-bodied and a narrow-bodied aircraft from European manufacturer Airbus. It had planned to purchase a A330-200 — a wide-bodied aircraft with a seat capacity of 279 — and a narrow-bodied A320-200 with seating capacity of 150.
But the government’s anti-corruption watchdog has put the NAC’s long-cherished dream of adding a new aircraft to its fleet of two age-old Boeings on the back burner.

Nepali Congress doyan BP's thoughts still relevant

The revolutionary advances in technology and its growth could raise the living standard of the people of under-developed countries without lowering the standard of living of peoples of the advanced countries, the then Prime Minister and the president of Nepal Congress BP Koirala said, while addressing the 15th session of the UN General Assembly.
Launching the book on 'BP's Economic Thought' here today, speakers remembered him as a visionary socialist thinker, who was aware of rising rich-poor gap that could be the source of much friction and tensions.
"His visions are still relevant," said newly elected NC president Sushil Koirala after launching the book. "BP was the world renowned socialist thinker," he said adding that democracy is indespensible for the development.
"BP has always been seen as a politician only but he also had economic vision on how to develop Nepal into a prosperous and just country," said economist Dr Chiranjibi Nepal, the author of the book. "BP's economic thoughts will prove to be a mile stone for today's youth to lead a better nation," he added.
Blaming BP’s own party for misinterpreting Democratic Socialism that BP believed on, Prof Dr Bishwhambher Pyakurel said that BP’s discipals have misled the country.
“BP believed in individual's ability to grow, and entrepreneurship that's why he is democratic," said former finance minister Dr Ramsharan Mahat. "And his belief that there should be equality in the society made him a socialist," he said, adding that capitalism is the first stage towards socialism. "For equality, BP imphasised on increase of production."
Government alone cannot help increase production, thus BP believed on private sector's role in increasing the production, according to Mahat. "BP believed in capitalism with a human face."
“BP believed that Nepal lives in village and only village can become the centre of the economic transformation.”
Defending his liberal policy during NC's rule over one-and-a-half decade, Mahat claimed that he has always followed BP's economic vision. “Following BP's vision, NC has always emphasised on resource allocation to village where majority of Nepalis live."
"The indiscipline, lack of law and order situation and corruption were the major hurdles in fulfiling BP's economic dreams," he claimed.

Sunday, October 24, 2010

Delay in budget to hit essential services hard

The delay in budget will hit the essential services hard.
"If the government failed to bring the full-fledged budget within November 15, the patients in the government hospitals would not be able to get medicine," said economist Dr Chiranjivi Nepal.
He categorically said that the essential services at the government hospitals will also suffer due to government's failure in paying salaries to the doctors. "The government staffers including the doctors in the government hospitals and teachers in the government scools will not get salary," he said, adding that the health and education sector will be the primary target of the delayed budget let alone the economic growth.
The economic growth rate (real GDP) in the last fiscal year 2009-10 is estimated around to be 3.5 per cent. But delay in the budget for this fiscal year will hit the gowth for the current fiscal year too bringing it down three per cent.
The failure in paying salary will have its impact the market as without the government expenditure, the market will have to feel the heat.
In absence of full-fledged budget, the private sector is also reluctant to invest puncturing the economic growth.
Due to resignation of incumbent Prime Minister Madhav Kumar Nepal in June, the government brought a Special Budget of Rs 110.21 billion for the regular expenses, under the special provision. But the budget is not enough to propel development activities and the private sector is still waiting for the full-fledged budget that might bring some hope and create conducive investment climate for them.
Despite the Cabinet's directives to the Finance Ministry to prepare for the full-fledged budget for the fiscal year 2010-11, the government fears that the UCPN-Maoists might not agree on budget.
The tradition has that the President announces the government's programmes and policies before the budget is tabled. But the government is prepapring to table the budget without programme and policies this time due to its care-taket status.
The ministry has been preparing for the full-fledged budget for the fiscal year due to no head-way in the political dead-lock and new government formation.
"However, there are some very essential and key issues that could be finalised only after the budget annoucement date is fixed," said a high-lavel sopurce at the Finance Ministry.
"The preparation is on, but in absence of fixed date to announce the budget, w could not finalise various issues," he said, adding that "the budget will follow the Three-Year Interim Plan and won't have any major policy shifts."
Though, the present care-taker government is going to bring the full-fledged budget despite UCPN-Maoists' disagreement, it needs UCPN-Maoists nod to fix the date to announce the budget in the Parliament.
The UCPN-Maoist has been pressuring the political parties on new government formation before the budget, claiming that the care-taker government has no moral and political right to bring full-fledged budget.

Saturday, October 23, 2010

Failed plans of Nepal

Nepal has started planned development approach since 1955 BS, but after over a century Nepal has reached nowhere.
Dr Jibgar Joshi in his book, ‘Planning Approaches in Nepal’ blames the foreign-educated professional without the ground reality of the country’s need, frequent changes in government, face-saving approach of professionals and donor-driven development agendas for the failure in the development.
The book – that has 10 chapters – goes through the concepts and definition of the planning, to national, regional and district planning, method of making plans and formulation of projects, land use and environment, tools and method of urban planning, provisions of infrastructure to the role of institutions in planning. The book is an eye-opener for the development planners, where they went wrong in the process over last five decades and helps take stocks of where they failed.
A new debate on Nepal’s development approaches has recently started and Joshi’s book will help both planners and government to revisit their past approaches.
As planning is a tool for change it must bring changes in the lives of the people. Joshi writes that the people at large for whom the plans are prepared are neglected in the planning and the gap between the planners and the people is the cause of the failure of plans. The result: after 10 five-year plans, the country – despite its huge potential – is still undeveloped and lagging behind the nations, that were at the same status at some point of time in the past.
Not only the professionals, the donor agencies have also spending a huge amount of resources experimented a lot, though they have now realised that the imported plans won’t give desired results. But the realisation came too late.
Apart from confusion over the role of development partners, the role of private sector and public sector is still not clearly defined. “In Nepal there is no clear demarcation of the roles between the role of private sector and public sector, which has weakened the planning process,” he rightly thinks. Such confusions persist on every front of development pulling the country backward.
At a time when questions have been raised on the whole process of planning and their implementation, Joshi’s book gives a pragmatic overview of the planning process. Being a planner himself, Joshi has not tried to cover the weakness on part of planners. He has also pointed out the need to integrate lower strata of the society in the planning process. “It is a futile exercise to try to make a radical change from the top,” he summerises.
The book has tried to give a deeper understanding on planning approaches in Nepal and will be worthy to go through at a time when the country is moving towards the federalism. The current development approaches that have not worked for the present state of the nation would definitely not work for the federal structure that country is looking forward. It’s high time, the planners start brain storming on the future course of development strategy that the book has missed.


BOOK REVIEW
Book: Planning Approaches in Nepal
Publisher: Mrs Lajmina Joshi
Author: Dr Jibgar Joshi
Pages: 162
Price: Rs 320

Friday, October 22, 2010

National Microfinance Vision 2015 in offing

Rural Microfinance Development Centre (RMCD) is organising a Nepal Microfinance Vision -2015 conference to formulate a medium-term vision for the coming five years.
"RMDC has planned a two-day conference to formulate a medium-term vision for 2015 in Kathmandu on October 28-29," said Shankar Man Shrestha, chief executive officer at the Centre addressing the 12th annual general meeting of the Centre here today.
"RMDC has encouraged all the Microfinance Institutions (MFIs) to formulate their individual visions for the next five years," he said, adding that the Centre will consolidate all the visions into one and formulate the National Microfinance Vision-2015 with well-defined strattegies and action plan.
There are around 90 microfinance institutions in operations currently. Out of the them, 86 are associated with the RMDC that provides wholesale credit, institutional strengthening and capacity building supports to MFIs, and training supports to the ultimate borrowers through the concerned MFIs. "Apart from MFIs some 40 specialised co-operatives are also associated with the RMDC," he added.
However, the cost of funds and the lending rate of the banks and financial institutions have gone up creating the supply of fund's constriants to the microfinance sector," said Ashoke Shumshere Rana, chairperson of the Board of Directors (BoD) of RMDC.
Despite all the odds, the authorised capital of the Centre has been raised to Rs 1 billion and the issued as well as paid up capital to Rs 540 million, Rana said, adding that the Centre will floate Rs 156 million worth shares to the general public, including five per cent to its staff, and Rs 44 million to the national or international institutions.
In the fiscal year 2009-10, the Centre has disbursed Rs 1.20 billion loan to varous MFIs, including some development banks. The MFIs have been providing financial services to more than one million poor households in the country.
MFIs have been helpful in creating a just society with women empowerment and economic empowerment.
"Encouraged by the success of MFIs, the government has announced a new mMicrofinance Policy," he said, adding that the central bank has also issued a new directives enabling microfinance institutions to mobilise deposits from the general public.
However, alongwith growth the MFIs have also been encountering some challenges. "But RMDC will work for resolving the problem of over financing caused by multiple financing of the MFIs," he added.
Though MFIs have been developed as an industry in last one decade, it has been observed that there has been some unhealthy competitions among the MFIs recently.
"The cut-throat competitions due to increasing numbers of MFIs lately -- especially in Tarai districts -- has encouraged unhealthy competitions," said Shrestha. "RMDC will look into the cases of overdebt seriously and try to make MFIs more responsible for their sustained growth."
Promoted by Nepal Rastra bank (NRB) -- the central bank -- and commercial banks, RMDC’s primary objective is to provide microfinance access, via microfinance institutions, to rural poor households, especially to women. The clients can then undertake viable farm and off-farm economic activities and improve their quality of life.

Thursday, October 21, 2010

Trading of some companies resumes at Nepse

Out of the 25 suspended listed companies, trading in nine have resumed after they paid their renewal fee to Nepal Stock Exchange (Nepse).
Salt Trading Company (STC), IME Financial Institution (IMEFIL), Prabhu Finance (PRFL), Malika Bikas Bank (MDBL), Api Finance (AFL), Diprox Development Bank Ltd (DDBL) and Kasthamandap Development Bank Ltd (KDBL) paid their annual fee today.
The trading of two of the suspended companies Goodwill Finance Company (GFCL) and Nilgiri Bikas Bank (NGBL) was resumed yesterday after they paid the renewal fee yesterday, according to the Nepse.
The listed companies have to pay the annual listing renewal fee within the three months of the end of fiscal year to be allowed to trade shares, but these companies failed to make the payment within the deadline thus the trading was suspended.
However, the trading can be resumed as soon as the companies pay the required fee to Nepse. "Nepse suspends the trading of companies for delay in paying the renewal fee," an official at the Nepse, said, adding that about half of the suspended companies are almost non-functioning. "They do not bother paying the renewal fee as they are non functional and the functional one, which see their shares being traded everyday also put off paying the renewal fee till the eleventh hour," he added.
Some of the suspended companies including Nepal Development Bank and Jyoti Spinning Mills are in the process of liquidation, while others like Samjhana Finance's trading has already been suspended back in June when Nepal Rastra Bank (NRB) declared it a 'troublesome financial institution' officially.
Likewise, companies such as Flour Himalayan, Shree Ram Sugar Mills and Shree Bhrikuti Pulp and Paper — that observe little or no trading — had paid the listing renewal fee last year, informed the official.
The companies need to pay the listing renewal fee depending on their capital structure of the company. "The companies with capital more than Rs 100 million have to pay Rs 50,000 that is the highest amount," Shankar Man Singh, general manager and chief executive officer of Nepse informed.
The companies need to be serious and pay the renewal fee in time as the suspension will create trouble for the investors.
"Despite the stocks of the companies doing well and being traded in great numbers, the delay in payment of fees reveals the companies' careless attitude towards the investors' in secondary market," the official said, adding that the negligence of companies about paying the renewal fee leads to trading suspension that will definitely affect the investors, who wants to buy or sell their stocks according to their plan and necessities.

Asian economic outlook rosy

Asia remains firmly in the lead of the global economic recovery and strong growth in the region is set to continue, the International Monetary Fund (IMF) said today in its latestRegional Economic Outlook (REO) for Asia and the Pacific which was released in Jakarta, Indonesia.
The expansion in Asia exceeded expectations in the first half of the year, the IMF said, prompting the Fund to revise up its 2010 growth forecast for the region to eight percent, nearly one percentage point higher than its April forecast. Economies across the region are expanding strongly. China and India are leading the way with projected 2010 growth rates of 10.5 per cent and 9.7 per cent, respectively, while Indonesia is expected to grow by six per cent. In Japan, growth is now projected at 2.8 per cent. In 2011, regional growth is expected to moderate to a more sustainable pace of 6.8 per cent.
Strong economic growth is leading to new policy challenges, according to the REO analysis. Inflationary pressures are continuing to build, while prices in some property markets are growing at double-digit rates. With Asia set to remain an attractive destination for foreign investment given the sluggish recovery in the US and Europe, capital inflows could add further to domestic price pressures in the period ahead.
The time has therefore come for countries in the region to normalise monetary and fiscal policy stances, according to Anoop Singh, director of the IMF’s Asia and Pacific Department.
"We welcome the steps so far taken by policymakers to control inflation risks and limit the build-up of financial sector vulnerabilities, but more now needs to be done given the continued strong growth in the region,” Singh said.
The REO points to the need for further tightening of monetary policy in many countries in Asia, including through greater exchange rate appreciation. A faster withdrawal of the fiscal stimulus put in place during the global financial crisis would also help guard against the risks of overheating. The REO notes, however, that should a worsening of global economic conditions negatively affect Asia, there is room to return to a more stimulative policy stance.
Managing capital inflows into the region is a difficult challenge. These inflows present many opportunities, but they also pose potential risks to financial stability. Macro-prudential measures have appropriately been taken in many regional economies to minimize risks, but more action may be needed. These important issues were recently discussed at a high-level conference on 'Macro-Prudential Policies: An Asian Perspective' hosted by the People’s Bank of China and the IMF in Shanghai.
Rebalancing Asia’s growth remains the top policy priority over the medium term. With external demand from advanced economies unlikely to return to pre-crisis levels in theforeseeable future, Asia will need stronger domestic demand in order to continue along a robust growth path. A broad range of reforms are needed to support domestic consumption and investment, including strengthening social safety nets, ensuring access to credit, easing restrictions in service sectors, and improving infrastructure. Exchange rate appreciation is an important part of rebalancing. “It is only natural that as Asian economies grow stronger so too will their currencies,” said the IMF’s Singh. “This is very much a sign of Asia’s success.”

Wednesday, October 20, 2010

Cabinet directs Finance Ministry to prepare budget

The Cabinet today directed the Finance Ministry to prepare for the full-fledged budget for the fiscal year 2010-11.
However, the ministry has already been preparing for the full-fledged budget for the fiscal year due to no head-way in the political dead-lock and new government formation.
"The present care-taker government is going to bring the full-fledged budget -- though its three months delayed -- despite UCPN-Maoists' disagreement with the move," spokesperson of the care-taker government and minister for Information and Communication Shanker Pokhrel said at the Reporters' Club here today.
"The care-taker government will go ahead with its budget plan and won't bow before the UCPN-Maoists pressure," he said, adding that the country cannot remain budget-less for a long time.
But the UCPN-Maoist has been pressuring the political parties on new government formation before the budget, claiming that the care-taker government has no moral and political right to bring full-fledged budget.
"The care-taker government has no political and moral authority to bring the full-fledged budget," said UCPN-Maoist vice-chairman Dr Baburam Bhattarai speaking at Geta Airport in Dhangadi today.
The Maoists have been pushing for political consensus and formation of new government to bring the full-fledged budget.
"Care-taker government cannot bring a full-fledged budget anywhere in the world," Bhattarai said, adding, "If it brings the full-fledged budget, UCPN-Maoists will not support."
The meeting of office-bearers of UCPN-Maoists here today also strongly opposed the government move to bring budget. "The political parties, instead, have to expidite the government formation process," said another vice-chairman of the UCPN-Maoists Narayankaji Shrestha, after the meeting at the residence of Maoist supremo Puspa Kamal Dahal 'Prachanda'.
However, the government is not leaving any stone unturned to bring the budget as it has already been three months delayed. "The government also has a majority to pass the budget," Pokhrel added.
Meanwhile, minister for Tourism and Civil Aviation Sarat Singh Bhandari said that the Nepal Tourism Year 2011 (NTY 2011) programmes have been hit due to delayed budget. "The NTY 2011 promotional activities are hit hard," he told talking to the journalists in Biratnagar.
He also claimed that the government still has the majority in the parliament to pass the budget despite it being a care-taker one. "The government still enjoys majority as any of its coalition partners have not yet pulled out of the alliance," he said.
Due to resignation of incumbent Prime Minister Madhav Kumar Nepal in June, the government brought a Special Budget of Rs 110.21 billion for the regular expenses, under the special provision. But the budget is not enough to propel development activities and the private sector is still waiting for the full-fledged budget that might bring some hope and create conducive investment climate for them.
Without the government expenditure, the private sector is reluctant to invest fearing the policy change in the full-fledged budget in absence of which the growth is going to suffer.
The economic growth rate (real GDP) in the last fiscal year 2009-10 is estimated to be 3.5 per cent – lower than four per cent achieved a fiscal year ago. But delay in the budget for this fiscal year will hit the gowth for the current fiscal year too.
According to the International Monetary Fund (IMF), the growth rate for the current fiscal year is expected to be three per cent which might go up to four per cent in the next fiscal year.

Nepse suspends over two dozen listed companies' trading

Nepal Stock Exchange (Nepse) has suspended the trading in 25 listed companies including four development banks and four finance companies due to delay in annual payment of listing renewal fees.
"The listed companies are supposed to pay the annual renewal fee within the three months of a fiscal year's end," said Shankar Man Singh, general manager and chief executive officer of the Nepse. "But these companies failed to make the payment within the deadline that ended on October 17 —thus their trading has been suspended until they pay their dues," he added.
The suspended companies include development banks like Malika Bikas Bank and Kasthamandap Development Bank, and finance companies like Goodwill Finance, IME Financial Institution, and Prabhu Finance Company among others.
Despite the stocks of these companies doing well and being traded in great volume, they have acted in quite a careless manner regarding the payment of renewable fees. According to the Nepse, this has definitely affected the investors, who wanted to buy or sell their stocks of these companies.
Every year around this time, Nepse has to suspend the trading of about two dozen listed companies for the very reason as more than half of these suspended companies are plainly waiting till the last hour to pay the renewal fee.
However, some of these suspended companies also include the almost non-existent companies that are waiting to be de-listed by the Nepse like Raghupati Jute Mills and Shree Bhrikuti Pulp and Paper Ltd.
The listed companies have to pay annual renewal fees depending upon their capital structure. "The renewal fee depends on the capital structure of the company but the maximum renewal fee of any company comes to Rs 50,000," Singh said. "This year, most of the companies were not able to pay the renewable fee due to holidays also. Goodwill Finance and Nilgiri Bikas Bank paid the renewal fee before the end of trading hours today.

Central Bank introduces new CPI measurement system

The central bank has introduced a new Consumer Price Index (CPI) increasing the earlier basket of goods and services and market points to update the measurement system and make more realistic according to the international standards.
The new basket has been developed on the basis of Classification of Individual Consumption According to Purpose (COICOP). The United Nations has included this system in 1993 under System of National Accounts (SNA).
"The new series of Consumer Price Index (CPI) has been started from this fiscal year's first month," said the central bank here today. The central bank has upgraded the CPI series to the new one according to its findings of Family Survey done five years ago.
"Nepal Rastra Bank (NRB) has also shifted the base year from 1995-96 to 2005-06," it said, adding that under the new series, the weight assigned to the food and beverage and services groups have also been changed.
According to the new CPI series, the weight assigned to the food and beverage group is 46.82 per cent in the new series compared to 53.20 per cent in the 1995-96 survey. Likewise, the weight assigned to the non-food and services group has been changed to 53.18 per cent from 46.80 per cent.
Similarly, the central bank has increased the urban and rural market centres -- from where they collect datas -- by 12 to 33 from the old 21 urban market centres in the old series. "The old basket of 301 goods and services has also been increased in the new series to 410 goods and services," it added.
Under the 401 goods and services, 223 are domestic, 133 imported and 54 goods and services are both domestic and imported.
"The change in the CPI will help make the price hike measurement more simple, authentic and scientic," according to the central bank.
Had the central bank used the old series, inflation rate in the first month of the current fiscal year would have been at 10.4 per cent. "But inflation stands at 9.5 per cent due to new measurement system," the central bank said, adding that Despite a 12.5 per cent rise in the index of the food and beverage group, inflation moderated to a single digit at 9.5 per cent due to low increment in the index of the non-food and services group.
Meanwhile, the International Monetray Fund (IMF) has forecast that the Consumer Price inflation will come down to 6.8 per cent in 2011. "For the year 2010, CPI will stand at 10.5 per cent," the IMF has predicted

UNCTAD launches UNCTADstat

UNCTADstat -- a new free online database offering a single entry point to UNCTAD's vast repository of statistics -- is being launched today on the occasion of World Statistics Day.
By harmonising and incorporating all UNCTAD’s online statistical databases, UNCTADstat will serve as an integrated platform for extracting and analysing data on development, trade, investment, and related issues, said the UNCTAD.
The site will be continuously updated and enriched so that it offers not only long historical time series but also the most recent data. "UNCTADstat will cover individual countries, regions, economic and trade groupings, and the world at large," it added.
Among the topics covered are International merchandise trade, including data breakdowns of exports and imports by partners and products; International trade in services; Economic trends; Foreign direct investment (FDI); External financial resources, including migrants' remittances, development assistance, external debt, and international reserves; Commodity prices updated monthly; Population and labour force; and Maritime transport.
The data base will also add more new topics, new tables, and indicators over the time, said the UN trade body.
UNCTADstat is intended to provide a statistical background against which users may address issues related to trade, investment, development, and economic growth. Among the topics of current concern for which it offers useful information are speculation in commodities markets; the global financial crisis with the severe decline of international trade that started to recover from the second quarter of 2009 to the second half of 2010; and the recent shifting in the balance of developing countries' inward financial flows from Official Development Assistance (ODA) towards more foreign direct investment and workers' remittances.
Commenting on World Statistics Day, UNCTAD secretary-general Supachai Panitchpakdi said strategies for establishing peace, well-being, and security in the world "cannot be elaborated without statistics highlighting long-standing and emerging development issues.
"Each bit of data, each figure is a piece of a 'statistical jigsaw puzzle' aiming to give us a measured representation of our world," he said. "However, there are as yet too many holes in the puzzle."
UNCTADstat is a major contribution by UNCTAD to filling in the puzzle.

Tuesday, October 19, 2010

Traders threaten to hit the street

Traders today threatened to take to street, if the government fails to bring full-fledged budget soon.
"The business community will take to street, if the political parties fail to reach consensus within a week," said Nepal Chamber of Commerce (NCC) president Surendra Bir Malakar speaking today at the Reporters Club in the Valley. "Due to delayed budget, some 2,000 projects have already been closed," he added.
"If there is political consensus, Finance Ministry is ready to bring budget within five days," said senior advisor at the Finance Ministry Keshav Prasad Acharya. "The ministry is preparing to bring the full-fledged budget by October 26," he said, adding that the economy has been hurt due to absence of full-fledged budget.
"If the full-fledged budget could not be announced by Mid-November, there could be disaster," Acharya added. "If the budget could not be announced by the mid-November, the government cannot pay regular salary to its employees. Even the Maoists combatants cannot get their salary."
"The political instabity has forced around three million youth leave the country in search of greener pasture," he said, adding that the country has to pay dearly if it cannot give them alternative. "Even the growth rate has come down to three per cent due to current situation."
Former governor of the central bank Deependra Bahadur Chhetri agreeing with Acharya said that the country is going to suffer in absence of the full-fledged budget that will encourage massive corruption.
"Nepal is heading towards a failed state," said economist Chiranjivi Nepal warning the politicians to take stock of the situation seriously. "Are 601 CA members ready to take the responsiblity for pushing the country towards failed state," he asked, adding that the people could also loose their trust on the government and political parties, if they cannot bring budget.
Major allies of the present caretaker coalition, Nepali Congress (NC) and CPN-UML, have also been saying that the budget should be presented but there is an environment of mis-trust among themselves making it difficult for the government to bring budget.
"NC has already agreed on budget," said Deep Kumar Upadhayaya, NC leader blaming Maoists supremo Prachanda and CPN-UML chairman Jhalnath Khanal for the political deadlock that has led to the current situation.
However, Pradeep Gyawali CPN-UML leader said that his party is ready to bring budget in a week.
But the UCPN-Maoist is insisting that the care-taker government has no authority to present the budget. Dev Prasad Gurung, UCPN-Maoist central committee member warned that the peace process would be derailed, if the current care-taker government announced the budget. "The political dead-lock should be solved before the budget," he added.

Asian economies transform global scenario

The ongoing transformation of the global economy, with Asia as an economic powerhouse, has been accelerated by the crisis, said Strauss-Kahn, managing director of International Monetary Fund (IMF) addressing the closing ceremony of Asian Economies in Shanghai yesterday.
Asia stands at the helm of the global recovery, he said adding that its policy choices are important for its own sake, and also for the global economy as a whole.
The conference focused on macro-prudential policies, which deal with the intersection of the real economy and the financial sector, providing a birds-eye view of the entire system.
"In our interconnected world, these policies will become increasingly important, both in shifting seamlessly out of the crisis and in moving toward new sources of growth," Strauss-Kahn added.
Asia’s economic performance over the past few decades has been nothing short of remarkable. "Driven by rapid and steady growth, the region now accounts for about a third of the global economy, up from under just a fifth in 1980, according to him. "On current trends, Asia’s economy could be as large as the US and the EU — combined — by 2015."
But growth must benefit everybody, he opined. "Asia has made tremendous progress with poverty reduction, with China alone pulling hundreds of millions of people out of poverty over the past few decades. Such a feat has never before been accomplished in the entire history of human civilization."
He praised the Asia for being resilient during the global financial crisis. "Asia had not made the mistakes of other countries by piling up debt or using complex financial engineering that magnified risk," he said, adding that banks had built sizeable capital cushions, followed prudent lending practices, and had limited exposure to toxic assets.
Policymakers had internalised the lessons of the past, embracing sound macroeconomic and prudential policies.
He thanked solid foundations and a quick and forceful policy response of Asian economies that have become the launching pad of the global economic recovery.