Thursday, March 31, 2011
Wednesday, March 30, 2011
"The cosmetic changes will not help LDCs meet the target unless there is socio-economic transformation," he said, adding that the structural transformation can alone benefit.
However, LDCs like Nepal have to enhance production capacity with changes in policy, he suggested, adding that productivity could not be enhanced with current industrial policy, institutional mechanism, and tariff regime.
The fourth United Nations Conference on the Least Developed Countries (UNLDC IV) is going to be held in Istanbul, Turkey on May 9-13. The purpose of the conference is to assess the results of the 10-year action plan for the LDCs adopted at UNLDC III in Brussels, Belgium in 2001 and to adopt new measures and strategies for the sustainable development of the LDCs into the next decade.
LDCs, including Nepal, have been engaged in preparatory works for the conference at national as well as regional and global levels through the participation of government organisations, civil society organisations, international organisations, private sector, academia, media, and all relevant stakeholders.
Currently, Nepal is the chair of the LDC Group, and therefore, the role it is playing in the preparatory process for UNLDC IV is extremely important.
"Integration of LDCs in access to multilateral trade regime could help sustainable development, said Permanent Representative of Nepal to the WTO and Permanent Mission to the United Nations Office at Geneva ambassador Dr Dinesh Bhattarai, who has been coordinating the preparatory tasks among the LDC representatives in Geneva.
In UN parlance, they are the 48 LDCs. Thirty-three are located in sub-Saharan Africa; 14 in southern Asia and Oceania; and one (Haiti) is in the western hemisphere.
Balanced on a knife edge between sorrow and hope, the case of the LDCs poses the next big globalisation challenge.
Investors are now eager to engage on a worldwide stage, and the world's new investors – the rising powers from the global south – are fast becoming major LDC trading and investment partners.
Tuesday, March 29, 2011
Monday, March 28, 2011
Zhao leaves Kathmanu
Sunday, March 27, 2011
"Even the Finance Ministry is being kept in dark,” claimed the parliamentarians.
But Dr Dilli Raj Khanal, a member of the Supplementary Budget preparatory team that also has Dr Sriram Poudel and Dr Dinesh Chandra Devkota, said that they are bringing Supplementary Budget by the end of this week.
Khanal also claimed that Supplementary Budget will address current economic anomalies, and stimulate exports encouraging private sector investment, though there is less time to implement it.
The fiscal year has only four months. "Due to less time to implement the budget, it will be realistic, he added.
“Evaporation of exports has bled the economy,” Khanal said, adding that the fiscal policy must stimulate exports’ share in the total trade that has dropped to 14 per cent.
“It will also address the current liquidity crunch in the banks and increase their lending capacity to the productive sector,” he said, adding that without new investment on productive sectors more employment could not be created.
The current ordinance budget presented by Surendra Pandey lacked vision as it has come without programme and policy, he justified the need of the Supplementary Budget that he thinks will expedite capital expenditure and stimulate economic activities.
However, parliamentarians today raised hell over the style of budget preparation in the Legislature Parliament.
At a time when there is only four months left in the fiscal year, the government is bringing Supplementary Budget, said Dr Ram Sharan Mahat, the Nepali Congress lawmake objecting the style of budget preparation. "We have heard that the Supplementary Budget is being prepared in ‘Guerrilla style,” he said, adding that a new economic policy is need of the hour to boost production and create conducive investment environment.
The production sector is perfoming poorly due to regular power outage, labour problems and lack of government initiatives.
Tabling a Proposal of Public Interest, Mahat seconded by Dr Prakash Chandra Lohani and Binod Chaudhary urged to boost the investors’ confidence, stop capital fligh and contain the price hike.
The consumption expenditure to GDP ratio has increased and gross national saving is shrinking, Mahat said, adding that industries are being closed blocking the no new employment opportunities, due to plunge in exports Forex reserve has dropped and the country is moving towards uncertain future.
Similarly Binod Chaudhary, CPN-UML lawmaker, said that the government has to create conducive environment for the industries to propel the economic growth.
The then finance minister Surendra Pandey had brought Rs 337.9 billion budget through ordinance for the fiscal year 2010-11, four months late than the schedule.
Saturday, March 26, 2011
Friday, March 25, 2011
Public Accounts Committee (PAC) under the Legislature-Parliament today reiterated its earlier direction to revoke licences of those casinos that have not adhered to the strict ruling of the committee not to allow Nepalis in the casinos, and have not paid their dues.
The parliamentary committee also directed the concerned ministries to recover dues by auctioning casinos' property, ensure rights of staffs currently working in casinos, keep entry records of visitors and present Casino Regulation within a week before the committee.
The committee reiterating its decision of December 28, 2010 and January 27, directed Finance Ministry, Tourism Ministry and Inland Revenue Department to present the update every 15 days.
Earlier on January 27, the parliamentary committee has directed the Tourism Ministry to revoke the licence of the casinos, if they didnot pay their dues within 35 days. "However, the casinos are still operating without paying dues and allowing Nepalis in to play against the law of the land and directives of the committee," said Constituent Assembly (CA) member Dhan Raj Gurung.
After the committee's decree, some casions have cleared their dues, some have paid only a little and others have disobeyed, he said, adding that the earlier directives should be implemented immediately. "If casinos will not pay, the hotels that have been granted licence to operate casino will pay." The casinos have paid Rs 512 million after the committees decree to revoke the licence, if they donot pay their dues.
"However, some of the casino owners are out of touch disobeying the parliamentary committee," another CA member Lal Babu Pandit said, accusing them of trying to influence the politicians and bureaucracy to seek amnesty.
"If the committee does not bring them to book, government coffer will hit hard," he added.
Most of the parliamentarians showed serious concern over social security of staff, who are employed in the casinos that have not paid their dues.
"To safeguard social security of some 7,000 to 8,000 staff, the assets of those casinos -- that have not paid by the deadline -- have to be auctioned and staff be paid their salary," said CA member Narayan Dahal. "Some of the casinos have not paid their staff since four months. One staff is reportedly committed suicide yesterday as he was frustrated with the casino that did not pay his salary."
Though parliamentarians came heavily on the casinos, they opined that the tourism sector should not be discouraged as the five-star hotels that have the licence to operate casinos are paying their taxes regularly. "Casinos have to be regulated and brought to book without discouraging tourism sector," they said. The parliamentarians also thanked tourism minintry for closing mini-casinos after their order.
Casino Anna gets new investor
KATHMANDU: Casino Anna has got new investor Shivam Intex Hotel and Restaurent Pvt Ltd owned by Arun Kumar Singh and Ashok Wassan. "We have got the new company -- that has registered itself yesterday formally -- to operate Casino Anna," said Nepal Tourism, Hotel, Casino and Restaurent Workers' Union executive member Krishna Pandey. Shivam Intex Hotel and Restaurent Pvt Ltd bought 50 per cent share from Nepal Recreation Centre (NRC) that was operating the casino earlier and is brining investment from India.
Thursday, March 24, 2011
The central bank’s board of directors meeting today evening has taken the decision under the Nepal Rastra Bank Act that gives the central bank the right to declare any banks and financial institutions troubled in case of financial discrepancies.
The bank will now be restricted to mobilise deposits and float loans after being declared a troubled financial institution.
Gurkha Development Bank (Nepal) Ltd -- promoted by British Gurkhas had been in trouble after a scandal over ‘embezzlement’ of Rs 130 million by its former executive director D B Bomjan and other staffers.
The bank replaced its ‘tainted’ executive director Bomjan and his team with chairman Nirmal Gurung in the second week of March. But last week, Bomjan again took over ‘forcefully’ replacing Gurung.
The central bank could not remain silence in such cases as the banks and financial institutions are losing their focus from good governance and regulatory compliance and involved in petty interest exposing the depositors’ money to risk.
Earlier, the central bank had directed Gurkha Development Bank to prepare a Due Diligence Report after former executive director DB Bamjan was found to have been involved in embezzlement while issuing credit to a customer Panchalal Maharjan.
Recently most of the banks and financial institutions have come into trouble after they failed in maintain good governance.
Similarly, the central bank decided to send Samjhana Finance after its explanation could not satisfy the central bank. The finance company submitted its explanation with proposal of new management that would take the management over and run it but central bank rejected the proposal and today decided to send it to the liquidation.
After declaring Samjhana Finance a troubled financial institution, the central bank has last year restricted it to mobilise deposits and float loans on the basis of its weak capital base and high non-performing asset.
The Banepa-headquartered finance company has an outstanding loan worth Rs 210 million and its non-banking assets stands at Rs 300 million.
Its not the case of poor communication between the authorities rather a case of how deep the coruption is rooted in the bureaucracy and how one can 'influnce' the ministries and even the central bank.
Though, the central bank is still silence on the issue, the finance ministry has asked the Nepali embassy in Washington to get the detailed information on the case and forward the report to the US Court that the ministry sent today through courier.
The US Court had asked central bank and finance ministry on the claim of Asim Khatri Chhetri (KC) but the responsible authorities never received the letter.
"It proves that strong lobbying of KC inside the central bank and finance ministry," a senior central bank official said, adding that the letter never reached central bank governor or finance secretary but made its way back to the US Court that gave verdict on the basis of the
However, today the ministry has directed Nepali embassy in washington DC to hold talks with the US authority and clarify the government's stand on the case that is a clear case of money laundering.
In his petition to the US Court, KC had sought retrieval of the money he paid to Wu Lixian, a Chinese national for supplying logistics to the Nepal Army and Nepal Police.
The money was received in 2008 by Nepal Bangladesh Bank, Bhaisepati branch in the account of Chinese national Wu. But the bank suspecting something fishy reported the central bank instead of paying it to him.
"Neither the purchase has been made in Nepal nor the goods were delivered in Nepal," the finance ministry said, adding that the money has been however transferred to Nepal in a Nepali bank. "It is a clear case of Anti-Money Laundering but handled in a most unfortunate way."
But, this time around KC has 'almost' received the money after the US Court in New York issued a verdict in his favour two weeks ago.
Based on the court's verdict, Chase Bank that made the payment on July 14, 2008 had deducted $1 million from an account of Nepal Rastra Bank in New York to make the payment.
Revenue and Anti-Money Laundering Department gets cases
KATHMANDU: After the Anti-Money Laundering Act came into effect, the Revenue and Anti-Money Laundering Department has investigated 62 case. "Of them, three are finalised," said Mahesh Prasad Dahal, director general of the department. "Of the three also, one was fined Rs 600,000 as he could not provide the source of income of Rs 300,000," he said, adding that the remaining two got clean chit from the Special Court.
Wednesday, March 23, 2011
In the last five years, income of a Nepali citizen has doubled from $350 to $642, if we go by the country’s gross domestic product (GDP) per capita but the GDP growth rate has seen no encouraging growth as it is hovering below four per cent in an average. In a country where more than half of the population lives below the international poverty line of $1.25 a day, the rate of unemployment and underemployment approaches half of the working-age population forcing the citizens to move to Malaysia and Gulf states in search of work, and the general standard of living enjoyed by the average Nepali citizen has been deteriorating over the years, the growth in GDP per capita could be confusing to some extent.
“The GDP per capita is a measure of all sources of income in an economic aggregate of a country including the remittance,” said director of the National Accounts Division at the Central Bureau of Statistics (CBS) Suman Raj Aryal.
“However, the remittance is not the component of the GDP,” he added. “That explains the increasing gap between rising GDP per capita and lower GDP growth.
”The country had received Rs 231.72 billion remittance -- apart from pension and other such income from out of Nepal -- in the fiscal year 2009-10 and Rs 118.44 billion by the first six months of the current fiscal year. The key reason of rising GDP per capita but lower GDP growth is also rising consumerism. “The consumption is increasing,” he said, adding that the widening gap between the rising GDP per capita and lowering GDP growth is remittance is being wasted on consumption rather than on productive sector.
The consumption expenditure to GDP ratio that was 90 per cent in 2006-07 has increased to 93.3 per cent this fiscal year, according to the CBS report, revealing that the consumption is increasing. However, gross national saving as percentage of GDP is shrinking to 30 per cent against almost 35 per cent in the 2008-09.
“The decrease in national savings will also make the country dependent on outer resources for development activities,” he said, suggesting the policy makers to take it seriously and divert remittance to the productive sector that can help capital formation and contribute to the GDP too that is projected to grow by 3.47 per cent in the current fiscal year.
Federation of Nepalese Chambers of Commerce and Industry (FNCCI) president Kush Kumar Joshi agreed. “The only remedy is to create conducive environment for investment and encourage production,” Joshi said, adding that agriculture alone cannot save the economy as the economy has diversified in the recent years.
"Other sectors like financial intermediaries emerged in the recent past, however, he opined that giving a boost to the manufacturing sector –that is expected to grow by a mere 1.47 per cent – is the only pills for the current economic ills.
GDP per capita
2006-07 -- $350
2007-08 -- $390
2008-09 -- $465
2009-10 -- $556
2010-11 -- $642
2006-07 -- 2.75 per cent
2007-08 -- 5.80 per cent
2008-09 -- 3.77 per cent
2009-10 -- 3.97 per cent
2010-11 -- 3.47 per cent
Tuesday, March 22, 2011
Poor performance of non-agriculture sector has pulled the economic growth below four per cent against the government projection of 4.5 per cent and Three Year Interim Plan's projection of 5.5 per cent, said the Central Statistics Bureau (CBS) releasing the national accounts report here today.
The non-agriculture sector that witnessed a gowth of 5.39 per cent in the last fiscal year is ecpected to grow by only 3.09 per cent this fiscal year -- compared to last fiscal year -- dragging the overall gross domestic production (GDP) below four per cent, said director at the National Accounts Division of CBS Suman Raj Aryal. "Boosted by the good crops yield, the agriculture sector is however, projected to grow by 4.11 per cent against last fiscal year's growth of 1.27 per cent."
Nepal's GDP is lowest among all South Asian countries against 12 per cent of Bhutan, six per cent of Bangladesh, nine per cent of India and even Southern neighbour China's 10 per cent, according to CBS.
Electricity, gas and water, and wholesale and retail trade are projected to post negative growth of 4.02 per cent and 0.23 per cent, respectively, whereas community, social and personal services; education; public administration and defence; real estate, renting and business activities; construction; and mining and quarrying are expected to register lower growth compared to the last fiscal year.
Similarly, agriculture and forestry; fishing; transport, storage and communication; financial intermediation; and health and social work sectors are the sectors that are expected to record more growth compared to last fiscal year.
The policy dilemma due to political intability, regular power outage, slowdown in construction and real estate sector due to regulatory barriers, and no new investments dragged the overall economic performnace resulting in the below four per cent growth.
Meanwhile, the Bureau has also revised the growth rate of last fiscal year 2009-10 to 3.97 per cent from its earlier projection of 3.53 per cent.
In the last one decade, the country had witnessed a growth of an average of a little over three per cent, except that in the fiscal year 2007-08, it had registered 5.80 per cent growth.
Per capita GDP at $642
KATHMANDU: The report also projected that the country could register $642 per capita GDP and $645 per capital gross national income (GNI). Per capita GDP -- that is income per person -- is the numerical quotient of income divided by population, in monetary terms that is a measure of all sources of income in an economic aggregate of a country but does not measure income distribution or wealth, whereas per capita GNI is the dollar value of a country’s final income in a year -- divided by its population -- that reflects the average income of a country’s citizens. But the classification by income does not necessarily reflect the development status of a country. A country with a biased income distribution could have a relatively high per-capita GNI while the majority of its citizens have a relatively low level of income, due to concentration of wealth in the hands of a small fraction of the population.
* Agriculture, Forestry and Fishing -- 4.11 per cent
* Non-agriculture -- 3.09 per cent
* Total GDP (at basic prices) -- 3.47 per cent
The report launched globally today was launched by the Samriddhi Foundation here in the valley.
Compared to last year's score of 4, Nepal has scored a little higher to 4.4 due to improvement in Physical property rights but in overall property Right Status Nepal has scored 3.2, in Legal and Political Environment 5.8, in Physical Property Rights and 4.1 and in Intellectual Property Rights 4.1.
Flanking neighbours to Nepal -- Peoples Republic of China and India -- on the other hand have scored 5.5 and 5.6 respectively making the countries in the list of the countries, where there is more property rights.
Sweden and Finland have tied for the top spot in this year's index with a score of 8.5, Finland has retained its top spot for the fifth year in a row, whereas in South Asian region, Pakistan and Bangladesh that are below Nepal, scored 4.1 and 3.6, respectively. Nigeria with 3.9 is in the bottom of the list, according to the index.
While in the context of Property Rights and Gender Equality, Nepal ranks 68th along with Zambia and Uganda.
The International Property Rights Index (IPRI) is a publication of the Property Rights Alliance, with sixty-seven think tanks and policy organisations in fifty-three countries involved in research, policy, development, education and promotion of property rights in various countries.
"Wherever there has been a rights to property, those countries have shown to have better GDP, a stronger Foreign Direct Investment (FDI) inflow and more income," said senior economic journalist Prateek Pradhan. "Property Rights and Intellectual Property Rights need to be secured in Nepal too for the economic growth."
Stating that majority of the people are unaware of Property rights in Nepal, he said that personal property, roughly speaking, is a private property that is moveable, as opposed to real property or real estate. In the common law systems personal property may also be called chattels or personality.
In the civil law systems personal property is often called movable property or movables - any property that can be moved from one location to another. This term is in distinction with immovable property or immovable, such as land and buildings. Under intellectual property law, owners are granted certain exclusive rights to a variety of intangible assets, such as musical, literary, and artistic works; discoveries and inventions; and words,phrases, symbols, and designs.
Monday, March 21, 2011
South Asia set the pace with the strongest arrivals growth from amongst the four sub-regions covered for January 2011, with a gain of 14 per cent. Sri Lanka ( 46 per cent), Nepal (26 per cent), the Maldives (18 per cent) and India (10 per cent) each set new records for the month (year-on-year). The ICC Cricket World Cup 2011, which started in mid-February in Bangladesh, India and Sri Lanka, is expected to help maintain the current growth momentum for this sub-region up to and including the final on April 02.
The destinations of Southeast Asia also reported a strong gain of ten per cent for the month, boosted by double-digit growth in international arrivals.
Growth in visitor arrivals to Malaysia remained sluggish with only a one per cent increase due largely to a small decline in arrivals from Southeast Asia, a sub-region that contributes more than 70 per cent of total visitor arrivals to Malaysia.
According to the report, Northeast Asia registered a comparatively slower growth of five and a half per cent, although it must be remembered that, because of the enormous volume base, this still equated to more than 940,000 additional arrivals for the month. Stronger arrivals growth was reported by Hong Kong SAR (22 per cent), Chinese Taipei (16 per cent) and Japan (12 per cent) and this offset subdued growth to China (plus one per cent), Macau SAR (plus one per cent) and Korea (ROK) (plus three per cent). No data is available as yet for Mongolia.
International arrivals to the Pacific recorded a steady growth of four per cent for January 2011, but this remained uneven across the destinations. Australia and New Zealand reported foreign inbound growth of five per cent and four per cent respectively, while the Marshall Islands (12 per cent), New Caledonia (16 per cent) and Palau (35 per cent) each saw relatively robust results. Samoa (minus two per cent) and Vanuatu (24 per cent) on the other hand recorded contractions in arrivals for the month.
Kris Lim, director, Strategic Intelligence Centre, PATA said, “The year 2011 started strongly for the travel and tourism industry in Asia and the Pacific, maintaining the arrivals growth momentum seen throughout 2010.
South Asia and Southeast Asia continued to deliver the stronger results while Northeast Asia and the Pacific posted comparatively slower growth. This early positive momentum however, is obviously expected to be negatively affected by the devastating earthquake and resultant tsunami that struck Japan on March 18.
Sunday, March 20, 2011
According to the preliminary report of the Central Statistics Bureau (CBS), the growth is projected to be around 3.9 per cent. "The low manufacturing growth, slowdown in the construction sector due to tight liquidity situation and higher interest rates; and regular power outage stalled the industrial growth pulling the obverall growth," said former member of National Planning Commission (NPC) Dr Puskar Bajracharya.
The industrial growth stands around 1.7 per cent, according to the preliminary forecast -- due to plunge in the key manufacturing items. The Manufacturing Price Index has recorded a growth of a mere 1.23 per cent in the second quarter compared to the first quarter of this fiscal year.
However, the agriculture growth recorded a good four per cent and service sector growth that stood around 5.2, according to the preliminary report, boosted the overall growth to nearly four per cent, though, it is not encouraging, he added.
According to the preliminary estimates of the Ministry of Agriculture and Cooperatives, the summer crop production has increased by 11 per cent and 11.5 per cent for paddy and maize, respectively compared to last year, while millet production has increased by one per cent giving relief to the agriculture growth.
The agriculture, that used to have around 40 per cent contribution in the gross domestic production (GDP), however, at present contributes to almost a quarter to the GDP that was projected to grow by 5.5 per cent in the Three Year Interim Plan.
"However, the delayed budget that slowed down the government spending, trade and consumption, coupled with the private sector economic activities hit the economy hard," he said, adding that there is also not any encouraging signal from the political quarters creating policy dilemma.
The economy grew by 3.53 per cent in the last fiscal year and by 3.95 per cent a fiscal year ago in 2008-09. In the last one decade, only in the fiscal year 2007-08, the country had witnessed a growth of 5.80 per cent.
Globally, nine countries received 95 per cent of the portfolio equity, 50 per cent of the portfolio debt and 74 per cent of the short-term debt flows to all developing countries, it said, adding that East Asia’s experience with capital flows during and after the global economic crisis contrasts with the period after the 1997–98 Asian financial crisis when the crash was more severe -- although concentrated in three countries: Indonesia, Thailand and Korea -- and the revival slower.
Inflows of foreign direct investment and bank flows have also recovered. FDI inflows to East Asia held up well during the crisis, declining in 2009 only to 2007 levels before recovering in 2010. Cross-border credits from foreign banks have also returned, in particular to China and the middle-income countries. Foreign banks, which pulled back from the region at the onset of the global financial crisis and are still retrenching globally, have steadily rebuilt their assets in the region.
Outward investment by East Asian residents has also strengthened substantially. China, Malaysia, and Thailand have become significant sources of FDI in foreign markets. China ranked fifth among the world’s top FDI investors in 2008, with FDI outflows of $44 billion in 2009 and $20 billion in the first half of 2010 (compared with $75 billion by Japan, which ranks third globally.)
Malaysia and Thailand each invested $4 billion a year abroad. As a result of sustained outward flows, net capital inflows into emerging East Asia were less than half of gross inflows at about two per cent of regional GDP in 2009.
Net capital inflows are still dwarfed by current account surpluses across East Asia. The current account surplus accounts for the bulk of foreign currency liquidity into China. In the region’s other middle-income countries,capital account deficits -- including errors and omissions flows -- in 2005-09 turned into a surplus in 2010. Portfolio flows into the region’s equities and bonds have been particularly volatile recently. In Indonesia, foreign investors purchased $2.2 billion worth of equities and $9.6 billion of government bonds in 2010, but sold $0.7 billion of the former and almost a $1 billion of the latter in January alone. In the Philippines, the range in net monthly foreign purchases of securities widened considerably. Both the largest monthly purchase and sale have more than doubled from a year earlier in 2010.
The pattern of larger and more volatile flows is also evident in Korea where purchases of government bonds by non-residents fell from $53 billion in April 2008 to $28 billion in January 2009 before rebounding to $65 billion at present.
Portfolio inflows have buoyed the region’s asset markets, but increased recent volatility is a useful reminder how quickly such inflows can reverse. As a result of large non-resident purchases of East Asian equities through most of 2010, the regional stock market index has outperformed the global index by 1.5 times and is currently at a level twice as high as its lowest point during the global financial crisis, it said.
Similarly, the report revealed that stock market capitalisation for emerging East Asia also doubled to 110 per cent of GDP in 2010 from 2003. As corporate fundamentals improved and as corporate and government issuers have taken advantage of the historically low yields to ramp up bond debt issuance, East Asia’s bond markets have responded with a bond return index that is now three times higher than its level at the beginning of 2000 and a regional return index that is one and half times the global index.
Thursday, March 17, 2011
The weightage of garments, woolen carpet, textile -- the key export items -- have plunged by almost half in the Manufaturing Price Index (MPI) in this fiscal year comapared to the fiscal year 2007-08.
The weightage of garments -- one of the key export items -- has dropped by almost seven times to 1.17 per cent in the current fiscal year from 7.14 per cent in the 2007-08, whereas the weightage of woolen carpet -- another key foreign currency earner -- has dropped by half to 2.91 per cent in the current fiscal year from 4.32 per cent in the 2007-08, according to the Central Bureau of Statistics (CBS).
"Similarly, the weightage of other textile has dropped to 4.17 per cent in the current fiscal year from 6.59 per cent in the 2007-08, whereas pashmina -- yet another key export items -- could not make it to the Index due to its meagre weightage in the Index this time compared to 2007-08, when it had 1.18 per cent weightage in the index.
However, the items of domestic consumption have more weightage in the latest Manufacturing Price Index.
Due to plunge in the key manufacturing items, the Manufacturing Price Index has recorded a growth of a mere 1.23 per cent in the second quarter compared to the first quarter of this fiscal year. In the fiscal year 2007-08, the MPI had recorded a growth of 10.76 per cent over a fiscal year ago.
Entrepreneurs blame the higher cost of production for the drop in the manufacturing. "Increasing cost of production due to frequent labour troubles, power-outage and unfavourable security situation in the country has brought the key exports manufacturing down," said president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Kush Kumar Joshi.
"Our products have been loosing competitive edge over other countries' products," he said, adding that the labour and energy could have been our advantages, had the government acted on time to boost the manufacturing and investment climate.
The Manufacturing Price Index has this year listed 44 items based on 2006-07 manufacturing census from earlier 34 items -- that was based on 2001-02 manufacturing census -- to make it more inclusive, said director of National Accounts Division at the CBS Suman Raj Aryal.
"The addition of new commodities is also due to diversification of industry lately," he said, adding that some new industries have made it to the list and the old ones are on the way out as their weightage have started shrinking.
The new industry like furniture has been added, though it has a meagre 0.56 per cent weightage in the Index.
The proposed amendment of BAFIA is a regressive step as it has tried to back track liberal economic policy adopted by the country some two decades ago, said Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and Confederation of Nepalese Industries (CNI) today.
It will discourage private sector investment as it has undermined the role of private sector, the entrepreneurs said, adding that no new investment will come, if such proposal is passed.
"The overall economy will suffer due to such Act," they opined.
The CA members have suggested amendments after discussions in Parliamentary sub committee but it seem to be guided through their political affiliation rather than economic sense.
Wednesday, March 16, 2011
"Due to a small technical problem, it has to back track the decision to withdraw currency notes with the portrait of former king for the time bring," said a higher official at the central bank.
Someone complained at the Commission for Investigation of Abuse of Authority (CIAA) pointing out the technical error of the central bank prompting the anti graft constitution body to jump into the action.
The central bank has, however, realised its technical fault and promised to correct it soon.
"The decision to phase out or demonitise any currency notes should be published in the government Gazette," said secretary at the CIAA Bhagwati Kafle. "Only after the publication of such notice in the government Gazette, the central bank can phase out or even demonitise bank notes of any denomination," he said, adding that the central bank has, however, taken the decision on the basis of another notice that was to replace 'Shree Panch ko Sarkar' to 'Nepal Sarkar' in the bank notes -- published in the Gazette.
According to the Nepal Rastra Bank Act, the central bank board has to recommend the government for phase out of any currency notes and the government decision has to be published in the government Gazette.
The cabinet on June 12, 2010 had decided to phase out the currency notes with former king's portrait with that of Mt Everest to reflect the change in the country that has turned into republic. The cut off date was fixed for March 14.
The central bank has worked out the Clean Note Policy according to the decision and designated the banks' branches to replace the currency notes with the former king's portrait.
Though some quarters suspect the political pressure on the central bank's back tracking of the decision and postponing it, the CIAA denied it.
There is a speculation that some of the political forces are hoarding the cash and are shying to replace them fearing the exposure.
The bankers belive that the horading has created the current cash crunch in the banking channel.
However, the central bank officials denied any such possibilites. They informed that Rs 10.16 billion worth currency notes with various denomination that have former king's portrait is in circulation in the market.
The currency notes with the Mt Everest began to appear after 2006 when the country was declared republic. Though, the central bank is only withdrawing the currency notes with the former king's portrait and not demonitising them, the general people thronged the designated branches of various banks yesterday fearing demonitising of their currency notes.
In the same month last fiscal year, the ministry had recorded Rs 105.58 billion revenue."The eighth month's revenue mobilisation growth is the highest one in the current fiscal year," said revenue secretary Krishnahari Baskota.
The budget for the current fiscal year has targetted to collect Rs 116.64 billion in revenue. "To meet the target the revenue growth should be above 20 per cent," he said, adding that the revenue mobilisation in the post-budget months has increased, though it still needs to be boosted.
"The four months delay in the regular budget has hit the revenue growth," he accepted, adding that the seventh month has recorded a revenue growth of 14.2 per cent to Rs 107.67 billion.
As usual, the VAT contributes Rs 40.21 billion, the largest chunk of the revenue followed by customs that contributed Rs 23.43 billion and Income tax that contributed Rs 22.70 billion, wheras excise contributed Rs 17.29 billion, and registration, vehicles tax and non-tax collectively contributed Rs 19.40 billion by the end of eighth month (mid-February to mid-March).
"The revenue mobilisation is slowing on upward trend," Baskota said, adding that the recent action against the VAT evaders has also helped in the increase in the revenue mobilisation.
First month-- Rs 13.16 billion
Second month -- Rs 25.07 billion
Third month -- Rs 37.54 billion
Fourth month -- Rs 51.25 billion
Fifth month -- Rs 65.10 billion
Sixth month -- Rs 91.33 billion
Seventh month -- Rs 107.67 billion
Eighth month -- Rs 123.03 billion
"Most of the Eastern, Central, and Western Hill and Mountain regions as well as the whole Terai are generally food-secure," according to a report.
"The seasonal improvement in the food security is mainly attributed to the good harvest of summer crops in 2010, following a normal winter crop production in April-May 2010," it said.
According to the preliminary estimates of the Ministry of Agriculture and Cooperatives, the 2010 summer crop production has increased by 11 per cent and 11.5 per cent for paddy and maize, respectively compared to last year, while millet production has increased by one per cent.
Poor or moderately impaired summer crop production was reported in parts of Saptari, Siraha, Mahottari, Dhanusha, Dailekh, Mugu, Dadeldhura, Bajura and Doti districts where localised disasters like dry spell, flood, and hailstorm have affected the crops.
"In part of the eastern Terai, namely Saptari and Siraha districts, significant proportions of paddy field remained fallow due to dry spell and lack of irrigation facilities," the report said, adding that District Food Security Networks (DFSNs) in the Eastern and the Far Western regions have identified a total of 33 VDCs in two districts -- Saptari and Baitadi -- that are highly food insecure.
The Mid and Far Western Hill and Mountain districts, which faces a chronic food insecurity, have reported low to moderate levels of food insecurity. The season appears to be one of the best seasons among the past years since the Food Security Phase Classification was first introduced in mid-2006, the food security report added.
Despite the late start of monsoon, the rain remained active from July till September 2010, providing a good irrigation to the crops. "Poor or moderately impaired summer crop production was reported in parts of Saptari, Siraha, Mahottari, Dhanusha, Dailekh, Mugu, Dadeldhura, Bajura and Doti districts where localised disasters like dry spell, flood, and hailstorm have affected the crops.
In part of the eastern Tarai, namely Saptari and Siraha districts, significant proportions of paddy field -- more than 50 per cent and 30 per cent respectively -- remained fallow due to dry spell and lack of irrigation facilities.
Eastern Hill and Mountain districts -- Taplejung, Terhathum, Sankhuwasabha, Panchthar and Bhojpur -- have benefited from cardamom production and sales, the report said, adding that the production has increased by 30 per cent in Taplejung pulling the selling price by more than five times compared to last year.
In the Karnali region, the population continued to earn good income from the sale of Yarchagumba (medicinal herb), apples, and walnuts. Opening of Tibetan border during the month of August helped people in the border areas to restock the food.
Tuesday, March 15, 2011
"Nepal needs to attract more FDI from other countries including from India,” he said, inaugurating the 16th annual general meeting (AGM) of Nepal India Chamber of Commerce and Industry (NICCI) here in the valley today.
“The current security related issues are temporary because of the transition period the country is passing through,” he said, adding that Nepal should think of increasing its exports and take advantage from the rising economic powers like China and India. “India’s help is crucial in solving the power crisis and boost for the economic development,” he added.
“India has contributed a lot to the development of Nepal,” said Indian ambassador to Nepal Rakesh Sood. “Around 45 per cent of FDI in Nepal is from India, he said, adding that the Indian investments in Nepal have generated some 30,000 jobs directly and the double the number indirectly to the Nepalis.
However, he complained of the discouraging investment environment in Nepal for the Indian investors currently. “The current issues have discouraged the new investments from India,” he said, also urging Nepal to check on diversion of third country goods to India and Intellectual Property Rights violation of the popular Indian brands.
Sood opined that the NICCI can play a key role in boosting Indian investors confidence and further strengthen the bilateral economic and trade ties.
On one hand trade ties with India is increasing and the other the trade deficit is also increasing that has doubled to Rs 317 billion between 2008 and 2010.
"Nepal has to think on how to bridge the trade deficit gap,"
Federation of Nepalese Chambers of Commerce and Industry (FNCCI) president Kush Kumar Joshi, said, adding that Nepal could not take advantage of the Nepal-India Trade Treaty -- due to its own internal reasons -- that could help reduce the trade deficit.
Joshi also urged to open custom points and expedite refund of excise duty as stated in the treaty. Similarly, Nepal Chambers of Commerce (NCC) president Surendra Bir Malakar also requested to simplify the cross border trade. "Revised trade treaty between the two South Asian neighbours has addressed many issues," he said, adding that both the countries should encourage formal trade.
Welcoming the guests, NICCI president Arun Kumar Chaudhary said that Nepal could not harness the hydropower despite the regular power outage that could derail the development in the long run. "More than trade deficit, Nepal is suffering from Balance of Payment (BoP) deficit," he said, adding, there will be more issues once the trade increases. "The NICCI is playing the role of facilitator in the issues," he added.
NICCI has been established in 1994 to promote or make arrangements for promoting contacts and co-operation among industrialists, businessmen and other professional groups of Nepal and India, and work as a non-profit-making organisation.
Change of guard
KATHMANDU: NICCI on Tuesday elected its new team led by Sanjiv Keshava, general manager of Surya Nepal. He was executive committee member in the last committee led by Arun Kumar Chaudhary.
Monday, March 14, 2011
Nepal Bankers Association (NBA) has termed the proposed amendment of Banks and Financial Institutions Act (BAFIA) as a regressive step as it has not only tried to back track liberal economic policy but also curtail the central bank and private sector's roles.
“It is a policy reversal," said vice-president of Nepal Bankers Association Rajan Singh Bhandari. "It has also tried to encroach the territory of the central bank," he said, adding that the proposed amendment will clip the regulatory wings of the central bank and discourage the private sector investment.
"With such draconian proposal, no new investment will come," said former NBA president and CEO of Kumari Bank Radhesh Pant. "The overall economy will suffer due to such Act," he said, adding that the proposed reduction in the single promoter share could lead to a crash in the secondary market due to over supply.
"The promoters have to off load their shares flooding the secondary market that could bring the share prices to the lowest level," said Sudhir Babu Khatri, president and CEO of DCBL Bank.
The proposed amendment is going to create lots of confusions, according to the bankers. The cap on CEO's salary — the much controversial issue lately — CEO and director's roles and repsosibilities, hike in deprived sector lending and venture capital are some of the issues the bankers showed serious concern over.
"The Act should not categorically mention percentage and fix ceilings as it would create practical hurdles in the future," suggested CEO of Lumbini Bank Shovan Dev Pant. "The Act should be forward looking," he said, adding that the proposed amendment has, but, back tracked the liberal economic policy adopted by the country some two decades ago.
"It has also included the clauses that could be addressed by Nepal Rastra Bank's directives and Act," Bhandari said," The NRB Act and proposed amendment will contradict each other.
The proposed amendment has also discouraged the industrialists to open banks and financial institutions to avoid conflict of interest, which is principally correct. However, Bhandari asked, “If not the entrepreneurs, who has the money to be the promoters?"
The CA members have suggested amendments after discussions in Parliamentary sub committee but it seem to be guided through their political affiliation rather than economic sense, according to the bankers.
Sunday, March 13, 2011
"The price of a litre of petraol has been hiked to Rs 97 per litre from Rs 88," said managing director of the Nepal Oil Corporation Digamber Jha.
The NOC has also hiked the duty-paid Air Turbine Fuel (ATF) to Rs 90 per litre from Rs 80 per litre for domestic airlines. "The international aviation fuel (bonded ATF) is increased by $130 to $1075 per 1,000 litres," he added.
"It has, however, not hiked the prices of cooking gas, diesel and kerosene prices," he said, adding that the NOC is compelled to hike the price of petrol as it has been incurring a huge loss after the price hike in the international market.
"After today's price adjustment, the NOC still will incur Rs 0.09 loss in a litre of petrol and Rs 14.27 in a litre of diesel," he said, adding that a litre of kerosene still incurs Rs 4.90 loss and a cylinder of cooking gas incurs Rs 254.84 loss.
However, the NOC makes Rs 15 per litre profit in the ATF.
After the upward price adjustment, the total loss of the state -oil monopoly has come down to Rs 1.14 billion from Rs 1.33 billion, Jha said, adding that the government has released Rs 600 million -- of the total loan amount of Rs 1.13 billion, it has promised.
Last year in 2010, the NOC had hiked the petroleum prices five times. On December 6, it had increased the per litre petrol price to Rs 88, diesel and kerosene price to Rs 68 and cooking gas Rs 1,325 per cylinder. Earlier, the NOC had hiked the price of cooking gas to Rs 1,250 on January 1, 2010 from Rs 1,125 per cylinder.
Despite enormous sources, electricity and renewal energy occupy only 1.80 per cent and 0.5 per cent in energy pie.
The country has imported Rs 53.25 billion worth petroleum products from India in the fiscal year 2009-10 that is 12.39 per cent higher than a fiscal ago.
Upward Price Adjustment
Date -- Petrol price revision
February 17, 2010 -- Rs 77.5
March 14, 2010 -- Rs 80
April 23, 2010 -- Rs 82
July 6, 2010 -- Rs 85
December 6, 2010 -- Rs 88
March 13, 2011 -- Rs 97
Thursday, March 10, 2011
Tiwari, the only one from Nepal to receive this honour this year opined that the award has recognised his organisational capacity.
Nepal received this honour after three years. Aashmi Rana was honoured as a Young Global Leader from Nepal in 2008.
The World Economic Forum honours with Young Global Leaders (YGLs) every year in recognition and acknowledgment of up to 200 outstanding young leaders from around the world for their professional accomplishments, commitment to society and potential to contribute to shaping the future of the world.
For 2011, the Forum has selected 190 Young Global Leaders from 65 countries and all stakeholders of society -- business, civil society, social entrepreneurs, politics and government, arts and culture, and opinion and media.
The new class represents all regions from East Asia (50) to South Asia (18), Europe (42) and Middle East and North Africa (13), sub-Saharan Africa (14), North America (37) and Latin America (16). "This year’s selection has more gender parity than ever, with 44 per cent women," said the World Economic Forum.
"The challenges faced by the next generation of leaders are more daunting and intractable than ever and cannot be mastered with the current set of strategies, institutions, standards and attitudes," said Klaus Schwab, Founder and Executive Chairman of the World Economic Forum.
"To address these challenges in a meaningful and sustainable way requires fresh thinking, multi stakeholder engagement and dynamic new ways of collaborating to develop innovative solutions that are truly global, I created the foremost platform for young leaders to engage in global affairs to shape a more positive, peaceful and prosperous society," he said, adding, "within the World Economic Forum community, the Young Global Leaders represent the voice for the future and the hopes of the next generation."
Drawn from a pool of almost 5,000 candidates, the Young Global Leaders 2011 were chosen by a selection committee, chaired by Queen Rania Al Abdullah of the Hashemite Kingdom of Jordan.
The Young Global Leaders 2011 reflect different kinds of leadership in different parts of the world and different parts of society.
The 2011 honourees will become part of the broader Forum of Young Global Leaders community that currently comprises 668 outstanding individuals. The YGLs convene at an annual summit which this year will be held in Dalian, People’s Republic of China, on September 12-16.