Thursday, June 30, 2016

Lack of access to finance hindering growth of social entrepreneurship

Lack of access to finance and acceptance are hindering the growth of social entrepreneurship in Nepal, according to the experts.
Addressing a session on 'Rebuilding Nepal through Social Entrepreneurship,' at a two-day international conference on social entrepreneurship in Kathmandu today, former finance secretary Rameshwor Khanal said that social entrepreneurs have been facing two challenges, one access to finance and the other lack of acceptance in general by the society and by the government in particular.
"The government needs to accept and expand the access to finance for social entrepreneurship," he said, giving examples of the various types of social entrepreneurship that have flourished in Nepal since long. "Likewise, social entrepreneurs should also increase their access to policy makers."
The session moderated by social entrepreneur Anil Chitrakar also discussed various aspects of social entrepreneurship like preparing sustainable business model, passion on what one does, and most importantly taking risks and celebrating the failures and mistakes that makes one a successful social entrepreneur.
The conference organised by King's College, in partnership with more than 30 organisations including Dwaitto Foundation, Samriddhi Foundation, Behruva Ventures, Sherpa Adventure Gear, Siddhartha Inc, and many more – many of which are social enterprises themselves – saw participation of more than 400 delegates and social entrepreneurs.
Presenting the keynote address at the inaugural session, Prof Jay Mitra of the University of Essex Business School, UK, differentiated between regular business entrepreneurship with that of social and citizen entrepreneurship. He opined that social entrepreneurship is distinct due to its social value, inclusiveness, sustainability, localisation and broad-based stake-holding.
Likewise, noted tourism entrepreneur, writer and social worker Karna Shakya said that his mission at this advanced age is to help imbibe the spirit of entrepreneurship on youths. Taking examples of low-cost eco-friendly tourism and alternative energy sector (especially solar), he said advanced thinking and customer-sensitivity are must for even social enterprises to grow.
On the occasion, executive director of King's College Narottam Aryal raised the discourse on 'compassionate capitalism' as a route to empower social entrepreneurs.
The conference also saw a social enterprise bazaar of 30 actual practitioners from the sector, showcasing their wares and services.
Similarly, a report 'The State and Profile of Social Enterprises and Social Entrepreneurship in Nepal' was also launched at the conference. The report concluded that there is dominance of male and Newar community in entrepreneurship in the Kathmandu Valley which started from 1965. “Younger population below 40 years of age are largely involved in enterprise creation,” the report said, adding:
“The major difference that has separated the socially responsible enterprises from commercial enterprises is the creation of social impact, either at the backward linkage during the operational phase or at the forward linkage," it reads.
The study also showed that government support is very minimal in spite of the fact that there is a strong potential for social enterprises to help solve problems associated with agriculture, education, health, unemployment and poverty. "Most organisations lack a coherent business plan and need training for that," the report further reads, adding that the social enterprises need focused training for nurturing of intention, innovation impact and income."
The study also recommended that the government should identify social enterprise as a separate entity like public or private enterprises with the support of banks and financial institutions coming in to increase financial access. "Special training packages need to be developed for the impact based Lean Canvas Business Model and business plan preparation," it adds.

Wednesday, June 29, 2016

Some 90 per cent of Nepalis still struggling or feel sense of insecurity

Some 90 per cent of Nepalis are either suffering from a sense of insecurity, or struggling, according to a report.
Though the middle class in Nepal has grown over three times – from 7 per cent to 22 per cent – in the 15 years between 1995 and 2010, it is still most vulnerable as they are mostly either suffering from a sense of insecurity or struggling, reads a World Bank study report titled 'Moving Up the Ladder', released in Kathmandu today.
"This group constitutes households with consumption levels high enough for their probability of falling into poverty to be minuscule," said senior economist at the World Bank and lead author of the report Sailesh Tiwari. But data on perceptions about current living standards as well as the outlook for the future collected by various Gallup surveys suggests that 90 per cent of Nepalis are actually either suffering or struggling, he added.
According to Gallup definitions, suffering households have well being that is at high risk and are more likely to be poor and deprived along other dimensions of welfare such as access to food, shelter and health. They are also likely to be under mental stress.
Likewise, struggling households are characterised by well being that is moderate or inconsistent. Even though they may not be directly deprived at any given point in time, they may expect to struggle to maintain that level in future.
"This implies that at least half of Nepal's nascent middle class is actually insecure about its future and thus probably constitutes what some have called the vulnerable middle class," Tiwari said.
The report also said the key challenge for Nepal in future is replicating the success in reducing poverty into building a larger and stronger middle class.
"This will require fostering an environment for the creation of more and better jobs within Nepal," the author suggested, adding that research undertaken for the report suggests Nepalis associate belonging to the middle class with being engaged in relatively secure professions such as government jobs, teaching, medicine and engineering and other forms of salaried employment. "But most of the job creation within Nepal in the last two decades has been in low skilled sectors such as construction and these jobs are mostly of casual nature."
The report has also suggested three main policy directions: equalise opportunities; reduce vulnerabilities and boost productivity; and create more and better jobs.
Tiwari suggested that ensuring all Nepali children – irrespective of the circumstances they are born into and circumstances they have no control over – have an equal shot at life chances is not just fair and equitable but also good for productivity and growth, apart from building the capacity to cope with natural disasters like  earthquakes, and finding an alternative to the remittances, which are not sustainable. The outflow of migrants has already started slowing down, it has pointed out.
Nepal urgently needs to create more and better jobs within Nepal to sustain the momentum of living standards improvement and to replicate the success in reducing poverty into commensurate success in building a larger middle class, Tiwari noted.
Though a quarter of Nepalis still live in absolute poverty, poverty in Nepal has decreased by a steady rate averaging 2.2 percentage points annually in the last two decades due to off-farm diversification at home and remittances from abroad, the report reads, attributing the drop in poverty to the labour income – accounted for 52 per cent – while remittances accounted for 27 per cent of the poverty reduction observed nationally between 1995 and 2010.
The report also noted that inter-generational social mobility has increased but with variations across social groups. "There are also important differences in the mobility experiences by the various caste/ethnicity groups that are consistent with the patterns of historical structural inequalities among social groups in Nepal," it reads.
There is a high degree of vulnerability among households and for every two Nepalis that escape poverty, one falls back below the poverty line, it is pointed out. "On an average, 45 per cent of Nepalis who are not directly poor are vulnerable to falling into poverty."

Tuesday, June 28, 2016

Nepal is 33rd most fragile state

Fund For Peace (FFP) – a Washington-based research and educational institution – has ranked Nepal as the 33rd most fragile state in the world.
Nepal with 91.2 points ranked 33rd most fragile state in the Fragile States Index (FSI) published by Fund For Peace. Nepal was ranked 36th in the index last year.
Afghanistan tops the list among the South Asian countries with 9th position, whereas Pakistan is second most fragile South Asian countries with 14th position in the index. India is ranked 70th while Maldives is the least fragile country at 91st rank.
The ranking – based on the indicators of risk and thousands of articles and reports that is re processed by the institution’s software from electronically available sources – has African country Somalia at the top of the Fragile State Index followed by South Sudan and Central African Republic, according to the Fund for Peace that has placed Sudan and Yemen in the top five most fragile countries list.
The index has ranked Finland as the most sustainable country in the list with first position, followed by Norway, New Zealand, Denmark and Switzerland.

Monday, June 27, 2016

Nepse looks up to record 1,721.77-point

Continuing bullish trend, the share market crossed the 1,700-point mark today.
Propelled by the banking group, the Nepal Stock Exchange (Nepse) index gained 36.60 points, or 2.17 per cent, in the intra-day trading today to close the market at 1,721.77 points.
Except insurance and hotels sub-groups, all the other sub-groups logged gains to push the share market upward beyond imagination as the market lacks depth to sustain the bubble.
The insurance sub-group, which has been instrumental in propelling the benchmark index to record high, shed 95.57 points to close the day's trading at 9384.04 points, whereas the Hotels sub-group also lost 26.19 points to close the day at 1,983.88 points. Shares of 132 listed companies worth Rs 1.64 billion were traded today, continuing to raise brows of observers as the country's sole bourse has been logging daily transactions worth more than Rs 1 billion in the past couple of weeks.
Lack of investment opportunity, lure of rights and bonus shares from banks and financial institutions and insurance companies, coupled with low interest rates offered by banks have fuelled the stock market growth in recent months despite the market regulator repeatedly advising investors to be cautious before putting their hard-earned money in the stock market.
According to the share market pundits, low supply of shares of insurance companies and micro finance companies has also pushed the market over the roof.
"Apart from the comparably better return than other sectors, the ongoing bullish trend is also attracting other investors to the secondary market," they claimed.
Market capitalisation climbed to Rs 1846.92 billion on Monday, which is over 80 per cent of the total gross domestic production (GDP).

Sunday, June 26, 2016

'The 11th hour spending spree encouraging financial crime'

Government expenditure that remains sluggish till the 11th month of the fiscal year, gains momentum in the final month of the fiscal years, according to the historical trend of budget expenditure.
The last month of the fiscal year – from mid-June to mid-July – generally sees spending of more than a quarter of the total annual budget, figures compiled by the Financial Comptroller General’s Office shows. The trend has not only encouraged financial indiscipline but also exposed lack of accountability and gross violation of basic fundamentals of public financial management, let alone the quality of last minute expenditure.
"Last minute spending is a financial crime,” says former senior adviser to Finance Ministry Keshav Acharya.
In Fiscal Year 2010-11, the Finance Ministry had issued a directive to line ministries advising them not to spend more than 40 per cent of the total budget in the last three months from mid-April to mid-July, Acharya reminded, adding that the ministry had also asked all the government agencies not to spend more than 20 per cent in the 12th month of the fiscal year. “However, the government has failed to implement this rule.”
According to former Auditor General Bhanu Prasad Acharya, last minute spending is not only financial indiscipline but also misuse of public purse. "We cannot be assured on quality of last minute spending as it is intended to ‘just spend’ the budget,” he added.
Successive governments have been spending almost a quarter of the total budget in the last month of the fiscal year, according to the Financial Comptroller General’s Office (FCGO) data.
In 2014-15, the government had spent a total of Rs 142.5 billion in the 12th month of the fiscal year, whereas the total annual budget for the last fiscal year was Rs 618 billion. A fiscal year earlier, the government had spent Rs 117.16 billion in the last month out of the total annual budget of Rs 517.24 billion.
Likewise, the government has managed to spend only half of the total budget by the end of the 11 months of the current fiscal year.
"As of June 25, the government has been able to spend only 53.94 per cent (Rs 442.01 billion) of the total budget of Rs 819.46 billion for the current fiscal year,” the FCGO data revealed, adding that the government has been able to spent 62.25 per cent (Rs 301.42 billion) in recurrent expenditure, and 31.24 per cent (Rs 65.25 billion) in capital expenditures.
The government had allocated Rs 484.26 billion for recurrent expenditure, whereas Rs 208.9 billion was allocated for capital expenditure for the current fiscal year 2015-16.
Though the low level of capital expenditure is attributed to budgeting system as it incorporates half-baked projects and projects of political interest often not implementable, the government has been not able to spend the recurrent expenditure too.
However, finance ministry officials say that the trend of last-minute spending will continue this fiscal year as well and the remaining 20 days will see surge in overall budget spending.
Former finance secretary Rameshwor Khanal attributes last minute expenditures to some valid technical reasons but more to the systemic and governance problem.
Generally, a contractor will prepare bill after 28 days of the completion of the work, he said, adding that the engineers will then verify and evaluate the work, and the contractor will make claim for payment in another 28 days. "They should ideally get payment within 2 months of the completion of the work."
However, the paying authority will start bargaining before making payment and keeps the payment pending till they get their cut, Khanal added. “At the end of the fiscal year, either one has to give the cut to get paid or the budget will be frozen.”
The current government record system also cannot show when the work has been completed, he said.
“Thus, the bill paid at the last minute could be the payment of the work completed in January or June,” he said, adding that the paying authority takes the advantage of the lack of tracking system and bargains for the cut.
Most of the 'Payment Ministries' like the Ministry of Physical Infrastructure and Transportation and Ministry of Energy has the culture of making payment in the last hour, pushing last month’s spending figures up.
Development partners also send the record of the projects completed through their direct payment at the last month of the fiscal year. Likewise, the government schedules the debt payment in the last month of the fiscal year also pushing the spending up in the last month.
However, Khanal attributed the last hour surge in budget spending to the lack of governance, financial indiscipline, eroding capacity of bureaucracy and lack of political willpower.

Thursday, June 23, 2016

ADB, IRRI sign knowledge partnership agreement

Asian Development Bank (ADB) president Takehiko Nakao and International Rice Research Institute (IRRI) director general Matthew Morell signed an agreement to promote food security in Asia and the Pacific by scaling up collaboration on disseminating research and other knowledge on the role of advanced agricultural technologies in providing affordable food for all.
Under the partnership agreement signed today during ADB’s Food Security Forum 2016, the two institutions will undertake annual consultations to review and ensure alignment of ongoing collaborative activities, and to develop a joint work programme. The 2016 programme will focus on expanding the use of climate-smart agriculture and water-saving technologies to increase productivity and boost the resilience of rice cultivation systems, and to minimise the carbon footprint of rice production.
“This new form of collaboration with IRRI is another step toward our shared goal of ensuring good food and nutrition for all citizens of this region," Nakao said on the occasion. "We look forward to further strengthening our cooperation in this area to promote inclusive and sustainable growth, as well as to combat climate change."
“I am delighted to build on our partnership with ADB to add a new dimension to our long-standing collaborative work,” Morell said, adding that IRRI looks forward to deepening our already strong partnership as we jointly develop and disseminate useful agricultural technologies throughout Asia.
ADB and IRRI have collaborated since 1975 on agricultural research to provide scientific solutions to a wide array of challenges including low crop yields, vulnerability to extreme weather, pests and disease, postharvest losses, deteriorating land and water resources, and greenhouse gas emissions.
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, ADB in December 2016 will mark 50 years of development partnership in the region. It is owned by 67 members – 48 from the region. In 2015, ADB assistance totaled $27.2 billion, including cofinancing of $10.7 billion.
IRRI has its headquarters in Los BaƱos, Philippines, and has offices in 15 countries. It is an independent, nonprofit agricultural research and educational organization established in 1960 through funding from the Ford and Rockefeller foundations, with support from the Philippine government. Its mission is to reduce poverty and hunger, improve the health of rice farmers and consumers, and ensure environmental sustainability of rice farming.

Wednesday, June 22, 2016

Government bows down to illegal strike by bottlers

The government has bowed down to the 'illegal strike' by the gas bottlers and revoked its earlier decision to suspend the product delivery order PDO of Himalayan Petrochemicals, the company that manufactures HP brand of gas cylinders.
Gas bottlers have been protesting by refusing to take PDO to import cooking gas since yesterday forcing to withdraw the government decision against the HP gas.
Supply of Liquefied Petroleum Gas (LPG) – popularly known as cooking gas – comes under the essential service and the bottlers' refusal against the Essential Service Act was against the law of the land. Essential Services Operation Act, 2014, states that no one shall disrupt the supply of essential consumer goods or services by exercising a monopoly or through any other means. But the LPG bottlers have challenged the government by refusing to take PDO of the cooking gas. The bottlers have declared to indefinitely stop collecting PDO from Nepal Oil Corporation (NOC) from yesterday. PDO is a document needed for importing cooking gas from India.
The weak governance, lack of political will power due to rising corruption and red tape and illegal syndicate of gas bottlers forced the government to bow down against the illegal strike putting thousands of lives at danger. The cooking gas cylinders – that are virtually bombs as they have not been undergone hydro-static test regularly as it should have been – has already taken three lives a month ago.
The talks between Supply Ministry and Nepal LP Gas Industry Association (NLPGIA) held today at the ministry concluded after the government took its earlier decision to suspend PDO of HP gas.
Consumer Protection Council – led by the supply minister – had suspended the PDO of HP gas last week. Three people were killed around a month ago on May 20, after the fatal explosion of HP Gas cylinder in Haugal tole of Lalitpur sub-metropolis.
Reacting to the government decision of PDO suspension, the association had appealed to all the bottling plants to stop buying cooking gas from India from yesterday to put 'illegal' pressure on the government to roll back its decision.
A government-formed investigation team has said in its report that further investigation is required to look into the thickness of the metal of the gas cylinder. The team has, however, ruled out the possibility of the explosion being caused due to lack of hydro-static tests.
After receiving the report on Sunday, the government had called the NLPGIA for talks on the condition that HP gas clears the compensation to the victims’ families.
The association and the victims' family today afternoon agreed on Rs 4.1 million 'blood money', and the government put stamp on the illegal deal. "There is no law and order in the country," according to consumer rights activist Jyoti Baniya, who termed the government and association deal, an illegal compromise. "This is the height of lawlessness in the country," he said, adding that government has bowed down in front of illegal strike, which will encourage the people to break the law. "Anyone can pay compensation and kill people and go unpunished, what kind of governance is it?"
The government has lifted the ban on the import of HP gas cylinders going against the recommendation of a committee of experts it had hired to probe the incident of gas cylinder explosion last month in Lalitpur that killed three people.
The ministry – which had banned the import of HP Gas last week after the probe committee blamed the poor quality of cylinders for the explosion – lifted the ban saying that the probe committee's report did not define the defects in HP Gas cylinders in concrete terms.
However, the report had clearly mentioned that many details of the exploded HP Gas cylinder and its quality could not be traced and further expert inquiry may be required to arrive at a definite conclusion. It means that the government has bowed against the pressure from the bottlers.  Weak laws and government's unwillingness to take any action had emboldened the gas bottling companies in the country to unlawfully halt the import of cooking gas, an essential commodity.
The ministry has also cited the bottlers' willingness to provide Rs 4 million as compensation apart from 0.1 million provided by the HP gas to be divided among the families of the deceased, as the justification for lifting the ban.
The association and the ministry team sat for talks after the company handed over the Rs
4.1 million compensation to the victims’ families, according to the joint secretary of the ministry Anandaram Regmi. "The Ministry will write to Nepal Oil Corporation (NOC) to issue the PDO to HP gas on a regular basis as earlier from tomorrow."
After the agreement, the bottlers have agreed to resume imports of cooking gas.

Tuesday, June 21, 2016

‘Livelihood revival as important as reconstruction’

The development partners have made an unequivocal call to expedite reconstruction work that directly supports livelihood recovery of earthquake-affected communities.
Speaking at a conference on ‘Livelihoods Recovery: Lessons Learnt and Way Forward’ held in Kathmandu today, they emphasised that livelihood recovery should be given equal emphasis as building houses and other infrastructure.
Speaking on the occasion, Industry Minister Som Prasad Pandey, on the occasion, said the government was serious about speeding up recovery of livelihood of the people affected by last year’s earthquake and urged the National Reconstruction Authority (NRA) to make its performance more visible on the ground.
Likewise, NRA chief executive officer Sushil Gyawali said there was huge potential for employment-creation in the construction industry. "NRA had a target of creating at least 25,000 masons and skilled workers in three months," he said.
Australian ambassador to Nepal Glenn White reiterated that livelihood recovery was as important as reconstruction. "Rebuilding houses is important,” he said, adding that livelihood recovery was more important as it helped families make decisions about their priorities about whether they wanted to build a house or send their children to school or grow a business.
UNDP country director Renaud Meyer, on the occasion, said reconstruction should not only focus on buildings but also rebuilding lives and livelihood. Meyer added that the Rapid Enterprises and Livelihoods Recovery Project (RELRP), supported by the Australian government, had supported 14,000 micro-entrepreneurs to revive their enterprises and livelihood. He added that UNDP’s Community Infrastructure and Livelihoods Recovery Project had supported 20,000 households through the reconstruction of 81 vital community infrastructures like irrigation canals, cooperative buildings, and drinking water and agricultural facilities.
The conference was jointly organised by the Industry Ministry, NRA and UNDP to share the lessons learnt in livelihood recovery following last year’s devastating earthquake. In the sideline of the event, an exhibition of products of micro-entrepreneurs revived after the earthquake was also organised.

Monday, June 20, 2016

Blockade institutionalised ‘black economy’: Experts

Experts said that the five month long blockade not only fueled the black economy and corruption but also institutionalised them.
Speaking at an interaction on ‘Post Disaster Assessment: Blockade 2015-16’ organised jointly by Nepal Economic Forum (NEF) and Alliance for Social Dialogue in Kathmandu today, they also said that the society has accepted black economy and corruption as the government was seen to support the black market activities during the period.
Journalists and political commentator Chandrakishore Jha, who is based in Birgunj, pointed that protection provided by the state to key players of the black market was a reason for the uncontrolled flourishing of the black market. He said the state had been Kathmandu-centric and indifferent to the concerns of the bordering areas, which were exemplified by the fact that during the blockade, getting supplies to Kathmandu was viewed as the priority, ignoring the people along the border towns who were also suffering as a result of the supply shock.
On the social front, he said social relations should be viewed as a key capital in the economy but dissatisfaction in the Tarai-Madhes, which gave rise to the blockade as a by-product, has heightened the discord in social relations.
Likewise, Janakpur-based social researcher and political commentator Surendra Labh said the social acceptance of the black economy exposed the society to dangers of that becoming the dominant norm. He talked about how corrupt attitude is celebrated in our society and our socialization process congratulates people geared toward materialism. Labh also talked about how different categories of people perceived the blockade differently and how it was important to view the blockade as a by-product of the discord brewing in the Tarai-Madhes.
On the occasion, NEF advisory board-member and professor at the South Asian University Mallika Shakya talked about the importance of understanding the difference in perception of the blockade from the capital and the border towns. In the context of the blockade and the black market that emerged during this period, she noted that the corrupt elite had captured and adapted the informal economy’s ways of operation to extract financial gains out of crisis situations. She also stressed on the need to view the blockade ordeal through the lenses of ‘South Asianness’.
The impact of the embargo that continued from September to February was felt across the economy as essential imports were stuck on the Indian side of the border and crippling fuel shortages badly hit the production, distribution and consumption processes of the economy, according to a report 'Post Disaster Assessment: Blockade 2015-16' prepared by the NEF and Alliance for Social Dialogue. "The private sector suffered losses totaling a staggering Rs 202.5 billion ($1.96 billion) – equivalent to almost a quarter of the current fiscal year’s budget – as a result of the blockade," it added.
For more than a year now, the Nepali economy has been gasping for breath as multiple challenges choked the country one after the other. The devastating earthquakes of 2015 claimed close to 9,000 lives and injured more than 22,000 inflicted enormous costs – estimated at $7 billion – on the economy and is expected to push close to 700,000 people below the poverty line.
Just months later, constitution-related protests in the Tarai-Madhesh region which culminated with the border blockade came as another major shock to the economy and the society at large. As the trade blockade continued, with vital supplies to the landlocked country virtually cut-off, the resultant energy crisis made its impact felt across all sectors of the economy.
On one hand, essential imports like medicines and fuel was not allowed to enter the country, and on the other hand, the crippling shortage of fuel adversely affected production, distribution, and consumption processes of the economy.
On the occasion, member of parliament and the chairman of the Parliamentary Development Committee Rabindra Adhikari stressed the importance of trade and transit diversification. He said the country cannot be truly sovereign till the day it diversifies trade and transit and moves away from excessive dependence on a single trading partner for essential commodities. Sharing his experiences of travelling across the postal highway in the Tarai, he identified it as a lifeline for national integration, highlighting that infrastructural connectivity should play a key role for integrating different geographic regions and thereby promoting overall national integration.
The key themes that emerged during the course of the discussions revolved around the need for social transformation in order to prevent corrupt attitudes becoming the new normal, moving toward a self-reliant economy through diversification of trade and transit, and demanding accountability from the government.
The longer term implications of the blockade could be much more complex and adverse, the speakers said, brainstorming in an attempt to trace the blockade’s ramifications and provide a fresh pair of lenses to the discourse.

Friday, June 17, 2016

Nepal profitable investment destination

While investors keep saying that investing in infrastructure in Nepal is challenging, the central bank governor says that the country is profitable to invest in as there aren’t enough and stringent laws and regulations here.
Not only does Nepal lack mega infrastructure projects, it also doesn’t have stringent laws, which gives enough space for investors, central bank governor Dr Chiranjivi Nepal said at a workshop on ‘Infrastructure Financing: Challenges and Opportunities’ organised jointly by the Confederation of Nepalese Industries (CNI) and Hydroelectric Investment and Development Company Ltd (HIDCL) in Kathmandu today.
Even though the reform process slowdown in the recent years has left some roadblocks for investors interested in mega infrastructure projects, there have been some positive initiatives too, he said, citing the example of the formation of Investment Board Nepal (IBN) which has been following every project closely to facilitate them.
“Investors look for five indicators before putting up their money,” the governor said, naming five indicators as political stability, policy consistency, flexible labour policy, tax policy and inflation rate. The formation of IBN has ensured some sort of policy consistency for foreign investors, he said, adding that Nepal was learning by doing and this could prove to be the best opportunity for investors.
IBN chief executive officer (CEO) Radhesh Pant, on the occasion, said that law alone cannot attract investment. “The laws should be there to gain trust from investors, but the government has to ensure that there is some profit for investors to come to invest in Nepal,” he said, adding that along with the implementation of the projects, policies should also go on improving. “But the government’s commitment and fulfillment of those commitments are a must to build trust on the government.”
Pant said the government must join hands with the private sector for the implementation of the projects as the private sector alone cannot complete the land acquisition and compensation process without the government’s participation.
Likewise, Nabil Bank chief executive officer Sashin Joshi also reiterated that without a guarantee of profit, no investor would ever invest anywhere. “Our neighbouring countries have been courting investors with incentives,” he said, asking why the investors should come to Nepal.
Nepal, he said, needed foreign investment as domestic investment was not enough to fund the infrastructure investment gap that the country faces. “Nepal needs $3 billion every year to develop hydropower alone according to the Millennium Challenge Corporation (MCC report,” he said, adding that Nepal needed $7 billion to achieve the double-digit growth which ensures Nepal’s graduation to the developing country status from the current Least Developed Country (LDC) status. “Thus, Nepal needs foreign investment in infrastructure.”
However, there are various challenges in attracting foreign investment in infrastructure.
According to member of the Infrastructure Cell of CNI Ashish Garg, Nepal needs to be in the investment radar with better credit ratings and investment protection. “Nepal also needs to develop a sustainable foreign-exchange management regime apart from simplifying the approval process by delivering a one-desk policy,” he said, adding that an enabling environment, establishment of a dedicated banking system, and building trust between the government and the private sectors are some of the way forward.
Likewise, advocate Gandhi Pandit urged the government to amend the laws to help promote project financing and attract institutional investors to Nepal.
Participants, on the occasion, also dwelt on various legal and procedural problems in project financing and how to simplify them.

Thursday, June 16, 2016

Inflation still in double digits

Despite government's claims of having cracked its whip at price rises, the country's inflation is hovering at double digits.
According to the central bank's macroeconomic update, for the 10th month of the current fiscal year, consumer price inflation stood at 10 percent.
In mid-May, belying general expectations that inflation would follow the trend of continuous moderation seen from its peak of 12.1 per cent in mid-January, inflation stood at double digits, reads Nepal Rastra Bank's (NRB) monthly report published today.
"Despite the improved supply of fuel and other consumable items following the return of normalcy in the southern customs points, the reversal in the inflation trend occurred on account of rise in housing rents and education-related expenses," it says , adding, "Of the overall inflation, non-food and services group inflation of 10.4 per cent exceeded the food and beverage group inflation of 9.6 per cent in mid-May."
Among food and beverage items, the prices of pulses and legumes sub-group and the vegetables sub-group continued to remain at a higher level of 23.4 per cent and 20.1 per cent, respectively. The prices of the clothes and footwear sub-group, the housing and utilities sub-group and the alcoholic drinks sub-group saw increment of 17 per cent, 16.4 per cent and 15.9 per cent, respectively, according to the central bank.
Likewise, the report also revealed that Kathmandu Valley is the most expensive place to live in Nepal, geographically. The valley witnessed relatively higher rates of inflation at 11.5 per cent followed by the hilly region at 11 per cent, the mountain region at 9.1 per cent and the Tarai region at 8.6 per cent in mid-May.
Last year, the Kathmandu Valley, the hilly region and the Tarai region had experienced the inflation rates of 6.8 per cent, 7.7 per cent and 6.9 per cent, respectively, the report added.
Supply constraints due to the lingering impact of the April-May 2015 earthquakes and the obstruction at the southern trade routes also fuelled the inflation, widening the gap between prices in Nepal and India.
Year-over-year consumer price inflation of Nepal in the tenth month of the current fiscal year continued to remain at a higher level of 10 per cent compared to that of India at 5.8 per cent showing inflation wedge of 4.2 per cent, the report reads, adding that a year ago, such inflation in Nepal was 7.1 per cent compared to 5 per cent in India reflecting a narrower inflation wedge of 2.1 per cent only.
India's annual consumer price inflation accelerated to a near two-year high of 5.76 per cent in May, driven by surging prices of food products like pulses and sugar, which could dampen hopes of a rate cut at least during the next monetary policy review in August.
Likewise, the blockade during the Tarai-Madhesh protests also pulled the import and export figures down. According to the central bank, in the 10 months of current fiscal year 2015-16, merchandise exports decreased by 21.7 per cent to Rs 55.60 billion while merchandise imports dropped by 4.6 per cent to Rs 599.36 billion. "Exports to India and China decreased by 33.4 per cent and 35.6 per cent, respectively, whereas exports to other countries increased by 4.1 per cent in mid-May," the report says, adding that imports from China increased by 9.5 per cent whereas imports from India and other countries decreased 7.8 per cent and 4.1 per cent, respectively
Exports through Tribhuvan International Airport (TIA) and Dry Port customs office - Birgunj increased, whereas exports through other customs points decreased, the report says, adding, "On the import side, imports through Birgunj Customs Point decreased, whereas imports through other customs points increased. Likewise, trade has not yet resumed through Tatopani Customs Point."
Nepal's trade deficit also contracted – by 2.4 per cent – to Rs 543.76 billion in mid-May compared to an expansion of 10.1 per cent in mid-May last year.
The report also says that decrease in the number of outflow of the Nepali migrant workers has not hit remittance inflow hard yet. "The workers' remittances inflow grew by 10.2 per cent to Rs 538.87 billion till mid-May compared to a growth of 10 per cent in the previous year," it observed, adding that net transfer receipt increased by 11.8 per cent to Rs 628.07 billion. The number of Nepali workers seeking foreign employment, based on final approval, decreased by 22.2 per cent in the 10th month of the current fiscal year, compared to an increment of 8.9 per cent in the same period of last fiscal year.

Wednesday, June 15, 2016

Drop in remittance will hit economy

If remittance entering the country were to drop by 10 per cent, Nepal’s annual economic growth could drop by up to 3 percentage points compared to baseline forecasts, says a report from the World Bank.
Focusing on ‘Remittances at Risk’, the World Bank report laundhed today highlighted the possibility of near-term risk of a slowdown in remittances. "Over the last 10 years, remittances have increased substantially and they play an important role in Nepal’s economy,” the report reads, "but the economy would be hit, if the remittance inflow were to drop."
Following two massive shocks which have resulted in two years of disappointing growth, economic activity is expected to rebound modestly, growing by 4.7 per cent in fiscal year 2016-17, according to the report that has warned of a third shock – drop in remittance – that could pull the economic growth downward.
"Should a slowdown in remittance occur, appropriate monetary and fiscal policy responses are required as well as enhanced supervision of the financial sector,” the World Bank’s senior country economist for Nepal and lead author of the report, Damir Cosic said.
Following the earthquake in April 2015, the outflow of migrant workers contracted for ten months in a row. In the first nine months of Fiscal Year 2016, the number of migrant workers declined by 25 per cent year over year.
This is the steepest and longest decline since 2009, notes the report. One reason for this is that potential migrant workers chose to stay home to support their families to rebuild homes and livelihoods, the report states, adding that a weaker demand for workers from oil- and commodity-producing countries – for example Gulf Cooperation Countries (GCC) and Malaysia – is likely to have contributed to this decline.
“A potential slowdown in remittance poses a significant near-term risk to Nepal because of its outsized role in the Nepali economy,” reads the twice-yearly Nepal Development Update.
Growth in remittance at a global level contracted in 2015 for the first time since 2009 as a result of a fall in oil prices which affected activity in remittance-sending countries, notes the report. Remittance inflows to South Asia declined as well but Nepal bucked the trend as remittance increased significantly in response to the 2015 earthquakes. However, a prolonged contraction in the departure of migrant workers is an early sign of a potential slowdown in remittance to Nepal.
Meanwhile, remittances have grown to more than 30 percent of the Gross Domestic Product (GDP), making Nepal among the highest remittance-recipient countries in the world, adjusted for size of the economy.
Quoting data from the Nepal Living Standards Survey (NLSS), the report further read that out of a total work force of 14 million, some 4 million Nepalis or 28 per cent of the workforce are working overseas at present.
"The reality is that remittances play a pivotal role in the Nepali economy,” the World Bank’s country manager for Nepal, Takuya Kamata, on the occasion said, adding that remittance is nearly 10 times larger than foreign aid and 2.5 times larger than total exports.
According to the report, the rebound in growth also hinges on stabilisation of the political process, effective mobilisation of post-earthquake rebuilding efforts and the full normalisation of supply of goods.
Nepal suffered devastating earthquakes in April and May of 2015, followed by a blockade along vital transit routes that brought trade and manufacturing to a near standstill between September 2015 and February 2016. “The overall impact of the trade disruptions has been nearly as large as the impact of the earthquakes resulting in the estimated growth rate for current fiscal year 2015-16 to be lowest in 14 years,” adds the report.
The trade disruptions have further affected poverty-reduction efforts which were already hampered by the earthquakes in 2015, the report notes. “Shortage of goods has pushed up prices with inflation inching into double-digit territory affecting welfare with significant impact on the poor in Nepal.”
Despite recovery in economic activity in the forecast period, the report highlights that fiscal and external environments are likely to be less favorable. Fiscal deficit is expected to widen, as reconstruction efforts take full shape.
The government’s expenditure is expected to grow substantially after fiscal year 2015-16 owing to increase in earthquake-related expenditures. Revenues, however, is expected to pick up, but at a slower pace, resulting higher fiscal deficit.

Tuesday, June 14, 2016

Intra-day transaction hits record Rs 2.2 billion

Transaction sailed past the Rs 2-billion mark for the first time in the history of domestic share market today to hit an all-time high of Rs 2.2 billion.
Likewise, insurance companies and banks propelled the stock market not only to record the highest intra-day transaction today at the Nepal Stock Exchange (Nepse) but also pushed Nepse index to a record high of 1,614.15 points, up by 4.56 points or 0.28 per cent from yesterday.
With bullish trend in recent months, the stock market has been observing daily transactions of over Rs 1 billion for the last 20 days.
The stock market analysts attribute high demand for insurance and microfinance stocks in particular coupled with excess liquidity with banks and financial institutions for the upswing in the market.
Of the total trading volume, some 22 per cent or Rs 400 million transaction was recorded pf the promoter shares of Nepal Insurance Company. Likewise, large volumes of shares of Nepal Bangladesh Bank, Rural Microfinance Development Centre, Standard Chartered Bank Nepal and Everest Bank also traded hands today.
Similarly, biggest gainers of today were Bhargav Bikash Bank, Bottlers Nepal (Terai), Vijaya Laghubitta Bittiya Sanstha, Butwal Power Company and ILFCO Microfinance Bittiya Sanstha.
The rush to buy shares of insurance companies and also banks and financial institutions started after the Insurance Board and central bank instructed them to jack up their capital base. The banks have to increase their paid up capital to Rs 8 billion, whereas the Insurance board has asked life insurance companies to increase their capital base to Rs 5 billion from current Rs 500 million and non-life insurance companies to Rs 4 billion from current Rs 250 million.
Likewise, the market capitalisation also reached Rs 1,740 billion today, which is almost 80 per cent of the gross domestic production (GDP) of the country.
The share market trading that used to hover around million rupees per day has lately started to skyrocket because of fully automated share trading that fastened the securities ownership transfer and clearance services, the analysts claim.
The use of dematerialised stocks has enabled investors, who buy shares in bulk, to slice them in smaller portions before selling and profit booking, they said, adding that earlier investors used to buy shares – paper scrips – in bulk, used to pay split charges and wait for almost a month before selling them in small volumes. "With the introduction of dematerialised stocks, investors do not have to wait for long time to sell after splitting them, which has helped raise trading volume and transactions both.

Monday, June 13, 2016

Blind-friendly new Rs 100 denomination banknotes in the market

The central bank has issued new Rs 100 denomination bank notes, in the market from today, with extra security features.
The new Rs 100 denomination banknotes also has a special feature, which allows visually impaired people to recognise them, the central bank said in a press release issued here today. The currency note has a raised black dot, which visually impaired people can feel with their fingers and find out the denomination. "This is the first time that paper money that has been specially designed for the benefit of blind people has been put in circulation,"  it said, adding that the bank notes also has two rhinos on the back – a mother and her calf – while the old Rs 100 note had only one rhino. "
The picture of the rhinos is based on photographs of rhinos found in Chitwan of Nepal and it is intended to spread the message of wildlife conservation.
Likewise, banknote has an image of Mt Everest on the left, a map of Nepal in the middle and an image of the Ashoka pillar with the text 'Lumbini is the birthplace of Lord Buddha', according to the central bank.  There is also a picture of the temple of Mayadevi, mother of Lord Buddha, on the left side of pillar.
With a 2-mm-wide security thread that looks red or green depending on the angle of view, the banknote bears the signature of new central bank governor Dr Chiranjivi Nepal. The 100 denomination banknotes are the first series of bank notes with the signature of new governor after he took the office almost  year ago.
The central bank is also planning to issue banknotes of Rs 1,000, Rs 50, Rs 20 and Rs 500 denomination bank notes. The Rs 1,000 banknotes will have an image of two elephants with other security features.

Blind-friendly new Rs 100 denomination banknotes in the market

The central bank has issued new Rs 100 denomination bank notes in the market from today with extra security features.
The new Rs 100 denomination banknotes also has a special feature, which allows visually impaired people to recognise them, the central bank said in a press release issued here today. The currency note has a raised black dot, which visually impaired people can feel with their fingers and find out the denomination. "This is the first time that paper money that has been specially designed for the benefit of blind people has been put in circulation,"  it said, adding that the bank notes also has two rhinos on the back – a mother and her calf – while the old Rs 100 note had only one rhino. "
The picture of the rhinos is based on photographs of rhinos found in Chitwan of Nepal and it is intended to spread the message of wildlife conservation.
Likewise, banknote has an image of Mt Everest on the left, a map of Nepal in the middle and an image of the Ashoka pillar with the text 'Lumbini is the birthplace of Lord Buddha', according to the central bank.  There is also a picture of the temple of Mayadevi, mother of Lord Buddha, on the left side of pillar.
With a 2-mm-wide security thread that looks red or green depending on the angle of view, the banknote bears the signature of new central bank governor Dr Chiranjivi Nepal. The 100 denomination banknotes are the first series of bank notes with the signature of new governor after he took the office almost  year ago.
The central bank is also planning to issue banknotes of Rs 1,000, Rs 50, Rs 20 and Rs 500 denomination bank notes. The Rs 1,000 banknotes will have an image of two elephants with other security features.

Blind-friendly new Rs 100 denomination banknotes in the market

The central bank has issued new Rs 100 denomination bank notes in the market from today with extra security features.
The new Rs 100 denomination banknotes also has a special feature, which allows visually impaired people to recognise them, the central bank said in a press release issued here today. The currency note has a raised black dot, which visually impaired people can feel with their fingers and find out the denomination. "This is the first time that paper money that has been specially designed for the benefit of blind people has been put in circulation,"  it said, adding that the bank notes also has two rhinos on the back – a mother and her calf – while the old Rs 100 note had only one rhino. "
The picture of the rhinos is based on photographs of rhinos found in Chitwan of Nepal and it is intended to spread the message of wildlife conservation.
Likewise, banknote has an image of Mt Everest on the left, a map of Nepal in the middle and an image of the Ashoka pillar with the text 'Lumbini is the birthplace of Lord Buddha', according to the central bank.  There is also a picture of the temple of Mayadevi, mother of Lord Buddha, on the left side of pillar.
With a 2-mm-wide security thread that looks red or green depending on the angle of view, the banknote bears the signature of new central bank governor Dr Chiranjivi Nepal. The 100 denomination banknotes are the first series of bank notes with the signature of new governor after he took the office almost  year ago.
The central bank is also planning to issue banknotes of Rs 1,000, Rs 50, Rs 20 and Rs 500 denomination bank notes. The Rs 1,000 banknotes will have an image of two elephants with other security features.

Blind-friendly new Rs 100 denomination banknotes in the market

The central bank has issued new Rs 100 denomination bank notes in the market from today with extra security features.
The new Rs 100 denomination banknotes also has a special feature, which allows visually impaired people to recognise them, the central bank said in a press release issued here today. The currency note has a raised black dot, which visually impaired people can feel with their fingers and find out the denomination. "This is the first time that paper money that has been specially designed for the benefit of blind people has been put in circulation,"  it said, adding that the bank notes also has two rhinos on the back – a mother and her calf – while the old Rs 100 note had only one rhino. "
The picture of the rhinos is based on photographs of rhinos found in Chitwan of Nepal and it is intended to spread the message of wildlife conservation.
Likewise, banknote has an image of Mt Everest on the left, a map of Nepal in the middle and an image of the Ashoka pillar with the text 'Lumbini is the birthplace of Lord Buddha', according to the central bank.  There is also a picture of the temple of Mayadevi, mother of Lord Buddha, on the left side of pillar.
With a 2-mm-wide security thread that looks red or green depending on the angle of view, the banknote bears the signature of new central bank governor Dr Chiranjivi Nepal. The 100 denomination banknotes are the first series of bank notes with the signature of new governor after he took the office almost  year ago.
The central bank is also planning to issue banknotes of Rs 1,000, Rs 50, Rs 20 and Rs 500 denomination bank notes. The Rs 1,000 banknotes will have an image of two elephants with other security features.

Sunday, June 12, 2016

Nepse scales new high, transaction also nears Rs 2 billion

Liquidity surplus in the banking system, attraction of rights and bonus shares of bank and financial institutions and insurance companies to raise their paid-up capital, and bullish sentiment of investors pushed the share market today to a new record high with the benchmark index approaching near 1,600 points. Along with continuing its bullish run, the market also posted record intra-day transaction of Rs 1.96 billion.
The Nepal Stock Exchange (Nepse) index jumped by 31.26 points to close at the market at 1,597.96 points due to commercial banks that gained 47.47 points.
All trading groups, except Hydropower, ended on the green zone today.
However, today's growth was led by commercial banks. A surge in the transaction of Nepal Bangladesh Bank shares pushed the commercial bank sub-index 47.47 points higher.
Nepal Bangladesh Bank has proposed issuing 80 per cent rights shares, which boosted the demand for its shares, resulting in the transaction of Rs 355.86 million today.
The share market has been in bullish trend for the past few months also due to the full-fledged implementation of dematerialised form of share trading from January 15.
Last Thursday too, the daily transaction at the stock market had set the record of high single day transaction of Rs 1.89 billion.
The excess liquidity in banking system and less investment opportunity has made the stock market lucrative investment opportunity, according ot the stock market analysts.
They also say that investors are finding it beneficial to invest in the stock market rather than park their hard-earned money in banks and financial institutions that offer average interest rates of around 5.8 percent on fixed deposits, let alone savings accounts that attract the minimum interest rates.
According to former president of Stock Brokers Association of Nepal (SBAN) Anjan Raj Poudyal the banks are offering margin lending at 8 to 9 percent interest rate as the banking system is flush with excess liquidity.
According to central bank, banks and financial institutions have extended a total of Rs 35 billion against share pledges in the first nine months of the current fiscal year, a jump by nearly Rs 11 billion compared to the corresponding period of the last fiscal year 2014-15. They had floated Rs 24 billion in margin lending in first nine months of the last fiscal year.
Till last year, average daily turnover of the stock market used to be around Rs 350 million only. However, the increase in turnover today is also due to bulk trading of promoter shares of some listed companies.

Saturday, June 11, 2016

Finance Minister denies price hike

Finance Minister Bishnu Prasad Poudel has denied reports of increase in inflation rate claiming that price hike was not possible without the endorsement of budget.
"How will the market price increase without the budget being endorsed,” he asked at an interaction programme in Kathmandu today. "This is false."
However, the market price had started looking up a week before as usual due to the budget leakage that the government employees are getting their salary hiked by 25 per cent. With the grade and salary hike, the government employees will pocket some 40 per cent hike in the current salary from the next fiscal year 2016-17, starting from July 16.
The budget leakage has also made the share market swell – propelled by the insurance companies – and it turned true as the fiscal policy a week later announced hosts of insurance programmes that will expand the insurance market and fuel their profit.
Likewise, let alone liquor and cigarette that get dearer every year after the budget, the prices of essential food stuff including rice, pulses and sugar has increased by Rs 10 to Rs 50 per kg, immediately after the budget announcement. Nepal Retailer's Association (NRA) president Pabitra Man Bajracharya accepted that the whole-sellers have increased the prices of the food stuff after the budget.
Unknown to the fact that the market won't wait for the budget to endorsed, the finance minister claimed that the government would not let the inflation rate go beyond 7.5 per cent. However, the inflation rate that has been around the double digit the whole fiscal year seems looking up only, also due to government's distributive and expansionary budget.
Paudel, on the occasion, also claimed that the budget will be fully implemented. "It is very natural that those who are habituated to the political practice of yesterday doubt its implementation,” he said, stressing that his budget will be implemented. But given the track record of all the political parties, which were in power, and bureaucracy, none of the budget in last one decade has been completely implemented, neither has the economic growth been achieved nor the price hike been tamed.
The finance minister also revealed that he would table the budget implementation proposal at the Parliament very soon.
He had announced the expansionary and distributive budget of Rs 1048.92 billion on May 28. "The budget, directed toward implementation of the new Constitution, will achieve the target of 6.5 per cent economic growth in the next fiscal year," he reiterated, adding that the revenue projection and foreign aid – both ambitious – would be achieved.

Friday, June 10, 2016

Security Board halts share trading of Nepal Life

Security Board of Nepal (Sebon) has halted Nepal Life Insurance’s plans Further Public Offering (FPO) temporarily. The board has today directed Nepal Stock Exchange (Nepse) to temporarily halt company’s share trading effective from June 10.
The life insurance company was planning to issue 3.96 million units of FPO. But the board said that the company made public its FPO plans without getting its permission from the board to influence the capital market. "The company has announced its decision to float FPO at a premium rate before getting the permission from Sebon," a press release issued by the board here today read. "The announcement can create price fluctuations, which can put investors at risk."
The Securities Registration and Issue Regulations-2008 requires a company to fulfill a resolution related to the further public issue passed by the company's general meeting too.
"If the price of the proposed issue is to be fixed higher than the face value, the methodology of fixation of price and basis and justification of the premium must be provided by the issuing company," the law also states.
“The company decided on its own, which is against the securities regulations,” according to the spokesperson of the board Niraj Giri.
Transaction of Nepal Life’s shares has been halted until further decision and also to warn other listed companies to refrain from making sensitive announcements on their own, he said, adding that the board is mulling to impose regulations that require companies to take approval from Nepse and the board at the same time to prevent such acts in future. "The board has also sought clarification from the company and the necessary actions will be taken after its gets clarification."
Nepal Life yesterday announced its decision to float 3.96 million units of share at Rs 2,951 per unit. The company plans to decrease promoter shareholding to 70 per cent from current 80 per cent through the Further Public Offering.
A board meeting of the company on Wednesday had decided to float the FPO, subject to approval from the Sebon. Due to the news, the company’s shares were trading at Rs
4,888 – Rs 240.50 more than a day ago – yesterday.

Thursday, June 9, 2016

Nepse hits new all-time high

Propelled by the insurance companies sub group, Nepal Stock Exchange (Nepse) today gained 19.9 points to close the market at fresh all-time high of 1,566.7 points. The insurance sub group jumped by 595.43 points today – pushing the overall Nepse index to the all time high – though the movers and shakers of the share market banking sub group lost 1.04 points.
The share market also recorded its highest ever single-day transaction of Rs 1.89 billion breaking its previous record of Rs 1.44 billion of May 23.
Share market pundits attribute the rise in the transaction to increasing demand and supply of stocks, and also the impact of the budget. The budget announcement of hosts of insurance schemes has been supportive to the insurance companies' market expansion, thereby making huge profits which would ensure better returns for the investors.
On one hand the increasing number of new buyers is getting attracted towards the stock market, whereas on the other, a number of investors are booking profits, boosting the transaction volume. Likewise, the increasing liquidity – that helped margin lending – in the banking sector is also fuelling the share market.
After hitting 1,544.65 points on May 24, the market dropped slightly to 1,483.14 points last Monday on rumours about central bank's plans to introduce a stern policy on margin lending. However, the central bank clarified that it was only the rumour, which helped boost the investors' confidence.
The share market has been in bullish trend since last couple of months due to paperless transaction and also the leakage of budget's hosts of insurance schemes. The market has been witnessing transaction of over Rs 1 billion every day – breaking all past record transaction – since last one week after the budget was leaked. Earlier, the market used to see transaction of around Rs 500 million only. Transaction started increasing after Nepse started demat transaction – or popularly known as paperless transaction of stocks – from January 15.

Tuesday, June 7, 2016

'Economic growth, job creation global issues'

Economic growth, reducing poverty and generating employment are the global issues at present, according to Federation of Nepalese Chambers of Commerce and Industry (FNCCI) vice president Shekhar Golchha.
Addressing the 105th meeting of the International Labour Organsation (ILO) plenary in Geneva today, Golchha said though the promulgation of new constitution in Nepal is a historic achievement, its implementation is the key to economic growth.
Though the devastating earthquakes of 2015 and border blockade has pulled down economic growth, private sector is committed to boost economy and generate employment, he said, adding that inclusive economic growth and creation of better jobs are the common concern and challenges of all. "To address these concerns, growth and expansion of economy is a must. High growth rate and generation of more jobs is possible only through additional investment. It is evident that attracting investment requires suitable policy and environment. Efficiency and competitiveness of enterprises can help them to provide improved working conditions," he added.
A Nepali delegation led by labour minister Deepak Bohara is participating in the ILO meeting in Geneva. Along with Golchha, FNCCI president Pashupati Muraraka and representatives of trade unions are also taking part in the meeting.
"Majority of least developed and developing countries have been suffering from the vicious cycle of low growth, low investment and unemployment. They lack appropriate policies and resources to increase economic growth," Golchha, who chairs the Employers' Council under FNCCI, said. "People's expectations have increased manifolds and it is not for countries like Nepal to respond to their expectations."
Golchha also said achieving social transformation is a complex task. "Besides, it requires sustainable growth of economy and appropriate policy measures to extend the coverage of social protection," he added.
Briefing the meeting about the latest development in Nepal, he also said that Nepal, for some years, has been experiencing the problem of low investment, low growth and low job creation. "Many factors like political instability, poor infrastructures and lack of suitable policy environment are some of the major factors that have been hindering economic development in Nepal," Golchha said, adding that the government has adopted the strategy of employment-led growth. "But due to many reasons, it has not been possible to achieve the goal."
On the occasion, he also highlighted the plight of Nepali migrant workers. "However, the repatriated remittance money into the country has contributed to the growth of economy significantly," he added. "Mobilisation of remitted money in productive sector and re-employment of returnees, now, has become a matter of debate."
Pitching for investment friendly environment, Golchha said formulation of suitable policy and environment are keys to attracting more investment.

Monday, June 6, 2016

Nepal to ask India not to open Integrated Check Post yet

Nepal has started a diplomatic process to request India not to operationalise the Integrated Check Post (ICP) at Raxual on the Indian side as it could increase Nepal's cost of trade, and ‘complicate’ trade between the two countries.
“We wrote a letter on Sunday requesting India to wait for completion of the ICP on the Nepal side,” according to Commerce Ministry officials. The Customs Department, Commerce Ministry and the Supplies Ministry have discussed the implications of operationalisation of the ICP on the Indian side and its impact on Nepal’s trade. “Even the Office of the Prime Minister has been looking into the issue,” the officials added.
The Raxual-Birgunj customs is the key customs point for Nepal, accounting for over 60 per cent of Nepal’s international trade.
The unilateral operation of Indian side of ICP that is aimed at providing all the services required for export-import trade, including customs, immigration, quarantine and banking, through an integrated one window on either side of the border has made the trade more difficult for the Nepali traders.
The operationalisation of the ICP on the Indian side, which is some 13 km from the current customs office, is going to hurt Nepal’s trade, according to traders. They also have expressed serious concern over India starting operations at its new ICP at Raxual.
Claiming that trading through the new ICP may hit trade through the Raxaul-Birgunj customs point until such time as the ICP on the Nepal side is completed, they said, requesting India to wait for the completion of the ICP at the Nepali side. The Indian authorities have, however, already inaugurated the ICP on their side on Friday.
Some 30 per cent work on the ICP on the Nepal side at Sirsiya is yet to be completed. India has taken responsibility for building the ICPs on both sides. The Land Port Authority of India is responsible for operating the Indian ICP.
Birgunj customs, which was blocked for almost five months during the Tarai-Madhes protests, has not only created supply shortages in the country but also encouraged the black economy due to lack of formal channel for bilateral trade.