The government has today endorsed 11 point agreement between employers and major trade unions including 'No Work No Pay' and social security to workers. Meeting of Central Labour Advisory Committee held today under Prime Minister Dr Babu Ram Bhattrai leadership agreed on four points to resolve tension in industrial sector.
PM Bhattrai has been also serving as Minister for labour and Transport Management, who would chair the committee.
Most of the problems in industrial sector related to labour is expected to be solved, said Krishna Hari Puskar Karma joint-spokesperson of the ministry. According to him, the meeting endorsed March 24 agreement between Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and three major trade unions– General Federation of Nepalese Trade Unions (GEFONT), National Trades Union Congress (NTUC) and All Nepal Trade Union Federation (ANTUF).
In the meeting, the government committed to introduce Social Security Act within three months."It is a great achievement for trade unions," Bishnu Rijal, president of GEFONT said, adding that formation of tripartite committee to sort out labour dispute is yet another milestone. "We have agreed to set up a committee of employers, trade unions and the government to solve labour disputes," he said.
The committee that will act as dispute settlement mechanism has been proposed from central level to district level. The meeting also agreed to build a Minimum Wage Board, committed to implement No Work No pay and enforce industrial peace year for next four years.
FNCCI, the employers organisation, welcomed the decision as it has addressed their issues. "Employers are happy and withdrawing the case from Supreme Court," said Pashupati Murarka, president of Employers Council of FNCCI. He also urged the government to strictly implement the agreement.
FNCCI had filed a petition against the government in Supreme Court as the government neglected their March 24 agreement and published Ministry of Labour and Transport Management's April 16 agreement with minor trade unions including ANTUF splinter ones, unilaterally in the government gazette.
There was minor difference in minimum wage in two agreements but the later has no provision of social security, No Work No Pay and four years long no strike deal. The March 24 agreement had fixed Rs 6,100 as minimum wage of workers whereas April 16 agreement increased that to Rs 6,200. The first agreement had Rs 226 as daily wages but the second one has Rs 231.
Meanwhile, the committee has fixed minimum wage of tea garden workers. The committee has increased workers minimum wage by Rs 1,064 and daily wage to Rs 158.
Friday, September 30, 2011
The government has today endorsed 11 point agreement between employers and major trade unions including 'No Work No Pay' and social security to workers. Meeting of Central Labour Advisory Committee held today under Prime Minister Dr Babu Ram Bhattrai leadership agreed on four points to resolve tension in industrial sector.
Thursday, September 29, 2011
PATA’s Strategic Intelligence Centre noted that the growth rate has become more stable following the global economic recovery phase, which started in early 2010 and peaked in June of that year.
Nevertheless, since then, Asia has continued to show healthy expansion. For the first seven months of 2011, international visitor arrivals into Asia/Pacific have grown by five per cent. Within Asia, South Asia is leading the pack growing by 14 per cent, with Southeast Asia up by 12 per cent, Northeast Asia up by four per cent and the Pacific region up by one per cent.
South Asia set the pace with the strongest arrivals growth in July, recording 14 per cent growth and adding almost 90,000 more international visitors to the sub-region’s total compared to July 2010 with India ( up by 10 per cent) grew at a faster rate than in previous months due in part to the lower growth base of July 2010. The Maldives (up by 27 per cent), Nepal (up by 20 per cent) and Sri Lanka ( up by 32 per cent) all enjoyed buoyant growth in foreign arrivals.
"Even during times of economic uncertainty, the Asia/Pacific region continues to perform strongly, reinforcing its image and position as a powerhouse of international travel and tourism," John Koldowski, Director of the Strategic Intelligence Centre said, adding that the source market mix, however, is changing.
"Some of the more traditional origin markets are losing ground to emerging ones. Arrivals from Russia for example have increased by more than 50 per cent so far this year. Numerically, the Russians are now as important as – for example – France and even Germany," he added.
Koldowski said that intra-Asian growth is 'substantial', with Asia generating more than seven million additional arrivals to the Asia/Pacific region during the seven months to July.
Similarly, the positive momentum continued for Southeast Asia in July with the sub-region returning an 11 per cent increase in international visitor arrivals. The growth rate of foreign arrivals into Thailand (up by 19 per cent) returned to a more normal level after three consecutive months of post-crisis peaks, which were largely inflated on the back of comparison periods involving the political turmoil April to June 2010. Strong travel demand within the sub-region generally contributed to double-digit growth for all reporting destinations.
Northeast Asia saw a rebound during July to realise a gain of six per cent for the month after posting slow growth since February this year. China (up by per cent) grew much more slowly than its SARs of Hong Kong (up by 22 per cent) and Macau (up by 18 per cent) during this period.
However, because of its very large arrivals base, the Mainland still managed to welcome more than 260,000 additional visitors during the month compared to July 2010. Japanese outbound increased by five per cent in July, the first positive month of growth since the tsunami in March. The promising expansion supported growth for all reporting Northeast destinations, particularly Chinese Taipei (up by nine per cent) and Korea (RoK) (up by 17 per cent).
Inbound visitors to Japan however, were down by 36 per cent in July.
The Pacific saw a drop in international arrivals of just under three per cent in July.
While this is negative, it is still a slight improvement over the four per cent decline of the previous month. Most Pacific destinations reported year-on-year declines in international arrivals for the month of July.
However, there were some exceptions including New Caledonia (up by 24 per cent), the Cook Islands (up by 13 per cent), Palau (up by 11 per cent), Vanuatu (up by 11 per cent) and Papua New Guinea (up by five per cent).
Nepal Rastra Bank (NRB) will be hosting the SAARC Finance Governors’ Symposium in 2012.
The 26th meeting of the SAARC Finance governors that concluded in Washington this week during the joint meeting of World Bank (WB) and International Monetary Fund (IMF) has decided to hold the next symposium in Nepal.
During the visit — on September 23 to 25 — Nepali team including central bank governor Dr Yubaraj Khatiwada, finance minister Barsha Man Pun and finance secretary Krishna Hari Baskota requested the WB and IMF to reinstate the country offices of both the organisations in Nepal. “The request has been taken positively by the financial organisations quite positively,” according to the central bank.
The delegation also met with WB vice president for South-East Asia to discuss its aid to Nepal along with Nepal’s financial stability. They also met IMF Asia-PAcific chief Anup Singh regarding its aid and technical assistance. IMF’s Fiscal Affairs Department also reviewed the situation of financial sector reform of Nepal and future of technical assistance also.
The WB-IMF meeting discussed issues of achieving balanced growth from the current unbalanced growth trend. Nepal actively took part in the discussion that brain stormed on measures to be incorporated in monetary policies to minimise the impact of rising global prices.
Wednesday, September 28, 2011
The Central Investigation Bureau (CIB) of Nepal Police today nabbed former executive chairman of Nepal Share Market and Finance Yogendra Prasad Shrestha for embezzlement of Rs 2.66 billion, the biggest fraud in the banking history of Nepal.
Shrestha was arrested in Mahendranagar of Kanchanpur, said CIB Director DIG Uprendra Kant Aryal today at a press meet at the CIB office in Kathmandu.
Shrestha (55) of Watu, Kathmandu- 24, was absconding ever since Nepal Police issued arrest warrant against him on banking offence charge at the behest of Nepal Rastra Bank on April 5.
"CIB officers arrested him in downtown Mahendranagar," Aryal said, adding that Shrestha had sanctioned a loan of Rs 1.57 billion to 88 persons without any supporting documents and collateral.
The investigation of Financial Information Unit (FIU) under the central bank and police has revealed that he had embezzled deposits of his clients and used the money in the promoters' share. "Shrestha had misused the deposits to serve his personal gains," said Aryal.
Similarly, Shrestha has sanctioned loans to the promoters of the company voilating the Banking and Financial Institutions Act (Bafia).
According to CIB, he embezzled a total of Rs 2.66 billion, including illegal loan of Rs 1.57 billion, misuse of deposits worth Rs 885.95 million and Rs 204.98 million loans sanctioned to promoters. "The sum of the money he has embezzled is likely to increase, after the final investigation," Aryal added.
Shrestha will also have to pay fine under on the basis of the claimed amount after recovering it and an imprisonment of up to five years.
DIG Aryal also informed that CIB has been investigating four separate cases worth Rs 5.11 billion in connection with banking offences.
Meanwhile, CIB has declared his wife Gita Shrestha (53) and his son Shaurav Shrestha (28) including another promoter fugitive.
During the press meet, Shrestha, however, refused to take responsibility of all the amount. “I may have embezzled some part of the total amount claimed by the CIB and central bank but not the whole," he said, asking the police to investigate on other promoters to find out the truth.
According to Dhangadi correspondent a team of CIB had arrested Shrestha, from New Delhi-based apartment of his sons on Tuesday. A police source in Kanchanpur said that Yogendra was hiding at the rented apartment of his sons in New Delhi. His sons are studying in New Delhi. It is learnt that Indian police had nabbed Shrestha handed him over to CIB in New Delhi on Tuesday.
Kanchanpur Police said that Shrestha, who was brought to Kanchanpur via Gaddacahuki border, has been sent to the capital. Police had put Yogendra on the most wanted list for embezzlement of billions of rupees deposited by people and floating loans without following legal procedure. But with his arrest the public might gain confidence on banks and financial institutions again as lately their confidence on banks and financial institutions have been wanning due to some people like Shrestha.
The government had seized his passport suspecting that he might leave the country. The government had also sought Interpol's help for his arrest.
After his arrest the banks that have lent him interbank lending are also hopeful of getting their amount back. Shrestha had pocketed the interbank borrowing of Rs 200 million from at least two commercial banks – without showing the it in the finance company’s accounts.
Last week, Qatar Airways has also announced the addition of flights to Kathmandu from October 1, due to increased demand.
Gulf Air — Bahrain’s national carrier — as part of its new winter schedule beginning November 1, is increasing its flights to Kathmandu from 12 to 14 per week. According to new schedule it will have two flights daily for more convenient onward connectivity through Bahrain’s efficient hub to Europe and the GCC.
Similarly, Qatar Airways has also increased its flights frequency on Doha-Kathmandu route from October 1. According to the airlines, from next month the airlines will operate four flights a day between Doha and Kathmandu. “It will give a wider choice to passenger from Nepal to travel their final destinations in Europe, North America, South America, Africa and Arabian Gulf countries,” Qatar Airway’s country manager for Nepal Ramdas Shivram, said, adding that the airlines has also brought a very exiting value for money offers to passengers. The offer will be valid for a limited time period, said the Qatar Airways that has bagged World’s Best Airline 2011 award in June is growing on an average of 35 per cent annually.
“Gulf Air’s Kathmandu flight has been increased to 14 flights per week to meet increasing commercial demand on the route,” Gulf Air commercial manager for Nepal Renji Thomas said, adding that it has carried more than 82,000 passengers to and from Kathmandu at a consistent 80 per cent seat load factor. But the airlines is hopeful of an increase in demand in future.
Gulf will initially operate an Airbus A320 to Nepal replacing it with a larger A330 during the peak season.
Tuesday, September 27, 2011
The report 'Women, Business and the Law 2012: Removing Barriers to Economic Inclusion' revealed that while 36 economies reduced legal differences between men and women, 103 out of 141 economies studied still impose legal differences on the basis of gender in at least one of the report’s key indicators. The report also identified 41 law and regulatory reforms enacted between June 2009 and March 2011 that could enhance women’s economic opportunities.
Globally, women represent 49.6 per cent of the population but only 40.8 per cent of the workforce in the formal sector. Legal differences between men and women may explain this gap. The report shows that economies with greater legal differentiation between men and women have, on average, lower female participation in the formal labour force.
"Competitiveness and productivity have much to do with the efficient allocation of resources, including human resources," Global Indicators and Analysis director at the World Bank Group Augusto Lopez-Claros, said, adding that the economy suffers when half of the world’s population is prevented from fully participating.
"It is certainly no surprise that the world’s most competitive economies are those where the opportunity gap between women and men is the narrowest," she added.
The report measured such things as a woman’s ability to sign a contract, travel abroad, manage property, and interact with public authorities and the private sector. In all economies, married women face more legal differentiations than unmarried women.
In 23 economies, married women cannot legally choose where to live, and in 29 they cannot be legally recognised as head of household. Every region includes economies with unequal rules for men and women, although the extent of the inequality varies widely.
On an average, high-income economies have fewer differences than middle- and low-income economies. The Middle East and North Africa have the most legal differences between men and women, followed by South Asia and Africa.
In Africa, a notable exception is Kenya, which leads globally with the most gender-parity reforms during the past two years. Regionally, the most improvements in gender parity occurred in Latin America and the Caribbean, Europe and Central Asia.
The project measures how regulations and institutions differentiate between women and men in ways that may affect women’s incentives or capacity to work or to set up and run a business. Women, Business and the Law objectively measures such legal differentiations on the basis of gender in 141 economies around the world, covering six areas: accessing institutions, using property, getting a job, providing incentives to work, building credit, and going to court. While the project provides a clear picture of gender gaps based on legal differences in each economy, it is a simple snapshot measuring only legal differentiation.
It does not capture the full extent of the gender gap, nor does it indicate the relative importance of each aspect covered, it said.
Monday, September 26, 2011
According to deputy governor of the central bank Maha Prasad Adhikari, the regional face-to-face meeting last week was encouraging, but the agency has shown concern on delay in complying with commitments that Nepal had made.
“Nepal has been able to extend the time-frame on several aspects," he said, adding that the meet approved Nepal’s request on extending time frame of strengthening of Financial Information Unit (FIU) till 2013 June, apart time extension for Department of Money Laundering Investigation’s up gradation.
The meeting accepted Nepal’s request to extend the time frame in line with the five year strategy that is currently in the cabinet, he added.
However, it could not extend the time frame for Mutual Legal Assistance Bill and Extradition Bill that should have been passed by 2010, according to Nepal’s commitment. But the parliament has ratified two keys UN Conventions — despite political transition to check the flow of dirty money according to Nepal’s commitment — International Convention for the Suppression of the Financing of Terrorism-1999 and UN Convention Against Transnational Organised Crime in June.
“Nepal will comply with the remaining key commitments too,” said Adhikari, who took part in the meeting along with Department of Money Laundering Investigation director general Khum Raj Punjali, FIU under central bank and Finance Ministry officials.
Slow progress, operational level weakness, weakness in detailed report and private sector's opposition on Anti Money Laundering (AML) might have made the committee suspicious on Nepal's intention but the country is committed on fighting against the inflow of dirty money. But the private sector has reservations on the Nepali translation of the name of Anti Money Laundering Act only not with the Act itself.
The final decision will be taken by the next FATF Plenary and Working Group Meetings scheduled for October 24-28 in Paris, France and last week's fact finding committee that broadly discussed on July's report will forward Nepal's progress report to the FATF plenary.
Nepal will take part as one of the Asia/Pacific Group on Money Laundering (APG) members in the FATF Plenary in Paris in October as it is not an independent member of FATF.
The Paris plenary will discuss on consideration of policy issues relating to the current review of the FATF standards; matters relevant to the fourth round of evaluations (commencing after 2012); and international cooperation issues with respect to a number of countries — including some APG members — and determining the way forward for jurisdictions that have strategic and other deficiencies in their domestic AML/CFT frameworks.
In July last the 14th annual meeting of Asia/Pacific Group on Money Laundering (APG) has approved Nepal’s mutual evaluation report in implementing international standards to combat money laundering and the financing of terrorism.
Of the total 40 plus nine compliance of Financial Action Task Force (FATF), Nepal still has fulfilled four of the recommendations.Although estimating the amount of worldwide money laundering is problematic, the International Monetary Fund (IMF) has estimated that between two per cent and five per cent of global GDP per year is generated annually as the proceeds of crime — in US funds that is an amount in the trillions of dollars — the largest sources of which are illicit drug manufacturing and trafficking, arms and people smuggling, corruption, fraud, extortion, kidnapping and theft.
Saturday, September 24, 2011
Like South Asia, Nepal also needs to address the top three constraints electricity, corruption and political instability to expand business, the report said, adding that since the demand for labour is derived from businesses, it is important to address constraints of electricity shortages, corruption and political instability in some parts of the region.
The country is reeling over long hours of load shedding that has not only increased the cost of production but also blocked the expansion of the business.
The report 'More and Better Jobs in South Asia' attributed lack of electricity the key hurdle and outlined the electricity reform agenda to tackle the issue.
It said that the reform agenda is not only about investment.
South Asian countries do significantly worse than comparators on electricity and power cuts and on labor legislation. They for the most part do not report corruption as being a more severe constraint than countries at similar income levels, although some do pay significantly higher in bribes.
The majority of workers in the region are still engaged in agriculture. Self-employment is the predominant type of employment and a high share of wage employment is casual labour. Regular wage or salaried workers have the highest wages and lowest poverty rates; the self employed have higher poverty rates; and casual labour, especially agricultural casual labour is associated with the lowest wages and the highest poverty rates, it added.
Total employment in South Asia — excluding Afghanistan and Bhutan — has grown from 473 million in 2000 to 568 million in 2010, creating an average of just under 800,000 new jobs per month.
The quality of jobs — measured by growth in real wages or falling poverty—has improved for all segments in the labor force, but at a rate substantially less than that seen in East Asia during its years of 'miracle' growth.
Labour regulations rank high in Nepal, India and Sri Lanka, the report said.
The picture of relatively low employment rates in South Asia reflects persistently low female employment rates in all countries, except Bhutan and Nepal. "Except for Nepal and to a lesser extent Bhutan, South Asian countries have among the lowest female labour participation rates in the world," the report said, adding that the lowest female participation rates are in the largest countries like Pakistan (22 per cent), Bangladesh (31 per cent), and India (30 per cent).
The demographic window of opportunity is expected to close around 2040 for all countries except Sri Lanka where it closed in 2005 and Afghanistan where it will stay open beyond 2040. The majority of workers in the region are still engaged in agriculture.
Friday, September 23, 2011
The region will be the largest contributor to the global workforce over the next two decades, the report released today said, adding that more and better jobs are needed to sustain growth and reduce poverty.
The report, 'More and Better Jobs in South Asia', the region — Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka — will need to add between one and 1.2 million additional jobs every month for the next twenty years, equivalent to about 40 per cent of the increase in the global labour force.
Reforms will have to be accelerated, if the region is going to meet the challenge of providing better jobs for them. "The key asset to South Asia is its people. South Asia has a young population and the second lowest female participation rate in the labour force," it added.
"The demographic transition will result in more than 350 million people to enter the working age population over the next two decades,” World Bank South Asia vice president Isabel Guerrero, said, adding that creating jobs for them will contribute to growth, equity, and peace in the region.
South Asia created nearly 800,000 jobs per month between 2000 and 2010. However, despite growth, the region is still home to the largest number of the world’s poor — a half billion people. Since labour is the primary asset of the poor, having more and better jobs is the key employment challenge facing the region. "The number of additions to the labour market over the next few decades will result in a 25 per cent to 50 per cent increase over the historical average,” co-author of the report Pablo Gottret said, adding that going forward the region faces an enormous employment challenge, but its demography can help if countries choose to reform.
Education attainment remains low and more education facilitates labour mobility to more productive employment, from rural agriculture to rural-based industry and service jobs and from urban casual work to urban-based regular wage and salaried industry and service jobs.
"It’s not only the quantity of jobs but the quality of the jobs being created in the region that is relevant,” chief economist for the World Bank’s South Asia Region Kalpana Kochhar, said, adding that there has not been much change in the composition of employment, that is between casual labourers, the self-employed and regular and salaried wage earners, but there has been an increase in real wages and poverty reduction within these categories.
However, the share of wage employment and high-end self-employment are stagnant.Poor nutrition is yet one of the reasons in lower productivity of the labour force. "Despite significant progress in recent years, the contrast between increasing demand for higher levels of education and the educational attainment of the labour force could not be starker," co-author of the report, Reema Nayar, said, adding that education reform is a key.
Thursday, September 22, 2011
He has also vowed to boost private sector’s confidence and create conducive environment for investment. But his words do not match the ground reality. The trade union affiliated to his own party UCPN-Maoist has been creating troubles that made the investors more insecure than ever. Due to lack of investment security, investors' confidence is eroding and there has been no new investment in the country in the last one year.
The global indices —Economic Freedom of the World and Global Competitive Index — both reflects the country’s poor investment climate.
Nepal has slipped eight positions down to be ranked at 129th among the 141 economies in this year’s Economic Freedom of the World report from last year’s 121st position due to its failure in ensuring the economic freedom. Nepal continued to be one of the least free countries in the world in case of economic freedom. Nepal continued to degrade in all the five measured areas of economic freedom; size of government, access to sound money, freedom to trade internationally and Regulation of Credit, Labour, and Business and Legal structure and security of property rights.
The Constituent Assembly that is drafting the Constitution has to ensure economic freedom in its preface as the countries that are economically free out-perform non-free nations in indicators of well being. The constitution should ensure freedom of personal choice, voluntary exchange, freedom to compete, and security of private property, if the leaders want Nepal to be a prosperous country.
Ensuring economic freedom can help reduce poverty, increase literacy rate and life expectancy and above all per capital income and propel the growth.
Similarly, Global Competitive Report 2011-12 by World Economic Forum has ranked Nepal at 125th position among 142 economies. Nepal still falls under factor driven country category that needs to focus on institutions, infrastructure, macroeconomic environment and health and primary education as the government's attitude towards market, market integration to reduce cost play key role in overall competitiveness.
Nepal is fast losing its competitive edge not only due to labour-management dispute fuelled by political interest and energy crisis but also due to instable government and policies. The private sector cannot invest at the time, when the government cannot ensure the stable policy that could instill the confidence and only the government spending is not enough to boost the economic growth.
Thus, the private sector has pinned its hope on the Prime Minister but the Prime Minister’s party itself is a stumbling block on the road to prosperity.
In such confusion, the Prime Minister should bring a Common Minimum agenda in consultation with all the political parties and private sector, and discipline his own party cadres and militant trade union. Only the political consensus on the economic agenda can rescue this country that has lost hope on anyone and everyone.
He must be clear that without foreign as well as domestic investment by the private sector, by merely distributing Rs 200,000 under his pet Self-Employment Programme from the government coffer, he cannot generate employment to almost 400,000 youth that enter the job market every year.
He should take leaf from Deng Xiaoping’s policy how he turned China into an economic powerhouse by ensuring the economic freedom in his communist country.In 1978, Deng visited Bangkok, Kuala Lumpur and Singapore, and met Prime Minister Lee Kuan Yew, who advised Deng to open up and institute reforms. Impressed by Lee Kuan Yew, Deng sent tens of thousands of Chinese to Singapore to learn about Singapore's success to help China develop. After the Third Plenum of the 11th Central Committee Congress of the Communist Party of China in December 1978, Deng took over the reins of power and started the economic reforms in capitalist type while maintaining the Communist-style rhetoric.
The commune system was gradually dismantled and the peasants began to have more freedom to manage the land they cultivate and sell their products on the market. He opened China's economy to foreigners and invited Boeing and Coca-Cola to China.
True to his famous phrase ‘do not care if the cat is black or white, what matters is it catches mice or not’, spoken in 1961 that had caused so much criticism, Deng Xiaoping’s four modernisations — economy, agriculture, scientific and technological development and national defence — ambitious plan of opening and liberalisation of the economy has put China in the global map making it a second largest economy after the United States.
India ranks at 94th, and communist China ensuring economic freedom ranks at 92nd position in the Economic Freedom of the World report, but how long will it take UCPN-Maoist to come out of its own ideological dogma?
During a staff meeting on August 10 almost all the staff on duty led by five workers walked off the job without any warning protesting the appointment of the evening manager by the management. There were still customers waiting to be served and they could not finish their meal. The situation escalated when the restaurant management was almost ready to go home at around l0 pm when one worker attacked my HHR manager," according to Annamaria Forgione, managing director of Fire and Ice Fire that first opened its doors in January 1995. "The others joined in, two people got hurt. It is almost impossible to continue to run the restaurant with the pressure of constant bullying."
The militant trade unionism supported by political parties and weak law and order situation hurt the investors' confidence recently.
The management sought government help in solving the dispute to reopen the restaurant. The restaurant is providing employment for 71 staff in total including cooks, waiters, barmen, cleaners, guards, store keepers, office employees, and HHR manager.
Wednesday, September 21, 2011
But Dr Bhattarai addressing a session themed 'Sustainable Energy for All: Water, Food and Energy Security' at the Roundtable 5 of the UN Private Sector Forum 2011 in New York yesterday, assured that Nepal is on track to achieve a number of its MDG targets despite the structural constraints.
"The government has taken several policy initiatives and made interventions, while working together with the local communities to bring about a change in their situation, aware of the constraints and challenges," he said, adding that the adverse effects of climate change that have caused significant decline in crop yields and aggravated the food situation in Nepal further compounding our vulnerabilities.
The Prime Minister expressed the absence of amenities like water, access to sufficient, safe and nutrient food along with access to modern energy services, poverty and hunger remain as major challenges in Nepal.
He called the attention to Nepal's water, food and energy insecurity attributing low investment, both domestic and international in an integrated manner as the reason. "We need both financial and technical assistance in the area of water resource management, agricultural development and energy generation to for the effective utilisation of existing resources," he added, calling for a higher level of support and collaboration of the international community including investment from the private sector, in improving and promoting clean and easy access to water and sanitation, hydropower generation, agricultural production, promotion of alternative energy, exchange of scientific and technological research.
The Premier also committed to improve the productivity of agricultural sector, accelerate efforts to attain water, food and energy security and fight against hunger and poverty.
Meanwhile, the heads of the US and UK government aid programmes have recognised that efforts to reduce maternal mortality in Nepal offer potentially 'game changing' lessons in the fight against international poverty.
At a high-profile event yesterday during the UN General Assembly in New York, Administrator of USAID Dr Rajiv Shah and UK secretary of State for International Development Andrew Mitchell, highlighted the innovative policies and programmes to improve reproductive and maternal health in Nepal as bringing about a significant step toward achieving the UN’s Millennium Development Goals (MDGs).
The event – MDG Countdown: Successes and Innovations – examined the successes and the potential for expansion in other countries.
Nepal’s achievements to date stem from the constitutional recognition of health as citizens’ rights, scale-up of effective reproductive and maternal health services, and innovative policies to remove financial barriers to utilize them. Secretary of Ministry of Health and Population Dr Sudha Sharma presented Nepal’s case at the MDG Countdown event.
Mitchell, said that the efforts are making a real difference toward reducing poverty. "We want to hold it up to the world, so others can learn from these successes, 'he said, adding that it demonstrates that development buys results – it shows that through innovations we can deliver inspirational change to people’s lives.
The MDGs consist of internationally agreed targets to reduce global poverty by 2015.
Tuesday, September 20, 2011
Nepal has slipped eight positions down to be ranked at 129th among the 141 economies with a score of 5.50 in this year’s Economic Freedom of the World report released here today. Last year, Nepal was at 121st rank with a score of 5.54.
Over the last one decade economic freedom in Nepal has steadily regressed to 5.50 this year from 5.75 in 2000. Nepal continues to be one of the least free countries in the world in case of economic freedom, according to the report.
"The countries that are economically free out-perform non-free nations in indicators of well being," the report said, adding that Nepal continues to degrade in all the five measured areas of economic freedom; size of government, access to sound money, freedom to trade internationally and Regulation of Credit, Labour, and Business and legal structure and security of property rights.
The Economic Freedom of the World Report uses 42 different measures to create an index ranking countries around the world based on policies that encourage economic freedom. The cornerstones of economic freedom are personal choice, voluntary exchange, freedom to compete, and security of private property.
"Nepal has to ensure economic freedom in the Constitution to be a prosperous country," constitutional law expert Dr Bhimarjun Acharya, said, adding that right to property, right to claim compensation and security of investment should be ensured by the Constitution. "The current Constitution lacks economic freedom as it has dangerous clause that empowers the government to confiscate property of any individuals without giving compensation," he added.
Due to lack of investment security, investors' confidence is eroding and there has been no new investment in the country in the last one year.
"Without political settlement the country cannot improve its investment climate," said Prof Dr Bishwambher Pyakurel. "But such reports have to be taken cautiously," he said, adding that the report does not reflect the ground reality.
Agreed Dr Chiranjivi Nepal. "The reality and score in the report does not match," he said, adding that Nepal has scored good marks in Regulation of Credit, Labour and Business but in reality labour dispute is key hurdle in the country.
However, the countries that adopted liberal regime have progressed in economic freedom," Nepal said, adding that only the open market can make a country prosperous.
Among the five indicators, according to the report, Nepal's score has improved in Legal structures and security of property rights to 3.9 from 3.51; Freedom to trade internationally also improved from 5 to 5.40 but score in Size of government has lowered from 6.20 to 6.10; Access to sound money lowered from 6.36 to 6.10 and Regulation of credit, labour and business also lowered from 6.16 to 6.
This year’s publication ranks 141 nations representing 95 per cent of the world’s population for 2009, the most recent year for which data is available. The report also updates data in earlier reports in instances where data have been revised.
It shows that individuals living in countries with high levels of economic freedom enjoy higher levels of prosperity, greater individual freedoms, and longer life spans. The report also contains new research showing the impact of economic freedom on the rates of unemployment and homicide like increases in economic freedom do appear to be associated with decrease in homicide and unemployment rates.
The Report also shows that countries with more economic freedom have substantially higher per-capita incomes, higher growth rates, life expectancy is about 20 years longer, and people living in countries with more economic freedom report more life satisfaction.With fewer regulations, taxes, and tariffs, economic freedom reduces the degree of corruption.
Hong Kong offers the highest level of economic freedom worldwide, with a score of 9.01 out of 10 followed by Singapore (8.68), New Zealand (8.20), Switzerland (8.03), Australia (7.98), Canada (7.81), Chile (7.77), the United Kingdom (7.71), Mauritius (7.67), and the United States (7.60).
Zimbabwe maintains the lowest level of economic freedom with Myanmar, Venezuela, Angola, and Democratic Republic of Congo at the bottom five nations.Economic Freedom of the World report uses 42 different measures to create an index ranking countries around the world based on policies that encourage economic freedom. The cornerstones of economic freedom are personal choice, voluntary exchange, freedom to compete, and security of private property.
The annual peer-reviewed Economic Freedom of the world report is produced by the Fraser Institute — Canada’s leading public policy think-tank — in cooperation with independent institutes in 80 nations and territories including Samriddhi, The Prosperity Foundation from Nepal.
The survey is an indicator that attempts to measure the degree to which the policies and institutions of countries are supportive of economic freedom. The indicator has been used in peer-reviewed studies some of which have found a range of beneficial effects of more economic freedom. Economic Freedom of the World index has been more widely used than any other measure of economic freedom, because of its coverage of a longer time period.
The report also revealed that overall levels of economic freedom decreased around the globe. This year’s report shows that the average economic freedom score fell to 6.64 in 2009, the lowest in nearly three decades, from 6.67 in 2008.
South Asian rakings (score)
India — 94 (6.40)
Bangladesh — 103 (6.17)
Sri Lanka — 107 (6.12)
Pakistan — 114 (6.03)
Nepal — 129 (5.50)
Top 10 countries with score
1. Hong Kong (9.01)
2. Singapore (8.68)
3. New Zealand (8.20)
4. Switerland (8.03)
5. Australia (7.98)
6. Canada (7.81)
7. Chile (7.77)
8. United Kingdom (7.71)
9. Mauritius (7.67)
10. United States (7.60)
Bottom 10 countries with score
141. Zimbabwe (4.08)
140. Myanmar (4.16)
139. Venezuela (4.28)
138. Angola (4.76)
137. Democratic Republic of Congo (5.04)
136. Central African Republic (4.88)
135. Guinea-Bissau (5.03)
134. Republic of Congo (5.04)
133. Burundi (5.12)
132. Chad (5.32)
Monday, September 19, 2011
After Prime Minister Baburam Bhattarai, who chose Nepal-assembled Mustang Max, Finance Minister Barsha Man Pun too asked chief secretary Madhav Prasad Ghimire today to sell the Toyota Prado — that he is currently using — and get him a vehicle that costs not more than Rs 3 million. Pun’s decision today comes in line with the Austerity Regulation-2068 that the government introduced today.
The Austerity Regulation has explicitly mentioned the categories of vehicles the government officials can have at their disposal. According to the Regulation, a first class officer can ride a 1200cc vehicle that costs up to Rs 2 million, government officials of special class and above can have a 1400cc vehicle of up to Rs 3 million and district-level projects can buy a 2000cc vehicle, the cost of which could go up to Rs 4 million.
With the Prime Minister and Finance Minister, both from the same party UCPN-Maoist, strict on cost-cutting measures, other ministers, who have always drawn flak for their ostentatious choice of vehicles, are under moral pressure to follow suit.
Though, it might seem a publicity stunt and could be difficult to monitor and implement the new regulation, riding Mustang Max is a symbol of national economic thought, according to Dr Bhattarai. "It’s a vision of national economic development by boosting the national industries," he added.
The Regulation also demands slashing of some facilities, including fuel benefits, that have been hugely used or abused by ministers and government officials. The government officials now cannot ride official vehicles on public holidays, according to the Regulation, which authorises traffic police to take any vehicle flouting the rule under their control. A prior written permission will be required to drive a government vehicle on a public holiday.
“The vehicles ministers’ ride should justify average Nepalis’ per capita income,” said Finance Minister Pun.
The respective departments heads have been asked to implement the Regulation, evaluate it every two months and report to the Office of the Prime Minister. The government is also planning to auction the unused vehicles that are on Singha Durbar premises within six months.
The Regulation has spelt out many cuts in spendings like on foreign trips, allowances, medical claims, field trips, office maintenance, appointments of new staff, subsidy, shares and investment on public enterprises, and stationary and newspapers.
Though, the regulation has tried to encourage domestic products by making it mandatory to buy Nepali products even if it is 15 per cent expensive compared to imported, the measure was brought by earlier finance ministers too but failed to implement.
Timely budget has helped the government raise revenue on line with its target.
According to finance secretary Krishna Hari Baskota the government has been able to mobilise Rs 30 billion revenue in the first two months of the current fiscal year 2011-12. "The initioal estimation is that the government has been able to mobilise Rs 12.25 billion in VAT, Rs 6.25 billion in customs, Rs 4.50 billion in excise, Rs 4 billion in income tax, Rs 550 million in vehicle registration, Rs 770 in land registration and Rs 2 bil;lion under non-tax revenue," he said, adding that the total — Rs 30 billion — is 20 per cent increment compared to the last fiscal year's same period, when the government had been able to mobilise Rs 25 billion.
VAT — Rs 12.25 billion
Customs — Rs 6.25 billion
Excise — Rs 4.50 billion
Income tax — Rs 4 billion
Non-tax — Rs 2 billion
Land Registration — Rs 0.77 billion
Vehicle Registration — Rs 0.55 billion
(Source: Finance Ministry)
Calling on countries to work to shrink that gap, the flagship report of the World Bank said gender equality is important in its own right as well as being 'smart economics'.
"Countries that create better opportunities and conditions for women and girls can raise productivity, improve outcomes for children, make institutions more representative, and advance development prospects for all,” it said, adding that in Nepal as many as 14 per cent married women are largely silent on how their earned money is spent. "But they are more actively involved in the decision making recently," according the World Bank that revealed that women's greater public voice not only benefits women and children but also men. "Giving women bigger say in managing forests in Nepal has significantly improved conservation outcomes too," it added.
"The disparities between boys and girls in primary education have almost closed over the past 25 years, and at the secondary level, the gaps are shrinking rapidly," it said, lauding Nepal's efforts in closing the gender gap.
"In Nepal, young women are offered three months of occupational skill training followed by a mandatory skill test and three-month job placement focusing on identifying nonstereotypical trades attractive to women.
The World Bank said the worst disparity was in the mortality rate relative to men in developing countries. “Globally, excess female mortality after birth and ‘missing’ girls at birth account for an estimated 3.9 million women each year in low- and middle-income countries.
"The 187-nation development lender has provided $65 billion in the past five years to support girls’ education, women’s health, and women’s access to credit, land, agricultural services, jobs and infrastructure.
The World Bank proposed four areas for action: addressing the excessive mortality rates and gender gaps in education, closing earning and productivity gaps, giving women greater voice within households and societies, and curbing the transmission of gender inequality from generation to generation.
The report detailed how girls now outnumber boys in secondary schools in 45 countries, and women outnumber men in universities in 60 countries. Progress also has been made in life expectancy, where women in poor countries outlive men and live 20 years longer than they did in 1960.
But countries stand to gain by addressing the remaining disparities, the Bank argued. Eliminating barriers that block women from working in certain occupations would reduce the productivity gap between male and female workers and boost output per worker by three to 25 per cent across a range of countries.
Sunday, September 18, 2011
The industry established in the year 1961 by late Maniharsha Jyoti, one of the pioneers in the industrialisation of Nepal, has over the years grown from strength to strength to become an example of industrialisation by the private sector, said chairman of the Jyoti Group Padma Jyoti.
Established with the slogan 'Himal builds beautiful and strong homes,' Himal Iron and Steel has been able to be the backbone of a strong Nepal providing around 450 direct jobs and thousands indirect jobs.
At a time, when there was no infrastructure, it was a distant dream of establishing an industry and that too of iron that was of very little use in the construction unlike the present time, he recalled the days at Parwanipur of Parsa district in 1961.
"Parwanipur was covered by dense shrubs and when Himal Iron was established steel rods were not even commonly used in Nepal," Jyoti, who is also a CA member said, adding, "With the course of time, Himal Iron has remarkably developed and progressed but has been consistent in the quality. "Installed with the Japanese machine in the very beginning, the industry at present has state-of-art equipments and machines."
Established with the authorised capital of Rs 2.9 million, the industry has at present Rs 800 million worth share investment apart from loans.
Himal Iron — the first iron and steel industry of Nepal — used to produce 8,000 tonnes during the early years but its capacity has been increased to more than 70,000 tonnes annually at present, said one of the oldest staff and the member of the board of director Lok Ratna Tuladhar. "It has a strong network of 108 dealers all over the country," he added.
Steel rods produced by Himal Iron — the first industry of Jyoti Group that was into trading business before Himal Iron — have been used to construct all kinds of small to big buildings, bridges and projects of Nepal at present, according to vice-chairman of Jyoti Group Dr Roop Jyoti.
From the Karnali Bridge — which is considered a role model for the use of best technology in South Asia — to the buildings of Nepal Telecom, Engineering College Pulchowk, Sunkoshi Hydropower House, and Kulekhani Hydropower Project, Soaltee Hotel, Everest Hotel, to Indian Embassy and Lincoln School Ravibhawan therr are various infrastructure projects that have used Himal Steel that has around 25 per cent market share in retail at present. "It produces 19 categories of iron rods," said the chairman of the Jyoti Group that was founded by the visionary Maniharsha Jyoti in the 1940s after his return from India, where he used to mine the ores and supply to the Steel Authority of India for sometime.
"Influenced by Mahamta Gandhi, Maniharsha Jyoti returned to the country and started his own trading house prior to establishing Himal Iron with a couple of friends," he added.
Friday, September 16, 2011
Welcoming the impressive progress the country has made in social development indicators, notwithstanding the challenging political environment, the World Bank’s Board of Directors that discussed today on strategy paper proposed the new strategy focusing on development programmes in line with the government's Three Year Interim Plan.
"Many of the Millennium Development Goals' (MDGs) indicators have improved and poverty levels are declining,” observes the Interim Strategy Note (ISN). "Inclusion and representation received increased policy attention but capacity building of marginalised communities remains challenging."
Given the transitional nature of the country, with a new constitution being drafted and elections to follow, the World Bank Group has prepared an Interim Strategy Note for fiscal years 2012-2013. "The interim strategy sets out some basic parameters of the World Bank Group programme but still retains the flexibility to deal with the birth of a new republic,” it noted.
In Nepal, the World Bank Group includes the International Development Association (IDA), the concessionary lending arm and the International Finance Corporation (IFC), the private sector arm.
Two more World Bank Group organisations, the Multilateral Investment Guarantee Agency (MIGA) and the World Bank Institute (WBI) also provide investment insurance and capacity building services respectively.
"IDA’s assistance programme will help improve food security, reduce malnutrition, especially among pregnant women, improve the immunisation coverage of children and enhance the access to and the quality of education," World Bank country director for Nepal and Bangladesh Ellen Goldstein, said, adding that it will also assist in removing key bottlenecks to higher economic growth and more jobs through investments in roads and bridges, and the energy sector.
"IFC programme, which is complementary and closely coordinated, aims at creating a positive impact on private sector growth and poverty reduction through investments in infrastructure, projects that promote inclusive and clean growth, and advisory interventions that enhance trade and support building a better business environment for private sector," said IFC Director for South Asia Thomas Davenport.
The strategy reflects considerable continuity, building on programmes with successful track records that are adapted to local conditions. It also emphasises greater selectivity, focusing on areas considered vital to Nepal’s development and complementing programmes supported by other development partners.
Supporting government's overarching goal to build a peaceful, prosperous and just Nepal, the strategy is organised around three ‘pillars’ that emerged during consultations within the Bank Group and with the Government, donor partners and key stakeholders.
The first pillar intends to enhance connectivity and productivity for growth. The second focuses on reducing vulnerabilities and improving resilience. The third pillar concentrates on promoting access to better quality services.
Governance, accountability, gender equality and social inclusion are themes that run across all three pillars. Within each of these pillars, the strategy identifies specific areas where it can make a difference.
The IDA includes roads, food security and livelihood vulnerability, education, health, urban services, and disaster management. IFC includes improving access to finance and investment climate, trade facilitation, lending to Small and Medium Enterprises (SMEs) and trade finance facilities for local banks.
IDA and IFC expect to work together on power development, agriculture and climate change. Over the next two years Nepal can potentially benefit from an allocation of about $400 million from the IDA, subject to performance and economic management. These funds could finance four to five new operations per year.
The IFC can potentially commit $25-30 million on average annually, depending on the availability of viable investments and improvements in the business climate.
The first quarter of 2011 saw the volume of world exports exceed pre-crisis levels. In spite of the slow recovery and the current debt crisis in the Eurozone, the multilateral trading system continues to function and WTO plays a vital role in monitoring national trade policies and resolving trade disputes.
Dr Supachai Panitchpakdi, secretary-general of UNCTAD and Pascal Lamy, director-general of the World Trade Organisation (WTO) addressed the annual Trade and Development Board, UNCTAD’s governing body, to discuss how trade and agricultural policies are at the core of development issues. He stressed the need to look at the financial crisis as a lever for engaging member States and to align domestic policies so that developing countries can log into the international trading system. He said that in 2010 there had been “a robust recovery fuelled by dynamic growth in emerging economies”, but now the international community was facing a growth crisis.
“The multilateral trading system (MTS) works as an insurance policy against protectionism,” noted Dr Supachai. It is precisely because of the fragile global economic recovery that the MTS faces greater challenges. Cooperation towards achieving the Millennium Development Goal (MDGs) and the targets set at the fourth United Nations Conference on the Least Developed Countries (LDCs) – with agriculture at its centre – are fundamental. The evolution of the international trading system depends on taking stock of the “role of trade in the global agricultural sector”, stated Lamy, citing food security as a main concern.
Lamy remarked that “the predictions, at the start of the 2008 crisis, that protectionist measures would increase, were fortunately wrong”. Although overall protectionism has been contained, this positive trend seems to have lost momentum in the past six months, and that is a matter of concern. Reiterating that a lot more needs to be done “towards designing a more coherent international agricultural trade policy framework”, WTO’s director-general added that domestic policies and their implications on natural resources management, property rights, energy, transportation, and distribution network credit systems are the key elements of a successful international agricultural trade policy.
Dr Nabarro, special representative of the United Nations secretary-general on Food Security and Nutrition, said that a shared trade policy vision was crucial in order to withstand future food security shocks and create a framework to protect vulnerable populations from the vagaries of the commodities markets.
The three keynote speakers stressed the importance of growth and social safety nets to prevent rising protectionism and to improve the food security situation of the millions of undernourished people. In the interactive debate, UNCTAD member states confirmed the importance of agriculture and agricultural trade rules for development and discussed approaches for the future of the multilateral trading system against the background of the impasse in the Doha Round.
"There were still customers waiting to be served and they could not finish their meal," according to Annamaria Forgione, managing director of Fire and Ice Fire that first opened its doors in January 1995.
"The situation escalated when we were almost ready to go home at around l0 pm when one worker attacked my HHR manager," Forgione said, adding that the others joined in, two people got hurt. It is almost impossible for me to continue to run the restaurant with the pressure of constant bullying.
"It was yet another situation where the labour-management dispute has led to the closure of company after the Surya Nepal garments unit.According to the central bank data, the country has received Rs 10.05 billion of foreign direct investment (FDI) commitment in the fiscal year 2010-11, against Rs 9.10 billion a fiscal year ago. "Department of Industry approved 209 joint venture projects with a FDI commitment of Rs 10.05 billion in 2010-11 against some 171 joint venture projects with a total amount of Rs 9.1 billion a fiscal year ago, the central bank said, adding that of 209 registered projects, 88 are service-related, 47 tourism, 39 manufacturing, 23 agriculture, six energy, five mines and one is construction-related projects.
But the militant trade unionism and weak law and order situation could hurt the investors' confidence.
"Unless the government and the trade unions are prepared to stand by the law and order, business people will think twice before investing in Nepal," Forgione added.
The restaurant was providing employment for 71 staff in total including cooks, waiters, barmen, cleaners, guards, store keepers, office employees, and HHR manager.
"My staff have been out of work for almost one and a half months. I do not have the power to bring them back to work, as, I believe they are afraid of repercussions from the Central Union Committee and continued bullying from the five workers — four cooks and a barman — who feel they can act as owners. The Central Trade Union Committee is controlling the entire incident and exerting total control over my staff," added Forgione.
"As a foreigner working in Nepal, I do not have any choice but follow the law of the land but discipline to run the company is essential," added Forgione.
Thursday, September 15, 2011
But Nepal’s gross domestic product (GDP) growth slowed somewhat in fiscal year 2011 (ended in July 2011) to 3.5 per cent from the earlier forecast of 3.8 per cent, according to the Asian Development Outlook Update 2011.
A weather induced rebound in agriculture could not fully offset the deceleration in nonfarm activities and high international food and oil prices kept inflation near double digits, said the flagship publication of the Asian Development Bank published on Wednesday.
Competition from non bank financial institutions has siphoned off deposits, exacerbating liquidity constraints on lending by banks, it said, adding that four-month delay in budget also hit revenue and capital spending, undermining already weak economic conditions.
The external position strengthened modestly, as import growth gradually decelerated and remittance growth stabilised at around 12 per cent. The overall current account, however, posted a small — but wider than forecast — deficit with exports staying weak.
In the fiscal year 2012, the GDP growth will likely edge back up — to reach the ADO 2011 forecast — with the marginal improvement coming fromagriculture and services.
Given a favourable monsoon, agricultural output is expected to grow faster than fiscal year 2011’s four per cent, according to the report. "For services, some slackness is expected to tighten in fiscal year 2012, reflecting Nepal Rastra Bank’s more accommodative monetary stance, a pickup in remittance inflows, robust tourist arrivals and the timely budget.
"Industry, however, is likely to remain unchanged, as power outages, sporadic fuel shortages, and poor labour relations are likely to persist.Continuing inflation among key trading partners, high international oil prices and upward adjustments in domestic oil prices, and a generous hike in civil servants’ salaries will exert upward pressure in fiscal year 2012, thereby raising the forecast, despite expectations of a solid food crop, the Asian Development Outlook Update 2011 revealed.
Remittance, the bulwark of Nepal’s external position, is expected to grow, as it did even during the turmoil in the Middle East earlier in 2011 benefitting the current account to move to a small surplus, even as the trade deficit remains wide.
"Similarly, growth in South Asia is also slowing this year as monetary authorities move to combat still high levels of inflation, the report said, adding that the South Asian GDP is expected to expand by 7.2 per cent, with the inflation forecast marked up to 9.1 per cent. "Next year growth should pick up to 7.7 per cent, led by India, after higher interest rates crimped consumer spending and investment in 2011."
Wednesday, September 14, 2011
However, the government brought a 12-point Immediate Relief Package-2068 on September 9 that has programmes that will add financial liabilities of over Rs 10 billion to the government.
“The Relief Package announced by the Prime Minister Dr Baburam Bhattarai last week has budgetary implications as it has added liabilities to the government," former finance minister and Constituent Assembly (CA) member Dr Ram Sharan Mahat told The Himalayan Times today.
Any programmes that will add financial liabilities to the government has to go through the Parliament as it needs Parliament's sanction, he added.
The government has promised to provide 60 per cent subsidy on interest rates on the loan of Rs 200,000 for Self-Employment programme.
Though Self Employment programme that has targeted to create employment for 50,000 persons has raised hopes of the unemployed, it has also brought complications too. The government will have extra burden of Rs 10 billion and there is no resources to support it which will create financial imbalance.
The relief package that was announced escaping the Parliament will create financial anarchy, according to economist Dr Chiranjivi Nepal. The financial institutions could find themselves at the receiving end as loans without collateral at subsidised interest rate without proper loan recovery mechanism could hurt their financial health.
There is also chances of resources misuse at the cost of development expenses, he suspected, adding that government's increase expenses will hit the development activities hurting the capital formation.
"The package also seems to be like Supplementary budget, though it has been named Relief Package," he said, adding that to escape the Parliament that is still discussing the budget, the government termed it as Relief package.
The relief package includes guaranteeing the transitional management, good-governance and corruption control, subsidy in price and easy supply of goods, security provision, and reforms in public service delivery. It has also included banking service, microfinance and taxpayer service, agriculture and rural service, load shedding, drinking water and infrastructure, employment and labour relations, Karnali region and remote areas, social security and development.
The gross domestic product (GDP) is expected to expand by 7.2 per cent, with the inflation forecast marked up to 9.1 per cent. Next year growth should pick up to 7.7 per cent, led by India, after higher interest rates crimped consumer spending and investment in 2011, the report said.
The Asian Development Bank (ADB) has cut its 2011 and 2012 growth forecasts for developing Asia amid ongoing worries about weak external demand from its key trading partners.
It has also trimmed its full year forecast to 7.5 per cent from 7.8 per cent seen in April. The 2012 projection is also lowered slightly to 7.5 per cent from 7.7 per cent previously.
Asian Development Outlook and Asian Development Outlook Update are ADB’s flagship economic reports analysing economic conditions and prospects in Asia and the Pacific, and are issued in April and September, respectively.
The slowdown in demand from the US and Europe continues to cast a cloud over the region, with export growth easing substantially in the second quarter of 2011 in leading economies, including the People’s Republic of China (PRC).
"At the same time, strong domestic consumption and expanding intraregional trade are helping to underpin still solid growth levels,” said Changyong Rhee, ADB’s Chief Economist. "Since the onset of the global recovery, the growth in exports to the PRC from several Asian economies has been stronger than their exports to the rest of the world."
The share of intraregional exports among the largest economies in the region has increased from 42 per cent in 2007 to 47 per cent in the first half of 2011, the report noted.
Accelerating price pressures remain a threat to many economies, with the inflation rate for developing Asia expected to average 5.8 per cent this year, up from an April projection of 5.3 per cent. The rate should cool in 2012 to 4.6 per cent as commodity prices recede but central banks will still need to keep a close watch and may need to take remedial action.
Capital continues to flow into the region, although the pace has eased in recent months, and remains at manageable levels. However policy makers should be prepared to act in the event of any upsurge in capital volatility once the US and European debt markets settle and advanced economies pick up again.
The report notes that many economies in the region are well placed to cope with soft global economic conditions for a while, provided the major industrial economies do not fall back into recession.
"Ample fiscal space, even after the recent spate of fiscal stimulus measures, and large foreign reserves provide a buffer against further downside risks,” Rhee said.In the longer term, the region must press forward with structural reforms that encourage domestic-led, inclusive growth, as demand from advanced countries is likely to remain subdued.
East Asia remains the key economic driver for developing Asia with expected growth of 8.1 per cent this year, although more moderate activity in the PRC has seen the forecast trimmed from the April estimate of 8.4 per cent.
Next year, a further easing of growth in the PRC will see overall growth for the five economies dip further to eight per cent.
Tuesday, September 13, 2011
The domestic private airlines is all set to start the flights to Banaras starting from March 1, 2012. "Buddha Air will be flying to Banaras four times a week — on Sundays, Tuesdays, Thursdays and Saturdays," according to the airlines that currently operates to nine destinations inside Nepal from the capital Kathmandu and one international flight to city of Lucknow in India.
With its fleet of nine aircrafts including Beechcrafts and ATRs Buddha Air is determined to extend its network to more Indian cities in future, it said, adding that after 13 years in domestic sky, the airlines started its first international flight from Kathmandu to Paro, Bhutan, in August 2010.
The airline has suspended its flights to Bhutan since February due to drop in passengers. In January 2011, the airliner started the operation of flights to Indian city of Lucknow. The airlines operates three flights a week to Lucknow.Earlier, Necon Air, Cosmic Air and Air Nepal used to fly to Indian cities and abroad but all these airlines failed to continue the international flights but Buddha Air has been spreading its wings slowly but steadily.
Currently, after the national flag carrier Nepal Airlines Corporation, Buddha Air is the only airlines that is flying to an international destination.
Buddha is also planning to introduce flights to other Indian cities like Guwahati, Kolkata, Patna, Banaras, Gorakhpur and Deharadun soon, said the airlines.
Saturday, September 10, 2011
Global foreign direct investment (FDI) has not yet bounced back to pre-crisis levels, though some regions show better recovery than others. The reason is not financing constraints, but perceived risks and regulatory uncertainty in a fragile world economy.
The World Investment Report 2011 revealed that, barring any economic shocks, FDI flows will recover to pre-crisis levels over the next two years. The challenge for the development community is to make this anticipated investment have greater impact on our efforts to achieve the Millennium Development Goals (MDGs).
In 2010 – for the first time – developing economies absorbed close to half of global FDI inflows. They also generated record levels of FDI outflows, much of it directed to other countries in the South. This further demonstrates the growing importance of developing economies to the world economy, and of South-South cooperation and investment for sustainable development.
Increasingly, transnational corporations are engaging with developing and transition economies through a broadening array of production and investment models, such as contract manufacturing and farming, service outsourcing, franchising and licensing. These relatively new phenomena present opportunities for developing and transition economies to deepen their integration into the rapidly evolving global economy, to strengthen the potential of their home-grown productive capacity, and to improve their international competitiveness.
Unlocking the full potential of these new developments will depend on wise policymaking and institution building by governments and international organisations. Entrepreneurs and businesses in developing and transition economies need frameworks in which they can benefit fully from integrated international production and trade. I commend this report, with its wealth of research and analysis, to policymakers and businesses pursuing development success in a fast-changing world.
Global foreign direct investment (FDI) inflows rose 5 per cent to $1.24 trillion in 2010, UNCTAD´s annual investment survey reports. The study says, however, that FDI flows at the end of the year were still some 15 per cent below their pre-crisis average and nearly 37 per cent below their peak in 2007. Overall, investment continues to lag behind recoveries in global industrial output and world trade, which are already back to their pre-crisis levels.
The World Investment Report 2011 (WIR11), subtitled "Non-equity modes of international production and development", was released today.
UNCTAD predicts in this report that the recovery of FDI flows will continue in 2011 and will reach a total of some $1.4 to $1.6 trillion, thus returning to the pre-crisis average. Thereafter, flows are forecast to rise to $1.7 trillion in 2012 and $1.9 trillion in 2013. The record level of cash holdings, low rates of debt financing and rising stock market valuations of transnational corporations (TNCs) should encourage them to expand overseas, the report says. On the recipients´ side, ongoing corporate and industrial restructuring, privatisations resulting from fiscal rebalancing efforts and unwinding of state support programmes, and the growth of emerging economies should create new investment opportunities.
However, the post-crisis business environment is still beset by uncertainties. Risk factors such as the unpredictability of global economic governance, a possible widespread sovereign debt crisis, and fiscal and financial sector imbalances in some developed countries, as well as rising inflation and signs of overheating in major emerging market economies, may yet derail the FDI recovery.
In 2010, the rise of emerging economies as new powerhouses of FDI became more apparent. Developing countries and transition economies absorbed more than half of global FDI inflows for the first time. As international production and, more recently, the weight of global consumption shift towards developing and transition economies, both efficiency-seeking and market-seeking projects in those economies are on the increase. Half of the top 20 host economies for FDI in 2010 were developing and transition economies. Their outward FDI also rose sharply in 2010, climbing by 21 per cent. These economies now account for 29 per cent of global FDI outflows. Six developing and transition economies were among the top 20 investors.
Despite the emergence of certain developing countries, FDI flows continued to decline in some of the poorest regions of the world. Flows to the Africa and South Asia, as well as to least developed countries, landlocked developing countries and small island developing States fell in 2010.
In terms of sectoral patterns, FDI in services continued its downward path in 2010. All the main service industries (business services, finance, utilities, and transport and communications) saw FDI flows fall, though at different speeds. FDI flows to the financial industry experienced one of the sharpest declines. The share of foreign investment channelled to manufacturing increased, meanwhile, and accounted for almost half of all FDI projects - cross-border mergers and acquisitions and greenfield projects, which are types of manufacturing new to a country or region. Within manufacturing, flows fell in business-cycle-sensitive industries such as metals and electronics. The chemical industry, including pharmaceuticals, remained resilient through the crisis, while industries such as food, beverages and tobacco, textile and garments, and automobiles, recovered in 2010. FDI channelled to extractive industries, a sector relatively unaffected by the crisis, declined, despite the growing demand for raw materials and energy resources.
The importance of TNCs to the global economy can be gauged from the indicators of international production, which showed gains in 2010. UNCTAD estimates that sales and value added of foreign affiliates around the world reached $33 trillion and $7 trillion, respectively, in 2010. Their exports amounted to more than $6 trillion, about one third of total global exports. Worldwide TNC operations, both at home and abroad, generated value added of approximately $16 trillion in 2010 - about a quarter of world gross domestic product.
Among the 100 largest non-financial TNCs, 19 are state-owned. Today, there are at least 650 state-owned TNCs with an estimated 8,500 foreign affiliates. While relatively small in number -less than 1 per cent of all TNCs - they undertook FDI estimated at $146 billion in 2010, accounting for about 11 per cent of the global flows. Developing and transition economies are home to the majority of these firms (56 per cent), although developed countries maintain a significant number of state-owned TNCs. In contrast to the widely held perception that state-owned TNCs are largely concentrated in the primary sector (8.6 per cent), they are present in diverse industries, particularly in the services sector.
From 2003 through 2010, FDI projects by state-owned TNCs made up an average of 32 per cent of total outflows from developing countries. The number of megadeals for which developing country state-owned TNCs have been responsible in the past five years is indicative of their importance. Four of six FDI projects with a value of more than $10 billion (one merger and acquisition and three greenfield investment projects) were undertaken by developing country state-owned TNCs. While there are no official statistics on the FDI stock controlled by state-owned TNCs, a rough estimate suggests that their share of global outward stock was no less than six per cent in 2010.
The fifty-eighth session of the Trade and Development Board is scheduled to be held on September 12-23, at the Palais des Nations in Geneva.
Friday, September 9, 2011
"Nepal will record a negative growth of one per cent in 2011 and 1.1 per cent in 2012," said the Asia-Pacific Trade and Investment Report, launched here today.
However, export has been dwindling in the last few years. "Exports sharply deteriorated in 2010, with an estimated negative growth of 17 per cent value based on constant prices, while imports increased more than 13 per cent," the report said, adding that the country is ranked seventh — among the ten countries — in South and South-West Asia in terms of trade in goods and services, whereas Nepal accounts for some 0.2 per cent of South and South-West Asia's merchandise exports and 0.8 per cent of imports, while its share of South and South-West Asia's commercial services is about 0.58 per cent for imports and less than 0.5 per cent for exports.
But in the greater Asia-Pacific region, Nepal represents less than 0.01 per cent of the region's exports of goods and services.
"Abject poverty, corruption, instability and poor governance have taken toll on the country's exports trade, said Prof Dr Madan Kumar Dahal during the launching of the report.
Nepal has experienced a persistent merchandise trade deficit throughout the past decade, the report revealed, adding that the country ended 2010 with a deficit of $4.55 billion, which was about 31 per cent of the total GDP. The share of exports to GDP stood at 6.4 per cent in 2009.Similarly, Nepal's trade in highly dependent on intraregional markets. Based on the 2009 data, some 78 per cent of the exports went to countries of Asia-Pacific, where 83 per cent of the imports came from the region.Nepal has only two regional trade agreements but they cover as much as 57 per cent of the total trade.
"The government failed in prioritising the trade, despite a huge markets in the neighbourhood — India and China," said joint secretary of the Ministry of Commerce and Supplies Chandra Ghimire.According to the report, the country witnessed an inflow of $41 million in Foreign Direct Investment (FDI) from 2005 to 2009 that accounts for only 0.02 per cent of the South and South-West Asia's FDI inflow.
The report highlighted that the country's trade cost is very high relative to the world in an average. "The high rate of inflation may adversely affect private consumption, increase production costs and hurt the export competitiveness of the country, the report cautioned, adding that Nepal is ranked 147th — of the 155 countries — based on the value of the World Bank's Logistics Performance Index with a score of 2.20, said the report that aims to deepen understanding of regional trends and developments in trade and investment; emerging issues in trade, investment and trade facilitation policies; and impacts of these policies on countries’ abilities to meet the challenges of achieving inclusive and sustainable development.
With its theme of 'Post-crisis trade and investment opportunities', this year’s Asia-Pacific Trade and Investment report identifies challenges and opportunities for trade and investment in the region. It also concluded that with strengthened regional cooperation and the right policies, the region will be able to continue its strong trade-and investment-led growth.
The report identifies areas of opportunity in trade and investment for regional economies such as intraregional trade and investment, trade in services and trade and investment in climate-smart goods and technologies. It offers three key sets of policy actions to turn those opportunities into reality. One is through measures and strategies aimed at reducing trade costs within the region as well as between the region and the rest of the world. While trade facilitation has become almost a household term, there are still many areas where trade facilitation policies have not been effective. The report focuses on these recurrent problems and spells out concrete actions for Asia-Pacific economies to consider.
Secondly, since these and other policies are aimed at enabling firms to do business more easily, the report also explores the conditions necessary for SMEs to connect not only with one another but also to regional and global value chains in order to enhance exports. Finally, the report posits that the increasing number of regional trade agreements and the dynamic growth of trade among Asia-Pacific economies are not causally correlated and provides some examples why that might be the case.
The report offers concrete policy responses at the national and regional levels for improving the governance of the noodle bowl of overlapping preferential trade agreements.
It has been grounded in Hong Kong since Tuesday after an unwelcomed guest was found in Hong Kong.
"The aircraft landed at the TIA at seven this evening," said deputy managing director and spokesperson of the national flag carrier Raju Bahadur KC. "It will fly to Kuala Lumpur at 11.30 pm."The aircraft Boeing 757 left Hong Kong today afternoon after finally getting rid of the mouse which made a surprise appearance at the cockpit of the aircraft in Hong Kong.
The Kathmandu bound flight also has some passengers, according to the national flag carrier. Hong Kong Aircraft Engineering Corporation (Haeco) after hours of search operation finally trapped the mouse on board today afternoon.
According to NAC, due to flight cancellation the corporation incurred a loss of over Rs 20 million in revenues as it had to cancel eight flights to Kuala Lumpur, New Delhi, Hong Kong and Doha/Dubai in the last five days.
Currently the NAC is flying only one Boeing as the other one is in Israel since August 28 for its regular C check and will start its flight after September 18.
A mouse was spotted by an air hostess in the aircraft on Monday while it was preparing to fly to Bangkok.
Thursday, September 8, 2011
“Today, Hong Kong Aircraft Engineering Corporation (Haeco) that has been looking after the aircraft in Hong Kong did fogging to trap the mouse,” deputy managing director of the corporation Raju Bahadur KC, said, adding that the mouse, however, could not be trapped.
They will again try tomorrow first by fogging and if it does not work by using pesticides,” he added.
Fogging is a procedure that creates fog like situation inside the air tight aircraft to trap any living beings.
The ailing national carrier has incurred Rs 20 million revenue loss due to the mouse in the last four days.
Though NAC resumed its flight to Kuala Lumpur on September 5 after getting clearance, another mouse appeared in the cockpit, while it was in Hongkong.
“Before we resumed our flights Monday night we had confirmed a total security check up of the plane,” he said, adding that on Tuesday, however, another mouse appeared in the cockpit while the flight was ready for its regular flight from Hong Kong, where it is under the surveillance of Hong Kong Aircraft Engineering Corporation (Haeco).
“We will not fly the aircraft until we confirm the security of the passengers as safety is our priority,” KC said, adding that due to flight cancellation, the corporation is bearing a loss of over Rs 8 million every day.
The flight to Bangkok was cancelled on Sunday immediately after the air hostess spotted a mouse in the aircraft. The 9am flight to Bangkok on Monday had 127 passengers who were later taken by Thai Airways to Bangkok whereas after total confirmation and security check-up NAC resumed its flight to Kuala Lumpur at 11:30pm with 190 passengers.
The national flag carrier presently has only two aircraft with it. Among the two, one is in Israel since August 28 for its regular C check and will start its flight after September 18.
According to Nepal Airlines Corporation, NAC is not the only airlines in which a mouse was spotted but there are many such incidents in the international market of airlines.
The political transition led instable government and bureaucracy fuelled the unethical business practices exposing not only the common people to threat but also the genuine businessmen and bleeding the government coffer blue.
"In such condition the government machinery must be active," said president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI) — the umbrella organisation of private sector — Suraj Vaidya, who has been lobbying for the good business practice.
Though, it is oblivious that business is done to make profit, the recent raids of businesses and arrests tell different stories.
It is the story of greed to become rich overnight during the transition phase when the law enforcement agencies could not concentrate on law and order situation. Some 'businessmen' are on the money making spree taking the advantage of the current transition.
According to Milton Friedman, business is not bound by any ethics other than abiding by the law. Businesses have the obligation to make a profit within the framework of the legal system nothing more. But the current trend in the country is fearlessness of law and challenging it exposing the people's lives to danger and hurting the business climate of the country.
There is no doubt that the duty of the businessmen is to make as much money as possible, while being responsible to the society. But the greed of profit-maximisation has non-economic concerns like neither can it helps in capital formation not generates employment.
The business bodies like Federation of Nepalese Chambers of Commerce and Industry and Nepal Chambers of Commerce (NCC) must focus on business ethics to protect the genuine business people, otherwise the public perception of businessmen will deteriorate and common people put all the businessmen in one basket saying they are all 'frauds'.
"We are ready to cooperate with the government as the unhealthy practice will hurt the genuine businessmen," Nepal Chambers of Commerce (NCC) president said, adding that there could not be any level playing field, when one businessman is paying tax and the other is not, which will hit the revenue.
Vaidya agreed that the government must punish the guilty not only to protect its revenue but also the genuine entrepreneurs. Last fiscal year, the government failed to meet its revenue target by Rs 16 billion due to its inefficiency in cracking down on such practices.
The government must be strict not only to save the people from being cheated but also to save economy from deviating to informalisation.
If the condition could not be improved, it will be like what chairman of Beed Investment Sujeev Shakya tweeted, “People are getting afraid to look at the mirror after discussions on business ethics have begun....so many people with so many skeletons.”
Wednesday, September 7, 2011
According to the Global Competitive Report 2011-12 released today by World Economic Forum globally, the country has improved in macroeconomic environment and health, though its needs to have a lots of improvements in institutions and infrastructures — the two key pillars of the index among the 12 pillars based upon which the score is calculated.
"However, Nepal still falls under factor driven country category that needs to focus on first four pillars — institutions, infrastructure, macroeconomic environment and health and primary education," said national coordinator of the WEF survey team in Nepal Prof Ramesh Chitrakar.
Under the first pillar — institutions — government's attitude towards market also plays key role and under second pillar — infrastructure — market integration to reduce cost to the market is key, which has pulled Nepal’s overall score.
"The importance of pillar and focus depends on the stage of the country," he said, adding that the per capita income and mineral exports decide the category.
There are 37 economies like Nepal that fall under the factor driven category that have their per capita income below $2,000. The economies that have between $3,000 and $8,999 per capita income fall under efficiency driven category which has 28 countries and the economies that have over $17,000 per capita income fall under the innovative driven category that has 35 countries.
Nepal's GDP stands at $15.8 billion with $562 per capita income, according to the report.
The report has identified government instability, inefficient government bureaucracy, policy instability, corruption and inadequate supply of infrastructure as five most problematic factors for doing business, which was similar to last year’s report.
The Global Competitiveness Report’s competitiveness ranking is based on the Global Competitiveness Index (GCI), developed for the World Economic Forum by Sala-i-Martin and introduced in 2004.
The GCI comprises 12 pillars — institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labour market efficiency, financial market development, technological readiness, market size, business sophistication and innovation — of competitiveness that together provide a comprehensive picture of a country’s competitiveness landscape.
The rankings are calculated from both publicly available data and the Executive Opinion Survey — a comprehensive annual survey conducted by the World Economic Forum with its network of Partner Institutes. "In Nepal, (Centre for Economic Development and Administration (CEDA) is the partner that has been releasing the report since 2006.
This year, over 14,000 business leaders were polled in a record 142 economies. In Nepal some 103 small (with less than 20 employees), medium (between 20 and 50 employees) and large (with over 50 employees) industries were polled for the survey that is designed to capture a broad range of factors affecting an economy’s business climate.
As usual Switzerland still leads the world in competitiveness because of innovation and labour market efficiency, whereas Singapore came second and Sweden third. The United States ranked fifth, falling for the third year in a row. The United States has good universities, is strong in research and development and has a big economy and a flexible workforce, the report said, adding that the business community, however, continues to be critical toward public and private institutions.
The South Asian ranking
Sri Lanka — 52
India — 56
Bangladesh — 108
Pakistan — 118
Nepal — 125
Monday, September 5, 2011
Nepal Airlines Corporation (NAC) today cancelled its flight to Bangkok after a mouse was spotted on its flight.
"The flight was cancelled immediately after the air hostess spotted a mouse in the plane,” said deputy managing director of the corporation Raju Bahadur KC. A mouse jumped out of the cupboard while the air hostess was preparing for the cutleries.
"The 9:00 am flight to Bangkok today had 127 passengers who were later taken by Thai airways to Bangkok," KC added.
"The plane is being well examined by our engineers and we are hopeful to resume our flights after 11:30 pm today,” he said, adding that the airlines has 190 passengers for the Kuala Lumpur flight scheduled for 11:30 pm, though he said that the NAC will not take any more flights till the engineers confirms of total security. "We cannot compromise with the security and safety of our passengers,” he added.
NAC currently owns only two plans but operating only one as the other aircraft is under comprehensive check-up in Israel. NAC had sent one of its two Boeings — 9N-ACA — for C check on August 28.
This time the aircraft will take about twenty days time unlike one or two months, he said, adding that the cost of C-check has also been decreased to $1.6 million instead of usual cost between $1.8 million to $2.5 million.
According to KC, the plane will be back on September 18 after its C-Check completion and start operation immediately after its regular examination.
At present NAC operates six international destinations; New Delhi in India, Bangkok, Hong Kong, and Kuala Lumpur in South East/Far East Asia and Dubai and Doha in the Middle East.
Direct flights to and from Dubai resumed from June 17, 2002 and Kuala Lumpur flight started from March 31, 2003. NAC flies to more than 25 destinations inside the country.
Currently some two dozen international airlines fly to Nepal but the ailing national flag carrier flies to only limited destinations due to lack of aircraft and regular political bickering that has hit the airlines financials hard.
Due to lack of aircraft of national flag carrier, tourists visiting Nepal have to pay higher air fare and it has also made the country an expensive destination compared to other countries.