Though the number and amount of listed bonds are increasing in the secondary market, they have not witnessed any trading due to lack of incentives from the government. "The government needs to give some incentives," said Dr Manohar Krishna Shrestha.
Without any attractive features, the bonds are losing their lustre. "The govenrment should provide tax exemption on the interest like it used to on the 16-year development bonds back in 1995," he said adding that high interest and tax exemption on the interest could re-ignite the interest of investors.
"The investors could also be given a convertible option," Shrestha added.
There are a total of 13 listed government bonds worth Rs 151,500,000,000 that are 1,51,500,000-units -- apart from corporate bonds -- in the secondary market. The first-ever government bond was issued by the British government in 1693 to raise money to fund a war against France. It was in the form of a tontine
In finance -- a bond is a debt -- where the authorised issuer like the government or a corporate house owes the holders a debt, and depending on the terms of the bond, is obliged to pay interest and repay the principal at a later date, termed maturity.Bonds can be issued by public authorities, credit institutions and companies in the primary market. Corporate houses issue bonds to raise money in order to expand business. The term is usually applied to longer-term debt instruments, generally with a maturity date falling at least a year after the issue date.
Apart from 13 government bonds, Nepal Electricity Authority (1,500,000-units), Himalayan Bank (500,000-units), Kumari Bank (400,000-units), Nepal Investment Bank Ltd (250,000-units), Nabil Bank (300,000-units), Laxmi Bank (350,000-units) and Siddhartha Bank (400,000-units) have also listed their bonds at Nepal Stock Exchange (Nepse).
But the investors are less interested in the bonds though these are similar to stocks. "Bonds and stocks are both securities but the major difference between the two is that stockholders have an equity stake in the company whereas bondholders have a creditor stake in the company," he said adding that another difference is that bonds usually have a defined term or maturity, after which the bond is redeemed while stocks may be outstanding indefinitely.
"The other cause for non-attraction of bonds is lack of instant liquidity," Shrestha said. "Though they can be used as collateral like shares there are more hassles than incentives."
He also blamed the lack of institutional investors in the domestic market as another cause for investors not being attracted to bonds though these are safer investment instruments than shares. "In other countries, bonds are bought and traded mostly by institutional investors like pension funds and mutual funds," he added.
The listed bonds and years
2006-07 -- Rs 650 million
2007-08 -- Rs 1725 million
2008-09 -- Rs 5335 million
Wednesday, September 30, 2009
NPA becomes FESPA member
Nepal Printers' Association (NPA) became the member of Federation of European Screenprinters Associations (FESPA) -- the organiser of the world's leading screenprinting and digital imaging exhibitions.
FESPA has extended its global reach with the addition of two more Asian associate members as it welcomed Sri Lanka Association of Printers and Nepal Printers' Association.
As associate members of FESPA, Nepal Printers' Association will now benefit from a wide range of educational resources, training and best-practice development tools as well as participate in a growing number of international projects and events. FESPA will benefit by forging even stronger links with the Asia-Pacific region, which as a whole is an increasingly significant player in the global screen, textile and digital printing markets.
"We are thrilled to welcome both the associations to FESPA's international community. We are committed to expanding our global reach and influence, particularly in emerging markets in the Asia-Pacific region. We're confident that our partnership with Sri Lanka Association of Printers and Nepal Printers' Association will be mutually beneficial and we look forward to collaborating with these new members in the coming months," said FESPA chief executive officer Nigel Steffens.
"NPA prides itself in providing members with a wealth of information, resources and support," said NPA president Uday Narsingh Shrestha. "We are delighted to become the associate member of FESPA as that will enable us to offer our fellow members even greater value thanks to FESPA's international links and industry expertise."
FESPA's commitment to the Asia-Pacific region is evidenced by the number of events it runs in the area, said the association that launched the first ever screen and digital print exhibition in India, FESPA India 2005. The event has continued to run every two years since the inaugural show, with the third FESPA India taking place in December.
Established in 1978, Nepal Printers' Association (NPA) has 211 members consisting of digital, offset, and screen printers, print suppliers and, pre-press and post-press related businesses. It provides its members with a number of services and support initiatives like organising various training schemes to help members better understand, manage and use latest printing technologies. The association runs a range of interactive printing workshops and seminars and also runs broader business sessions on income tax, VAT and tax registration to help members develop their commercial awareness. It provides members with valuable business and economic information that it disseminates via post, circulars and newsletters.
It is also involved in lobbying and making recommendations to the government on relevant policy matters. It played an integral role in securing projects for the country's domestic printers, such as the printing and distribution of school texts books with its Public-Private Partnership (PPP) approach. The association also represents the business community in various government and wider organisations like the Ministries of Finance, Education and Commerce & Supplies, Federation of Nepalese Chambers of Commerce & Industry (FNCCI), South Asia Print Congress, Federation of Small & Cottage Industries and Nepal Chambers of Commerce (NCC), creating strong networking opportunities for members.
FESPA has extended its global reach with the addition of two more Asian associate members as it welcomed Sri Lanka Association of Printers and Nepal Printers' Association.
As associate members of FESPA, Nepal Printers' Association will now benefit from a wide range of educational resources, training and best-practice development tools as well as participate in a growing number of international projects and events. FESPA will benefit by forging even stronger links with the Asia-Pacific region, which as a whole is an increasingly significant player in the global screen, textile and digital printing markets.
"We are thrilled to welcome both the associations to FESPA's international community. We are committed to expanding our global reach and influence, particularly in emerging markets in the Asia-Pacific region. We're confident that our partnership with Sri Lanka Association of Printers and Nepal Printers' Association will be mutually beneficial and we look forward to collaborating with these new members in the coming months," said FESPA chief executive officer Nigel Steffens.
"NPA prides itself in providing members with a wealth of information, resources and support," said NPA president Uday Narsingh Shrestha. "We are delighted to become the associate member of FESPA as that will enable us to offer our fellow members even greater value thanks to FESPA's international links and industry expertise."
FESPA's commitment to the Asia-Pacific region is evidenced by the number of events it runs in the area, said the association that launched the first ever screen and digital print exhibition in India, FESPA India 2005. The event has continued to run every two years since the inaugural show, with the third FESPA India taking place in December.
Established in 1978, Nepal Printers' Association (NPA) has 211 members consisting of digital, offset, and screen printers, print suppliers and, pre-press and post-press related businesses. It provides its members with a number of services and support initiatives like organising various training schemes to help members better understand, manage and use latest printing technologies. The association runs a range of interactive printing workshops and seminars and also runs broader business sessions on income tax, VAT and tax registration to help members develop their commercial awareness. It provides members with valuable business and economic information that it disseminates via post, circulars and newsletters.
It is also involved in lobbying and making recommendations to the government on relevant policy matters. It played an integral role in securing projects for the country's domestic printers, such as the printing and distribution of school texts books with its Public-Private Partnership (PPP) approach. The association also represents the business community in various government and wider organisations like the Ministries of Finance, Education and Commerce & Supplies, Federation of Nepalese Chambers of Commerce & Industry (FNCCI), South Asia Print Congress, Federation of Small & Cottage Industries and Nepal Chambers of Commerce (NCC), creating strong networking opportunities for members.
Climate change poses food, energy crisis threat
Climate change poses fundamental threats to Asia's food and energy security which, if left unchecked, will result in an upsurge of migration into already overburdened mega cities, according to three major new studies funded by Asian Development Bank (ADB).
Draft versions of the studies were released today in Bangkok on the sidelines of a major United Nations Framework Convention on Climate Change (UNFCCC) negotiations on a new climate change treaty to succeed the Kyoto Protocol's provisions, which expire in 2012.
Among the studies' findings is that the impacts of rising temperatures in Asia will fall disproportionately on the region's poor, and rural women from developing countries will be among the most affected groups given their dependence on subsistence crops, limited access to resources and their lack of decision-making power.
"The food and energy security of every Asian is threatened by climate change, but it's the poor -- and especially poor women -- who are most vulnerable and most likely to migrate as a consequence," said ADB vice-president Ursula Schaefer-Preuss.
More than half of Asia's total population lives below the $2-per-day poverty line, and it is this sector of the population that tends to depend on rain-fed agriculture and lives in settlements that are highly exposed to climate variability and change.
The agriculture, energy and migration studies were produced by the International Food Policy Research Institute (IFPRI); USA, Energy and Resources Institute (TERI), India and the University of Adelaide, Australia, respectively.
The agriculture study warns that the sector -- and therefore food security -- is particularly vulnerable to climate change. Some 2.2 billion Asians rely on the sector for their livelihoods, which are now threatened by falling crop yields caused by floods, droughts, erratic rainfall and other climate change impacts. Current climate models indicate food prices may increase sharply -- rice prices by 29 per cent to 37 per cent, maize by 58 per cent to 97 per cent and wheat by 81 per cent to 102 per cent -- by 2050.
According to the energy report, Asia's access to affordable energy is under increasing threat due to factors including demand-supply gaps, high reliance on traditional biomass fuels, and the high-energy intensity of the region's economies. The region's vast renewable energy potential could help respond to this threat but only if policy and finance measures quickly scale-up proven technologies for the poor, including small hydro and solar power.
Climate change-induced threats to Asia's agriculture and energy will contribute significantly to migration within national boundaries, according to the migration report. The report identifies a number of global 'hot spots' -- specific areas where residents are at relatively high risk from climate change hazards -- in the Asia and the Pacific region. The criteria for defining these areas include coastal vulnerability due to sea level rise, water stress, flooding and cyclones.
Draft versions of the studies were released today in Bangkok on the sidelines of a major United Nations Framework Convention on Climate Change (UNFCCC) negotiations on a new climate change treaty to succeed the Kyoto Protocol's provisions, which expire in 2012.
Among the studies' findings is that the impacts of rising temperatures in Asia will fall disproportionately on the region's poor, and rural women from developing countries will be among the most affected groups given their dependence on subsistence crops, limited access to resources and their lack of decision-making power.
"The food and energy security of every Asian is threatened by climate change, but it's the poor -- and especially poor women -- who are most vulnerable and most likely to migrate as a consequence," said ADB vice-president Ursula Schaefer-Preuss.
More than half of Asia's total population lives below the $2-per-day poverty line, and it is this sector of the population that tends to depend on rain-fed agriculture and lives in settlements that are highly exposed to climate variability and change.
The agriculture, energy and migration studies were produced by the International Food Policy Research Institute (IFPRI); USA, Energy and Resources Institute (TERI), India and the University of Adelaide, Australia, respectively.
The agriculture study warns that the sector -- and therefore food security -- is particularly vulnerable to climate change. Some 2.2 billion Asians rely on the sector for their livelihoods, which are now threatened by falling crop yields caused by floods, droughts, erratic rainfall and other climate change impacts. Current climate models indicate food prices may increase sharply -- rice prices by 29 per cent to 37 per cent, maize by 58 per cent to 97 per cent and wheat by 81 per cent to 102 per cent -- by 2050.
According to the energy report, Asia's access to affordable energy is under increasing threat due to factors including demand-supply gaps, high reliance on traditional biomass fuels, and the high-energy intensity of the region's economies. The region's vast renewable energy potential could help respond to this threat but only if policy and finance measures quickly scale-up proven technologies for the poor, including small hydro and solar power.
Climate change-induced threats to Asia's agriculture and energy will contribute significantly to migration within national boundaries, according to the migration report. The report identifies a number of global 'hot spots' -- specific areas where residents are at relatively high risk from climate change hazards -- in the Asia and the Pacific region. The criteria for defining these areas include coastal vulnerability due to sea level rise, water stress, flooding and cyclones.
Private sector can accelerate growth
The private sector has the resources and can garner additional resources internally as well as externally only if doing business is convenient in these regions. "However bureaucratic hassles, barriers, unpredictable policy framework and political rivalries are sure to vitiate the investment-friendly climate, said entrepreneur Jagadish Prasad Agrawal addressing Regional Conference Asia on Quality of Growth: Approaches to Inclusive Development in Asian Societies.
In the conference organised by Deutsche Gesellschaft fuer Technische Zusammenarbeit (GTZ) -- German Federal Ministry of Economic Cooperation and Development (BMZ) and the Planning Commission of India recently in New Delhi, he also stressed on the rule of law.
The latest economic survey mentions that of the 30.85 per cent population below the poverty line, 78 per cent are from the agricultural sector, 47.1 per cent from the hilly regions and 45.4 per cent from the Tarai, Agarwal pointed out adding that the rural sector accounts for approximately 95.3 per cent of the total population below the poverty line despite Nepal's four-decade history of planned development.
"It thus devolves on the private sector to continue forcing economic agenda to the forefront of national discussion for development and for enhancing its own capability and acceptability among the public about its role in bringing about balanced development of backward regions," he added.
Nepal's major problem is not that of unemployment but of under-employment. One-third of the total working population is under-utilised. Poultry, fishing and dairy development are such professions which can not only supplement their income at their own place but also provide food security without involvement of transport costs.
"Locally generated income builds capability to save, spend and participate in local developmental efforts. An integrated approach linking these sectors to commercialisation of agriculture is called for. Despite huge pouring of investment in the last 40 years, the agricultural sector continues to be primitive. Productivity is low, farming practices are outdated and there is no linkage with agro-processing industries," Agrawal said adding that the private sector has always advocated commercialisation of agricultural sector through corporate involvement via contract farming.
However, labour reform, labour productivity and self-employment are some of the issues of human resource development that have remained non-priorities in the development process. "It is imperative that the state create a unique comparative advantage for these backward regions by converting pockets of deprivation into targeted economic development zones exempt from taxes and regulations for a limited period of time. A combination of cheap electricity, cheap labour and cheap transportation cost for a limited period can transform these less developed regions of Nepal into flourishing blocks of affluence within a very short time," he said. One big advantage Nepal enjoys is that the markets exists on both sides of the country for any product and services within 200km of the production base.
However, the foremost issue is political stability which alone can generate confidence and facilitate private investments, Agrawal said in the three-day conference where around 17 Asian countries participated.
In the conference organised by Deutsche Gesellschaft fuer Technische Zusammenarbeit (GTZ) -- German Federal Ministry of Economic Cooperation and Development (BMZ) and the Planning Commission of India recently in New Delhi, he also stressed on the rule of law.
The latest economic survey mentions that of the 30.85 per cent population below the poverty line, 78 per cent are from the agricultural sector, 47.1 per cent from the hilly regions and 45.4 per cent from the Tarai, Agarwal pointed out adding that the rural sector accounts for approximately 95.3 per cent of the total population below the poverty line despite Nepal's four-decade history of planned development.
"It thus devolves on the private sector to continue forcing economic agenda to the forefront of national discussion for development and for enhancing its own capability and acceptability among the public about its role in bringing about balanced development of backward regions," he added.
Nepal's major problem is not that of unemployment but of under-employment. One-third of the total working population is under-utilised. Poultry, fishing and dairy development are such professions which can not only supplement their income at their own place but also provide food security without involvement of transport costs.
"Locally generated income builds capability to save, spend and participate in local developmental efforts. An integrated approach linking these sectors to commercialisation of agriculture is called for. Despite huge pouring of investment in the last 40 years, the agricultural sector continues to be primitive. Productivity is low, farming practices are outdated and there is no linkage with agro-processing industries," Agrawal said adding that the private sector has always advocated commercialisation of agricultural sector through corporate involvement via contract farming.
However, labour reform, labour productivity and self-employment are some of the issues of human resource development that have remained non-priorities in the development process. "It is imperative that the state create a unique comparative advantage for these backward regions by converting pockets of deprivation into targeted economic development zones exempt from taxes and regulations for a limited period of time. A combination of cheap electricity, cheap labour and cheap transportation cost for a limited period can transform these less developed regions of Nepal into flourishing blocks of affluence within a very short time," he said. One big advantage Nepal enjoys is that the markets exists on both sides of the country for any product and services within 200km of the production base.
However, the foremost issue is political stability which alone can generate confidence and facilitate private investments, Agrawal said in the three-day conference where around 17 Asian countries participated.
Friday, September 25, 2009
Nepal, Bangladesh talk on transit facilities
Bangladesh Prime Minister Sheikh Hasina underscored the need for transit facilities with Nepal “for expediting the long-cherished economic emancipation of the South Asian region”.
She held talks with Prime Minister Madhav Kumar Nepal at the United Nations bilateral booth today on the sidelines of the UN General Assembly session 2009. During the meeting, the two prime ministers discussed a wide range of issues related to bilateral and regional development — trade, transit, tourism, peace efforts and the like.
She also told the Nepal that her government would modernise Mongla seaport by which the neighbouring countries, including the landlocked Himalayan nation will be benefited and the regional development will also be accelerated.
She further emphasised making best use of water resources in the region for attaining the development targets. The two leaders discussed high prospects for flourishing tourism industry in the two neighbouring countries. In this regard, the prime minister reiterated her call for introducing package tourism between the two countries, as it will have significant impact on the two economies.
“Tourism packaged with the Himalayas and the Sundarbans, the beeches of Cox’s Bazar would open up potential for earning in this sector,” Hasina said.
The prime minister said Nepali students can also take quality higher education at various universities in Bangladesh, particularly in medicine and engineering. She mentioned that currently around 1000 Nepali students are studying in Bangladesh in various disciplines. In his part, Nepal sought cooperation of Bangladesh in maintaining peace and stability in the transitional time of his country and strengthening its democratic foundations.
As various matters of bilateral trade and business, and regional development came up during the discussion, Hasina underscored the need for transit facilities with Nepal ‘for expediting the long-cherished economic emancipation of the South Asian region”.
She held talks with Prime Minister Madhav Kumar Nepal at the United Nations bilateral booth today on the sidelines of the UN General Assembly session 2009. During the meeting, the two prime ministers discussed a wide range of issues related to bilateral and regional development — trade, transit, tourism, peace efforts and the like.
She also told the Nepal that her government would modernise Mongla seaport by which the neighbouring countries, including the landlocked Himalayan nation will be benefited and the regional development will also be accelerated.
She further emphasised making best use of water resources in the region for attaining the development targets. The two leaders discussed high prospects for flourishing tourism industry in the two neighbouring countries. In this regard, the prime minister reiterated her call for introducing package tourism between the two countries, as it will have significant impact on the two economies.
“Tourism packaged with the Himalayas and the Sundarbans, the beeches of Cox’s Bazar would open up potential for earning in this sector,” Hasina said.
The prime minister said Nepali students can also take quality higher education at various universities in Bangladesh, particularly in medicine and engineering. She mentioned that currently around 1000 Nepali students are studying in Bangladesh in various disciplines. In his part, Nepal sought cooperation of Bangladesh in maintaining peace and stability in the transitional time of his country and strengthening its democratic foundations.
As various matters of bilateral trade and business, and regional development came up during the discussion, Hasina underscored the need for transit facilities with Nepal ‘for expediting the long-cherished economic emancipation of the South Asian region”.
Commercial banks push Nepse up
The commercial banks -- a key player in the secondary market -- again pushed the Nepse up by 2.58 points to 630.55 points from the Sunday morning's 627.97 points.
However, of the nine sub-groups -- two sub-groups manufacturing and hotels -- like last week did not see any transaction. The week started in the green and continued till the fourth day as the secondary market was opened for the four days only this week.
This week, Standard Chartered bank Nepal topped the chart in terms of transaction amount as its shares were traded at Rs 70.40 million. Paschmanchal Bikas Bank followed with Rs 27.56 million, and Laxmi Bank (with Rs 18.88 million), Nepal Bangladesh Bank (with Rs 15.41 million) and Nepal SBI Bank (with Rs 12.95 million) managed to come in the top five slot, respectively.
In terms of number of share units traded, Pashimanchal Bikas Bank topped the chart with 77,000-unit shares changing hands while in terms of number of transactions Lumbini General Insurance topped the chart with 311 transactions.
The transaction amount decreased by 42.84 per cent to Rs 254.31 million against last week's 9.46 percent loss to Rs 438.11 million.
However, Group-A companies' contribution increase to 60.42 per cent to Rs 151.3 against last week's 48.75 per cent whereas the 78-scrip sensitive index -- a barometer of Group-A companies -- gained 1.28 points to 161.80 points from Sunday's 160.52 points. The float index -- calculated on the basis of real transactions -- also rose by a mere 0.27 point to 59.97 points.
However, of the nine sub-groups -- two sub-groups manufacturing and hotels -- like last week did not see any transaction. The week started in the green and continued till the fourth day as the secondary market was opened for the four days only this week.
This week, Standard Chartered bank Nepal topped the chart in terms of transaction amount as its shares were traded at Rs 70.40 million. Paschmanchal Bikas Bank followed with Rs 27.56 million, and Laxmi Bank (with Rs 18.88 million), Nepal Bangladesh Bank (with Rs 15.41 million) and Nepal SBI Bank (with Rs 12.95 million) managed to come in the top five slot, respectively.
In terms of number of share units traded, Pashimanchal Bikas Bank topped the chart with 77,000-unit shares changing hands while in terms of number of transactions Lumbini General Insurance topped the chart with 311 transactions.
The transaction amount decreased by 42.84 per cent to Rs 254.31 million against last week's 9.46 percent loss to Rs 438.11 million.
However, Group-A companies' contribution increase to 60.42 per cent to Rs 151.3 against last week's 48.75 per cent whereas the 78-scrip sensitive index -- a barometer of Group-A companies -- gained 1.28 points to 161.80 points from Sunday's 160.52 points. The float index -- calculated on the basis of real transactions -- also rose by a mere 0.27 point to 59.97 points.
Thursday, September 24, 2009
Dragon Air increases frequency of flights, fly Airbus 330A to Nepal
Dragonair today announced more flights to Kathmandu.
The new arrangement for its services to Dhaka and Kathmandu starting from October 1 which will offer passengers travelling to and from Nepal a greater number of flights per week to choose from. The night flight to Kathmandu from Hong Kong and the return early morning flight from Kathmandu will both operate via Dhaka.
The new arrangement will bring improved service benefits to passengers travelling between Hong Kong and Kathmandu, with the frequency increasing to five times a week from the existing thrice-weekly service. Moreover, the flight will be operated using an A330 aircraft which offers greater capacity for both passengers and cargo.
"We are pleased to announce increased frequency for our flights to Kathmandu, which will mean more convenience as well as better service quality for passengers travelling to and from Nepal," said Dragonair Chief Executive Officer Kenny Tang.
"The increased capacity will definitely play a part in helping to meet Nepal Tourism Board's target of one million tourists in 2011. The airline will also help increase the number of inbound tours to Nepal via Hong Kong using the extensive worldwide network offered by both Dragonair and sister airline Cathay Pacific," Tang added.
The flight schedule under the new arrangement, subject to government approval, is as follows:
Dragonair today announced that it will launch a new service to Guangzhou, the provincial capital of Guangdong and the biggest city in the fast-growing Pearl River Delta region, on September 14. The twice-daily service, to be operated by A320 and A321 aircraft, will provide passengers travelling between Hong Kong and Guangzhou with more choice and convenience. At the same time, the new flights will offer improved connectivity via Hong Kong to the rest of the world, enhancing Hong Kong's status as one of the world's premiere international aviation hubs.
"We are excited to announce this new operation to Guangzhou which extends our network's coverage into the Pearl River Delta. This is one of the most affluent and most economically dynamic regions in Mainland China and is home to a population of 45 million -- six times greater than that of Hong Kong," saids Tang.
In July 1985, a Boeing 737-200A took off from Hong Kong International Airport bound for Kota Kinabalu in Malaysia. The event marked the start of a new chapter in Hong Kong's aviation history, as it was the first commercial flight of Hong Kong Dragon Airlines, an airline which was to grow into Hong Kong's international carrier and become known as Dragonair.
Dragonair's fleet now comprises 14 wide-bodied A330s, six single-aisle A321s and 10 A320s. The airline's network covers 29 destinations in the world with 17 in Mainland China.
The new arrangement for its services to Dhaka and Kathmandu starting from October 1 which will offer passengers travelling to and from Nepal a greater number of flights per week to choose from. The night flight to Kathmandu from Hong Kong and the return early morning flight from Kathmandu will both operate via Dhaka.
The new arrangement will bring improved service benefits to passengers travelling between Hong Kong and Kathmandu, with the frequency increasing to five times a week from the existing thrice-weekly service. Moreover, the flight will be operated using an A330 aircraft which offers greater capacity for both passengers and cargo.
"We are pleased to announce increased frequency for our flights to Kathmandu, which will mean more convenience as well as better service quality for passengers travelling to and from Nepal," said Dragonair Chief Executive Officer Kenny Tang.
"The increased capacity will definitely play a part in helping to meet Nepal Tourism Board's target of one million tourists in 2011. The airline will also help increase the number of inbound tours to Nepal via Hong Kong using the extensive worldwide network offered by both Dragonair and sister airline Cathay Pacific," Tang added.
The flight schedule under the new arrangement, subject to government approval, is as follows:
Dragonair today announced that it will launch a new service to Guangzhou, the provincial capital of Guangdong and the biggest city in the fast-growing Pearl River Delta region, on September 14. The twice-daily service, to be operated by A320 and A321 aircraft, will provide passengers travelling between Hong Kong and Guangzhou with more choice and convenience. At the same time, the new flights will offer improved connectivity via Hong Kong to the rest of the world, enhancing Hong Kong's status as one of the world's premiere international aviation hubs.
"We are excited to announce this new operation to Guangzhou which extends our network's coverage into the Pearl River Delta. This is one of the most affluent and most economically dynamic regions in Mainland China and is home to a population of 45 million -- six times greater than that of Hong Kong," saids Tang.
In July 1985, a Boeing 737-200A took off from Hong Kong International Airport bound for Kota Kinabalu in Malaysia. The event marked the start of a new chapter in Hong Kong's aviation history, as it was the first commercial flight of Hong Kong Dragon Airlines, an airline which was to grow into Hong Kong's international carrier and become known as Dragonair.
Dragonair's fleet now comprises 14 wide-bodied A330s, six single-aisle A321s and 10 A320s. The airline's network covers 29 destinations in the world with 17 in Mainland China.
NRB pays heed to panel, circulates Rs 650 million to ease demand
The high level committee formed by the Finance Ministry yesterday lived upto its expectations, a day after it set up the committee to tackle the growing shortage of high denomination currency notes during Dashain.
As per its directive, the Nepal Rastra Bank (NRB) today distributed Rs 650 million to the banks and financial institutions.
In an unpredecented move, the Rs 940 million old notes that bore ex-governor of NRB Tilak Rawal’s signature, which had “some technical glitches”, was circulated today to ease the shortfall.
NRB governor Bijaya Nath Bhattarai convened a meeting today, which was attended by all the 26 commerical banks. However, twleve commerical banks sought Rs 100 million and the rest demanded Rs 200 million to fulfil the demand of their customers.
According to the bankers’ estimate, an additional Rs 5 billion would help to tide over the crisis (the delayed French consignment is on its way to Nepal with Rs 15.5 billion).
The central bank’s distributed Rs 350 million for development banks and finance companies.“Till date, we’ve pumped around Rs 18 billion in the market. But the demand is for an additional Rs 5 billion,” said deputy governor Krishna Bahadur Manandhar. The year-on-year demand for currency notes during Dashain is increasing, an indication to the overreliance on remittance economy and the growing population as well. Last year, he NRB had circulated only Rs 12 billion.
Going by this figure, the demand has doubled this Dashain. The French company, which bagged the contract for printing and supplying Rs 20 billion higher denomination notes, flunked the deadline by two months. “Earlier, it had sent Rs 4.5 billion. While, the rest Rs 15.5 billion is expected only on October 6. The consignment may reach the Kolkata port on October 1. We’ve requested our state carrier, Nepal Airlines Corporation (NAC), to airlift the stuff from Kolkata to expedite the delivery process,” said Manandhar.
Collector's item in the
KATHMANDU; The currency notes that bear the picture of king Gyanendra Shah, the last monarch of the 240-year-old Shah dynasty, is being circulated from Thursday. The notes have the making of a collector’s item for two interesting historical reasons. They not only have deposed king’s picture but also have a “minor technical glitch”. There is a printing error on these notes. The Sanskrit verse on the back of the note should have read Asatoma Satgamaya instead of Asatama Sadgamay.
As per its directive, the Nepal Rastra Bank (NRB) today distributed Rs 650 million to the banks and financial institutions.
In an unpredecented move, the Rs 940 million old notes that bore ex-governor of NRB Tilak Rawal’s signature, which had “some technical glitches”, was circulated today to ease the shortfall.
NRB governor Bijaya Nath Bhattarai convened a meeting today, which was attended by all the 26 commerical banks. However, twleve commerical banks sought Rs 100 million and the rest demanded Rs 200 million to fulfil the demand of their customers.
According to the bankers’ estimate, an additional Rs 5 billion would help to tide over the crisis (the delayed French consignment is on its way to Nepal with Rs 15.5 billion).
The central bank’s distributed Rs 350 million for development banks and finance companies.“Till date, we’ve pumped around Rs 18 billion in the market. But the demand is for an additional Rs 5 billion,” said deputy governor Krishna Bahadur Manandhar. The year-on-year demand for currency notes during Dashain is increasing, an indication to the overreliance on remittance economy and the growing population as well. Last year, he NRB had circulated only Rs 12 billion.
Going by this figure, the demand has doubled this Dashain. The French company, which bagged the contract for printing and supplying Rs 20 billion higher denomination notes, flunked the deadline by two months. “Earlier, it had sent Rs 4.5 billion. While, the rest Rs 15.5 billion is expected only on October 6. The consignment may reach the Kolkata port on October 1. We’ve requested our state carrier, Nepal Airlines Corporation (NAC), to airlift the stuff from Kolkata to expedite the delivery process,” said Manandhar.
Collector's item in the
KATHMANDU; The currency notes that bear the picture of king Gyanendra Shah, the last monarch of the 240-year-old Shah dynasty, is being circulated from Thursday. The notes have the making of a collector’s item for two interesting historical reasons. They not only have deposed king’s picture but also have a “minor technical glitch”. There is a printing error on these notes. The Sanskrit verse on the back of the note should have read Asatoma Satgamaya instead of Asatama Sadgamay.
Government defies revenue target
The finance ministry has collected Rs 22.55 billion revenue in the second month (July 15-August 15) of the current fiscal year.
“The collection is 54.5 per cent higher than the collection in the same period of last fiscal year,” said Revenue Secretary Krishna Hari Baskota. During the same month in the last fiscal year the government has collected Rs 14.58 billion.
Baskota contributed the encouraging collection to the leakage control, higher valuation in customs, and effective monitoring of VAT receipt before the festive season.
The VAT has become the major source of revenue for the government. In the second month, the government has collected Rs 8.76 billion — the highest among the tax heads — under the VAT, while from customs it collected Rs 5.34 billion only.
Similarly, the government collected Rs 3.75 billion from excise, Rs 2.63 billion from income tax, Rs 580 million from registration, Rs 570 million from visitors’ and Rs 930 million from non-tax.Reforms in tax administration and new entrants in the tax net have also helped the government collect ore revenue.
Finance Minister Surendra Pandey set a target of Rs 176.50 billion — Rs 150.24 billion from tax revenue and Rs 26.25 billion from non-tax revenue for the fiscal year 2009-10.He has announced his accommodative budget of Rs 285.93 billion for the fiscal 2009-10 on July 13. For the first month of this fiscal year (June16-July16), it had set a target of Rs 9.78 billion but the ministry exceeded the target and collected Rs 11.74 billion. The first month’s collection was Rs 4.02 billion more than that in last fiscal year’s same month. It was 52.2 per cent higher than the first month of the last fiscal year.
According to the ministry, among all taxes the Value Added Tax (VAT) will fetch in the most revenue, followed by customs. The ministry is set to collect Rs 51.56 billion in VAT and Rs 33.12 billion in customs. The collection from excise duty would be Rs 19.64 billion and that from education service tax Rs 120 million, according to the target. It has planned to collect Rs 26.25 billion in non-tax revenue.
The ministry is also encouraged by its campaign to register for service sector employees and professional consultants in the PAN to boost revenue. The data reveals that the income tax comes into the fourth position after VAT, Customs and Excise.
Its a good return
VAT Rs 8.76 billion
Customs Rs 5.34 billion
Excise Rs 3.75 billion
Income tax Rs 2.63 billion
Registration tax Rs 580 million
Visitors tax Rs 570 million
Non-Tax Rs 930 million
“The collection is 54.5 per cent higher than the collection in the same period of last fiscal year,” said Revenue Secretary Krishna Hari Baskota. During the same month in the last fiscal year the government has collected Rs 14.58 billion.
Baskota contributed the encouraging collection to the leakage control, higher valuation in customs, and effective monitoring of VAT receipt before the festive season.
The VAT has become the major source of revenue for the government. In the second month, the government has collected Rs 8.76 billion — the highest among the tax heads — under the VAT, while from customs it collected Rs 5.34 billion only.
Similarly, the government collected Rs 3.75 billion from excise, Rs 2.63 billion from income tax, Rs 580 million from registration, Rs 570 million from visitors’ and Rs 930 million from non-tax.Reforms in tax administration and new entrants in the tax net have also helped the government collect ore revenue.
Finance Minister Surendra Pandey set a target of Rs 176.50 billion — Rs 150.24 billion from tax revenue and Rs 26.25 billion from non-tax revenue for the fiscal year 2009-10.He has announced his accommodative budget of Rs 285.93 billion for the fiscal 2009-10 on July 13. For the first month of this fiscal year (June16-July16), it had set a target of Rs 9.78 billion but the ministry exceeded the target and collected Rs 11.74 billion. The first month’s collection was Rs 4.02 billion more than that in last fiscal year’s same month. It was 52.2 per cent higher than the first month of the last fiscal year.
According to the ministry, among all taxes the Value Added Tax (VAT) will fetch in the most revenue, followed by customs. The ministry is set to collect Rs 51.56 billion in VAT and Rs 33.12 billion in customs. The collection from excise duty would be Rs 19.64 billion and that from education service tax Rs 120 million, according to the target. It has planned to collect Rs 26.25 billion in non-tax revenue.
The ministry is also encouraged by its campaign to register for service sector employees and professional consultants in the PAN to boost revenue. The data reveals that the income tax comes into the fourth position after VAT, Customs and Excise.
Its a good return
VAT Rs 8.76 billion
Customs Rs 5.34 billion
Excise Rs 3.75 billion
Income tax Rs 2.63 billion
Registration tax Rs 580 million
Visitors tax Rs 570 million
Non-Tax Rs 930 million
Hello Nepal starts ringing
Nepal Satellite Telecom (NST) Pvt Ltd soft-launched its GSM service today.
Launching the Hello Nepal brand, former prime ministers Girija Prasad Koirala and Pushpa Kamal Dahal 'Prachanda' made a conference call from Kathmandu and Rolpa. CPN-UML general secretary Ishwor Pokharel also made a conference call from Dang.
The new telecom service provider has promised to provide voice and data services. According to NST executive director Ajeya Raj Sumargi, NST will start its operation in the rural areas and will launch its GSM service within a year in Kathmandu Valley.
NST, whose number starts with 963, will start its services in 273 village development committees (VDCs).
Mukti Shree Telecom (Nepal), Sewa Telecom Pvt Ltd (Bangladesh), Pakistan Mobile Communication (Pakistan) and Air Bell Company (Cyprus) are the major investors in NST.It has Basic Telecommunication Service license under which it also has license for limited mobility service -- only for landlines.
NST got its license on February 17, 2008 and according to the licence it has to start its services from the Mid-western region, followed by Far-western Region, Western region and only after that it can bring its service to Kathmandu Valley. It is also planning to bring international gateway, CDMA and landline PSTN services in the near future
Meanwhile, there are already three players in the market -- Nepal Telecom (NT), Spice Nepal and United Telecom Ltd (UTL). Among them, NT plans to distribute 2.2 million GSM mobile SIM cards in the fiscal year 2009-10, increase the number of CDMA customers to 0.4 million and add 50,000 more land line services.
According to NTA data of last May, Spice Nepal has service penetration of one in 100 population. Spice has market share of 40.27 per cent and NT 59.73 per cent.
Nepal's fixed line base reached 812,615 in August and the number of mobile users topped 5.59 million.Nepal Telecommunications Authority (NTA) has published its latest 'Management Information System' report for the period ended 14 August 2009, showing the country was home to a total of 812,615 fixed line users. Of the total, 563,127 lines were PSTN connections for incumbent operator Nepal Doorsanchar Company Ltd (Nepal Telecom) while the remainder were wireless in the local loop (WiLL) connections for Nepal Telecom (177,265), United Telecom Ltd (68,163) and STM Telecom (4,060
Fixed teledensity stood at 2.95 per cent at the end of the period, the regulator said.
In the mobile segment, Nepal Telecom again led the way with more than 3.169 million GSM users, ahead of Spice Nepal's base of 1.873 million while CDMA (Sky Phone) services rendered Nepal Telecom a further 555,338 connections and helped pushed cellular penetration to 20.35 per cent by 14 August. NTA also reported a smattering of 'other' mobile users, including limited mobility (85,577), GMPCS (1,517) and W-CDMA (683
Meanwhile, in the data services market, Nepal, or more specifically Nepal Telecom, had 15,561 ADSL connections at the end of the review period as well as 50,400 registered GPRS customers and 3,283 CDMA 1x subscribers, while United Telecom and Spice Nepal counted 24,823 and 332,428 CDMA 1x users respectively.
NT balance transfer service resumes
KATHMANDU: Nepal Telecom (NT) has resumed its balance transfer service that had halted due to technical glitches. Due to technical problem, NT halted balance transfer facility in GSM prepaid mobile service halted since July 7. NT users were suffering due to the message delivery system also. Users were faced with the problems like the same message delivering a number of times and some messages not getting delivered or stored.
Launching the Hello Nepal brand, former prime ministers Girija Prasad Koirala and Pushpa Kamal Dahal 'Prachanda' made a conference call from Kathmandu and Rolpa. CPN-UML general secretary Ishwor Pokharel also made a conference call from Dang.
The new telecom service provider has promised to provide voice and data services. According to NST executive director Ajeya Raj Sumargi, NST will start its operation in the rural areas and will launch its GSM service within a year in Kathmandu Valley.
NST, whose number starts with 963, will start its services in 273 village development committees (VDCs).
Mukti Shree Telecom (Nepal), Sewa Telecom Pvt Ltd (Bangladesh), Pakistan Mobile Communication (Pakistan) and Air Bell Company (Cyprus) are the major investors in NST.It has Basic Telecommunication Service license under which it also has license for limited mobility service -- only for landlines.
NST got its license on February 17, 2008 and according to the licence it has to start its services from the Mid-western region, followed by Far-western Region, Western region and only after that it can bring its service to Kathmandu Valley. It is also planning to bring international gateway, CDMA and landline PSTN services in the near future
Meanwhile, there are already three players in the market -- Nepal Telecom (NT), Spice Nepal and United Telecom Ltd (UTL). Among them, NT plans to distribute 2.2 million GSM mobile SIM cards in the fiscal year 2009-10, increase the number of CDMA customers to 0.4 million and add 50,000 more land line services.
According to NTA data of last May, Spice Nepal has service penetration of one in 100 population. Spice has market share of 40.27 per cent and NT 59.73 per cent.
Nepal's fixed line base reached 812,615 in August and the number of mobile users topped 5.59 million.Nepal Telecommunications Authority (NTA) has published its latest 'Management Information System' report for the period ended 14 August 2009, showing the country was home to a total of 812,615 fixed line users. Of the total, 563,127 lines were PSTN connections for incumbent operator Nepal Doorsanchar Company Ltd (Nepal Telecom) while the remainder were wireless in the local loop (WiLL) connections for Nepal Telecom (177,265), United Telecom Ltd (68,163) and STM Telecom (4,060
Fixed teledensity stood at 2.95 per cent at the end of the period, the regulator said.
In the mobile segment, Nepal Telecom again led the way with more than 3.169 million GSM users, ahead of Spice Nepal's base of 1.873 million while CDMA (Sky Phone) services rendered Nepal Telecom a further 555,338 connections and helped pushed cellular penetration to 20.35 per cent by 14 August. NTA also reported a smattering of 'other' mobile users, including limited mobility (85,577), GMPCS (1,517) and W-CDMA (683
Meanwhile, in the data services market, Nepal, or more specifically Nepal Telecom, had 15,561 ADSL connections at the end of the review period as well as 50,400 registered GPRS customers and 3,283 CDMA 1x subscribers, while United Telecom and Spice Nepal counted 24,823 and 332,428 CDMA 1x users respectively.
NT balance transfer service resumes
KATHMANDU: Nepal Telecom (NT) has resumed its balance transfer service that had halted due to technical glitches. Due to technical problem, NT halted balance transfer facility in GSM prepaid mobile service halted since July 7. NT users were suffering due to the message delivery system also. Users were faced with the problems like the same message delivering a number of times and some messages not getting delivered or stored.
Wednesday, September 23, 2009
Govt steps in to difuse currency note crisis
In a bid to overcome the acute crisis of high denomination currency notes during Dashain, the Finance Ministry has decided to airlift the ‘delayed consignment’ from France, which is on its way to Kolkata Port, within next five days.
The move comes in the wake of mounting pressure from the bankers and public alike.
Taking into account the looming crisis at hand, the Finance Ministry formed a three-member high-level committee late this evening. The panel will probe the delay in both print and supply of the currency notes.
Former National Planning Commission vice-chairman Prof Dr Mangal Siddhi Manandhar, former finance secretary Bhanu Prasad Acharya and Comptroller General Abinendra Kumar Shrestha are the members of the panel. Porf Dr Manandhar is the coordinator of the committee, which will submit the report within 21 days.
Finance Minister Surendra Pandey, who chaired the meeting, took extraordinary measures to diffuse the crisis. The panel instructed the central bank —Nepal Rastra Bank (NRB) — to distribute the airlifted-cash to the banks during Dashain holidays also.
As a stopgap measure, the old notes in the stock and higher denomination ones of around Rs 940 million — signed by ex-governor Tilak Rawal that had certain “minor technical errors” — will also be circulated from tomorrow. But given the crisis, the amount is insignificant.
The panel has also decided to airlift the notes to other districts which have to contend with an acute cash crunch. The crisis that precipitated around a week ago had led the banks and financial institutions to ration the distribution of cash.
Typically, the demand for currency notes peak during the 10-day Dashain. As per the tradition, offering cash is as much an integral part of the festivity as the shopping spree. A section of the banks have shutdown their ATMs due to shortage of cash and others lowered the withdrawal limits.
With no end to the crisis in sight, the banks had also started paying in Indian Currency (IC) even though it is against the NRB’s norms.
The French company, which bagged the tender to print Nepali currency notes, missed the delivery deadline by two months. It delivered only 25 per cent of the order last week, while, the rest is expected next month by October 6 at Kolkata Port. The NRB has penalized the company for the inordinate delay. Be that as it may, the public have been hit hard by the crisis.
Meanwhile, the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has expressed concern over the shortage of currency notes in banks and financial institutions.
The move comes in the wake of mounting pressure from the bankers and public alike.
Taking into account the looming crisis at hand, the Finance Ministry formed a three-member high-level committee late this evening. The panel will probe the delay in both print and supply of the currency notes.
Former National Planning Commission vice-chairman Prof Dr Mangal Siddhi Manandhar, former finance secretary Bhanu Prasad Acharya and Comptroller General Abinendra Kumar Shrestha are the members of the panel. Porf Dr Manandhar is the coordinator of the committee, which will submit the report within 21 days.
Finance Minister Surendra Pandey, who chaired the meeting, took extraordinary measures to diffuse the crisis. The panel instructed the central bank —Nepal Rastra Bank (NRB) — to distribute the airlifted-cash to the banks during Dashain holidays also.
As a stopgap measure, the old notes in the stock and higher denomination ones of around Rs 940 million — signed by ex-governor Tilak Rawal that had certain “minor technical errors” — will also be circulated from tomorrow. But given the crisis, the amount is insignificant.
The panel has also decided to airlift the notes to other districts which have to contend with an acute cash crunch. The crisis that precipitated around a week ago had led the banks and financial institutions to ration the distribution of cash.
Typically, the demand for currency notes peak during the 10-day Dashain. As per the tradition, offering cash is as much an integral part of the festivity as the shopping spree. A section of the banks have shutdown their ATMs due to shortage of cash and others lowered the withdrawal limits.
With no end to the crisis in sight, the banks had also started paying in Indian Currency (IC) even though it is against the NRB’s norms.
The French company, which bagged the tender to print Nepali currency notes, missed the delivery deadline by two months. It delivered only 25 per cent of the order last week, while, the rest is expected next month by October 6 at Kolkata Port. The NRB has penalized the company for the inordinate delay. Be that as it may, the public have been hit hard by the crisis.
Meanwhile, the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has expressed concern over the shortage of currency notes in banks and financial institutions.
President hails Informal sector's contribution
In developing countries, the majority of the people's livelihood depends on the informal sector making it an integral part of the economy, opined President Dr Ram Varan Yadav while inaugurating an international conference on measuring informal economy in developing countries here today.
However, measuring the depth and scope of the informal economy is a challenging task, he said adding that by its nature its larger than the formal economy.
The conference -- organised jointly by South Asian Institute of management (SAIM) and International Association for Research on Income and Wealth (IARIW) will hold serious discussions during their sessions on Thursday and Friday.
Welcoming guests from over 30 countries, Centre for Economics and Applied Statistics (CEAS) director Dr Bishnu Dev Pant said the informal sector is very important for developing countries like Nepal. "Its role has been increasing as a major part of the economy is outside the radar of national statistics," he said. "Measuring the informal economy is thus one of the main themes of the special conference." He added that measurement is useful only when it serves the needs of policy makers. "Nepal is one of the weakest in the region in terms of research on statistics as it has never been the government's priority."
CA member and former finance minister Dr Prakash Chandra Lohani said the word informal sector was coined in 1971 in Ghana. "The informal sector acts as a shock absorber in the economy of countries like Nepal," he said adding that more than 90 per cent of domestic labour is in the informal sector and its contribution to the gross domestic production (GDP) stands at over 51 per cent.
Although the largest part of GDP may be generated by the formal economy, most people in developing countries live in the informal one. They derive their income from subsistence farming or by operating small unincorporated enterprises. However, to gauge their contribution in real terms, brainstorming is needed and the conference -- attended by over 70 professionals from across the globe -- will brainstorm for two days, IARIW chair Dr Andrea Brandolini said.
However, measuring the depth and scope of the informal economy is a challenging task, he said adding that by its nature its larger than the formal economy.
The conference -- organised jointly by South Asian Institute of management (SAIM) and International Association for Research on Income and Wealth (IARIW) will hold serious discussions during their sessions on Thursday and Friday.
Welcoming guests from over 30 countries, Centre for Economics and Applied Statistics (CEAS) director Dr Bishnu Dev Pant said the informal sector is very important for developing countries like Nepal. "Its role has been increasing as a major part of the economy is outside the radar of national statistics," he said. "Measuring the informal economy is thus one of the main themes of the special conference." He added that measurement is useful only when it serves the needs of policy makers. "Nepal is one of the weakest in the region in terms of research on statistics as it has never been the government's priority."
CA member and former finance minister Dr Prakash Chandra Lohani said the word informal sector was coined in 1971 in Ghana. "The informal sector acts as a shock absorber in the economy of countries like Nepal," he said adding that more than 90 per cent of domestic labour is in the informal sector and its contribution to the gross domestic production (GDP) stands at over 51 per cent.
Although the largest part of GDP may be generated by the formal economy, most people in developing countries live in the informal one. They derive their income from subsistence farming or by operating small unincorporated enterprises. However, to gauge their contribution in real terms, brainstorming is needed and the conference -- attended by over 70 professionals from across the globe -- will brainstorm for two days, IARIW chair Dr Andrea Brandolini said.
$130 million World Bank aid for Nepal' education
The World Bank will contribute a further $130 million towards meeting Nepal's Education for All goals. The School Sector Reform Programme approved today is the main vehicle for the implementation of the Government of Nepal's 15-year National Programme of Action. World Bank funding will meet a slice of the programme's expenditures over the next five years -- both recurrent and development -- covering all levels of school education.
The project -- a blend of credit of $71.50 million and grant $58.50 million from the International Development Association, the World Bank's concessionary lending arm -- is credit for 40 years to maturity with a 10-year grace period.
The programme focuses on the three pillars of Access, Inclusion and Quality. It is supported by eight other development partners who will also pool their resources, together with the World Bank, and with government resources. In addition, five 'non-pooling partners' will support the program directly. The total cost of the five-year programme -- from October 2009 to 2013-14 -- is estimated to be about $2.6 billion, of which pooled development partners have committed approximately $500 million.
As a sector wide approach, the programme will finance salaries and benefits for nearly 120,000 government school teachers. It will also finance salaries of around 100,000 community recruited teachers through salary grants. Financing for all additional teachers to be recruited during the program period will be made through a per capita child financing formula that takes into account the number of students enrolled in a particular school. The programme plans to address the problem of uneven deployment of teachers by providing incentives for teachers to transfer from schools that have too many teachers to those with too few, said the bank.
The programme will also finance a range of activities intended to ensure equitable access and quality basic education for all children in the 5-12 age group, prepare pre- school age children for basic education through Early Childhood Education Development and deliver basic numeracy and literacy to youth and adults, especially women.
"Nepal should be proud of its accomplishments in the education sector," said Susan Goldmark, World Bank Country Director for Nepal.
Because earlier programmes were so successful, the demand for quality schooling beyond primary level has soared. To meet this demand and to provide children with skills to prepare them for a life of work, Nepal is now combining the primary and lower secondary cycles to form a basic education cycle of grades 1-8 and a secondary cycle of grades 9-12.
It will also finance the construction and rehabilitation of classrooms and other school facilities as well as block grants for textbooks and teacher salaries. With these activities, the programme aims to increase the Net Enrollment Ratio at primary level to 98 per cent from the current 91.8 per cent, and at the basic level to 84 per cent from the current 75 per cent.
"In spite of the difficult political environment Nepal has been able to undertake a series of ground breaking reforms in school education, and the program will take these reforms even further," said Rajendra Dhoj Joshi, Senior Education Specialist and Co-Task Team Leader at the World Bank. "Nepal has firmly established itself as the world leader in community management of schools. Community management of schools builds upon Nepal's tradition of community initiative in delivery of education. The credit for significant achievements made in the education sector largely goes to communities. SSRP will accord high priority to enhancing community capacity."
The project -- a blend of credit of $71.50 million and grant $58.50 million from the International Development Association, the World Bank's concessionary lending arm -- is credit for 40 years to maturity with a 10-year grace period.
The programme focuses on the three pillars of Access, Inclusion and Quality. It is supported by eight other development partners who will also pool their resources, together with the World Bank, and with government resources. In addition, five 'non-pooling partners' will support the program directly. The total cost of the five-year programme -- from October 2009 to 2013-14 -- is estimated to be about $2.6 billion, of which pooled development partners have committed approximately $500 million.
As a sector wide approach, the programme will finance salaries and benefits for nearly 120,000 government school teachers. It will also finance salaries of around 100,000 community recruited teachers through salary grants. Financing for all additional teachers to be recruited during the program period will be made through a per capita child financing formula that takes into account the number of students enrolled in a particular school. The programme plans to address the problem of uneven deployment of teachers by providing incentives for teachers to transfer from schools that have too many teachers to those with too few, said the bank.
The programme will also finance a range of activities intended to ensure equitable access and quality basic education for all children in the 5-12 age group, prepare pre- school age children for basic education through Early Childhood Education Development and deliver basic numeracy and literacy to youth and adults, especially women.
"Nepal should be proud of its accomplishments in the education sector," said Susan Goldmark, World Bank Country Director for Nepal.
Because earlier programmes were so successful, the demand for quality schooling beyond primary level has soared. To meet this demand and to provide children with skills to prepare them for a life of work, Nepal is now combining the primary and lower secondary cycles to form a basic education cycle of grades 1-8 and a secondary cycle of grades 9-12.
It will also finance the construction and rehabilitation of classrooms and other school facilities as well as block grants for textbooks and teacher salaries. With these activities, the programme aims to increase the Net Enrollment Ratio at primary level to 98 per cent from the current 91.8 per cent, and at the basic level to 84 per cent from the current 75 per cent.
"In spite of the difficult political environment Nepal has been able to undertake a series of ground breaking reforms in school education, and the program will take these reforms even further," said Rajendra Dhoj Joshi, Senior Education Specialist and Co-Task Team Leader at the World Bank. "Nepal has firmly established itself as the world leader in community management of schools. Community management of schools builds upon Nepal's tradition of community initiative in delivery of education. The credit for significant achievements made in the education sector largely goes to communities. SSRP will accord high priority to enhancing community capacity."
Tuesday, September 22, 2009
Higher denomination notes in short supply
ATMs closed, banks’ ceiling on withdrawal ahead of Dashain
The Nepal Rastra Bank (NRB) is facing a tough time ahead of Dashain. There is an acute crisis of currency notes of higher denomination.
Krishna Bahadur Manandhar, deputy governor, NRB, however, failed to allay revellers’ apprehension. “A shipment, carrying Rs 12 billion, is only expected on October 6. It will help tide over the scarcity,” he said. But that makes little sense for the revellers. Dashain will be over on October 3. A team of Nepal Bankers’ Association (NBA), too, lodged a complaint with the NRB about the looming crisis.
In a departure from the norm, a few desperate bankers were compelled to accept Indian Currency (IC) to meet the growing customers’ demand. But a peeved banker pointed out the legal constraints of paying the customers in IC. In the run up to the festive season, a bank requires around Rs 1 billion in cash daily to pay the customers.However, Manandhar explained the logistical problem that led to the crisis.
“We’ve been expecting the consignment from France earlier. But it got delayed due to unavoidable circumstances. The shortage stands at Rs 4,800 million,” he explained. As the crisis deepened, some banks were forced to shutdown their ATMs from this evening.
A few banks have put a cap on withdrawal as well. A depositor cannot withdraw more than Rs 1 lakh. Agriculture Development Bank Nepal has instructed its branches not to pay more than Rs 25,000, sending the customers into a tizzy.
“Though the central bank gave us Rs 10 million today, the demand is five fold,” said a banker.Uma Kant Thapaliya, president, NRB Employee's Association (Thapathali), said that there had also been an increased demand for lower denominations
.“This year, we’re not giving more than Rs 4,000 in lower denominations to an individual. This is half of the usual amount during the festive season,” he said.
He took a dig at the NRB for mismanagement, alleging it has been able to fulfill only 10 per cent of the demand. Thapaliya said that the crisis could have been averted had a proper planning was in place around six months ago.
NDB depositors withdraw cash
KATHMANDU: Around 60 depositors of the Nepal Development Bank (NDB) on Tuesday withdrew Rs 4.84 million — 50 per cent of their deposit. The withdrawal process took place between 3 and 5pm. “It’ll continue for the next two days," said Kirti Madan Joshi, president, Nepal Bikas Bank Pidith Sangh. On Friday, the Patan Appellate Court had directed the Nepal Rastra Bank (NRB) to release funds for the cash-strapped depositors. Subsequently, the central bank released Rs 27.9 million on Sunday. The court has ordered the NRB to let the depositors withdraw 50 per cent of their sum but not exceeding Rs 2 lakh.
The Nepal Rastra Bank (NRB) is facing a tough time ahead of Dashain. There is an acute crisis of currency notes of higher denomination.
Krishna Bahadur Manandhar, deputy governor, NRB, however, failed to allay revellers’ apprehension. “A shipment, carrying Rs 12 billion, is only expected on October 6. It will help tide over the scarcity,” he said. But that makes little sense for the revellers. Dashain will be over on October 3. A team of Nepal Bankers’ Association (NBA), too, lodged a complaint with the NRB about the looming crisis.
In a departure from the norm, a few desperate bankers were compelled to accept Indian Currency (IC) to meet the growing customers’ demand. But a peeved banker pointed out the legal constraints of paying the customers in IC. In the run up to the festive season, a bank requires around Rs 1 billion in cash daily to pay the customers.However, Manandhar explained the logistical problem that led to the crisis.
“We’ve been expecting the consignment from France earlier. But it got delayed due to unavoidable circumstances. The shortage stands at Rs 4,800 million,” he explained. As the crisis deepened, some banks were forced to shutdown their ATMs from this evening.
A few banks have put a cap on withdrawal as well. A depositor cannot withdraw more than Rs 1 lakh. Agriculture Development Bank Nepal has instructed its branches not to pay more than Rs 25,000, sending the customers into a tizzy.
“Though the central bank gave us Rs 10 million today, the demand is five fold,” said a banker.Uma Kant Thapaliya, president, NRB Employee's Association (Thapathali), said that there had also been an increased demand for lower denominations
.“This year, we’re not giving more than Rs 4,000 in lower denominations to an individual. This is half of the usual amount during the festive season,” he said.
He took a dig at the NRB for mismanagement, alleging it has been able to fulfill only 10 per cent of the demand. Thapaliya said that the crisis could have been averted had a proper planning was in place around six months ago.
NDB depositors withdraw cash
KATHMANDU: Around 60 depositors of the Nepal Development Bank (NDB) on Tuesday withdrew Rs 4.84 million — 50 per cent of their deposit. The withdrawal process took place between 3 and 5pm. “It’ll continue for the next two days," said Kirti Madan Joshi, president, Nepal Bikas Bank Pidith Sangh. On Friday, the Patan Appellate Court had directed the Nepal Rastra Bank (NRB) to release funds for the cash-strapped depositors. Subsequently, the central bank released Rs 27.9 million on Sunday. The court has ordered the NRB to let the depositors withdraw 50 per cent of their sum but not exceeding Rs 2 lakh.
ADB provides $95 million for education
The Asian Development Bank (ADB) is helping Nepal restructure its education system and ensure all children, especially girls and children from vulnerable groups, have access to a better education.
The ADB's Board of Directors approved the Education Sector Programme (ESP) Subprogramme III that will contribute to the restructuring of the school system by extending the current five-year primary education into eight years of basic education, said the head office Manila.
The assistance package, consisting of a $70 million grant and a $25 million loan, will also help the government initiate pilot projects to improve secondary education as well as technical education and vocational training. At present, 25 per cent of Nepali children aged between five and 12 years old are out of school, compounded by high dropout and repetition rates at the primary level.
While there have been substantial improvements in equal access to school over the last decade, gender, caste, and ethnic disparities increase as children move up to higher levels. Grade performance of children from vulnerable groups is below average. In addition, schools serving the poorest and most marginalised communities are found to be the least staffed and supported.
Under the government's School Sector Reform programme, a range of affirmative actions to support education for girls and vulnerable groups has been defined, including financial incentives and teaching support for the schools as well as financial and non-cash support for the children and their families. The programme will also improve learning achievement levels and the cost-efficiency and effectiveness of the education system.
"A shift to an egalitarian and inclusive education system will help to relieve the root causes of conflict and social tension, build social cohesion, and contribute to social stability," said Takashi Matsuo, Director (Agriculture, Natural Resources and Social Services) at ADB's South Asia Department.
"Better access to affordable and quality education, and better learning achievements will ensure that these groups are able to generate the necessary human and social capital to build economically and socially responsible lives," said Alain Borghijs, Social Sector Economist at ADB's South Asia Department.
The package will be released in two tranches -- $45 million in the first tranche and $50 million within 18 months of the release of the first tranche and upon compliance of certain conditions.
The Subprogramme III will finance the initial phase of the government's School Sector Reform programme from fiscal year 2010 to 2012.
ADB approved the Education Sector Programme's Subprogramme I in 2006 with a programme loan of $30 million to be used from fiscal year 2007 to 2009. The $8-million Subprogramme II, approved in 2008, supports the preparation for the School Sector Reform programme from fiscal year 2008 to 2011.
The ADB's Board of Directors approved the Education Sector Programme (ESP) Subprogramme III that will contribute to the restructuring of the school system by extending the current five-year primary education into eight years of basic education, said the head office Manila.
The assistance package, consisting of a $70 million grant and a $25 million loan, will also help the government initiate pilot projects to improve secondary education as well as technical education and vocational training. At present, 25 per cent of Nepali children aged between five and 12 years old are out of school, compounded by high dropout and repetition rates at the primary level.
While there have been substantial improvements in equal access to school over the last decade, gender, caste, and ethnic disparities increase as children move up to higher levels. Grade performance of children from vulnerable groups is below average. In addition, schools serving the poorest and most marginalised communities are found to be the least staffed and supported.
Under the government's School Sector Reform programme, a range of affirmative actions to support education for girls and vulnerable groups has been defined, including financial incentives and teaching support for the schools as well as financial and non-cash support for the children and their families. The programme will also improve learning achievement levels and the cost-efficiency and effectiveness of the education system.
"A shift to an egalitarian and inclusive education system will help to relieve the root causes of conflict and social tension, build social cohesion, and contribute to social stability," said Takashi Matsuo, Director (Agriculture, Natural Resources and Social Services) at ADB's South Asia Department.
"Better access to affordable and quality education, and better learning achievements will ensure that these groups are able to generate the necessary human and social capital to build economically and socially responsible lives," said Alain Borghijs, Social Sector Economist at ADB's South Asia Department.
The package will be released in two tranches -- $45 million in the first tranche and $50 million within 18 months of the release of the first tranche and upon compliance of certain conditions.
The Subprogramme III will finance the initial phase of the government's School Sector Reform programme from fiscal year 2010 to 2012.
ADB approved the Education Sector Programme's Subprogramme I in 2006 with a programme loan of $30 million to be used from fiscal year 2007 to 2009. The $8-million Subprogramme II, approved in 2008, supports the preparation for the School Sector Reform programme from fiscal year 2008 to 2011.
China bans tourists in Tibet
China has barred foreigners from travelling to Tibet until after sensitive October 1 celebrations marking the 60th birthday of communist China, a government tourism office and travel agents said Tuesday.
A woman staffer at the official Lhasa Tourism Bureau in the regional capital said the ban would officially go into effect on Thursday.
"Passes for foreign travellers to enter Tibet will be suspended from September 24 to October 8. That's according to a notice from the Tibet Tourism Bureau," said the woman, who refused to give her name.
She said the notice contained no further information and no reason for the measure.
Officials with the regional government and Tibet Tourism Bureau refused to comment.
However, travel agents reached by AFP said the ban was already in place.
"It started from Monday, according to the notice from the Tibet Tourism Bureau. Passes for foreign travellers are suspended until October 8," said a woman staff member at the Tibet Youth Travel Service.
Staff at two other major travel agencies also confirmed the ban to AFP.
The move is the latest sign of intense official concern over security ahead of National Day, which will mark 60 years since Mao Zedong proclaimed the founding of the People's Republic of China at Tiananmen Square in Beijing.
The government already has sharply ramped up security in the capital, putting thousands of extra police on the streets ahead of the festivities, which will include a military parade, fireworks and mass performances at the square.
State media reported Monday that outgoing flights would be halted at Beijing's airport during the parade, and retailers have said they have been banned from selling kitchen knives after two recent stabbings near the square.
Foreign tourists must obtain special permission from China's government to enter Tibet, the remote Himalayan region where resentment against Chinese control has seethed for decades.
China has previously banned foreign tourists from visiting Tibet including after deadly anti-Chinese riots that erupted in Lhasa and across the Tibetan plateau in March 2008, triggering a massive Chinese security clampdown.
Beijing also barred foreigners in March of this year during the tense 50th anniversary of a failed 1959 uprising against China that sent the Dalai Lama, the Tibetan spiritual leader, into exile.
The bans and tight security in Tibet since last year's unrest have devastated the picturesque Buddhist region's tourism industry, according to state media reports.
Reports have said visitor arrivals dropped to 2.2 million in 2008, compared to four million the year before.
Chinese authorities are currently grappling with seething ethnic unrest in the restive western region of Xinjiang, including a wave of mysterious syringe attacks.
The attacks have been blamed on Uighurs, a Muslim ethnic minority that has long chafed at Chinese control.
Staff at several major state-run travel agents handling Xinjiang tours said on Tuesday they had so far received no notice of any ban on foreign tourists to the region. -- Ageancy France Presse
A woman staffer at the official Lhasa Tourism Bureau in the regional capital said the ban would officially go into effect on Thursday.
"Passes for foreign travellers to enter Tibet will be suspended from September 24 to October 8. That's according to a notice from the Tibet Tourism Bureau," said the woman, who refused to give her name.
She said the notice contained no further information and no reason for the measure.
Officials with the regional government and Tibet Tourism Bureau refused to comment.
However, travel agents reached by AFP said the ban was already in place.
"It started from Monday, according to the notice from the Tibet Tourism Bureau. Passes for foreign travellers are suspended until October 8," said a woman staff member at the Tibet Youth Travel Service.
Staff at two other major travel agencies also confirmed the ban to AFP.
The move is the latest sign of intense official concern over security ahead of National Day, which will mark 60 years since Mao Zedong proclaimed the founding of the People's Republic of China at Tiananmen Square in Beijing.
The government already has sharply ramped up security in the capital, putting thousands of extra police on the streets ahead of the festivities, which will include a military parade, fireworks and mass performances at the square.
State media reported Monday that outgoing flights would be halted at Beijing's airport during the parade, and retailers have said they have been banned from selling kitchen knives after two recent stabbings near the square.
Foreign tourists must obtain special permission from China's government to enter Tibet, the remote Himalayan region where resentment against Chinese control has seethed for decades.
China has previously banned foreign tourists from visiting Tibet including after deadly anti-Chinese riots that erupted in Lhasa and across the Tibetan plateau in March 2008, triggering a massive Chinese security clampdown.
Beijing also barred foreigners in March of this year during the tense 50th anniversary of a failed 1959 uprising against China that sent the Dalai Lama, the Tibetan spiritual leader, into exile.
The bans and tight security in Tibet since last year's unrest have devastated the picturesque Buddhist region's tourism industry, according to state media reports.
Reports have said visitor arrivals dropped to 2.2 million in 2008, compared to four million the year before.
Chinese authorities are currently grappling with seething ethnic unrest in the restive western region of Xinjiang, including a wave of mysterious syringe attacks.
The attacks have been blamed on Uighurs, a Muslim ethnic minority that has long chafed at Chinese control.
Staff at several major state-run travel agents handling Xinjiang tours said on Tuesday they had so far received no notice of any ban on foreign tourists to the region. -- Ageancy France Presse
Monday, September 21, 2009
Special conference on informal sector
City streets are lined by barbers, cobblers, waste recyclers, vendors of vegetables and every other imaginable kind of goods. They join the legions of workers that comprise the informal sector, that shadowy part of the economy, where companies -- if they can even be called that --don't exist on official registers and workers don't have secure contracts or benefits and social protection.
"This sector is hugely important to developing countries, having ballooned over the past decades as high rates of urbanisation, population growth and declining wages have pushed people out of the formal sector," said Professor Bishnu Dev Pant, director of the Centre for Economic and Applied Statics (CEAS)-South Asian Institute of Management.
"To gauge their contribution in real terms, brainstorming is needed," he said adding that South Asian Institute of Management is holding an international conference on 'Measuring Informal Sector in Developing Countries' jointly with International Association for Research on Income and Wealth (IARIW) on September 24-25 in Kathmandu.In most developing countries, most people depend for their livelihood on the 'informal economy' as their incomes come from subsistence farming or from operating small unincorporated enterprises.
Although the largest part of GDP may be generated by the formal economy, most people in developing countries live in the informal one, according to Pant.
By its nature the informal economy is difficult to measure. Informal enterprises are not usually listed in statistical registers used for official surveys, so indirect methods have to be used to estimate their contribution to value addition, output and employment. "Measuring the informal economy is therefore one of the main themes of the Special Conference," Prof Pant said adding, "But measurement is only useful if it serves the needs of policy makers. The conference will also consider the more basic questions of what needs to be measured and how measuring the wrong things may lead to bad policy-making."
"Yet, there's scant data on the informal sector, largely because of its high turnover, the reluctance of informal workers to participate in official survey and the small size of informal enterprises. This has a dealt death blow to sound policy-making in small economies where the informal sector plays a big role," he said adding that traditional survey methods will need to be totally overhauled to capture the full complexity of the informal sector.
This Special IARIW Conference -- that will have 50-75 participants -- will look at both economic and social aspects of the informal economy. How large it is in terms of employment and output, where families in the informal economy stand in the overall income distribution, what access they have to government education and health services, how they are served by non-profit institutions, how they cope with food shortages and price hike of basic for foodstuffs, and what government policies may be helpful or harmful in promoting the welfare of those who live in the informal economy.
"This sector is hugely important to developing countries, having ballooned over the past decades as high rates of urbanisation, population growth and declining wages have pushed people out of the formal sector," said Professor Bishnu Dev Pant, director of the Centre for Economic and Applied Statics (CEAS)-South Asian Institute of Management.
"To gauge their contribution in real terms, brainstorming is needed," he said adding that South Asian Institute of Management is holding an international conference on 'Measuring Informal Sector in Developing Countries' jointly with International Association for Research on Income and Wealth (IARIW) on September 24-25 in Kathmandu.In most developing countries, most people depend for their livelihood on the 'informal economy' as their incomes come from subsistence farming or from operating small unincorporated enterprises.
Although the largest part of GDP may be generated by the formal economy, most people in developing countries live in the informal one, according to Pant.
By its nature the informal economy is difficult to measure. Informal enterprises are not usually listed in statistical registers used for official surveys, so indirect methods have to be used to estimate their contribution to value addition, output and employment. "Measuring the informal economy is therefore one of the main themes of the Special Conference," Prof Pant said adding, "But measurement is only useful if it serves the needs of policy makers. The conference will also consider the more basic questions of what needs to be measured and how measuring the wrong things may lead to bad policy-making."
"Yet, there's scant data on the informal sector, largely because of its high turnover, the reluctance of informal workers to participate in official survey and the small size of informal enterprises. This has a dealt death blow to sound policy-making in small economies where the informal sector plays a big role," he said adding that traditional survey methods will need to be totally overhauled to capture the full complexity of the informal sector.
This Special IARIW Conference -- that will have 50-75 participants -- will look at both economic and social aspects of the informal economy. How large it is in terms of employment and output, where families in the informal economy stand in the overall income distribution, what access they have to government education and health services, how they are served by non-profit institutions, how they cope with food shortages and price hike of basic for foodstuffs, and what government policies may be helpful or harmful in promoting the welfare of those who live in the informal economy.
Sunday, September 20, 2009
Bangla baton passes on to Nepal for LDC Group
The 64th UN General Assembly meet
It is Nepal’s turn to chair the 50-member Least Developed Countries (LDC) Group during the ongoing 64th General Assembly of the United Nations. Bangladesh will hand over the reins to Nepal.
“It’ll help us to raise the issues of the LDCs at the UNGA. We can play a decisive role on behalf of these nations,” said foreign minister Sujata Koirala.
Developed nations, including Britain, want to forge an alliance with the LDCs to press emerging economic giants, like China and India, to make firm commitments for reducing the Green House Gas (GHG) emission.
The LDC Group comprises countries that are most vulnerable to the negative impacts of climate change due to the increased GHG emission of both developed and developing countries.
The LDC alliance with the developed countries will help mount pressure on China and India, which are one of the major GHG emitters.
The UN and the World Bank have also urged developed nations to shoulder "the moral responsibility".
Bangladesh, the outgoing chair, will seek compensation for LDCs.
As per UN’s charter, the LDCs are those nations that exhibit the lowest indicators of socio-economic and Human Development Index ratings. Ten Asian nations are a part of the LDCs.
Nepal ranks as 115th-largest economy in the world on the basis of its GDP that is over $12 billion.
From 2004 through 2006, for example, Bangladesh was elected by the LDC countries to chair the group. During this period, it was able to bring the disparate group of nearly 50 LDCs from Africa and Asia together under a common agenda and negotiating strategy, which in turn enabled the group to negotiate a special LDC Fund to support adaptation planning in these countries.
The Foreign Minister will also attend another meeting of the Landlocked Developing Countries (LLDC). Nepal will chair both the LDC and LLDC Groups for three years.
Koirala plans to strengthen the foreign missions, adding that the economic diplomacy was the need of the hour
“My recent visits to both India and China have been successful. I’ve managed to convince the investors in our neighbouring countries to invest in Nepal,” she said.
The government has allocated Rs 50 million for economic diplomacy in this fiscal.
The foreign missions — especially in the West Asia and Malaysia — are under tremendous pressure since the ongoing global downturn led to the job loss for thousands of Nepali migrant workers.
The 10 Asian LDCs:
Afghanistan
Bangladesh
Bhutan
Cambodia
East-Timor
Laos
Maldives
Myanmar
Nepal
Yemen
LANDLOCKED DEVELOPING COUNTRIES: Facts and Figures 2006
Highlights
Landlocked developing countries (LLDCs) are widely dispersed around the globe:
15 are located in Africa
12 in Asia
2 in Latin America
2 in Central and Eastern Europe
Despite their location on four different continents, all 31 LLDCs share common problems of geographical remoteness and dependence on trade and transport systems in neighbouring and coastal countries. The location of LLDCs in the interior of continents requires their export and import goods to travel hundreds, if not thousands of kilometers to and from the closest maritime ports. However, transit dependence increases transactions costs and reduces competitiveness in world market. This discourages investors and diminishes the capacity of LLDCs’ to reap benefits from the international division of labour. Not surprisingly, most landlocked developing countries are very poor.
Most of them are far from reaching the Millennium Development Goals (MDGs) related to primary education, infant mortality, access to safe water and the primary goal of poverty eradication. In fact, several landlocked developing countries are even moving further away from reaching these objectives.
For landlocked developing countries, promoting efficient transit systems in order to lower trade transaction and transport costs, in particular, is an important objective. However, the building of supply capacities for goods and services that are not sensitive to distance and a stronger regional trade expansion are also major prerequisites for a more beneficial integration of these countries into the international trading system.
The international community has focused on the specific development constraints of LLDCs for many decades. The United Nations Millennium Declaration urged their development partners to increase financial and technical assistance to LLDCs to help them overcome the impediments of geography. This call was echoed at major United Nations conferences in Brussels, Monterrey, Johannesburg and, particularly in Almaty, which was solely dedicated to the problems of landlocked and transit developing countries.
The 2003 Almaty International Ministerial Conference of Landlocked and Transit Developing Countries and Donor Countries and International Financial and Development Institutions on Transit Transport Cooperation helped forge a global partnership to tackle the economic marginalization of LLDCs. UNCTAD is fully committed to shoulder its obligations for the implementation of the Almaty Programme of Action, including its mid-term review process.
This publication presents key economic, social and trade information on all 31 LLDCs. It helps to understand the development challenge faced by these countries and underlines the need for international assistance to them.
It is Nepal’s turn to chair the 50-member Least Developed Countries (LDC) Group during the ongoing 64th General Assembly of the United Nations. Bangladesh will hand over the reins to Nepal.
“It’ll help us to raise the issues of the LDCs at the UNGA. We can play a decisive role on behalf of these nations,” said foreign minister Sujata Koirala.
Developed nations, including Britain, want to forge an alliance with the LDCs to press emerging economic giants, like China and India, to make firm commitments for reducing the Green House Gas (GHG) emission.
The LDC Group comprises countries that are most vulnerable to the negative impacts of climate change due to the increased GHG emission of both developed and developing countries.
The LDC alliance with the developed countries will help mount pressure on China and India, which are one of the major GHG emitters.
The UN and the World Bank have also urged developed nations to shoulder "the moral responsibility".
Bangladesh, the outgoing chair, will seek compensation for LDCs.
As per UN’s charter, the LDCs are those nations that exhibit the lowest indicators of socio-economic and Human Development Index ratings. Ten Asian nations are a part of the LDCs.
Nepal ranks as 115th-largest economy in the world on the basis of its GDP that is over $12 billion.
From 2004 through 2006, for example, Bangladesh was elected by the LDC countries to chair the group. During this period, it was able to bring the disparate group of nearly 50 LDCs from Africa and Asia together under a common agenda and negotiating strategy, which in turn enabled the group to negotiate a special LDC Fund to support adaptation planning in these countries.
The Foreign Minister will also attend another meeting of the Landlocked Developing Countries (LLDC). Nepal will chair both the LDC and LLDC Groups for three years.
Koirala plans to strengthen the foreign missions, adding that the economic diplomacy was the need of the hour
“My recent visits to both India and China have been successful. I’ve managed to convince the investors in our neighbouring countries to invest in Nepal,” she said.
The government has allocated Rs 50 million for economic diplomacy in this fiscal.
The foreign missions — especially in the West Asia and Malaysia — are under tremendous pressure since the ongoing global downturn led to the job loss for thousands of Nepali migrant workers.
The 10 Asian LDCs:
Afghanistan
Bangladesh
Bhutan
Cambodia
East-Timor
Laos
Maldives
Myanmar
Nepal
Yemen
LANDLOCKED DEVELOPING COUNTRIES: Facts and Figures 2006
Highlights
Landlocked developing countries (LLDCs) are widely dispersed around the globe:
15 are located in Africa
12 in Asia
2 in Latin America
2 in Central and Eastern Europe
Despite their location on four different continents, all 31 LLDCs share common problems of geographical remoteness and dependence on trade and transport systems in neighbouring and coastal countries. The location of LLDCs in the interior of continents requires their export and import goods to travel hundreds, if not thousands of kilometers to and from the closest maritime ports. However, transit dependence increases transactions costs and reduces competitiveness in world market. This discourages investors and diminishes the capacity of LLDCs’ to reap benefits from the international division of labour. Not surprisingly, most landlocked developing countries are very poor.
Most of them are far from reaching the Millennium Development Goals (MDGs) related to primary education, infant mortality, access to safe water and the primary goal of poverty eradication. In fact, several landlocked developing countries are even moving further away from reaching these objectives.
For landlocked developing countries, promoting efficient transit systems in order to lower trade transaction and transport costs, in particular, is an important objective. However, the building of supply capacities for goods and services that are not sensitive to distance and a stronger regional trade expansion are also major prerequisites for a more beneficial integration of these countries into the international trading system.
The international community has focused on the specific development constraints of LLDCs for many decades. The United Nations Millennium Declaration urged their development partners to increase financial and technical assistance to LLDCs to help them overcome the impediments of geography. This call was echoed at major United Nations conferences in Brussels, Monterrey, Johannesburg and, particularly in Almaty, which was solely dedicated to the problems of landlocked and transit developing countries.
The 2003 Almaty International Ministerial Conference of Landlocked and Transit Developing Countries and Donor Countries and International Financial and Development Institutions on Transit Transport Cooperation helped forge a global partnership to tackle the economic marginalization of LLDCs. UNCTAD is fully committed to shoulder its obligations for the implementation of the Almaty Programme of Action, including its mid-term review process.
This publication presents key economic, social and trade information on all 31 LLDCs. It helps to understand the development challenge faced by these countries and underlines the need for international assistance to them.
NRB releases Rs 27.9 million for troubled-NDB depositors
Nepal Rastra Bank (NRB) on Sunday decided to release Rs 27.9 million for the depositors of Nepal Development Bank (NDB). On Friday, the Patan Appellate Court directed the NRB to let the depositors withdraw a minimum amount in view of the festive season.
The court ordered the NRB to let the customers withdraw 50 per cent of their deposits, if the deposit is up to Rs 1 lakh. While, the maximum amount that be withdrawn is Rs 2 lakh, which ought to be at least 50 per cent of the deposit. Depositors can withdraw their sum from Tuesday.
The court has directed the NRB as suggested by Investigation Officer T R Upadhyaya, who submitted his report on Wednesday.
Apart from Dashain limited-withdrawal, Upadhayay has also recommended the revival of NDB as the Badri Bhattarai-Nabin Pun group has given bank guarantees equivalent to Rs 340 million -- Rs 240 million and Rs 100 million each. He has also argued that the liquidation of the NDB might hit the economy and encourage capital flight.
The court has also directed the central bank to release the NDB employees' salaries and their Dashain bonus. There are around 30 employees including those in NDB's Pokhara branch office and the head office at Kamaladi of Kathmandu.
Based on the recommendations by Upadhyaya, the court will decide whether to revive the bank or send it into liquidation after Dashain. The recommendation has said that in case of revival, the institutional depositors like Nepal Army and Employment Provident Fund will get their money back in three years.
The court ordered the NRB to let the customers withdraw 50 per cent of their deposits, if the deposit is up to Rs 1 lakh. While, the maximum amount that be withdrawn is Rs 2 lakh, which ought to be at least 50 per cent of the deposit. Depositors can withdraw their sum from Tuesday.
The court has directed the NRB as suggested by Investigation Officer T R Upadhyaya, who submitted his report on Wednesday.
Apart from Dashain limited-withdrawal, Upadhayay has also recommended the revival of NDB as the Badri Bhattarai-Nabin Pun group has given bank guarantees equivalent to Rs 340 million -- Rs 240 million and Rs 100 million each. He has also argued that the liquidation of the NDB might hit the economy and encourage capital flight.
The court has also directed the central bank to release the NDB employees' salaries and their Dashain bonus. There are around 30 employees including those in NDB's Pokhara branch office and the head office at Kamaladi of Kathmandu.
Based on the recommendations by Upadhyaya, the court will decide whether to revive the bank or send it into liquidation after Dashain. The recommendation has said that in case of revival, the institutional depositors like Nepal Army and Employment Provident Fund will get their money back in three years.
Panel to advice on Central Revenue Board
The government has formed a high-level committee to provide advice on the formation of Central Revenue Board.
The five-member committee will study the present revenue administration at length and go through such arrangements of neighbouring countries which have autonomous boards, and prepare the draft of an autonomous Central Revenue Board.
From the government side the committee has senior economic advisor Keshav Acharya and joint secretary Shanta Raj Subedi of the finance ministry while Niranjan Tibrewal and Prof Dr Puspa Kandel led by Prof Dr Madan Kumar Dahal represent the economists. The committee will submit its report with concrete suggestions on Central Revenue Board, its structure, role and responsibility by November 15.
In his budget speech for the fiscal year 2009-10, finance minister Surendra Pandey had promised to form an autonomous Central Revenue Board.
The five-member committee will study the present revenue administration at length and go through such arrangements of neighbouring countries which have autonomous boards, and prepare the draft of an autonomous Central Revenue Board.
From the government side the committee has senior economic advisor Keshav Acharya and joint secretary Shanta Raj Subedi of the finance ministry while Niranjan Tibrewal and Prof Dr Puspa Kandel led by Prof Dr Madan Kumar Dahal represent the economists. The committee will submit its report with concrete suggestions on Central Revenue Board, its structure, role and responsibility by November 15.
In his budget speech for the fiscal year 2009-10, finance minister Surendra Pandey had promised to form an autonomous Central Revenue Board.
CRANE becomes Nepal's first credit rating agency
Finally Nepal has a credit rating agency.
Credit Rating Agency Nepal Pvt Ltd (CRANE) has become the first credit rating agency (CRA) to be registered in Nepal and will start operating from November.
CRA is a company that assigns credit ratings for issuers of certain types of debt obligations as well as the debt instruments themselves. The issuers of securities are companies, special purpose entities, state and local governments, non-profit organisations or national governments issuing debt-like securities that is bonds that can be traded on a secondary market.
A credit rating for an issuer takes into consideration the issuer's creditworthiness such as ability to pay back a loan and affects the interest rate applied to the particular security being issued. Prior to buying the securities, the public can get complete and reliable information about the instrument where one is going to pour in hard-earned money.
With the increasing domestic corporate world of especially financial institutions, such rating agencies are the need of the hour.
"Such rating agencies are self regulated and its not a compulsan rather a certifiaction that can boost the confidence of the investors and the company itself," said CRANE chairman Sujeev Shakya. CRANE will begin rating services for individuals, corporates, financial institutions and instruments issued by them. "It will provide a full range of international quality rating and grading services for individuals and organisations," he added.
CRANE has also signed a Memorandum of Understanding (MoU) with CARE Ratings -- India's premier rating agency Credit Analysis & Research Ltd. CARE Ratings is a full-service rating company that offers a wide range of rating and grading services across sectors. It has unparalleled depth of expertise and its methodologies are in line with the best international practices.
Recognised by Securities and Exchange Board of India (Sebi), Government of India (GoI) and Reserve Bank of India (RBI) CARE Ratings has completed over 6,256 rating assignments having aggregate value of about IRs 18,248 billion (till June 30), since its inception in April 1993.
CARE Ratings managing director D R Dogra hoped that the MoU would bring world class rating methodologies to Nepal and add a complete new dimension to the country's domestic financial and corporate world.
Shakya said it was a continuation of beed management's efforts to pioneer new businesses in Nepal. "We look forward to fill the void of a rating agency in Nepal and change the way business and financial transactions are conducted," he said.
Credit Rating Agency Nepal Pvt Ltd (CRANE) has become the first credit rating agency (CRA) to be registered in Nepal and will start operating from November.
CRA is a company that assigns credit ratings for issuers of certain types of debt obligations as well as the debt instruments themselves. The issuers of securities are companies, special purpose entities, state and local governments, non-profit organisations or national governments issuing debt-like securities that is bonds that can be traded on a secondary market.
A credit rating for an issuer takes into consideration the issuer's creditworthiness such as ability to pay back a loan and affects the interest rate applied to the particular security being issued. Prior to buying the securities, the public can get complete and reliable information about the instrument where one is going to pour in hard-earned money.
With the increasing domestic corporate world of especially financial institutions, such rating agencies are the need of the hour.
"Such rating agencies are self regulated and its not a compulsan rather a certifiaction that can boost the confidence of the investors and the company itself," said CRANE chairman Sujeev Shakya. CRANE will begin rating services for individuals, corporates, financial institutions and instruments issued by them. "It will provide a full range of international quality rating and grading services for individuals and organisations," he added.
CRANE has also signed a Memorandum of Understanding (MoU) with CARE Ratings -- India's premier rating agency Credit Analysis & Research Ltd. CARE Ratings is a full-service rating company that offers a wide range of rating and grading services across sectors. It has unparalleled depth of expertise and its methodologies are in line with the best international practices.
Recognised by Securities and Exchange Board of India (Sebi), Government of India (GoI) and Reserve Bank of India (RBI) CARE Ratings has completed over 6,256 rating assignments having aggregate value of about IRs 18,248 billion (till June 30), since its inception in April 1993.
CARE Ratings managing director D R Dogra hoped that the MoU would bring world class rating methodologies to Nepal and add a complete new dimension to the country's domestic financial and corporate world.
Shakya said it was a continuation of beed management's efforts to pioneer new businesses in Nepal. "We look forward to fill the void of a rating agency in Nepal and change the way business and financial transactions are conducted," he said.
Saturday, September 19, 2009
Relief for strapped NDB depositors
Troubled Nepal Development Bank's (NDB) depositors might be able to celebrate Dashain with an easy mind as Patan Appellate Court yesterday directed Nepal Rastra Bank (NRB) to let them withdraw a minimum amount from their deposits.
The court has asked NRB to let worried depositors withdraw Rs 50,000 -- 50 per cent of their deposit -- if their deposit is Rs 1,00,000. "In case of more than Rs 1,00,000 deposit, they can still withdraw 50 per cent but not above Rs 2,00,000 deposit," said Nepal Bikash Bank Peedit Sangh president Kirti Madan Joshi.
"The letter wil reach NRB on Sunday and it will decide when to let us withdraw our deposits," an elated Joshi said adding that the NRB governor might decide their fate on Sunday. "If NRB permits us to withdraw, depositors with savings accounts and fixed -- whose account has already matured -- can withdraw according to the court directive," he added.
The court has heard the case after Investigation Officer T R Upadhyaya submitted his report on Wednesday. Upadhayay has recommended the revival of NDB as the Badri Bhattarai-Nabin Pun group has given bank guarantees equivalent to Rs 340 million -- Rs 240 million and Rs 100 million each. He has also argued that the liquidation of the NDB might hit the economy and encourage capital flight.
Though he has asked the court to clarify the definition of small depositors the court is silent on it and in turn has asked NRB to make arrangements for the withdrawal of deposits before Dashain.
The court has also asked the central bank to release the NDB employees' salaries and their Dashain bonus. There are around 30 employees including those in NDB's Pokhara branch office and the head office at Kamaladi of Kathmandu.
Based on the recommendations by Upadhyaya, the court will decide whether to revive the bank or send it into liquidation after Dashain. The recommendation has said that in case of revival, the institutional depositors like Nepal Army and Employment Provident Fund will get their money back in three years.
According to Upadhayay's recommendation, the settlement of Non-Performing Assets (NPA) and Non-Banking Assets (NBA) with extra capital injection can revive the bank. "The bank can be revived with internal resources (Rs 274.64 million) and Rs 320 million capital injection from the Bhattarai-Pun Group," he said.
Bhattarai -- the current promoter -- has given a Rs 240 million bank guarantee through Kumari Bank. Pun -- the son of 'controversial' former NDB chairman Uttam Pun -- has given a Rs 100 million bank guarantee through Kist Bank.
However, NDB has also to settle its NPA -- Rs 110 million with Holyland School, Rs 90 million with Nepal Cooperatives Ltd and Rs 80 million with Gurkha Hydropower for its revival.
The first development bank of Nepal has 19,865 shareholders and around 4,000 depositors. Patan Appellate Court appointed Upadhyaya as investigation officer on July 29 as per the Insolvency Act 2007. This is the first of its kind of case in the financial history of Nepal in which NRB sought the court's approval to sent a bank into liquidation.
The court has asked NRB to let worried depositors withdraw Rs 50,000 -- 50 per cent of their deposit -- if their deposit is Rs 1,00,000. "In case of more than Rs 1,00,000 deposit, they can still withdraw 50 per cent but not above Rs 2,00,000 deposit," said Nepal Bikash Bank Peedit Sangh president Kirti Madan Joshi.
"The letter wil reach NRB on Sunday and it will decide when to let us withdraw our deposits," an elated Joshi said adding that the NRB governor might decide their fate on Sunday. "If NRB permits us to withdraw, depositors with savings accounts and fixed -- whose account has already matured -- can withdraw according to the court directive," he added.
The court has heard the case after Investigation Officer T R Upadhyaya submitted his report on Wednesday. Upadhayay has recommended the revival of NDB as the Badri Bhattarai-Nabin Pun group has given bank guarantees equivalent to Rs 340 million -- Rs 240 million and Rs 100 million each. He has also argued that the liquidation of the NDB might hit the economy and encourage capital flight.
Though he has asked the court to clarify the definition of small depositors the court is silent on it and in turn has asked NRB to make arrangements for the withdrawal of deposits before Dashain.
The court has also asked the central bank to release the NDB employees' salaries and their Dashain bonus. There are around 30 employees including those in NDB's Pokhara branch office and the head office at Kamaladi of Kathmandu.
Based on the recommendations by Upadhyaya, the court will decide whether to revive the bank or send it into liquidation after Dashain. The recommendation has said that in case of revival, the institutional depositors like Nepal Army and Employment Provident Fund will get their money back in three years.
According to Upadhayay's recommendation, the settlement of Non-Performing Assets (NPA) and Non-Banking Assets (NBA) with extra capital injection can revive the bank. "The bank can be revived with internal resources (Rs 274.64 million) and Rs 320 million capital injection from the Bhattarai-Pun Group," he said.
Bhattarai -- the current promoter -- has given a Rs 240 million bank guarantee through Kumari Bank. Pun -- the son of 'controversial' former NDB chairman Uttam Pun -- has given a Rs 100 million bank guarantee through Kist Bank.
However, NDB has also to settle its NPA -- Rs 110 million with Holyland School, Rs 90 million with Nepal Cooperatives Ltd and Rs 80 million with Gurkha Hydropower for its revival.
The first development bank of Nepal has 19,865 shareholders and around 4,000 depositors. Patan Appellate Court appointed Upadhyaya as investigation officer on July 29 as per the Insolvency Act 2007. This is the first of its kind of case in the financial history of Nepal in which NRB sought the court's approval to sent a bank into liquidation.
Nepse's chin just above water
Commercial banks -- the key player in the secondary market -- followed by others and hydropower sub-groups rescued Nepse from sliding below the 600-point mark.
They propelled Nepse by 13.18 points to reach 627.97 points from Sunday morning's opening of 604.65 points. Nepse seems to be hovering at 600 points for a while.
Of the nine sub-groups -- commercial banks gained a whopping 21.91 points to rise to 626.56 points, others sub-group gained 12.92 points to reach 657.94 points and hydropower sub-group gained 4.69 points to reach 833.25 points. Four sub-groups lost this week and two sub-groups -- hotels and manufacturing -- did not see any trading of their shares this week.
The week started in the green but could not continue as on the fourth and fifth day Nepse lost points to settle at 627.97 points.
This week, National Hydropower topped the chart in terms of transaction amount as its shares were traded at Rs 75.04 million. Standard Chartered Bank Nepal followed with Rs 53.36 million, and NIC Bank (with Rs 37.41 million), Bank of Kathmandu (with Rs 25.95 million) and Nabil Bank (with Rs 22.32 million) managed to come in the top five slot, respectively.
In terms of number of share units traded also, National Hydropower topped the chart with 8,42,000-unit shares changing hands while in terms of number of transactions Pashupati Development Bank topped the chart with 439 transactions.
However, the transaction amount decreased by 9.46 percent this week against last week's increase of 40.08 per cent to Rs 483.89 million. Similarly, Group-A companies' contribution also dropped to 48.75 per cent against last week's 70.71 per cent whereas the 78-scrip sensitive index -- a barometer of Group-A companies -- gained 3.10 points to 160.52 points. The float index -- calculated on the basis of real transactions -- also rose by a mere 1.17 points to 59.70 points.
This week over 3.46 million-unit rights and bonus shares of NMB Bank and Om Finance were listed in the secondary market whereas in the fiscal year 2008-09, bonus shares of 37 companies worth Rs 1,924.77 million, rights share of of 50 companies worth Rs 9,307.8 million and ordinary shares of 14 companies worth Rs 19,087.5 million had been listed.
Asian Life Insurance to float shares
KATHMANDU: Securities Board of Nepal (Sebon) has permitted Asian Life Insurance Company to issue 1.08-million units of share with face value of Rs 100 per unit to the public. The company that has Rs 360 million paid-up capital is issuing 30 per cent public shares, said a press release. NIDC Capital Market is the issue manager and sales manager. Currently, Nepse has 17 insurance companies -- totalling to 20,467,884-unit that has Rs 2,046,788,400 paid up capital -- under the insurance companies sub-group.
They propelled Nepse by 13.18 points to reach 627.97 points from Sunday morning's opening of 604.65 points. Nepse seems to be hovering at 600 points for a while.
Of the nine sub-groups -- commercial banks gained a whopping 21.91 points to rise to 626.56 points, others sub-group gained 12.92 points to reach 657.94 points and hydropower sub-group gained 4.69 points to reach 833.25 points. Four sub-groups lost this week and two sub-groups -- hotels and manufacturing -- did not see any trading of their shares this week.
The week started in the green but could not continue as on the fourth and fifth day Nepse lost points to settle at 627.97 points.
This week, National Hydropower topped the chart in terms of transaction amount as its shares were traded at Rs 75.04 million. Standard Chartered Bank Nepal followed with Rs 53.36 million, and NIC Bank (with Rs 37.41 million), Bank of Kathmandu (with Rs 25.95 million) and Nabil Bank (with Rs 22.32 million) managed to come in the top five slot, respectively.
In terms of number of share units traded also, National Hydropower topped the chart with 8,42,000-unit shares changing hands while in terms of number of transactions Pashupati Development Bank topped the chart with 439 transactions.
However, the transaction amount decreased by 9.46 percent this week against last week's increase of 40.08 per cent to Rs 483.89 million. Similarly, Group-A companies' contribution also dropped to 48.75 per cent against last week's 70.71 per cent whereas the 78-scrip sensitive index -- a barometer of Group-A companies -- gained 3.10 points to 160.52 points. The float index -- calculated on the basis of real transactions -- also rose by a mere 1.17 points to 59.70 points.
This week over 3.46 million-unit rights and bonus shares of NMB Bank and Om Finance were listed in the secondary market whereas in the fiscal year 2008-09, bonus shares of 37 companies worth Rs 1,924.77 million, rights share of of 50 companies worth Rs 9,307.8 million and ordinary shares of 14 companies worth Rs 19,087.5 million had been listed.
Asian Life Insurance to float shares
KATHMANDU: Securities Board of Nepal (Sebon) has permitted Asian Life Insurance Company to issue 1.08-million units of share with face value of Rs 100 per unit to the public. The company that has Rs 360 million paid-up capital is issuing 30 per cent public shares, said a press release. NIDC Capital Market is the issue manager and sales manager. Currently, Nepse has 17 insurance companies -- totalling to 20,467,884-unit that has Rs 2,046,788,400 paid up capital -- under the insurance companies sub-group.
Friday, September 18, 2009
Price hike pall hangs over Dashain
This Dashain is going to be costlier than the last one as the price of staple food is higher than it was at the peak of the international food crisis last August.
In comparison to last August, the price of musuro (lentil) is up by 35 per cent. Black gram is up by 23 per cent and wheat by two per cent. Vegetable prices are also very high -- in some cases more than double what they were last August. This is primarily due to the winter drought, late monsoon and difficulty in transportation caused by various road closures, said a report prepared jointly by the Ministry of Agriculture and Cooperatives (MoAC), Department of Agriculture, Agribusiness Promotion and Marketing Development Directorate, Federation of Nepalese Chambers of Commerce and Industries, World Food Programme-Food Security Monitoring and Analysis Unit and Consumer Interest Protection Forum.
Dashain is expected to be particularly expensive for Nepali households as chicken prices are already very high because the poultry industry is recovering from losses caused by bird flu earlier in the year and that had led to increased consumption of mutton. It is reported that mutton price also will be higher than normal this Dashain due to reduced supply.
The price of sugar is continuing to increase, up by an average of seven per cent this month compared to last month. This is due to reduced regional and global supply, according to the report.
Maize and potato harvests have begun in various hill and mountain areas in Central and Western Nepal and this has had a positive impact on the availability of these items. However, the harvests have been impaired by drought and in some areas by flood also.
During August, Dairy Development Corporation (DDC) increased the retail price of milk by Rs 2 per litre. Following the hike, milk supply was seriously disrupted after dairy farmers across the country protested asking for a Rs 4 per litre hike.
Traders in the hill and mountain markets of Bajhang, Baitadi, Dadeldhura, Dailekh, Dolpa, Jumla, Humla, Mugu, Myagdi and Sindhupalchok say that there is insufficient supply of important food items to meet the demands of local people.
During August and early September monsoon rains reduced road access and increased transportation costs to many hill and mountain markets, fuelling food prices higher. The delayed and weak monsoon is also expected to reduce crop output by around 15 to 20 per cent, creating more pressure.
Many of the markets have insufficient supply of key commodities and consequently prices have increased. Nepal is also expected to face an estimated 400,000 metric tonnes (MT) domestic food grain deficit this year. This shortfall combined with poor crop cultivation in India is expected to increase food prices in Nepal towards the end of 2009 and during the first quarter of 2010, said the report.
On one hand, the demand for food has risen three-fold and on the other the reduced putput is certain to push the price of commodities sky-high.
According to Nepal Rastra Bank, in 2008-09 the agriculture sector was estimated to grow by half to 2.2 per cent and non-agriculture sector at 4.7 per cent against the growth of 4.7 per cent and 5.6 per cent a year ago.
Due to an unfavourable monsoon, the production of paddy has dropped to 5.2 per cent in comparison to a growth of 16.8 per cent in 2007-08. The fall in production of the main winter crops such as wheat (by 14.5 per cent) and barley (by 17.3 per cent) and slowdown in growth rate of paddy production led to deceleration in overall agricultural growth in 2008-09, said the central bank.
In a year, the price has doubled as the annual average consumer inflation increased to 13.2 per cent in 2008-09 against 7.7 per cent in 2007-08 due to rise by 16.7 per cent in food and beverages group. The annual average price of non-food and service group is less as it increased by 9.5 per cent.
"Of the items under food and beverages group, yearly average price indices of sugar and sugar related products, increased by a whopping rate of 45.9 per cent against a decline of 10.1 per cent in 2007-08," said the NRB report.
Region-wise, annual average price level in Kathmandu Valley, the Terai and Hills rose by double to 14.3 per cent, 12.8 per cent and 12.7 per cent respectively in 2008-09 in comparison to a rise of 7.2 per cent, 8.1 per cent and 7.4 per cent, respectively in 2007-08.
Annual price hike rate (graph)
2002-03 -- 4.8 per cent
2003-04 -- 4.0 per cent
2004-05 -- 4.5 per cent
2005-06 -- 8.0 per cent
2006-07 -- 6.4 per cent
2007-08 -- 7.7 per cent
2008-09 -- 13.2 per cent
In comparison to last August, the price of musuro (lentil) is up by 35 per cent. Black gram is up by 23 per cent and wheat by two per cent. Vegetable prices are also very high -- in some cases more than double what they were last August. This is primarily due to the winter drought, late monsoon and difficulty in transportation caused by various road closures, said a report prepared jointly by the Ministry of Agriculture and Cooperatives (MoAC), Department of Agriculture, Agribusiness Promotion and Marketing Development Directorate, Federation of Nepalese Chambers of Commerce and Industries, World Food Programme-Food Security Monitoring and Analysis Unit and Consumer Interest Protection Forum.
Dashain is expected to be particularly expensive for Nepali households as chicken prices are already very high because the poultry industry is recovering from losses caused by bird flu earlier in the year and that had led to increased consumption of mutton. It is reported that mutton price also will be higher than normal this Dashain due to reduced supply.
The price of sugar is continuing to increase, up by an average of seven per cent this month compared to last month. This is due to reduced regional and global supply, according to the report.
Maize and potato harvests have begun in various hill and mountain areas in Central and Western Nepal and this has had a positive impact on the availability of these items. However, the harvests have been impaired by drought and in some areas by flood also.
During August, Dairy Development Corporation (DDC) increased the retail price of milk by Rs 2 per litre. Following the hike, milk supply was seriously disrupted after dairy farmers across the country protested asking for a Rs 4 per litre hike.
Traders in the hill and mountain markets of Bajhang, Baitadi, Dadeldhura, Dailekh, Dolpa, Jumla, Humla, Mugu, Myagdi and Sindhupalchok say that there is insufficient supply of important food items to meet the demands of local people.
During August and early September monsoon rains reduced road access and increased transportation costs to many hill and mountain markets, fuelling food prices higher. The delayed and weak monsoon is also expected to reduce crop output by around 15 to 20 per cent, creating more pressure.
Many of the markets have insufficient supply of key commodities and consequently prices have increased. Nepal is also expected to face an estimated 400,000 metric tonnes (MT) domestic food grain deficit this year. This shortfall combined with poor crop cultivation in India is expected to increase food prices in Nepal towards the end of 2009 and during the first quarter of 2010, said the report.
On one hand, the demand for food has risen three-fold and on the other the reduced putput is certain to push the price of commodities sky-high.
According to Nepal Rastra Bank, in 2008-09 the agriculture sector was estimated to grow by half to 2.2 per cent and non-agriculture sector at 4.7 per cent against the growth of 4.7 per cent and 5.6 per cent a year ago.
Due to an unfavourable monsoon, the production of paddy has dropped to 5.2 per cent in comparison to a growth of 16.8 per cent in 2007-08. The fall in production of the main winter crops such as wheat (by 14.5 per cent) and barley (by 17.3 per cent) and slowdown in growth rate of paddy production led to deceleration in overall agricultural growth in 2008-09, said the central bank.
In a year, the price has doubled as the annual average consumer inflation increased to 13.2 per cent in 2008-09 against 7.7 per cent in 2007-08 due to rise by 16.7 per cent in food and beverages group. The annual average price of non-food and service group is less as it increased by 9.5 per cent.
"Of the items under food and beverages group, yearly average price indices of sugar and sugar related products, increased by a whopping rate of 45.9 per cent against a decline of 10.1 per cent in 2007-08," said the NRB report.
Region-wise, annual average price level in Kathmandu Valley, the Terai and Hills rose by double to 14.3 per cent, 12.8 per cent and 12.7 per cent respectively in 2008-09 in comparison to a rise of 7.2 per cent, 8.1 per cent and 7.4 per cent, respectively in 2007-08.
Annual price hike rate (graph)
2002-03 -- 4.8 per cent
2003-04 -- 4.0 per cent
2004-05 -- 4.5 per cent
2005-06 -- 8.0 per cent
2006-07 -- 6.4 per cent
2007-08 -- 7.7 per cent
2008-09 -- 13.2 per cent
PAC tells NAC not to buy aircraft
The Public Accounts Committee (PAC) today asked Minister for Tourism and Civil Aviation Sharad Singh Bhandari to improve the management of the ailing national flag carrier rather than buy new aircraft.
Nepal Airlines Corporation (NAC) is planning to buy wide-body aircraft. "A committee formed to study the need to buy new aircraft has raised serious questions about the necessity of buying widebody aircraft," said PAC members. "However, buying narrow body aircraft might make it easier to start regional flights according to the revised Air Service Agreement (ASA) between Nepal and India," it added.
Bhandari, however, reasoned that the new aircraft are the need of the hour as the country is celebrating Nepal Tourism Year 2011 and the number of present aircraft is not enough. There are two old aircraft -- Boeing 747s -- with NAC, of which only one is in operation currently.NAC has also raised questions about the process of the aircraft purchase. According to PAC, it is not in accordance with economic regulations of NAC.
The minister accepted that the confusion over the executive power of chairman Sugat Ratna Kansakar and general manager KB Gurung has hindered the smooth operation of NAC. "Once the court gives a verdict clearing the confusion, the issue will be resolved," he said.
The government has appointed Kansakar executive chairman. Earlier, Limbu was managing director and enjoying the executive rights. Managing director captain Kul Bahadur has moved the SC asking for a stay order against the appointment of Sugat Ratna Kansakar as executive chairman. The present government appointed Kansakar executive chairman on July 26.Dr Prakash Chandra Lohani, joint chairman of Rastriya Janashakti Party and Hridayesh Tripathi, both members of the PAC had warned NAC of the negative consequencies of buying aircraft.
Ailing NAC has been planning to add new aircraft in its domestic fleet also. On the domestic routes NAC is flying its four DHC-6-Twin Otter aircraft that each have 19-seat capacity, though it has seven Twin OttersApart from the two much-talked wide-body aircraft, NAC also had planned to add six aircraft on international routes. Currently, on international routes NAC is flying a Boeing B-757 and a Boeing 757-200 aircraft -- Karnali and Gandaki -- each with 190-seat capacity. The then Royal Nepal Airlines Corporation (RNAC) -- and present NAC -- had taken two Boeing 757s -- Karnali on lease in 1987 and Gandaki in 1988.
The national flag carrier has incurred an operating loss of around Rs 50 million in the fiscal year 2008-09 due to unavailability of one of the aircraft for maintanance and hiked fuel price reasons.
Nepal Airlines Corporation (NAC) is planning to buy wide-body aircraft. "A committee formed to study the need to buy new aircraft has raised serious questions about the necessity of buying widebody aircraft," said PAC members. "However, buying narrow body aircraft might make it easier to start regional flights according to the revised Air Service Agreement (ASA) between Nepal and India," it added.
Bhandari, however, reasoned that the new aircraft are the need of the hour as the country is celebrating Nepal Tourism Year 2011 and the number of present aircraft is not enough. There are two old aircraft -- Boeing 747s -- with NAC, of which only one is in operation currently.NAC has also raised questions about the process of the aircraft purchase. According to PAC, it is not in accordance with economic regulations of NAC.
The minister accepted that the confusion over the executive power of chairman Sugat Ratna Kansakar and general manager KB Gurung has hindered the smooth operation of NAC. "Once the court gives a verdict clearing the confusion, the issue will be resolved," he said.
The government has appointed Kansakar executive chairman. Earlier, Limbu was managing director and enjoying the executive rights. Managing director captain Kul Bahadur has moved the SC asking for a stay order against the appointment of Sugat Ratna Kansakar as executive chairman. The present government appointed Kansakar executive chairman on July 26.Dr Prakash Chandra Lohani, joint chairman of Rastriya Janashakti Party and Hridayesh Tripathi, both members of the PAC had warned NAC of the negative consequencies of buying aircraft.
Ailing NAC has been planning to add new aircraft in its domestic fleet also. On the domestic routes NAC is flying its four DHC-6-Twin Otter aircraft that each have 19-seat capacity, though it has seven Twin OttersApart from the two much-talked wide-body aircraft, NAC also had planned to add six aircraft on international routes. Currently, on international routes NAC is flying a Boeing B-757 and a Boeing 757-200 aircraft -- Karnali and Gandaki -- each with 190-seat capacity. The then Royal Nepal Airlines Corporation (RNAC) -- and present NAC -- had taken two Boeing 757s -- Karnali on lease in 1987 and Gandaki in 1988.
The national flag carrier has incurred an operating loss of around Rs 50 million in the fiscal year 2008-09 due to unavailability of one of the aircraft for maintanance and hiked fuel price reasons.
Thursday, September 17, 2009
South Asia faces daunting climate-related development challenges
If developed countries act now, a 'climate-smart' world is feasible, and the costs for getting there will be high but still manageable, says a new World Bank report released today.
High-income countries also need to act quickly to reduce their carbon footprints and boost development of alternative energy sources to help tackle the problem of climate change. World Development Report 2010: Development and Climate Change, released in advance of the December meetings on climate change in Copenhagen, states that advanced countries, which produced most of the greenhouse gas emissions of the past, must act to shape our climate future. Developing countries can shift to lower-carbon paths while promoting development and reducing poverty, but this depends on financial and technical assistance from high-income countries. A key way to do this is by ramping up funding for mitigation in developing countries, where most future growth in emissions will occur.
"The countries of the world must act now, act together and act differently on climate change," said World Bank president Robert B Zoellick. "Developing countries are disproportionately affected by climate change -- a crisis that is not of their making and for which they are the least prepared. For that reason, an equitable deal in Copenhagen is vitally important."
Countries need to act now because today's decisions determine both the climate of tomorrow and the choices that shape the future. Countries need to act together because no one nation can take on the interconnected challenges posed by climate change and global cooperation is needed to improve energy efficiencies and develop new technologies.
Developing countries will bear most of the costs of the damage from climate change. Many people in developing countries live in physically exposed locations and economically precarious conditions, and their financial and institutional capacity to adapt is limited, states the report.
Already, policymakers in some developing countries note that an increasing amount of their development budget is being diverted to cope with weather-related emergencies.
Geography coupled with high levels of poverty and population density make countries in the South Asia region particularly vulnerable to climate change. Global warming of 2 degrees Celsius above pre-industrial temperatures -- the minimum the world is likely to experience -- could result in permanent reductions in GDP of four to five per cent for South Asia, according to the report.
Agricultural productivity is one of many factors driving the greater vulnerability of developing countries. Extrapolating from past year-to-year variations in climate and agricultural outcomes, yields of major crops in India are projected to decline by 4.5 to nine per cent within the next three decades, even allowing for short- term adaptations. The report states the implications of such climate change for poverty -- and GDP -- could be enormous given projected population growth and high dependence of livelihoods on rain-fed agriculture in the South Asia region.
At the same time, the report notes that 1.6 billion people in the developing world lack access to electricity. Those developing countries-whose average per capita emissions are a fraction of those of high-income countries-need massive expansions in energy, transport, urban systems, and agricultural production. Increasing access to energy and other services using high-carbon technologies will produce more greenhouse gases, hence more climate change.
The World Bank Group's 'Strategic Framework for Development and Climate Change' puts emphasis on including mitigation and adaptation initiatives in its lending, while recognising that developing countries need to encourage economic growth and reduce poverty.
High-income countries also need to act quickly to reduce their carbon footprints and boost development of alternative energy sources to help tackle the problem of climate change. World Development Report 2010: Development and Climate Change, released in advance of the December meetings on climate change in Copenhagen, states that advanced countries, which produced most of the greenhouse gas emissions of the past, must act to shape our climate future. Developing countries can shift to lower-carbon paths while promoting development and reducing poverty, but this depends on financial and technical assistance from high-income countries. A key way to do this is by ramping up funding for mitigation in developing countries, where most future growth in emissions will occur.
"The countries of the world must act now, act together and act differently on climate change," said World Bank president Robert B Zoellick. "Developing countries are disproportionately affected by climate change -- a crisis that is not of their making and for which they are the least prepared. For that reason, an equitable deal in Copenhagen is vitally important."
Countries need to act now because today's decisions determine both the climate of tomorrow and the choices that shape the future. Countries need to act together because no one nation can take on the interconnected challenges posed by climate change and global cooperation is needed to improve energy efficiencies and develop new technologies.
Developing countries will bear most of the costs of the damage from climate change. Many people in developing countries live in physically exposed locations and economically precarious conditions, and their financial and institutional capacity to adapt is limited, states the report.
Already, policymakers in some developing countries note that an increasing amount of their development budget is being diverted to cope with weather-related emergencies.
Geography coupled with high levels of poverty and population density make countries in the South Asia region particularly vulnerable to climate change. Global warming of 2 degrees Celsius above pre-industrial temperatures -- the minimum the world is likely to experience -- could result in permanent reductions in GDP of four to five per cent for South Asia, according to the report.
Agricultural productivity is one of many factors driving the greater vulnerability of developing countries. Extrapolating from past year-to-year variations in climate and agricultural outcomes, yields of major crops in India are projected to decline by 4.5 to nine per cent within the next three decades, even allowing for short- term adaptations. The report states the implications of such climate change for poverty -- and GDP -- could be enormous given projected population growth and high dependence of livelihoods on rain-fed agriculture in the South Asia region.
At the same time, the report notes that 1.6 billion people in the developing world lack access to electricity. Those developing countries-whose average per capita emissions are a fraction of those of high-income countries-need massive expansions in energy, transport, urban systems, and agricultural production. Increasing access to energy and other services using high-carbon technologies will produce more greenhouse gases, hence more climate change.
The World Bank Group's 'Strategic Framework for Development and Climate Change' puts emphasis on including mitigation and adaptation initiatives in its lending, while recognising that developing countries need to encourage economic growth and reduce poverty.
Public Entreprises lack professionalism
Lack of competitive edge, professionalism, efficiency and accountability, regular political bickering, over-staffing, trade unionism, legal hurdles and confusion over their orientation -- profit-oriented or service-oriented -- have dogged the public entreprises (PEs), secretaries said in the hearing in the Public Accounts Committee (PAC) here today.
The ministers though accepted that the corporations are performing poorly, they didnot bother to show any political commitment on improving their performance.
Out of the total 36 corporations, only 17 are in profit and 19 are in loss according to the report of fiscal year 2008-09. After change in government and even the minister, the general managers and board of these corporations change. "Political parties treat corporations like the employment centre for their party cadres," the CA members said urging for strong political commitment from the ministers.
The secretaries and ministers, however, theoritically agreed on forming a permanent mechanism that can appoint the board of directors and general managers, and monitor the effective operations of corporations. "A permanent mechanism is need of the hour," said finance minister Surendra Pandey, who is under tremendous pressure from employees of the various loss making corporations.
"When they are in loss they put pressure on finance ministry to pay even their salaries but when they are in profit the employees share bonus and government gets nothing," Pandey said adding that their line ministries also lobby with them that increases extra expenses of the government. He also complained about the line ministries in being unable in monitoring them effectively.
Finance secretary Rameshwor Khanal supported the minister and also suggested to amend the Bonus Act. "The corporations should be brought under one umbrella to reduce the expenses," he added.
Some of the corporations have not yet completed their auditing since last couple of years. "The corporations have no proper management plan and only blame political instability," the CA members said adding that they should be held accountable.
Purushottam Ojha, secretary for Ministry of Commerce and Supplies said that there should be periodic monitoring of these corporations. However minister for Commerce and Supplies Rajendra Mahato said that the government should not run corporations in the age of free market economy.
Some of the CA members also complained that over the years interaction between PAC, and chairmen and general managers of the corporations has become monotonous and the performance of the corporations have worsened.
The ministers though accepted that the corporations are performing poorly, they didnot bother to show any political commitment on improving their performance.
Out of the total 36 corporations, only 17 are in profit and 19 are in loss according to the report of fiscal year 2008-09. After change in government and even the minister, the general managers and board of these corporations change. "Political parties treat corporations like the employment centre for their party cadres," the CA members said urging for strong political commitment from the ministers.
The secretaries and ministers, however, theoritically agreed on forming a permanent mechanism that can appoint the board of directors and general managers, and monitor the effective operations of corporations. "A permanent mechanism is need of the hour," said finance minister Surendra Pandey, who is under tremendous pressure from employees of the various loss making corporations.
"When they are in loss they put pressure on finance ministry to pay even their salaries but when they are in profit the employees share bonus and government gets nothing," Pandey said adding that their line ministries also lobby with them that increases extra expenses of the government. He also complained about the line ministries in being unable in monitoring them effectively.
Finance secretary Rameshwor Khanal supported the minister and also suggested to amend the Bonus Act. "The corporations should be brought under one umbrella to reduce the expenses," he added.
Some of the corporations have not yet completed their auditing since last couple of years. "The corporations have no proper management plan and only blame political instability," the CA members said adding that they should be held accountable.
Purushottam Ojha, secretary for Ministry of Commerce and Supplies said that there should be periodic monitoring of these corporations. However minister for Commerce and Supplies Rajendra Mahato said that the government should not run corporations in the age of free market economy.
Some of the CA members also complained that over the years interaction between PAC, and chairmen and general managers of the corporations has become monotonous and the performance of the corporations have worsened.
Wednesday, September 16, 2009
Upadhyaya recommends NDB's revival
Investigation officer T R Upadhyaya has suggested the revival of troubled Nepal Development Bank (NDB). He has recommended to Patan Appellate Court that the bank has chances of revival as the Badri Bhattarai-Nabin Pun Group has given bank guarantees equivalent to Rs 340 million -- Rs 240 million and Rs 100 million each.
However, he has asked the court to clarify who the small depositors are and how much should they get. The Court had earlier instructed him to pay them first. Tomorrow, the court will define the small depositors and the amount they should get, and it will also order that the salaries of the employees be paid as they have not got their salaries. The employees had urged Investigation Officer Upadhyaya to get them their salaries before Dashain. Upadhyaya has urged the Court for payment of the employees salaries. There are around 30 employees including those in NDB's Pokhara branch office and head office in Kamaladi of Kathmandu.
However, based on the recommendations of Upadhyaya the Court will decide either to revive the bank or send it into liquidation after Dashain.
The recommendation has clearly stated that the bank, even if revived, cannot pay institutional depositors like Nepal Army and Employment Provident Fund. "If the bank is revived and runs according to the plan of the Bhattarai-Pun group, these institutions could get their deposits after three years," the recommendation said. It said that the settlement of Non-Performing Assets (NPA) and Non-Banking Assets (NBA) with capital injection will help improve the financial health of the bank as its Capital Adequacy Ration (CAR) will come to 11 per cent. In his report, Upadhyaya has recommended that the bank can be revived with internal resources (Rs 274.64 million) and Rs 320 million capital injection from the Bhattarai-Pun Group.
Bhattarai -- the current promoter -- has given a Rs 240 million bank guarantee through Kumari Bank. Pun -- son of 'controversial' former NDB chairman Uttam Pun -- has given Rs 100 million bank guarantee through Kist Bank.
If NDB settles its NPA -- Rs 110 million with Holyland School, Rs 90 million with Nepal Cooperatives Ltd and Rs 80 million with Gurkha Hydropower -- it can be revived, Upadhyaya has recommended in his report to Patan Appellate Court this week.Bhattarai-Pun Group's claim of settling the NPA and NBA before injecting Rs 340 million capital has been accepted by the investigation officer.
Bhattarai -- who personally holds 10,000-unit of promoters shares of NDB -- can also add Rs 80 million that is deposited for rights shares by the share holders. But Nepal Rastra Bank has frozen the money.Neither all the promoters nor all the shareholders bought the rights shares. According to the new Securities Board of Nepal (Sebon) rule, the promoters have to buy the rights shares before floating it to ordinary shareholders.The first development bank of Nepal has 19,865 shareholders and around 4,000 depositors. Patan Appellate Court appointed Upadhyaya as investigation officer on July 29 as per the Insolvency Act 2007. This is not only the first of its kind of case in the financial history of Nepal but also the appointed investigation officer has not himself got his fee though his payment comes as the first priority. The Court will decide the fee of the investigation officer.
However, he has asked the court to clarify who the small depositors are and how much should they get. The Court had earlier instructed him to pay them first. Tomorrow, the court will define the small depositors and the amount they should get, and it will also order that the salaries of the employees be paid as they have not got their salaries. The employees had urged Investigation Officer Upadhyaya to get them their salaries before Dashain. Upadhyaya has urged the Court for payment of the employees salaries. There are around 30 employees including those in NDB's Pokhara branch office and head office in Kamaladi of Kathmandu.
However, based on the recommendations of Upadhyaya the Court will decide either to revive the bank or send it into liquidation after Dashain.
The recommendation has clearly stated that the bank, even if revived, cannot pay institutional depositors like Nepal Army and Employment Provident Fund. "If the bank is revived and runs according to the plan of the Bhattarai-Pun group, these institutions could get their deposits after three years," the recommendation said. It said that the settlement of Non-Performing Assets (NPA) and Non-Banking Assets (NBA) with capital injection will help improve the financial health of the bank as its Capital Adequacy Ration (CAR) will come to 11 per cent. In his report, Upadhyaya has recommended that the bank can be revived with internal resources (Rs 274.64 million) and Rs 320 million capital injection from the Bhattarai-Pun Group.
Bhattarai -- the current promoter -- has given a Rs 240 million bank guarantee through Kumari Bank. Pun -- son of 'controversial' former NDB chairman Uttam Pun -- has given Rs 100 million bank guarantee through Kist Bank.
If NDB settles its NPA -- Rs 110 million with Holyland School, Rs 90 million with Nepal Cooperatives Ltd and Rs 80 million with Gurkha Hydropower -- it can be revived, Upadhyaya has recommended in his report to Patan Appellate Court this week.Bhattarai-Pun Group's claim of settling the NPA and NBA before injecting Rs 340 million capital has been accepted by the investigation officer.
Bhattarai -- who personally holds 10,000-unit of promoters shares of NDB -- can also add Rs 80 million that is deposited for rights shares by the share holders. But Nepal Rastra Bank has frozen the money.Neither all the promoters nor all the shareholders bought the rights shares. According to the new Securities Board of Nepal (Sebon) rule, the promoters have to buy the rights shares before floating it to ordinary shareholders.The first development bank of Nepal has 19,865 shareholders and around 4,000 depositors. Patan Appellate Court appointed Upadhyaya as investigation officer on July 29 as per the Insolvency Act 2007. This is not only the first of its kind of case in the financial history of Nepal but also the appointed investigation officer has not himself got his fee though his payment comes as the first priority. The Court will decide the fee of the investigation officer.
NOC back in the red, 10-month profit cycle comes to an end
Nepal Oil Corporation (NOC) is bearing Rs 3.60 loss on per litre of diesel.
According to the new rate list that NOC received yesterday from its sole petroleum products supplier Indian Oil Corporation (IOC), its per litre loss in diesel has come down to Rs 3.60 from the rate it received on September 1. "The loss on per litre of diesel then was Rs 4.91 and Rs 87.88 on a cylinder of cooking gas," said NOC managing director Digambar Jha.
On every 1st and 15th of the English calender month, NOC receives the new rate of diesel, kerosene and petrol from its supplier IOC. However, the rate of cooking gas is revised -- according to the international market price -- on the first of every English month. NOC, however, is in profit in petrol and kerosene.
The sole distributor of petroleum products in Nepal started downward adjustment of the price of petroleum products since last October when international prices plunged. "NOC was in loss in the first three months of the last fiscal year 2008-09 -- Shrawan, Bhadra and Ashwin -- but it started going into profit from the fourth month of fiscal 2008-09," Jha said adding that it seems that the last 10-month profit cycle has come to an end as the price of petroleum products have started going up in the international market.
"NOC has posted a Rs 40 million loss and it might increase according to the new rate," Jha added. However, the 10-month profit cycle helped NOC pay Rs 1.40 billion and Rs 1.80 billion dues of IOC and domestic commercial banks, respectively. "Currently, Rs 2.10 billion of the Employees Provident Fund (EPF) and Rs 830 million of Citizens' Investment Trust (CIT) are yet to be paid," he said. NOC's cumulative dues come to Rs 10.84 billion including the government, EPF and CIT by August 31."Of the total dues, Rs 1.78 billion is an urgent need," said Jha. NOC has a transaction of Rs 60 billion worth of petroleum products. NOC contributes around Rs 10 billion to the national coffers as customs, VAT and other taxes.
Due to the growing demand for petroleum products, NOC has not been able to invest in infrastructure development. "Apart from planning for well-equipped lab to test the quality of petroleum products, NOC has recently started estimation and designing of new depos in Charali of Jhapa and Mahendranagar of Dhanusha," he added.
NOC in red and green
2002-03 -- Rs1.83 billion (loss)
2003-04 -- Rs 898.1 million (loss)
2004-05 -- Rs 3.8 billion (loss)
2005-06 -- Rs 3.86 billion (loss)
2006-07 -- Rs 1.92 billion (loss)
2007-08 -- Rs 5.57 billion (loss)
2008-09 -- Rs 3.90 billion (unaudited-profit)
According to the new rate list that NOC received yesterday from its sole petroleum products supplier Indian Oil Corporation (IOC), its per litre loss in diesel has come down to Rs 3.60 from the rate it received on September 1. "The loss on per litre of diesel then was Rs 4.91 and Rs 87.88 on a cylinder of cooking gas," said NOC managing director Digambar Jha.
On every 1st and 15th of the English calender month, NOC receives the new rate of diesel, kerosene and petrol from its supplier IOC. However, the rate of cooking gas is revised -- according to the international market price -- on the first of every English month. NOC, however, is in profit in petrol and kerosene.
The sole distributor of petroleum products in Nepal started downward adjustment of the price of petroleum products since last October when international prices plunged. "NOC was in loss in the first three months of the last fiscal year 2008-09 -- Shrawan, Bhadra and Ashwin -- but it started going into profit from the fourth month of fiscal 2008-09," Jha said adding that it seems that the last 10-month profit cycle has come to an end as the price of petroleum products have started going up in the international market.
"NOC has posted a Rs 40 million loss and it might increase according to the new rate," Jha added. However, the 10-month profit cycle helped NOC pay Rs 1.40 billion and Rs 1.80 billion dues of IOC and domestic commercial banks, respectively. "Currently, Rs 2.10 billion of the Employees Provident Fund (EPF) and Rs 830 million of Citizens' Investment Trust (CIT) are yet to be paid," he said. NOC's cumulative dues come to Rs 10.84 billion including the government, EPF and CIT by August 31."Of the total dues, Rs 1.78 billion is an urgent need," said Jha. NOC has a transaction of Rs 60 billion worth of petroleum products. NOC contributes around Rs 10 billion to the national coffers as customs, VAT and other taxes.
Due to the growing demand for petroleum products, NOC has not been able to invest in infrastructure development. "Apart from planning for well-equipped lab to test the quality of petroleum products, NOC has recently started estimation and designing of new depos in Charali of Jhapa and Mahendranagar of Dhanusha," he added.
NOC in red and green
2002-03 -- Rs1.83 billion (loss)
2003-04 -- Rs 898.1 million (loss)
2004-05 -- Rs 3.8 billion (loss)
2005-06 -- Rs 3.86 billion (loss)
2006-07 -- Rs 1.92 billion (loss)
2007-08 -- Rs 5.57 billion (loss)
2008-09 -- Rs 3.90 billion (unaudited-profit)
Tuesday, September 15, 2009
Banks, hydropower firm ink accord
Ankhukhola Hydropower Company has signed an agreement with six banks and financial institutions that will see Rs 700 million lent to the hydel project that aims to start electricity generation by June 2010.
A consortium of four commercial banks -- Prime Commercial Bank, Machhapuchchhre Bank, Sunrise Bank and Kist Bank led by Prime Commercial Bank; one development bank -- Kasthamandap Development Bank and a finance company -- Standard Finance -- have signed the agreement to lend the seven megawatt (MW) Ankhukhola Hydropower Project that has already finished 30 per cent of its preliminary work.
The hydel project estimated to cost around Rs 1006 million has been financed up to Rs 230 million by Prime Commercial Bank, Rs 170 million by Machhapuchchhre Bank, Rs 100 million each from Sunrise Bank and Kist Bank, and Rs 50 million each from Kasthamandap Development Bank and Standard Finance, making it a total of Rs 700 million. The promoters of the hydropower company will bear 30 per cent of the total estimated cost.
For hydropower projects, financial management is one of the key issues. However, domestic banks are slowly finding it more confortable to fund hydropower projects. Consortium leader Prime Commercial Bank has lent Rs 270 million to Mai Khola Hydropower also as it is one of the most lucrative investments.
A consortium of eight banks and financial institutions -- led by Citizens' Bank International -- has lent moeny to the 10 MW Lower Modi hydel project recently.
"Ankhukhola hydel project has 15.66 per cent internal rate of returns," Bishwonath Kadel, executive director of the hydel company, said adding that the payback period of the project is estimated at six years and two months.
D B Bamjan, chairman of the hydropower company, that has a 7 MW installed capacity said that the company has already done Power Purchase Agreement (PPA) on June 4, 2009 after it got the survey licence on July 31, 2008.
Located in Dhading, a district neighbouring Kathmandu, Ankhu Khola is one of the major tributaries of Budhi Gandaki. "With complete indigenous technology, the hydro power company shall generate average annual energy up to 39.265 GWh," he said adding that the generated electricity will be connected to the national grid through Nepal Electricity Authority (NEA) sub-station in Dhading Besi.
According to the PPA, NEA will buy the electricity generated by Ankhukhola Hydropower Company at Rs 7 per unit in dry season and Rs 4 per unit in wet season.
A consortium of four commercial banks -- Prime Commercial Bank, Machhapuchchhre Bank, Sunrise Bank and Kist Bank led by Prime Commercial Bank; one development bank -- Kasthamandap Development Bank and a finance company -- Standard Finance -- have signed the agreement to lend the seven megawatt (MW) Ankhukhola Hydropower Project that has already finished 30 per cent of its preliminary work.
The hydel project estimated to cost around Rs 1006 million has been financed up to Rs 230 million by Prime Commercial Bank, Rs 170 million by Machhapuchchhre Bank, Rs 100 million each from Sunrise Bank and Kist Bank, and Rs 50 million each from Kasthamandap Development Bank and Standard Finance, making it a total of Rs 700 million. The promoters of the hydropower company will bear 30 per cent of the total estimated cost.
For hydropower projects, financial management is one of the key issues. However, domestic banks are slowly finding it more confortable to fund hydropower projects. Consortium leader Prime Commercial Bank has lent Rs 270 million to Mai Khola Hydropower also as it is one of the most lucrative investments.
A consortium of eight banks and financial institutions -- led by Citizens' Bank International -- has lent moeny to the 10 MW Lower Modi hydel project recently.
"Ankhukhola hydel project has 15.66 per cent internal rate of returns," Bishwonath Kadel, executive director of the hydel company, said adding that the payback period of the project is estimated at six years and two months.
D B Bamjan, chairman of the hydropower company, that has a 7 MW installed capacity said that the company has already done Power Purchase Agreement (PPA) on June 4, 2009 after it got the survey licence on July 31, 2008.
Located in Dhading, a district neighbouring Kathmandu, Ankhu Khola is one of the major tributaries of Budhi Gandaki. "With complete indigenous technology, the hydro power company shall generate average annual energy up to 39.265 GWh," he said adding that the generated electricity will be connected to the national grid through Nepal Electricity Authority (NEA) sub-station in Dhading Besi.
According to the PPA, NEA will buy the electricity generated by Ankhukhola Hydropower Company at Rs 7 per unit in dry season and Rs 4 per unit in wet season.
Monday, September 14, 2009
All MDGs impossible to achieve
Though the government has through its three Year Interim plan committed to the Millennium Development Goals (MDGs), it seems some of the goals among the eight are nearly impossible to achieve.
Nepal is one of 189 countries committed to MDGs, a pledge renewed in its Three-Year Interim Plan 2008-10. The MDG Progress Report for Nepal suggested that despite the decade-long conflict Nepal was likely or potentially able to meet all goals except two -- universal primary education and anti-HIV/AIDS drive.
The Millennium Development Goals (MDGs) are eight goals to be achieved by 2015 that respond to the world's main development challenges. The MDGs are drawn from the actions and targets contained in the Millennium Declaration that was adopted by 189 nations-and signed by 147 heads of state and governments during the UN Millennium Summit in September 2000.
There has indeed been tangible progress on some of the targets. Poverty incidence has gone down by over a percentage point per year since the mid-nineties. "But poverty alleviation and global partnership for development -- the first and the last of the eight goals -- are still elusive," according to the national MDG campaign and Advocacy. "However, five of the eight goals could still be achieved."
Eradication of extreme poverty and hunger, primary education for all, gender equality and women empowerment, reduction in child mortality rate, improving maternal health, combating HIV/AIDS, malaria and other diseases, ensuring environmental sustainability and global partnership for development are the eight MDGs. These MDGs have been further broken down into 21 quantifiable targets that are measured by 60 indicators.
Due to lack of coordination between the government's development goals and MDGs, the fight against extreme hunger has gone nowhere. According to the report, unhealthy competition among social groups has made it impossible to achieve to the target of eradicating extreme hunger.
Even though the MDG report states that the poverty level in Nepal has declined to 21 per cent, the reason for poverty reduction is not the government and or any component of MDGs but the huge inflow of remittance.
Nepal is one of the countries with 48 per cent of children suffering from physical disabilities whereas there has been some progress in its targeted goal of universal primary education goal. The primary education for all status that was 64 per cent in 1990 has now reached 90 per cent, according to the report.
An overwhelming improvement has been observed in terms of women empowerment and gender equality -- with 33 per cent women's representation in the Constitution Assemble (CA) and women's increasing role in society.
The child mortality rate has also been reduced to more than a half in an interval of ten years and the present challenge is to reduce the mortality rate of children below five years of age from the current 54 per cent.
The report states that goal number five is achievable as the maternal mortality rate has come down by around 50 per cent since the 90s. n the other hand, cases of HIV/AIDS have been increasing whereas cases of malaria and tuberculosis are decreasing. The seventh goal -- improved environmental sustainability -- is also achievable as the the rural water supply and sanitation have improved according to the target, it said.
Nepal is one of 189 countries committed to MDGs, a pledge renewed in its Three-Year Interim Plan 2008-10. The MDG Progress Report for Nepal suggested that despite the decade-long conflict Nepal was likely or potentially able to meet all goals except two -- universal primary education and anti-HIV/AIDS drive.
The Millennium Development Goals (MDGs) are eight goals to be achieved by 2015 that respond to the world's main development challenges. The MDGs are drawn from the actions and targets contained in the Millennium Declaration that was adopted by 189 nations-and signed by 147 heads of state and governments during the UN Millennium Summit in September 2000.
There has indeed been tangible progress on some of the targets. Poverty incidence has gone down by over a percentage point per year since the mid-nineties. "But poverty alleviation and global partnership for development -- the first and the last of the eight goals -- are still elusive," according to the national MDG campaign and Advocacy. "However, five of the eight goals could still be achieved."
Eradication of extreme poverty and hunger, primary education for all, gender equality and women empowerment, reduction in child mortality rate, improving maternal health, combating HIV/AIDS, malaria and other diseases, ensuring environmental sustainability and global partnership for development are the eight MDGs. These MDGs have been further broken down into 21 quantifiable targets that are measured by 60 indicators.
Due to lack of coordination between the government's development goals and MDGs, the fight against extreme hunger has gone nowhere. According to the report, unhealthy competition among social groups has made it impossible to achieve to the target of eradicating extreme hunger.
Even though the MDG report states that the poverty level in Nepal has declined to 21 per cent, the reason for poverty reduction is not the government and or any component of MDGs but the huge inflow of remittance.
Nepal is one of the countries with 48 per cent of children suffering from physical disabilities whereas there has been some progress in its targeted goal of universal primary education goal. The primary education for all status that was 64 per cent in 1990 has now reached 90 per cent, according to the report.
An overwhelming improvement has been observed in terms of women empowerment and gender equality -- with 33 per cent women's representation in the Constitution Assemble (CA) and women's increasing role in society.
The child mortality rate has also been reduced to more than a half in an interval of ten years and the present challenge is to reduce the mortality rate of children below five years of age from the current 54 per cent.
The report states that goal number five is achievable as the maternal mortality rate has come down by around 50 per cent since the 90s. n the other hand, cases of HIV/AIDS have been increasing whereas cases of malaria and tuberculosis are decreasing. The seventh goal -- improved environmental sustainability -- is also achievable as the the rural water supply and sanitation have improved according to the target, it said.
Sunday, September 13, 2009
Record remittance inflow recorded in fiscal year 2008-09
Nepal received the highest ever remittance in 2008-09 exceeding this year's Monetary Policy's expectation of Rs 200 billion.
"Nepal received Rs 209.69 billion in 2008-09," said the current macroeconomic situation -- based on annual data of the fiscal year 2008-09 -- published by Nepal Rastra Bank (NRB) here today. It is 35.8 per cent of the gross domestic product (GDP).
The overall Balance of Payment (BoP) rose to Rs 37.7 billion surplus in comparison to a surplus of Rs 29.7 billion a year ago. "The current account also recorded a massive surplus of Rs 41.4 billion compared to a surplus of Rs 23.7 billion in 2007-08 due to rise in net transfers -- remittance -- by 36.5 per cent," the central bank said.
According to a preliminary estimate of Central Bureau of Statistics (CBS), the real GDP growth stood at 3.8 per cent at basic price and 4.7 per cent at producers' price during the last fiscal year, the NRB report said.
In accordance with the currently released statistics by CBS, the manufacturing production index increased marginally by 0.19 per cent in 2008-09 against last year's decrease of 0.94 per cent. The ratio of total consumption to GDP increased by 3.2 percentage points to 92 per cent. "As a consequence, the gross domestic savings remained only at eight per cent of the GDP," NRB said. In the review year, the ratio of investment to GDP stood at 31.8 per cent compared to 29.7 per cent in the preceding year. The gross fixed capital formation reached 21.2 per cent with a marginal rise from 21.1 per cent in 2007-08.
"The inflow of foreign direct investment is not encouraging in the review year and that must be attributed to the gloomy investment climate. The number of joint venture projects increased by 8.5 per cent to 230, while the foreign investment tied with these projects decreased by 36.4 per cent to Rs 6245 million," said the report. Earlier in 2007-08, 212 joint venture projects with total FDI amounting to Rs 9811 million were registered in the Department of Industry.
The report also said that the annual average consumer inflation increased to almost double -- 13.2 per cent in comparison to an increase of 7.7 per cent in 2007-08 due to mainly on account of annual average price rise by 16.7 per cent on food and beverages group. The annual average price of non-food and service group increased by 9.5 per cent.
During the last fiscal year, exports went up by 13.5 per cent in contrast to a nominal decline of 0.2 per cent a year ago. Exports to India rose by 6.2 per cent as against a decline of 7.6 per cent in the previous year. Likewise, exports to other countries expanded by 26.9 per cent compared to an increase of 17.3 per cent a year ago, it said. "However, the total imports also soared by 28.2 per cent in comparison to an increase of 14 per cent a year earlier," the report pointed out.
Grants rose by 27.6 per cent compared to a growth of 15.2 per cent in the preceding year.In mid-July 2009, the gross foreign exchange reserves stood at Rs 280.0 billion -- an increse of 31.7 per cent compared to the level in mid-July 2008. The current level of reserves is adequate for financing merchandise imports for 11.8 months and merchandise and service imports for 9.7 months.
However, the government budget deficit -- on cash basis -- increased by 16.3 per cent to Rs 26.2 billion in 2008-09 as against a deficit of Rs 22.5 billion in 2007-08.
During the review period , revenue mobilisation increased significantly by 33.2 per cent to Rs 143.3 billion. Revenue had risen by 22.7 per cent to Rs 107.6 billion in 2007-08, according to the NRB. Consequently, the revenue to GDP ratio moved up to 14.9 per cent.
"Nepal received Rs 209.69 billion in 2008-09," said the current macroeconomic situation -- based on annual data of the fiscal year 2008-09 -- published by Nepal Rastra Bank (NRB) here today. It is 35.8 per cent of the gross domestic product (GDP).
The overall Balance of Payment (BoP) rose to Rs 37.7 billion surplus in comparison to a surplus of Rs 29.7 billion a year ago. "The current account also recorded a massive surplus of Rs 41.4 billion compared to a surplus of Rs 23.7 billion in 2007-08 due to rise in net transfers -- remittance -- by 36.5 per cent," the central bank said.
According to a preliminary estimate of Central Bureau of Statistics (CBS), the real GDP growth stood at 3.8 per cent at basic price and 4.7 per cent at producers' price during the last fiscal year, the NRB report said.
In accordance with the currently released statistics by CBS, the manufacturing production index increased marginally by 0.19 per cent in 2008-09 against last year's decrease of 0.94 per cent. The ratio of total consumption to GDP increased by 3.2 percentage points to 92 per cent. "As a consequence, the gross domestic savings remained only at eight per cent of the GDP," NRB said. In the review year, the ratio of investment to GDP stood at 31.8 per cent compared to 29.7 per cent in the preceding year. The gross fixed capital formation reached 21.2 per cent with a marginal rise from 21.1 per cent in 2007-08.
"The inflow of foreign direct investment is not encouraging in the review year and that must be attributed to the gloomy investment climate. The number of joint venture projects increased by 8.5 per cent to 230, while the foreign investment tied with these projects decreased by 36.4 per cent to Rs 6245 million," said the report. Earlier in 2007-08, 212 joint venture projects with total FDI amounting to Rs 9811 million were registered in the Department of Industry.
The report also said that the annual average consumer inflation increased to almost double -- 13.2 per cent in comparison to an increase of 7.7 per cent in 2007-08 due to mainly on account of annual average price rise by 16.7 per cent on food and beverages group. The annual average price of non-food and service group increased by 9.5 per cent.
During the last fiscal year, exports went up by 13.5 per cent in contrast to a nominal decline of 0.2 per cent a year ago. Exports to India rose by 6.2 per cent as against a decline of 7.6 per cent in the previous year. Likewise, exports to other countries expanded by 26.9 per cent compared to an increase of 17.3 per cent a year ago, it said. "However, the total imports also soared by 28.2 per cent in comparison to an increase of 14 per cent a year earlier," the report pointed out.
Grants rose by 27.6 per cent compared to a growth of 15.2 per cent in the preceding year.In mid-July 2009, the gross foreign exchange reserves stood at Rs 280.0 billion -- an increse of 31.7 per cent compared to the level in mid-July 2008. The current level of reserves is adequate for financing merchandise imports for 11.8 months and merchandise and service imports for 9.7 months.
However, the government budget deficit -- on cash basis -- increased by 16.3 per cent to Rs 26.2 billion in 2008-09 as against a deficit of Rs 22.5 billion in 2007-08.
During the review period , revenue mobilisation increased significantly by 33.2 per cent to Rs 143.3 billion. Revenue had risen by 22.7 per cent to Rs 107.6 billion in 2007-08, according to the NRB. Consequently, the revenue to GDP ratio moved up to 14.9 per cent.
Development banks want bigger pie
Development banks want a bigger role in the financial market.
"The central bank should ensure our representation in Credit Information Bureau (CIB)," said Development Bankers Association president and CEO of Malika Bikas Bank Jhapat Bohara, adding that Development banks also want to be the part of Central Depository Company, Banking Training Institute and Clearing House.
The Central Depository Company that is being established for the modernisation of the domestic capital market will have 50 per cent share of Nepse, 10 per cent share of CIB, 15 per cent of CIT and 25 percent of a group of six commercial banks -- Standard Chartered Bank, Nabil Bank, Nepal SBI Bank, Bank of Kathmandu, Nepal Investment Bank and NIC Bank -- as promoters. Bohara urged the Nepal Bankers Association (NBA) to give development banks also a chance to be part of it.
NBA -- along with Nepal Rastra Bank (NRB) and other financial institutions -- has established Nepal Clearing House Ltd that will commence Automatic Check Truncation and Clearing Systems to be evolved into a nation-wide payments system. It has 60 per cent share of NBA, 15 per cent of SCT, 10 per cent share of NRB and the remaining share is planned to be distributed between development banks and finance compnaies.
NBA -- with the help of NRB and Rural Microfinace Development Centre (RMDC) and other financial institutions -- has also planned National Banking Training Institute (NBTI). The training institute has a support base of $2 million from Asian Development Bank (ADB). "It will be developed as a self-sustainable institute that will be run by a professional CEO," said Nepal Rastra Bank (NRB) deputy governor Bir Bikram Rayamajhi, inaugurating the one-day seminar on 'Corporate Good Governance in Banks and Financial Institutions' organised by Development Bankers Association here yesterday.
Giving his presentation on Corporate Good Governance in Banks and FIs, Kumari Bank chief executive officer Radhesh Pant said that lack of good corporate governance will result in collapse of banks and financial institutions.
"Good corporate governance will increase depositors' trust leading to rise in premium, Price to Earning (PE) ratio and share price of institutions as a whole," he said adding that corporate good governance will also increase access to finance, spruce up brand image and help mobilise funds.
"Banks are the custodians of public money and thus they need to ensure good corporate government for the better management of public money," Pant added.
"Lack of good corporate governance will lead banks and financial institutions to suffer a fate similar to that of Nepal Development Bank (NDB)," Bohara said.
"The central bank should ensure our representation in Credit Information Bureau (CIB)," said Development Bankers Association president and CEO of Malika Bikas Bank Jhapat Bohara, adding that Development banks also want to be the part of Central Depository Company, Banking Training Institute and Clearing House.
The Central Depository Company that is being established for the modernisation of the domestic capital market will have 50 per cent share of Nepse, 10 per cent share of CIB, 15 per cent of CIT and 25 percent of a group of six commercial banks -- Standard Chartered Bank, Nabil Bank, Nepal SBI Bank, Bank of Kathmandu, Nepal Investment Bank and NIC Bank -- as promoters. Bohara urged the Nepal Bankers Association (NBA) to give development banks also a chance to be part of it.
NBA -- along with Nepal Rastra Bank (NRB) and other financial institutions -- has established Nepal Clearing House Ltd that will commence Automatic Check Truncation and Clearing Systems to be evolved into a nation-wide payments system. It has 60 per cent share of NBA, 15 per cent of SCT, 10 per cent share of NRB and the remaining share is planned to be distributed between development banks and finance compnaies.
NBA -- with the help of NRB and Rural Microfinace Development Centre (RMDC) and other financial institutions -- has also planned National Banking Training Institute (NBTI). The training institute has a support base of $2 million from Asian Development Bank (ADB). "It will be developed as a self-sustainable institute that will be run by a professional CEO," said Nepal Rastra Bank (NRB) deputy governor Bir Bikram Rayamajhi, inaugurating the one-day seminar on 'Corporate Good Governance in Banks and Financial Institutions' organised by Development Bankers Association here yesterday.
Giving his presentation on Corporate Good Governance in Banks and FIs, Kumari Bank chief executive officer Radhesh Pant said that lack of good corporate governance will result in collapse of banks and financial institutions.
"Good corporate governance will increase depositors' trust leading to rise in premium, Price to Earning (PE) ratio and share price of institutions as a whole," he said adding that corporate good governance will also increase access to finance, spruce up brand image and help mobilise funds.
"Banks are the custodians of public money and thus they need to ensure good corporate government for the better management of public money," Pant added.
"Lack of good corporate governance will lead banks and financial institutions to suffer a fate similar to that of Nepal Development Bank (NDB)," Bohara said.
Saturday, September 12, 2009
NDB revival possible, subject to ifs...
Nepal Development Bank (NDB) investigation officer T R Upadhyaya thinks that the bank can be revived if it settles its Non-Performing Assets (NPA).
"If NDB settles its NPA -- like Rs 110 million with Holyland School, Rs 90 million with Nepal Cooperatives Ltd and Rs 80 million with Gurkha Hydropower -- it can be revived," he said hinting that he might submit the report to Patan Appellate Court this week. The court will decide NDB's fate after it receives Upadhyaya's report -- whether to revive or liquidate it.
Impatient depositors of the Nepal's first development bank today tried to convince him of the possibilities of the revival of the bank. Around 4,000 depositors of troubled NDB are willing to assist the new investors by not withdrawing their accumulated sum -- around Rs 350 million -- for the next six months. "We want the bank to reopen at the earliest," said Nepal Bikash Bank Peedit Sangh president Kirti Madan Joshi. "Hence, we'd like to withdraw money in instalments. We are ready to withdraw only 50 per cent of our deposit to help the bank, if it reopens," he said adding that new investors should be given a chance.
"But the new investors' capital plans have to be convincing," said Upadhyaya, who is holding one-to-one consultations with prospective investors.
Meanwhile, depositors urged Upadhyaya indirectly to accept the proposal of Badri Bhattarai and Nabin Pun -- son of former chairman Uttam Pun -- and his group who have proposed to settle the NPA and Non-Banking Assets (NBA) before injecting Rs 240 million capital. Bhattarai -- who personally holds 10,000-unit of promoters shares of NDB -- plans to use the Rs 80 million that is deposited for rights shares to make a total of Rs 320 million. Along with Rs 280 NPA -- that they have planned to recover, and Rs 320 million -- the total will come to Rs 600 million, according to the capital plan of Bhattarai and his group.
Nimbus Group and its associates plan to inject Rs 320 million but want to buy out 'promoters' who have been held responsible for sullying NDB's reputation. Nimbus has offered depositors the choice to withdraw their deposit. It also plans to issue rights shares to increase capital to Rs 640 million by end of 2010.
However, not only depositors but also around 20,000 shareholders are clueless since the matter has gone into a legal loop. Patan Appellate Court appointed Upadhyaya as investigation officer on July 29 as per the Insolvency Act 2007.
Of late, depositors are getting lured by high interest rates and do not check the reliability of the banks' management and Board of Directors. They have learnt the hard way that reliability is the key and not just the lure of high interest.
NDB's case has also debunked the myth that banks can never fail. "In fact banks can fail, if the management and directors are not sincere," said a banker. "Depositors must be aware of the back ground of the management and Board of Directors of banks and financial institutions before depositing their hard-earned money," he said, urging banks and financial institutions to follow Nepal Rastra Bank's (NRB) directives. "Had NDB followed NRB's directives it would not have been in trouble today."
"If NDB settles its NPA -- like Rs 110 million with Holyland School, Rs 90 million with Nepal Cooperatives Ltd and Rs 80 million with Gurkha Hydropower -- it can be revived," he said hinting that he might submit the report to Patan Appellate Court this week. The court will decide NDB's fate after it receives Upadhyaya's report -- whether to revive or liquidate it.
Impatient depositors of the Nepal's first development bank today tried to convince him of the possibilities of the revival of the bank. Around 4,000 depositors of troubled NDB are willing to assist the new investors by not withdrawing their accumulated sum -- around Rs 350 million -- for the next six months. "We want the bank to reopen at the earliest," said Nepal Bikash Bank Peedit Sangh president Kirti Madan Joshi. "Hence, we'd like to withdraw money in instalments. We are ready to withdraw only 50 per cent of our deposit to help the bank, if it reopens," he said adding that new investors should be given a chance.
"But the new investors' capital plans have to be convincing," said Upadhyaya, who is holding one-to-one consultations with prospective investors.
Meanwhile, depositors urged Upadhyaya indirectly to accept the proposal of Badri Bhattarai and Nabin Pun -- son of former chairman Uttam Pun -- and his group who have proposed to settle the NPA and Non-Banking Assets (NBA) before injecting Rs 240 million capital. Bhattarai -- who personally holds 10,000-unit of promoters shares of NDB -- plans to use the Rs 80 million that is deposited for rights shares to make a total of Rs 320 million. Along with Rs 280 NPA -- that they have planned to recover, and Rs 320 million -- the total will come to Rs 600 million, according to the capital plan of Bhattarai and his group.
Nimbus Group and its associates plan to inject Rs 320 million but want to buy out 'promoters' who have been held responsible for sullying NDB's reputation. Nimbus has offered depositors the choice to withdraw their deposit. It also plans to issue rights shares to increase capital to Rs 640 million by end of 2010.
However, not only depositors but also around 20,000 shareholders are clueless since the matter has gone into a legal loop. Patan Appellate Court appointed Upadhyaya as investigation officer on July 29 as per the Insolvency Act 2007.
Of late, depositors are getting lured by high interest rates and do not check the reliability of the banks' management and Board of Directors. They have learnt the hard way that reliability is the key and not just the lure of high interest.
NDB's case has also debunked the myth that banks can never fail. "In fact banks can fail, if the management and directors are not sincere," said a banker. "Depositors must be aware of the back ground of the management and Board of Directors of banks and financial institutions before depositing their hard-earned money," he said, urging banks and financial institutions to follow Nepal Rastra Bank's (NRB) directives. "Had NDB followed NRB's directives it would not have been in trouble today."
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