The National Geographic Society has named two Nepalis in its Adventurers of the Year awards, for travelling from the top of Everest to the Bay of Bengal.Sano Babu Sunuwar (28) and Lakpa Tsheri Sherpa (37) won the People's Choice category for their trip, dubbed the Ultimate Descent Summit to Sea, thanks to 72,000 votes by members of the public.
The duo climbed Mt Everest in April, and paraglided down to the basecamp.Then they bicycled to the nearest river and kayaked across the Nepali border into India and paddled the Ganges River all the way to the Indian Ocean.With no corporate support or media backing, and a limited budget, the pair borrowed gear for the trip, and said they were robbed by villagers, lived on berries at one time and often slept in their kayaks.
Wednesday, February 29, 2012
World Bank sees progress against extreme poverty, flags vulnerabilities
In every region of the developing world, the percentage of people living on less than $1.25-a-day and the number of poor declined between 2005-2008, according to estimates released today by the World Bank.
This across-the-board reduction over a three-year monitoring cycle marks a first since the Bank began monitoring extreme poverty, it claimed.Similarly, South Asia witnessed the $1.25-a-day poverty rate fell from 61 per cent to 36 per cent between 1981 and 2005 and fell a further 3.5 percentage points between 2005 and 2008. The proportion of the population living in extreme poverty is now the lowest since 1981, the global agency said, adding that its methodology is based on consumption and income, adjusted for inflation within countries and for purchasing power differences across countries.
An estimated 1.28 billion people in 2008 lived below $1.25-a-day, equivalent to 22 per cent of the population of the developing world. By contrast, in 1981, some 1.94 billion people were living in extreme poverty. The update draws on over 850 household surveys in nearly 130 countries. The year 2008 is the latest date for which a global figure can be calculated because, while more recent statistics for middle income countries are available, for low-income countries newer data are either scarce or not comparable with previous estimates.
More recent post-2008 analysis reveals that, while the food, fuel and financial crises over the past four years had at times sharp negative impacts on vulnerable populations and slowed the rate of poverty reduction in some countries, global poverty overall kept falling. In fact, preliminary survey-based estimates for 2010—based on a smaller sample size than in the global update—indicate that the $1.25-a-day poverty rate had fallen to under half of its 1990 value by 2010. It would mean that the first Millennium Development Goal (MDG) of halving extreme poverty from its 1990 level has been achieved before the 2015 deadline.
“The developing world as a whole has made considerable progress in fighting extreme poverty, but the 663 million people who moved above the poverty lines typical of the poorest countries are still poor by the standards of middle- and high-income countries,” director of the Bank’s Research Group and leader of the team that produced the numbers Martin Ravallion said, adding that the bunching up just above the extreme poverty line is indicative of the vulnerability facing a great many poor people in the world. “And at the current rate of progress, around one billion people would still live in extreme poverty in 2015.”
The $1.25 poverty line is the average for the world’s poorest 10 to 20 countries. A higher line of $2-a-day — the median poverty line for developing countries — reveals less progress versus $1.25-a-day.
Indeed, there was only a modest drop in the number of people living below $2-per-day between 1981 and 2008, from 2.59 billion to 2.44 billion, though falling more sharply since 1999. "Having 22 per cent of people in developing countries still living on less than $1.25-a-day and 42 per cent with less than $2-a-day is intolerable,” director of the World Bank’s Poverty Reduction and Equity Group Jaime Saavedra, said, adding that they need to increase the efforts. “On the policy and programme side, we need to continue attacking poverty on many fronts, from creating more and better jobs, to delivering better educational and health services and basic infrastructure, to protecting the vulnerable. And on the measurement side, countries need to expand data collection and strengthen statistical capacity, particularly in low-income countries.”
This across-the-board reduction over a three-year monitoring cycle marks a first since the Bank began monitoring extreme poverty, it claimed.Similarly, South Asia witnessed the $1.25-a-day poverty rate fell from 61 per cent to 36 per cent between 1981 and 2005 and fell a further 3.5 percentage points between 2005 and 2008. The proportion of the population living in extreme poverty is now the lowest since 1981, the global agency said, adding that its methodology is based on consumption and income, adjusted for inflation within countries and for purchasing power differences across countries.
An estimated 1.28 billion people in 2008 lived below $1.25-a-day, equivalent to 22 per cent of the population of the developing world. By contrast, in 1981, some 1.94 billion people were living in extreme poverty. The update draws on over 850 household surveys in nearly 130 countries. The year 2008 is the latest date for which a global figure can be calculated because, while more recent statistics for middle income countries are available, for low-income countries newer data are either scarce or not comparable with previous estimates.
More recent post-2008 analysis reveals that, while the food, fuel and financial crises over the past four years had at times sharp negative impacts on vulnerable populations and slowed the rate of poverty reduction in some countries, global poverty overall kept falling. In fact, preliminary survey-based estimates for 2010—based on a smaller sample size than in the global update—indicate that the $1.25-a-day poverty rate had fallen to under half of its 1990 value by 2010. It would mean that the first Millennium Development Goal (MDG) of halving extreme poverty from its 1990 level has been achieved before the 2015 deadline.
“The developing world as a whole has made considerable progress in fighting extreme poverty, but the 663 million people who moved above the poverty lines typical of the poorest countries are still poor by the standards of middle- and high-income countries,” director of the Bank’s Research Group and leader of the team that produced the numbers Martin Ravallion said, adding that the bunching up just above the extreme poverty line is indicative of the vulnerability facing a great many poor people in the world. “And at the current rate of progress, around one billion people would still live in extreme poverty in 2015.”
The $1.25 poverty line is the average for the world’s poorest 10 to 20 countries. A higher line of $2-a-day — the median poverty line for developing countries — reveals less progress versus $1.25-a-day.
Indeed, there was only a modest drop in the number of people living below $2-per-day between 1981 and 2008, from 2.59 billion to 2.44 billion, though falling more sharply since 1999. "Having 22 per cent of people in developing countries still living on less than $1.25-a-day and 42 per cent with less than $2-a-day is intolerable,” director of the World Bank’s Poverty Reduction and Equity Group Jaime Saavedra, said, adding that they need to increase the efforts. “On the policy and programme side, we need to continue attacking poverty on many fronts, from creating more and better jobs, to delivering better educational and health services and basic infrastructure, to protecting the vulnerable. And on the measurement side, countries need to expand data collection and strengthen statistical capacity, particularly in low-income countries.”
Tuesday, February 28, 2012
Nepal asks IFC to help float local currency bond
The central bank has proposed International Finance Corporation (IFC) — a lending window of the World Bank — to help float a local currency bond.
"Since there is a mismatch between long-term credit demand and short-term liquidity, the central bank has suggested the IFC to help float a local currency bond," according to central bank governor Dr Yubaraj Khatiwada. “The mismatch has made it difficult for the financial institutions to lend on long-term investment projects.”
During his meeting with the Nepal Rastra Bank (NRB) governor, Thunell thanked government’s support to IFC’s ongoing investments in the financial sector in addition to the payment reform project and other interventions aimed at making doing business easier.
The visiting IFC delegation — led by executive vice president and chief executive Lars Thunell — has today met Prime Minister Dr Baburam Bhattarai and reiterated IFC’s commitment towards increasing investments in Nepal, particularly in infrastructure, and support private sector development.
"IFC sees great potential in Nepal," explained Thunell after his meeting with the premier today at the latter's office. "We believe that the country can grow rapidly in the near future."
This is the first visit of IFC executive vice president and chief executive Lars Thunell to Nepal. IFC offers services both as an advisor to the government and as a financier to the private sector, especially in infrastructure, microfinance and financial sectors. IFC’s strategic agenda in Nepal includes priority sectors of infrastructure; financial sector including access to finance for small and medium enterprises (SMEs) particularly for women entrepreneurs, tourism and agribusiness.
Thunell also met finance minister Barshaman Pun yesterday and shared details of IFC’s ongoing assistance to the government in simplifying regulations relating to business licensing, registration and taxation to attract investments. Underscoring the continued support towards strengthening the financial sector and providing support to SMEs, he however, asked the finance minister to create conducive environment for investment.
Pun, on the occasion, appraised him of Nepal Investment Year and government plan to attract foreign investments on 50 mega project to propel economic growth."IFC is keen on supporting essential infrastructure projects, particularly hydropower, to help meet development needs,” Thunell said, during his meeting with Minister of Energy Post Bahadur Bogati.Last year, IFC invested in a run-of-river hydropower project with Butwal Power.
The IFC — which sent a high level delegation that has been busy meeting finance minister, central bank governor and other government officials since last week — has focused on Nepal in South Asia after 2008, when it reopened its Nepal office, though it has been engaged in Nepal since 1970.
Meanwhile, IFC’s committed portfolio of $25 million covering projects across a range of sectors — including power, air transport, banking, microfinance, and trade finance lines. It is committed to supporting investment climate improvements, strengthening local financial institutions, improving access to finance, promoting trade, and helping address climate change impacts.
The visiting delegation of IFC includes South Asia director Thomas Davenport, Asia Infrastructure director Anita George and Kyle Kelhofer, Country Manager for Bangladesh, Bhutan and Nepal.
"Since there is a mismatch between long-term credit demand and short-term liquidity, the central bank has suggested the IFC to help float a local currency bond," according to central bank governor Dr Yubaraj Khatiwada. “The mismatch has made it difficult for the financial institutions to lend on long-term investment projects.”
During his meeting with the Nepal Rastra Bank (NRB) governor, Thunell thanked government’s support to IFC’s ongoing investments in the financial sector in addition to the payment reform project and other interventions aimed at making doing business easier.
The visiting IFC delegation — led by executive vice president and chief executive Lars Thunell — has today met Prime Minister Dr Baburam Bhattarai and reiterated IFC’s commitment towards increasing investments in Nepal, particularly in infrastructure, and support private sector development.
"IFC sees great potential in Nepal," explained Thunell after his meeting with the premier today at the latter's office. "We believe that the country can grow rapidly in the near future."
This is the first visit of IFC executive vice president and chief executive Lars Thunell to Nepal. IFC offers services both as an advisor to the government and as a financier to the private sector, especially in infrastructure, microfinance and financial sectors. IFC’s strategic agenda in Nepal includes priority sectors of infrastructure; financial sector including access to finance for small and medium enterprises (SMEs) particularly for women entrepreneurs, tourism and agribusiness.
Thunell also met finance minister Barshaman Pun yesterday and shared details of IFC’s ongoing assistance to the government in simplifying regulations relating to business licensing, registration and taxation to attract investments. Underscoring the continued support towards strengthening the financial sector and providing support to SMEs, he however, asked the finance minister to create conducive environment for investment.
Pun, on the occasion, appraised him of Nepal Investment Year and government plan to attract foreign investments on 50 mega project to propel economic growth."IFC is keen on supporting essential infrastructure projects, particularly hydropower, to help meet development needs,” Thunell said, during his meeting with Minister of Energy Post Bahadur Bogati.Last year, IFC invested in a run-of-river hydropower project with Butwal Power.
The IFC — which sent a high level delegation that has been busy meeting finance minister, central bank governor and other government officials since last week — has focused on Nepal in South Asia after 2008, when it reopened its Nepal office, though it has been engaged in Nepal since 1970.
Meanwhile, IFC’s committed portfolio of $25 million covering projects across a range of sectors — including power, air transport, banking, microfinance, and trade finance lines. It is committed to supporting investment climate improvements, strengthening local financial institutions, improving access to finance, promoting trade, and helping address climate change impacts.
The visiting delegation of IFC includes South Asia director Thomas Davenport, Asia Infrastructure director Anita George and Kyle Kelhofer, Country Manager for Bangladesh, Bhutan and Nepal.
Current liquidity short term phenomenon: Governor
The current liquidity surplus is a short term phenomenon, according to the central bank governor Dr Yubraj Khatiwada.
"The current liquidity is a short term phenomenon whereas there is a long term credit demand," he said, addressing the official inauguration of the youngest commercial bank, Sanima Bank, here in the Valley today.
Currently the banks and financial institutions have added around Rs 85 billion deposits, and are in the comfortable position against last year's tight liquidity situation, though the loanable liquidity is very limited.
The financial sector should move ahead with other sectors, he said, adding that the sector alone cannot sustain the economy in absence of other sectors that are performing poorly currently. "It’s time the banks and financial institutions think of long-term investment instead of short-term investment and profit maximisation."
The financial institutions should increase their capital base to invest in the long-term. Suggesting the banks and financial institutions to invest in productive sectors like agriculture, Khatiwada said that the banks and financial institutions are competing on profit maximisation in the short term, which will not support the economic growth. "Development of real sector is key in the overall economic development that will ultimately benefit the banks and financial institutions too. There may be less profit but small farmers are also bankable and the banks should look to the villages, where there is immense opportunity."
The long term investment in the productive sector, despite less benefit, is sustainable, he suggested.Sanima Bank — the 32nd bank — will also help mobilise domestic and foreign investment in the productive sectors, he said, hoping that Nepal Investment Year 2012-13 will benefit from the bank that is promoted by the Non-Resident Nepalis Association (NRNA) that would help invite foreign investment in the country. "The bank could help make Nepal Investment Year successful."
Indicating that Sanima Bank will be the last commercial bank for the time being, central bank governor also said that the paid up capital is not the measuring rod of a commercial bank. "There are other indicators like good governance."
The bank's chairman and president of the NRNA Jeeba Lamichhane promised to maintain good governance in the institution. "We have maintained good governance in our bank and will maintain it," he said, adding that the bank is providing scholarships to some 16 students of 10+2 level apart from training to 40 youth of its eight branches in the rural areas. "The bank has allocated Rs 5.3 million for such programmes," he added.
'Do not expect dividend soon'
KATHMANDU: Central bank governor Dr Yubraj Khatiwada requested the investors not to expect dividend immediately. "The banks and financial institutions should have patient and increase their capital base instead of immediate profit and dividends," he said, suggesting them to maintain capital adequacy more than the central bank's prescription to cushion the future risks. "The country is passing through the transition and the banks and financial institutions and investors should change their tendency of immediate dividend rather think of long-term strong capital base," he warned.
"The current liquidity is a short term phenomenon whereas there is a long term credit demand," he said, addressing the official inauguration of the youngest commercial bank, Sanima Bank, here in the Valley today.
Currently the banks and financial institutions have added around Rs 85 billion deposits, and are in the comfortable position against last year's tight liquidity situation, though the loanable liquidity is very limited.
The financial sector should move ahead with other sectors, he said, adding that the sector alone cannot sustain the economy in absence of other sectors that are performing poorly currently. "It’s time the banks and financial institutions think of long-term investment instead of short-term investment and profit maximisation."
The financial institutions should increase their capital base to invest in the long-term. Suggesting the banks and financial institutions to invest in productive sectors like agriculture, Khatiwada said that the banks and financial institutions are competing on profit maximisation in the short term, which will not support the economic growth. "Development of real sector is key in the overall economic development that will ultimately benefit the banks and financial institutions too. There may be less profit but small farmers are also bankable and the banks should look to the villages, where there is immense opportunity."
The long term investment in the productive sector, despite less benefit, is sustainable, he suggested.Sanima Bank — the 32nd bank — will also help mobilise domestic and foreign investment in the productive sectors, he said, hoping that Nepal Investment Year 2012-13 will benefit from the bank that is promoted by the Non-Resident Nepalis Association (NRNA) that would help invite foreign investment in the country. "The bank could help make Nepal Investment Year successful."
Indicating that Sanima Bank will be the last commercial bank for the time being, central bank governor also said that the paid up capital is not the measuring rod of a commercial bank. "There are other indicators like good governance."
The bank's chairman and president of the NRNA Jeeba Lamichhane promised to maintain good governance in the institution. "We have maintained good governance in our bank and will maintain it," he said, adding that the bank is providing scholarships to some 16 students of 10+2 level apart from training to 40 youth of its eight branches in the rural areas. "The bank has allocated Rs 5.3 million for such programmes," he added.
'Do not expect dividend soon'
KATHMANDU: Central bank governor Dr Yubraj Khatiwada requested the investors not to expect dividend immediately. "The banks and financial institutions should have patient and increase their capital base instead of immediate profit and dividends," he said, suggesting them to maintain capital adequacy more than the central bank's prescription to cushion the future risks. "The country is passing through the transition and the banks and financial institutions and investors should change their tendency of immediate dividend rather think of long-term strong capital base," he warned.
Food prices likely to increase
The moderated food price inflation is expected to be challenged by rising fuel prices and its shortage in the coming months.
"Food prices are likely to increase in the coming months due to the rise in fuel prices and high transportation costs," according to a joint report published by UN World Food Programme (WFP), Ministry of Agriculture and Co-operatives, Federation of Nepalese Chambers of Commerce and Industries (FNCCI) and Consumer Interest Protection Forum.
The index of the food and beverage group increased by a mere four per cent in the first half of the current fiscal year which stood at 17.6 per cent during the corresponding period of the previous year. The index of non-food and services group increased by nine per cent during the review period that stood at 6.4 per cent last year, according to the recent macroeconomic report published by Nepal Rastra Bank (NRB).
The rate at which the national price level increased is below the central bank's target of 6.8 per cent for this year. The monetary policy this fiscal year had estimated to contain inflation at seven per cent which NRB revised to eight per cent during the mid term evaluation.
Central bank governor Yubaraj Khatiwada had attributed the declining prices in India as the reason behind the lower price hike rate. However, the continued fuel crisis coupled with the rise in its prices are likely to affect the smooth operation of transportation services affecting the price of the commodities, cautions the report.
In the last two months, the price of petrol and diesel has gone up to Rs 116 from Rs 105 and to Rs 85 from Rs 84, respectively. Higher fuel prices translate to increased transportation costs resulting in the rise in food prices. The supply situation across the country was not disrupted in spite of the few bandhs and due to the normal post harvest period of summer crops. The winter crops are also growing well due to timely winter rains leading to a positive outlook for national food balance.
Prices of most commodities have shown a nominal fluctuation in the past one month as the national average price of coarse rice and wheat flour did not go through much changes.
The price index of vegetables went down by 5.1 per cent in the first six months of the current fiscal year while it had increased by 67.4 per cent during the same period last year. The price index of ghee and oil subgroup witnessed the highest rise of 15.6 per cent during the review period compared to an increase of 0.3 percent in the same period of the previous year.
Food Price inflation
Mid-August — 9.9 per cent
Mid-September — 10.1 per cent
Mid-October — 9.6 per cent
Mid-November — 8.4 per cent
Mid-December — 7.1 per cent
Mid-January — 4 per cent
(Source: Nepal Rastra Bank)
"Food prices are likely to increase in the coming months due to the rise in fuel prices and high transportation costs," according to a joint report published by UN World Food Programme (WFP), Ministry of Agriculture and Co-operatives, Federation of Nepalese Chambers of Commerce and Industries (FNCCI) and Consumer Interest Protection Forum.
The index of the food and beverage group increased by a mere four per cent in the first half of the current fiscal year which stood at 17.6 per cent during the corresponding period of the previous year. The index of non-food and services group increased by nine per cent during the review period that stood at 6.4 per cent last year, according to the recent macroeconomic report published by Nepal Rastra Bank (NRB).
The rate at which the national price level increased is below the central bank's target of 6.8 per cent for this year. The monetary policy this fiscal year had estimated to contain inflation at seven per cent which NRB revised to eight per cent during the mid term evaluation.
Central bank governor Yubaraj Khatiwada had attributed the declining prices in India as the reason behind the lower price hike rate. However, the continued fuel crisis coupled with the rise in its prices are likely to affect the smooth operation of transportation services affecting the price of the commodities, cautions the report.
In the last two months, the price of petrol and diesel has gone up to Rs 116 from Rs 105 and to Rs 85 from Rs 84, respectively. Higher fuel prices translate to increased transportation costs resulting in the rise in food prices. The supply situation across the country was not disrupted in spite of the few bandhs and due to the normal post harvest period of summer crops. The winter crops are also growing well due to timely winter rains leading to a positive outlook for national food balance.
Prices of most commodities have shown a nominal fluctuation in the past one month as the national average price of coarse rice and wheat flour did not go through much changes.
The price index of vegetables went down by 5.1 per cent in the first six months of the current fiscal year while it had increased by 67.4 per cent during the same period last year. The price index of ghee and oil subgroup witnessed the highest rise of 15.6 per cent during the review period compared to an increase of 0.3 percent in the same period of the previous year.
Food Price inflation
Mid-August — 9.9 per cent
Mid-September — 10.1 per cent
Mid-October — 9.6 per cent
Mid-November — 8.4 per cent
Mid-December — 7.1 per cent
Mid-January — 4 per cent
(Source: Nepal Rastra Bank)
Monday, February 27, 2012
Central bank asks banks and financial institutions to keep hawk’s eye on clientele
The central bank today asked the banks and financial institutions to keep tab on their clients more effectively to control money laundering and fight terrorist financing.
Issuing a directive that has replaced earlier one on know-your-client (KYC) — by the Financial Information Unit (FIU) — it has made mandatory for the banks and financial institutions to follow it thoroughly. “It is mandatory also due to the country’s commitment to the Financial Action Task Force (FATF) — the global body that keeps watch on money laundering and terrorists financing — recently,” according to the central bank.
The banks and financial institutions now need to adopt and implement customer due diligence meaning they should keep track of all their clients and report suspicious transactions to the FIU, the focal point under the central bank.
They have to take necessary measures to identify suspicious transactions and strictly abide by the law and regulations related with anti-money laundering and terrorism financing, he said, adding that the banks and financial institutions must make sure that branches throughout the country maintain the rule.
The central bank has asked the banks and financial institutions to closely monitor customers having multiple transactions, even if the volume is small, and keep tab on electronic transfers, both receipts and paid, too.
“They must list their customers into three categories — highly risk, medium risk and low risk — depending on the risks, they are exposed to,” the central bank said.
Issuing a directive that has replaced earlier one on know-your-client (KYC) — by the Financial Information Unit (FIU) — it has made mandatory for the banks and financial institutions to follow it thoroughly. “It is mandatory also due to the country’s commitment to the Financial Action Task Force (FATF) — the global body that keeps watch on money laundering and terrorists financing — recently,” according to the central bank.
The banks and financial institutions now need to adopt and implement customer due diligence meaning they should keep track of all their clients and report suspicious transactions to the FIU, the focal point under the central bank.
They have to take necessary measures to identify suspicious transactions and strictly abide by the law and regulations related with anti-money laundering and terrorism financing, he said, adding that the banks and financial institutions must make sure that branches throughout the country maintain the rule.
The central bank has asked the banks and financial institutions to closely monitor customers having multiple transactions, even if the volume is small, and keep tab on electronic transfers, both receipts and paid, too.
“They must list their customers into three categories — highly risk, medium risk and low risk — depending on the risks, they are exposed to,” the central bank said.
CG Mart to open on Nepali New Year
The country will see the first convenient store by the New Year 2069.
"Arun Intercontinental Traders — that deal with automobiles — under Chaudhary Group (CG) is opening CG Mart from Nepali New year to provide distinct products and services that meet the needs in both retailing and distributing of consumer goods," said managing director of the CG Arun Chaudhary.
Though, three years down the line, the country will have around 300 to 400 CG Mart — a 7/11 concept store — in the first phase Minbhawan, Babarmahal and Thamel will have such stores, he said, adding that the stores will sell a wide range of imported goods, where as minimarts and provision shops sell local products with a limited range of products.
Catching up with a new trend, the expansion of CG Mart outlets will have characteristics like promotion of franchising model, selling a wider range of food and services through trained employees, and promoting the brand, Chaudhary added. "The stores will be located on the main road leading to one of two public areas and other transportation hubs."
CG Mart will be a start-up convenience food and non food shop operation. "CG Mart caters to the shopping needs of consumers, who work irregular working hours," he said. "In addition, convenience stores, to some extent will replace the old-fashioned general store with long hour opening policy that allows convenience stores to reach out to larger group consumers due to the relatively small size store."
The potential of convenience store market in Kathmandu is great due to rapidly growing population. "We believe warm growth of the market as a result of the sustained growth in remittance and per capita income will possibly recover in economy of Nepal," he said.
"Arun Intercontinental Traders — that deal with automobiles — under Chaudhary Group (CG) is opening CG Mart from Nepali New year to provide distinct products and services that meet the needs in both retailing and distributing of consumer goods," said managing director of the CG Arun Chaudhary.
Though, three years down the line, the country will have around 300 to 400 CG Mart — a 7/11 concept store — in the first phase Minbhawan, Babarmahal and Thamel will have such stores, he said, adding that the stores will sell a wide range of imported goods, where as minimarts and provision shops sell local products with a limited range of products.
Catching up with a new trend, the expansion of CG Mart outlets will have characteristics like promotion of franchising model, selling a wider range of food and services through trained employees, and promoting the brand, Chaudhary added. "The stores will be located on the main road leading to one of two public areas and other transportation hubs."
CG Mart will be a start-up convenience food and non food shop operation. "CG Mart caters to the shopping needs of consumers, who work irregular working hours," he said. "In addition, convenience stores, to some extent will replace the old-fashioned general store with long hour opening policy that allows convenience stores to reach out to larger group consumers due to the relatively small size store."
The potential of convenience store market in Kathmandu is great due to rapidly growing population. "We believe warm growth of the market as a result of the sustained growth in remittance and per capita income will possibly recover in economy of Nepal," he said.
PAF to distribute identity cards for poor soon
The government has asked Poverty Alleviation Fund (PAF) to prepare for the distributing of identity cards for poor.
The government's much-ambitious Immediate Action Plan had targeted to distribute the identity cards to the poor under the national poverty line.
The 39th meeting of the Fund chained by the Prime Minister Dr Baburam Bhattarai decided to distribute the cards. The managing committee meeting also formed two committees — direction and technical — to carry out the task under the leadership of vice president of PAF Janak Raj Joshi and director general of Central Bureau of Statistics (CBS) Uttam Narayan Malla, respectively.
According to the CBS, around 25.16 per cent of the total 26.6 million populations — meaning a quarter of the total population — is under poverty line as they earn less than Rs 54 in a day. The national poverty line has been calculated on the basis of consumption that a person needs 2,220 calorie per day.
Though, the experts are of the opinion that the graduation of a poor to non-poor is only possible through micro-enterprises and skill based programmes that can generate income, the government has been planning for the identity card since long. "Though identification will help the government to reach them with programmes to help them graduate out, distributing cards is humiliating and encouraging not to work," according to the development experts.
However vice chair of the fund Joshi opined that the committees will explore on the criteria to identify poor in national context before distributing the cards.
The meeting has also approved expansion plan of the fund to 15 additional districts, apart from current 40 districts, where it is working on.Meanwhile, PAF is also preparing the exit strategy. "The fund will prepare a draft Act of an umbrella organisation of the community organisations," he said, adding that the Act will pave the way for the PAF to make exit strategy slowly making the umbrella organisation of the community organisations more responsible for the poverty reduction.
The government's much-ambitious Immediate Action Plan had targeted to distribute the identity cards to the poor under the national poverty line.
The 39th meeting of the Fund chained by the Prime Minister Dr Baburam Bhattarai decided to distribute the cards. The managing committee meeting also formed two committees — direction and technical — to carry out the task under the leadership of vice president of PAF Janak Raj Joshi and director general of Central Bureau of Statistics (CBS) Uttam Narayan Malla, respectively.
According to the CBS, around 25.16 per cent of the total 26.6 million populations — meaning a quarter of the total population — is under poverty line as they earn less than Rs 54 in a day. The national poverty line has been calculated on the basis of consumption that a person needs 2,220 calorie per day.
Though, the experts are of the opinion that the graduation of a poor to non-poor is only possible through micro-enterprises and skill based programmes that can generate income, the government has been planning for the identity card since long. "Though identification will help the government to reach them with programmes to help them graduate out, distributing cards is humiliating and encouraging not to work," according to the development experts.
However vice chair of the fund Joshi opined that the committees will explore on the criteria to identify poor in national context before distributing the cards.
The meeting has also approved expansion plan of the fund to 15 additional districts, apart from current 40 districts, where it is working on.Meanwhile, PAF is also preparing the exit strategy. "The fund will prepare a draft Act of an umbrella organisation of the community organisations," he said, adding that the Act will pave the way for the PAF to make exit strategy slowly making the umbrella organisation of the community organisations more responsible for the poverty reduction.
Sunday, February 26, 2012
Airlines to increase fuel surcharge
With the increment of petroleum prices, private airlines operators are also increasing fuel surcharge making the air travel costlier from March 1.
Though, the Airline Operators Association of Nepal (AOAN) is taking the formal decision tomorrow, the increment — Rs 60 in the shortest route and Rs 150 in the longest route — will be effective from March 1, according to the association.
"The Civil Aviation Authority of Nepal (CAAN) has mandated the private airliners to automatically adjust the fuel surcharge with an increase or decrease of Air Turbine Fuel (ATF)," said executive marketing manager of Buddha Air Rupesh Joshi.
The state oil monopoly has increased Rs 4 for a litre of ATF making it Rs 109 per litre yesterday forcing the airlines to increase the fuel surcharge that will hike the airfare again within a month.
"According to the regulations, airlines can revise fuel surcharge when ATF price is increased or decreased by more than Rs 4 per litre," he said, adding that the fuel surcharge is calculated automatically with price revision of ATF every time.But, CAAN reviews airfare every two years on the basis of inflation rate, fuel price and maintenance cost.
The domestic airlines had on January 21 increased the fuel surcharge by Rs 55 to Rs 200 following the price-hike in ATF. Nepal Oil Corporation (NOC) had increased Rs 5 per liter in a litre of ATF on January 18 making it to Rs 105 per litre.
There are some half dozen domestic private airlines including Buddha Air, Yeti Airlines, Guna Air and Agni Air flying on the domestic routes, apart from the new airlines Blues Air that got Airlines Operating Certificate (AOC) last week.
The government opened the sky after the 1990 movement giving space for the private sector to operate airlines apart from the national flag carrier Nepal Airlines Corporation (NAC) which is operating on the international routes too. The government has encouraged private airliners to fly on the international route as the ailing national flag carrier could not operate its flights on all the routes that the country already has agreement with.
Though, the Airline Operators Association of Nepal (AOAN) is taking the formal decision tomorrow, the increment — Rs 60 in the shortest route and Rs 150 in the longest route — will be effective from March 1, according to the association.
"The Civil Aviation Authority of Nepal (CAAN) has mandated the private airliners to automatically adjust the fuel surcharge with an increase or decrease of Air Turbine Fuel (ATF)," said executive marketing manager of Buddha Air Rupesh Joshi.
The state oil monopoly has increased Rs 4 for a litre of ATF making it Rs 109 per litre yesterday forcing the airlines to increase the fuel surcharge that will hike the airfare again within a month.
"According to the regulations, airlines can revise fuel surcharge when ATF price is increased or decreased by more than Rs 4 per litre," he said, adding that the fuel surcharge is calculated automatically with price revision of ATF every time.But, CAAN reviews airfare every two years on the basis of inflation rate, fuel price and maintenance cost.
The domestic airlines had on January 21 increased the fuel surcharge by Rs 55 to Rs 200 following the price-hike in ATF. Nepal Oil Corporation (NOC) had increased Rs 5 per liter in a litre of ATF on January 18 making it to Rs 105 per litre.
There are some half dozen domestic private airlines including Buddha Air, Yeti Airlines, Guna Air and Agni Air flying on the domestic routes, apart from the new airlines Blues Air that got Airlines Operating Certificate (AOC) last week.
The government opened the sky after the 1990 movement giving space for the private sector to operate airlines apart from the national flag carrier Nepal Airlines Corporation (NAC) which is operating on the international routes too. The government has encouraged private airliners to fly on the international route as the ailing national flag carrier could not operate its flights on all the routes that the country already has agreement with.
Foreign exchange reserves up
The central bank witnessed an increase of Rs 89.98 billion gross foreign exchange reserves in the six months of the current fiscal year.
The gross foreign exchange reserves increased by 33.1 per cent to Rs 362.13 billion in mid-January from a level of Rs 272.15 billion as at mid-July 2011, according to the central bank data.
"Such reserves had declined by 2.7 per cent to Rs 261.64 billion in the same period of the last fiscal year," it said, adding that of total reserves, Nepal Rastra Bank's (NRB) reserves increased by 41.3 per cent to Rs 301.07 billion from a level of Rs 213.10 billion as of mid-July 2011.
In the US dollar terms, the gross foreign exchange reserves increased by 15.3 per cent to $4.42 billion in mid-January from the level of mid-July 2011.
"The reserves had increased by just 0.7 per cent in the same period of the previous year," it added.
Based on the trend of imports during the six months of the current fiscal year, the current level of reserves is sufficient for financing merchandise imports of 10.2 months, and merchandise and service imports of 9.1 months, the central bank said.
The gross foreign exchange reserves increased by 33.1 per cent to Rs 362.13 billion in mid-January from a level of Rs 272.15 billion as at mid-July 2011, according to the central bank data.
"Such reserves had declined by 2.7 per cent to Rs 261.64 billion in the same period of the last fiscal year," it said, adding that of total reserves, Nepal Rastra Bank's (NRB) reserves increased by 41.3 per cent to Rs 301.07 billion from a level of Rs 213.10 billion as of mid-July 2011.
In the US dollar terms, the gross foreign exchange reserves increased by 15.3 per cent to $4.42 billion in mid-January from the level of mid-July 2011.
"The reserves had increased by just 0.7 per cent in the same period of the previous year," it added.
Based on the trend of imports during the six months of the current fiscal year, the current level of reserves is sufficient for financing merchandise imports of 10.2 months, and merchandise and service imports of 9.1 months, the central bank said.
Nepse resumes Sanima share trading
Nepse resumed the share trading of the youngest commercial bank from today."Sanima Bank has been allowed to resume share trading from today," according to the Nepal Stock Exchange (Nepse).
"Though there was no transaction of Sanima's shares today, there were sellers offering the bank's shares at Rs 254 per unit," a broker said, adding that the trading of then Sanima Bikas Bank had been suspended since June 12, 2010 when it had formally started the process to upgrade to avoid any manipulation in the prices.
Share holders of the newly upgraded commercial bank — Sanima Bank — will now be able to trade their shares at the stock exchange, according to Nepse that has been recently blamed for stopping the trading of shares without providing any reason which had hurt investor sentiment.
Investors blamed the front line regulator Nepse — during an interaction at the Finance Ministry — of being ineffective in making the listed companies play by the rules, which has discouraged investors.
The last share price of the bank stood at Rs 497 per share before trading was halted someone and a half years back.
"Though there was no transaction of Sanima's shares today, there were sellers offering the bank's shares at Rs 254 per unit," a broker said, adding that the trading of then Sanima Bikas Bank had been suspended since June 12, 2010 when it had formally started the process to upgrade to avoid any manipulation in the prices.
Share holders of the newly upgraded commercial bank — Sanima Bank — will now be able to trade their shares at the stock exchange, according to Nepse that has been recently blamed for stopping the trading of shares without providing any reason which had hurt investor sentiment.
Investors blamed the front line regulator Nepse — during an interaction at the Finance Ministry — of being ineffective in making the listed companies play by the rules, which has discouraged investors.
The last share price of the bank stood at Rs 497 per share before trading was halted someone and a half years back.
Saturday, February 25, 2012
NOC hikes petroleum products prices
Nepal Oil Corporation (NOC) increased the price of petrol, diesel and kerosene today.
The government decided to increase the price of petrol, diesel and kerosene by Rs 4 although it had brought prices down by Rs 3 on January 26.Petrol will now cost Rs 116 per litre and diesel and kerosene Rs 85, according to the revised price.
This is the second time that the state oil monopoly has decided to hike the price of petroleum products since January.
In the sharpest one-time increment ever, the state oil monopoly had jacked up the price of petroleum products on January 18. It had hiked price of petrol by Rs 10 and diesel and kerosene by Rs 9 and cooking gas by Rs 175. But the Ministry of Commerce and Supplies, on January 26, decided to bring down prices following a week-long student protest. The ministry had directed Nepal Oil Corporation to reduce price of petrol by Rs 3 per litre, diesel and kerosene by Rs 4 and cooking gas by Rs 85 per cylinder at that time.
With today’s hike, the monthly loss of Nepal Oil Corporation has come down to Rs 857.5 million.
The hike in petroleum price will add to the burden on household budgets already stretched with soaring prices of essential foodstuffs. Increase in the price of diesel will not only push up the cost of food items, including fruits and vegetables, and many other perishables that are moved largely by trucks but also the operating cost of industries.
However spokesperson at Ministry of Commerce and Supplies Dipak Subedi said inflation due to today’s price hike will be nominal. Public vehicle fares will not go up and consumers will not be hit, he claimed.
The government decided to increase the price of petrol, diesel and kerosene by Rs 4 although it had brought prices down by Rs 3 on January 26.Petrol will now cost Rs 116 per litre and diesel and kerosene Rs 85, according to the revised price.
This is the second time that the state oil monopoly has decided to hike the price of petroleum products since January.
In the sharpest one-time increment ever, the state oil monopoly had jacked up the price of petroleum products on January 18. It had hiked price of petrol by Rs 10 and diesel and kerosene by Rs 9 and cooking gas by Rs 175. But the Ministry of Commerce and Supplies, on January 26, decided to bring down prices following a week-long student protest. The ministry had directed Nepal Oil Corporation to reduce price of petrol by Rs 3 per litre, diesel and kerosene by Rs 4 and cooking gas by Rs 85 per cylinder at that time.
With today’s hike, the monthly loss of Nepal Oil Corporation has come down to Rs 857.5 million.
The hike in petroleum price will add to the burden on household budgets already stretched with soaring prices of essential foodstuffs. Increase in the price of diesel will not only push up the cost of food items, including fruits and vegetables, and many other perishables that are moved largely by trucks but also the operating cost of industries.
However spokesperson at Ministry of Commerce and Supplies Dipak Subedi said inflation due to today’s price hike will be nominal. Public vehicle fares will not go up and consumers will not be hit, he claimed.
Friday, February 24, 2012
Erroneous policies, weaker regulators hurt investors’ confidence
Investors have blamed the failure of the regulatory authorities and government’s unstable economic policy for the poor performance of the share market.
“The weak regulatory agencies are to be blamed for the low confidence among investors which has led to the current poor performance of the share market,” blamed investors during an interaction on the share market here at the Finance Ministry today.
“The front line regulator Nepse and the capital market regulator Securities Board of Nepal (Sebon) have both failed to protect the rights of investors distracting them from the capital market,” they blamed, adding that the listed companies are not following regulatory norms but the regulatory authorities have not been able to punish them and protect the rights of the investors, let alone form an encouraging policy.
Nepse is considered the mirror of the economy and the Nepse index which at present is below 500 points reflects the low confidence of the fiscal and monetary policies, said former Nepse managing director, Rewat Bahadur Karki. The government is back tracking on the economic policy and heading towards a controlled economy, discouraging investors, he said, adding that the market distorting decisions of the government has also hit the confidence of investors.
The share market has been hovering around 312 points from the beginning of this fiscal year’s 378 points despite good performances of banks and financial institutions. But single sector concentration is also not sustainable for the market, said chairman of Sebon Dr Baburam Shrestha.
“Nepse’s inefficiency coupled with high supply and low demand and single sector concentration has discouraged investors,” he said.
The listing of all the hydropower companies of Nepal Electricity Authority (NEA) could help diversify the share market, suggested share market analyst Rabindra Bhattarai.
“The listing of NEA’s hydropower companies will not only help diversify the market but also help cash-strapped NEA collect capital for new hydropower projects. The share market could be revived with diversification,” he said.
Right time to invest
KATHMANDU: It is the right time to invest, according to central bank governor Dr Yubaraj Khatiwada. Banks and financial institutions have excessive liquidity and the current low prices of shares should be appealing to investors, he said, adding that the central bank is open about making policy changes to encourage investors to boost the share market. “All the economic indicators are positive that should help boost the confidence of the investors.”
“The weak regulatory agencies are to be blamed for the low confidence among investors which has led to the current poor performance of the share market,” blamed investors during an interaction on the share market here at the Finance Ministry today.
“The front line regulator Nepse and the capital market regulator Securities Board of Nepal (Sebon) have both failed to protect the rights of investors distracting them from the capital market,” they blamed, adding that the listed companies are not following regulatory norms but the regulatory authorities have not been able to punish them and protect the rights of the investors, let alone form an encouraging policy.
Nepse is considered the mirror of the economy and the Nepse index which at present is below 500 points reflects the low confidence of the fiscal and monetary policies, said former Nepse managing director, Rewat Bahadur Karki. The government is back tracking on the economic policy and heading towards a controlled economy, discouraging investors, he said, adding that the market distorting decisions of the government has also hit the confidence of investors.
The share market has been hovering around 312 points from the beginning of this fiscal year’s 378 points despite good performances of banks and financial institutions. But single sector concentration is also not sustainable for the market, said chairman of Sebon Dr Baburam Shrestha.
“Nepse’s inefficiency coupled with high supply and low demand and single sector concentration has discouraged investors,” he said.
The listing of all the hydropower companies of Nepal Electricity Authority (NEA) could help diversify the share market, suggested share market analyst Rabindra Bhattarai.
“The listing of NEA’s hydropower companies will not only help diversify the market but also help cash-strapped NEA collect capital for new hydropower projects. The share market could be revived with diversification,” he said.
Right time to invest
KATHMANDU: It is the right time to invest, according to central bank governor Dr Yubaraj Khatiwada. Banks and financial institutions have excessive liquidity and the current low prices of shares should be appealing to investors, he said, adding that the central bank is open about making policy changes to encourage investors to boost the share market. “All the economic indicators are positive that should help boost the confidence of the investors.”
World Bank to strengthen debt sustainability framework for low-income countries
The World Bank’s board of executive directors has approved a number of improvements to the analytical framework used for assessing debt sustainability and allocating IDA resources in low-income countries. These improvements ensure the framework remains relevant given the changing macroeconomic landscape facing low-income countries.
The paper, 'Revisiting the Debt Sustainability Framework for Low-Income Countries', which also was discussed by the board of the International Monetary Fund (IMF) last week, provides a comprehensive review of the Debt Sustainability Framework (DSF), a joint World Bank-IMF tool used to conduct public and external debt sustainability analysis.
“Underlying this revision of the DSF is the reality and recognition that low-income countries need to finance an enormous investment gap in order to achieve sustainable growth," said World Bank director for Economic Policy and Debt Jeffrey D Lewis.
"It’s key to adapt the DSF to help low-income countries meet the new challenges and enhance policy dialogue with their development partners,” he said.
Drawing on analytical work and consultations with a range of stakeholders, the proposals endorsed by the board include the analysis of debt thresholds by giving more prominence to country-specific factors affecting debt sustainability in low-income countries; improving the analysis of public debt and fiscal vulnerabilities, to guide external and domestic borrowing decisions; simplifying the implementation of the debt sustainability analysis to allow country authorities to undertake their own analysis, achieve greater transparency and strengthen their ownership of the DSF and strengthening the link between debt-financed investment and growth by relying on analytical models developed by IMF and World Bank staff to better capture the expected economic and social returns from investments.
These proposals come amid a changing landscape in many low-income countries, as the range of available financing options has widened since the DSF was first introduced in 2005.
Debt relief under the Heavily Indebted Poor Countries Initiative and the Multilateral Debt Relief Initiative has permitted low-income countries to exit from continued cycles of debt crisis and restructuring, alleviated financial burdens on a sustained basis, and created new borrowing space.
As a result, low-income countries are seeking to exploit this borrowing space to finance public investment and are relying increasingly on non-concessional external borrowing.
Domestic debt is also likely to grow in importance as national savings increase and governments seek to develop local debt markets. Accordingly, low-income countries will face new risks as the universe of creditors and debt instruments continues to expand.
The joint World Bank-IMF Debt Sustainability Framework aims to support low-income countries’ efforts to achieve their development goals without creating future debt problems.
The DSF helps guide the borrowing decisions of low-income countries, provide guidance for creditors’ lending and grant allocation decisions, and improve World Bank and IMF assessments and policy advice. The DSF was previously reviewed in 2006 and 2009.
The paper, 'Revisiting the Debt Sustainability Framework for Low-Income Countries', which also was discussed by the board of the International Monetary Fund (IMF) last week, provides a comprehensive review of the Debt Sustainability Framework (DSF), a joint World Bank-IMF tool used to conduct public and external debt sustainability analysis.
“Underlying this revision of the DSF is the reality and recognition that low-income countries need to finance an enormous investment gap in order to achieve sustainable growth," said World Bank director for Economic Policy and Debt Jeffrey D Lewis.
"It’s key to adapt the DSF to help low-income countries meet the new challenges and enhance policy dialogue with their development partners,” he said.
Drawing on analytical work and consultations with a range of stakeholders, the proposals endorsed by the board include the analysis of debt thresholds by giving more prominence to country-specific factors affecting debt sustainability in low-income countries; improving the analysis of public debt and fiscal vulnerabilities, to guide external and domestic borrowing decisions; simplifying the implementation of the debt sustainability analysis to allow country authorities to undertake their own analysis, achieve greater transparency and strengthen their ownership of the DSF and strengthening the link between debt-financed investment and growth by relying on analytical models developed by IMF and World Bank staff to better capture the expected economic and social returns from investments.
These proposals come amid a changing landscape in many low-income countries, as the range of available financing options has widened since the DSF was first introduced in 2005.
Debt relief under the Heavily Indebted Poor Countries Initiative and the Multilateral Debt Relief Initiative has permitted low-income countries to exit from continued cycles of debt crisis and restructuring, alleviated financial burdens on a sustained basis, and created new borrowing space.
As a result, low-income countries are seeking to exploit this borrowing space to finance public investment and are relying increasingly on non-concessional external borrowing.
Domestic debt is also likely to grow in importance as national savings increase and governments seek to develop local debt markets. Accordingly, low-income countries will face new risks as the universe of creditors and debt instruments continues to expand.
The joint World Bank-IMF Debt Sustainability Framework aims to support low-income countries’ efforts to achieve their development goals without creating future debt problems.
The DSF helps guide the borrowing decisions of low-income countries, provide guidance for creditors’ lending and grant allocation decisions, and improve World Bank and IMF assessments and policy advice. The DSF was previously reviewed in 2006 and 2009.
Thursday, February 23, 2012
Government to bring Act to guarantee employment
The government is set to guarantee employment to reduce poverty.
The proposed Employment Guarantee Bill — that has got the principal approval from the last week's cabinet — is based on rights approach that every adult citizen has a right to employment, according to the vice chair of National Planning Commission (NPC) Deependra Bahadur Kshetry.
“An adult person from 16 years of age to 65 of a household must get minimum 100-day employment in a fiscal year," he said, adding that the government will pay 50 per cent of the minimum wage — as unemployment benefit — of the 100-day, if a recorded unemployed person remains unemployed throughout the fiscal year.
The national think tank proposed Bill is currently at the Ministry of Law for the final approval. After the final go ahead from the Ministry of Law, it will again be sent to the cabinet to further send it to the Parliament for discussion and will be passed, the vice chair added.
A brainchild of the planning commission, the proposed Bill envisions a Employment Guarantee Trust at the centre level apart from a local committee under Village Development Committee (VDC), a district committee under District Development Committee (DDC) and a central level coordination committee. The local level committees will keep records of unemployed and distribute unemployment benefits, whereas the central level coordination committee that include 16 secretaries of different ministries, in coordination of vice chair of the National Planning Commission, will coordinate the scheme across the country.
The bill — inspired by India's Mahatma Gandhi National Rural Employment Guarantee Act — aims at reducing the poverty by guaranteeing people hundred days of wage-employment in a fiscal year to a household, whose adult members volunteer to do labour intensive work. "But one has to get 'Unemployed Identity Card' to claim the benefit," he added.
Similarly, the employers will also be encouraged by incentives. “The employers, who employ over 50 per cent of the recorded unemployed persons according to local committees' recommendation, in the local development activities will get 25 per cent of the total paid wages refund from the central coordination committee," Kshetry said, adding that it will encourage the local employers to recruit the recorded unemployed persons.
Though, experts are not convinced of the government's idea of reducing poverty through employment guarantee as poverty is a cross-cutting issue, the planning commission is targeting basically labour intensive works and encourage unskilled people to be involved in the local development activities — as their rights — through Consumers Groups and local agencies that must employ the recorded unemployed persons after the Act comes to effect.
The proposed Employment Guarantee Bill — that has got the principal approval from the last week's cabinet — is based on rights approach that every adult citizen has a right to employment, according to the vice chair of National Planning Commission (NPC) Deependra Bahadur Kshetry.
“An adult person from 16 years of age to 65 of a household must get minimum 100-day employment in a fiscal year," he said, adding that the government will pay 50 per cent of the minimum wage — as unemployment benefit — of the 100-day, if a recorded unemployed person remains unemployed throughout the fiscal year.
The national think tank proposed Bill is currently at the Ministry of Law for the final approval. After the final go ahead from the Ministry of Law, it will again be sent to the cabinet to further send it to the Parliament for discussion and will be passed, the vice chair added.
A brainchild of the planning commission, the proposed Bill envisions a Employment Guarantee Trust at the centre level apart from a local committee under Village Development Committee (VDC), a district committee under District Development Committee (DDC) and a central level coordination committee. The local level committees will keep records of unemployed and distribute unemployment benefits, whereas the central level coordination committee that include 16 secretaries of different ministries, in coordination of vice chair of the National Planning Commission, will coordinate the scheme across the country.
The bill — inspired by India's Mahatma Gandhi National Rural Employment Guarantee Act — aims at reducing the poverty by guaranteeing people hundred days of wage-employment in a fiscal year to a household, whose adult members volunteer to do labour intensive work. "But one has to get 'Unemployed Identity Card' to claim the benefit," he added.
Similarly, the employers will also be encouraged by incentives. “The employers, who employ over 50 per cent of the recorded unemployed persons according to local committees' recommendation, in the local development activities will get 25 per cent of the total paid wages refund from the central coordination committee," Kshetry said, adding that it will encourage the local employers to recruit the recorded unemployed persons.
Though, experts are not convinced of the government's idea of reducing poverty through employment guarantee as poverty is a cross-cutting issue, the planning commission is targeting basically labour intensive works and encourage unskilled people to be involved in the local development activities — as their rights — through Consumers Groups and local agencies that must employ the recorded unemployed persons after the Act comes to effect.
Country imports seven times more than exports
The country imports almost seven times to what it exports, according to the central bank.
In the first six months of the current fiscal year, merchandise exports rose by 11.2 per cent to Rs 35.92 billion, whereas merchandise imports increased by 16.8 per cent to Rs 216.68 billion maintaining the export-import gap at almost the same level." Total trade deficit went up by 17.9 per cent to Rs 180.77 billion," according to the central bank's macroeconomic situation for the six months of the current fiscal year. "Trade deficit had declined by 1.3 per cent in the same period last fiscal year," it said, adding that trade deficit with India increased by 9.4 per cent against a growth of 32.8 per cent in the same period last fiscal year.
Similarly, trade deficit with other countries increased by 36.7 per cent against a drop by 36.8 per cent in the same period last fiscal year. "In US dollar term, the total trade deficit rose by 9.2 per cent to $2.30 billion during the first half of the fiscal year compared to a growth of 2.8 per cent in the same period last fiscal year."
The central bank figure also revealed export-import ratio drop to 16.6 per cent from 17.4 per cent a year ago contributing the decline to high growth of imports.
However, the overall Balance of Payment (BoP) recorded the highest ever surplus of Rs 66.72 billion against a deficit of Rs 4.26 billion in the first half of the last fiscal year. "The current account registered a surplus of Rs 31.99 billion pushing the BoP upwards," it said.
In US dollar terms, the overall BoP recorded a surplus of $851.6 million during the first six months of the current fiscal year against a deficit of $56.4 million in the same period last fiscal year.
Similarly, the current account registered a surplus of $400.1 million compared to a deficit of $47.7 million in last fiscal year's same period and growth of remittance coupled with improvement in the service account.
Similarly, net service account witnessed a surplus of Rs 9.93 billion in contrast to a deficit of Rs 5.28 billion in the same period of last fiscal year. "Under services, tourism income rose by 29.5 per cent, the net transfer account registered a growth of 29.1 per cent to Rs 189.33 billion," the figures revealed, adding that under transfers, while pension receipts declined by 5.6 per cent to Rs. 13.14 billion, workers' remittances increased by 37.1 per cent to Rs 162.37 billion compared to a growth of 11.5 per cent in the same period of the last fiscal year, though on a monthly basis, the remittance inflows declined by 2.7 per cent in December-January compared to the value of the a month ago.
In US dollar terms, remittance inflow increased by 26.7 per cent to $2.07 billion compared to a growth of 14.8 per cent in the same period of the last fiscal year.
Likewise, under the financial account, foreign direct investment (FDI) of Rs 5.09 billion was recorded compared to Rs 4.46 billion in the same period a year ago.
Inflation at 6.8 per cent
KATHMANDU: Though the consumers are bearing the brunt of price rise, the year-on-year (y-o-y) inflation as measured by the consumer price index increased by 6.8 per cent in mid-January 2011 against 11.3 per cent of the same period last fiscal year, according to the central bank. "The index of food and beverage group, and non-food and services group increased by four per cent and nine per cent respectively against the increase of 17.6 per cent and 6.2 per cent respectively in the same period of last fiscal year. Under the items of the food and beverage group, price index of ghee and oil sub-group rose by the highest rate of 15.6 per cent against an increase of 0.3 per cent in the same period of the last fiscal year, whereas the price index of fruits, which had increased by 26.7 per cent in the same period of last fiscal year, went up by 14.8 per cent only.
In the first six months of the current fiscal year, merchandise exports rose by 11.2 per cent to Rs 35.92 billion, whereas merchandise imports increased by 16.8 per cent to Rs 216.68 billion maintaining the export-import gap at almost the same level." Total trade deficit went up by 17.9 per cent to Rs 180.77 billion," according to the central bank's macroeconomic situation for the six months of the current fiscal year. "Trade deficit had declined by 1.3 per cent in the same period last fiscal year," it said, adding that trade deficit with India increased by 9.4 per cent against a growth of 32.8 per cent in the same period last fiscal year.
Similarly, trade deficit with other countries increased by 36.7 per cent against a drop by 36.8 per cent in the same period last fiscal year. "In US dollar term, the total trade deficit rose by 9.2 per cent to $2.30 billion during the first half of the fiscal year compared to a growth of 2.8 per cent in the same period last fiscal year."
The central bank figure also revealed export-import ratio drop to 16.6 per cent from 17.4 per cent a year ago contributing the decline to high growth of imports.
However, the overall Balance of Payment (BoP) recorded the highest ever surplus of Rs 66.72 billion against a deficit of Rs 4.26 billion in the first half of the last fiscal year. "The current account registered a surplus of Rs 31.99 billion pushing the BoP upwards," it said.
In US dollar terms, the overall BoP recorded a surplus of $851.6 million during the first six months of the current fiscal year against a deficit of $56.4 million in the same period last fiscal year.
Similarly, the current account registered a surplus of $400.1 million compared to a deficit of $47.7 million in last fiscal year's same period and growth of remittance coupled with improvement in the service account.
Similarly, net service account witnessed a surplus of Rs 9.93 billion in contrast to a deficit of Rs 5.28 billion in the same period of last fiscal year. "Under services, tourism income rose by 29.5 per cent, the net transfer account registered a growth of 29.1 per cent to Rs 189.33 billion," the figures revealed, adding that under transfers, while pension receipts declined by 5.6 per cent to Rs. 13.14 billion, workers' remittances increased by 37.1 per cent to Rs 162.37 billion compared to a growth of 11.5 per cent in the same period of the last fiscal year, though on a monthly basis, the remittance inflows declined by 2.7 per cent in December-January compared to the value of the a month ago.
In US dollar terms, remittance inflow increased by 26.7 per cent to $2.07 billion compared to a growth of 14.8 per cent in the same period of the last fiscal year.
Likewise, under the financial account, foreign direct investment (FDI) of Rs 5.09 billion was recorded compared to Rs 4.46 billion in the same period a year ago.
Inflation at 6.8 per cent
KATHMANDU: Though the consumers are bearing the brunt of price rise, the year-on-year (y-o-y) inflation as measured by the consumer price index increased by 6.8 per cent in mid-January 2011 against 11.3 per cent of the same period last fiscal year, according to the central bank. "The index of food and beverage group, and non-food and services group increased by four per cent and nine per cent respectively against the increase of 17.6 per cent and 6.2 per cent respectively in the same period of last fiscal year. Under the items of the food and beverage group, price index of ghee and oil sub-group rose by the highest rate of 15.6 per cent against an increase of 0.3 per cent in the same period of the last fiscal year, whereas the price index of fruits, which had increased by 26.7 per cent in the same period of last fiscal year, went up by 14.8 per cent only.
Wednesday, February 22, 2012
SAARC Investment Promotion and Protection Agreement to give boost to intra-regional trade
A SAARC Investment Promotion and Protection Agreement that is pending since 2007 is going to be finalised in the 18th SAARC summit that is being held in Nepal next year.
The deal is expected to make the region attractive investment destination.
"During the fifth meeting of South Asian Association for Regional Cooperation (SAARC) finance ministers held in Dhaka on January 30, the finance ministers have agreed to push forward the agreement for the finalisation in the next summit in 2013," according to finance secretary Krishna Hari Baskota.
The finance ministers’ meet aimed at further expanding regional cooperation in economic and financial sectors discussed on investment promotion and protection guidelines,” he said, adding that Finance Minister Barsha Man Pun gave a green signal on the guideline, though one of the participant had some reservation on the guidelines.
The guideline envisions opening of intra regional investments with equal treatment of the investments in any of the SAARC countries by any other regional block member country like domestic without restriction and quota and marketing, he said, adding that products of such investments will not be listed under the sensitive list to promote cross border trade and investment.
The investment promotion and protection in the regional block is expected to give boost to the intra regional trade envisaged in the South Asian Free Trade Area Agreement's (SAFTA) that came into force some six years ago.
Nepal that is observing Investment Year 2012-13 might benefit from the agreement as it will help open regional market and attract investment in the country, he added.
Greater free trade and investment among South Asian countries could also help SAARC become opportunity to catalyse the potential within the region.
The region in the recent years — after the global recession — has been exploring ways to deepen trade and investment linkages as the domestic market can absorb global shock.
The region could emerge as a locomotive for the world economy, if it could ensure an environment for rapid growth building on the member countries’ comparative advantages to make the region a magnet for greater trade, investment and financial flows, according to participants in the Dhaka meet.
India has called for fast-tracking a regional investment treaty and creation of regional production chains to deepen economic linkages in the SAARC region. At the 17th SAARC summit in the Maldives held in November last year, India had announced elimination of India's sensitive list for Least Developed Countries (LDCs) including Nepal in the SAARC region that could give a boost to exports from Nepal.
The deal is expected to make the region attractive investment destination.
"During the fifth meeting of South Asian Association for Regional Cooperation (SAARC) finance ministers held in Dhaka on January 30, the finance ministers have agreed to push forward the agreement for the finalisation in the next summit in 2013," according to finance secretary Krishna Hari Baskota.
The finance ministers’ meet aimed at further expanding regional cooperation in economic and financial sectors discussed on investment promotion and protection guidelines,” he said, adding that Finance Minister Barsha Man Pun gave a green signal on the guideline, though one of the participant had some reservation on the guidelines.
The guideline envisions opening of intra regional investments with equal treatment of the investments in any of the SAARC countries by any other regional block member country like domestic without restriction and quota and marketing, he said, adding that products of such investments will not be listed under the sensitive list to promote cross border trade and investment.
The investment promotion and protection in the regional block is expected to give boost to the intra regional trade envisaged in the South Asian Free Trade Area Agreement's (SAFTA) that came into force some six years ago.
Nepal that is observing Investment Year 2012-13 might benefit from the agreement as it will help open regional market and attract investment in the country, he added.
Greater free trade and investment among South Asian countries could also help SAARC become opportunity to catalyse the potential within the region.
The region in the recent years — after the global recession — has been exploring ways to deepen trade and investment linkages as the domestic market can absorb global shock.
The region could emerge as a locomotive for the world economy, if it could ensure an environment for rapid growth building on the member countries’ comparative advantages to make the region a magnet for greater trade, investment and financial flows, according to participants in the Dhaka meet.
India has called for fast-tracking a regional investment treaty and creation of regional production chains to deepen economic linkages in the SAARC region. At the 17th SAARC summit in the Maldives held in November last year, India had announced elimination of India's sensitive list for Least Developed Countries (LDCs) including Nepal in the SAARC region that could give a boost to exports from Nepal.
Petroleum products’ import bill doubles
Increase in price and consumption has made the country pay more than double the petroleum products import bill in last two fiscal years.
"Nepal has imported petroleum products worth Rs 32.77 billion worth in the first five months of the current fiscal year against Rs 15.18 billion import bill it paid in the same period of the fiscal year 2009-10," according to the central bank figures.
Nepal is becoming more dependent on petroleum products for meeting its energy requirement. The demand of all sorts of petroleum products like MS, HSD, SKO, ATF and LPG is about 1.2 million tonne per annum with annual increase of 20 per cent. Petroleum products constitute about 11 per cent of total energy consumed in the country, according to the Nepal Oil Corporation (NOC).
On one hand the price of petroleum products is looking up and on the other the consumption has also seen steep rise. The country has imported Rs 75.07 billion worth petroleum products in the fiscal year 2010-11 from a fiscal year ago's Rs 51.61 billion, according to the central bank figures. "The country had imported Rs 41.40 billion worth petroleum products in the fiscal year 2008-09."
"The state oil monopoly has imported and sold 159,286 metric tonnes (MT) of cooking gas in the fiscal year 2010-11, whereas it had imported and sold 141,171 MT of cooking gas in fiscal year 2009-10," according to the NOC figures, which revealed that the corporation sold 995,220 kl of petroleum products in the fiscal year 2010-11.
With increasing consumption and import, the country's total exports is not able to pay the petroleum products' bill forcing the government to either find alternative or decrease the import of petroleum products. The frequent shortage of the petroleum products and technically insolvent NOC have been eagerly waiting for the government’s long-term plan that could help maintain smooth supply and reduce the loans from the start oil monopoly by checking the leakages.
Indian Oil Corporation (IOC) is the sole exporter of all the petroleum products consumed in Nepal under a five-year contract agreement signed on March 31, 2007, which is going to be revised next month.
To meet the increasing demand, a memorandum of understanding between IOC and NOC has been reached to construct cross border Petroleum Product Pipeline from IOC's depot (Raxaul) to NOC's depot (Amlekhgunj) that is expected to decrease transportation cost.
Rising import bill
2009-10 — Rs 15.18 billion
2010-11 — Rs 23.67 billion
2011-12 — Rs 32.77 billion
(Figures for the first five months of the fiscal years. Source: Nepal Rastra Bank)
"Nepal has imported petroleum products worth Rs 32.77 billion worth in the first five months of the current fiscal year against Rs 15.18 billion import bill it paid in the same period of the fiscal year 2009-10," according to the central bank figures.
Nepal is becoming more dependent on petroleum products for meeting its energy requirement. The demand of all sorts of petroleum products like MS, HSD, SKO, ATF and LPG is about 1.2 million tonne per annum with annual increase of 20 per cent. Petroleum products constitute about 11 per cent of total energy consumed in the country, according to the Nepal Oil Corporation (NOC).
On one hand the price of petroleum products is looking up and on the other the consumption has also seen steep rise. The country has imported Rs 75.07 billion worth petroleum products in the fiscal year 2010-11 from a fiscal year ago's Rs 51.61 billion, according to the central bank figures. "The country had imported Rs 41.40 billion worth petroleum products in the fiscal year 2008-09."
"The state oil monopoly has imported and sold 159,286 metric tonnes (MT) of cooking gas in the fiscal year 2010-11, whereas it had imported and sold 141,171 MT of cooking gas in fiscal year 2009-10," according to the NOC figures, which revealed that the corporation sold 995,220 kl of petroleum products in the fiscal year 2010-11.
With increasing consumption and import, the country's total exports is not able to pay the petroleum products' bill forcing the government to either find alternative or decrease the import of petroleum products. The frequent shortage of the petroleum products and technically insolvent NOC have been eagerly waiting for the government’s long-term plan that could help maintain smooth supply and reduce the loans from the start oil monopoly by checking the leakages.
Indian Oil Corporation (IOC) is the sole exporter of all the petroleum products consumed in Nepal under a five-year contract agreement signed on March 31, 2007, which is going to be revised next month.
To meet the increasing demand, a memorandum of understanding between IOC and NOC has been reached to construct cross border Petroleum Product Pipeline from IOC's depot (Raxaul) to NOC's depot (Amlekhgunj) that is expected to decrease transportation cost.
Rising import bill
2009-10 — Rs 15.18 billion
2010-11 — Rs 23.67 billion
2011-12 — Rs 32.77 billion
(Figures for the first five months of the fiscal years. Source: Nepal Rastra Bank)
Tuesday, February 21, 2012
Nepal, Bangladesh to sign DTAA soon
Nepal is signing the Double Taxation Avoidance Agreement (DTAA) with Bangladesh soon.
“We are prepared to go to Dhaka to finalise the draft of the DTAA, but the host country has not yet finalised the dates," said director general of Inland Revenue Department Tanka Mani Sharma, who will lead the Nepali team to Dhaka.
Though, Kathmandu has tried to finalise the draft and sign the DTAA with Dhaka during the SAARC Finance Ministers' meet in Dhaka on January 30, the process to finalise the draft has delayed the signing of the agreement which is expected to help boost bilateral trade and exchange information of tax frauds between the two South Asian countries.
The cabinet has mandated Sharma to lead a team to Dhaka as soon as possible to finalise the DTAA draft. "But the Foreign Ministry has not received any dates from the Bangladeshi Finance Ministry," he said, adding that after the draft is finalised, the signing ceremony could be held either in Dhaka or Kathmandu anytime soon.
The DTAA with Bangladesh that was finalised some two years back was delayed due to a couple of issues like whether to accept the SAARC or the OECD model. Nepal revised the DTAA with India in November 2011 on the basis of the Organisation for Economic Co-operation and Development (OECD) model that is thought to be practical and updated.
The OECD model of DTAA has incorporated the provision of exchange of information on banking and tax evasion which will facilitate effective tax collection and control fiscal evasion.
"Similarly, Kathmandu has received a DTAA draft from Bahrain, and has already exchanged a draft with Oman, according to the joint secretary of the Finance Ministry Shanta Raj Subedi. "Last year, Nepal forwarded DTAA drafts to Canada and Brazil through the Foreign Ministry and is awaiting their response," he said, adding that the Inland Revenue Department is also considering the benefits of signing DTAA with Japan, USA and Russia after request from Non-Resident Nepalis (NRNs) to enter into agreements with these countries to attract more investment for hydropower and infrastructure projects.
Nepal has already entered into DTAA with 10 countries including major trading partners like India and China.
"The DTAAs with various trading partners will also help the country's efforts to track and unearth black money," according to finance secretary Krishnahari Baskota.
The Detailed Action Plan of the Finance Ministry has vowed to enter into DTAA with all the SAARC countries to encourage intra-regional investment.
“We are prepared to go to Dhaka to finalise the draft of the DTAA, but the host country has not yet finalised the dates," said director general of Inland Revenue Department Tanka Mani Sharma, who will lead the Nepali team to Dhaka.
Though, Kathmandu has tried to finalise the draft and sign the DTAA with Dhaka during the SAARC Finance Ministers' meet in Dhaka on January 30, the process to finalise the draft has delayed the signing of the agreement which is expected to help boost bilateral trade and exchange information of tax frauds between the two South Asian countries.
The cabinet has mandated Sharma to lead a team to Dhaka as soon as possible to finalise the DTAA draft. "But the Foreign Ministry has not received any dates from the Bangladeshi Finance Ministry," he said, adding that after the draft is finalised, the signing ceremony could be held either in Dhaka or Kathmandu anytime soon.
The DTAA with Bangladesh that was finalised some two years back was delayed due to a couple of issues like whether to accept the SAARC or the OECD model. Nepal revised the DTAA with India in November 2011 on the basis of the Organisation for Economic Co-operation and Development (OECD) model that is thought to be practical and updated.
The OECD model of DTAA has incorporated the provision of exchange of information on banking and tax evasion which will facilitate effective tax collection and control fiscal evasion.
"Similarly, Kathmandu has received a DTAA draft from Bahrain, and has already exchanged a draft with Oman, according to the joint secretary of the Finance Ministry Shanta Raj Subedi. "Last year, Nepal forwarded DTAA drafts to Canada and Brazil through the Foreign Ministry and is awaiting their response," he said, adding that the Inland Revenue Department is also considering the benefits of signing DTAA with Japan, USA and Russia after request from Non-Resident Nepalis (NRNs) to enter into agreements with these countries to attract more investment for hydropower and infrastructure projects.
Nepal has already entered into DTAA with 10 countries including major trading partners like India and China.
"The DTAAs with various trading partners will also help the country's efforts to track and unearth black money," according to finance secretary Krishnahari Baskota.
The Detailed Action Plan of the Finance Ministry has vowed to enter into DTAA with all the SAARC countries to encourage intra-regional investment.
Central bank raises gold import limit
After repeated demands from bullion traders, the central bank today increased the limit for gold imports to 20 kg from 15 kg per day, which will be in effect till the end of the current fiscal year.
"The central bank's move might ease supply, albeit negligibly," said Nepal Gold and Silver Dealers' Association (Negosida) president Tej Ratna Shakya, adding that the increased import limit is not sufficient to meet the current market demand which has been increasing.
Due to the wedding season, the current market demand stands at 40 kg per day, though rising prices had led to a decrease in demand by 25 per cent a couple of months back. But during the off season, the import limit of 20 kg per day, will be sufficient to meet demands, he added.
Traders have been asking the central bank to increase the daily import limit to 30 kg or open gold imports through Open General License (OGL) that could help meet the rising demand.
Last year, the government had banned the import of the precious yellow metal as excessive imports had bled its coffers of US dollars pushing the Balance of Payment (BoP) to a negative zone.
Apart from the traditional use of gold for ornaments, investors have lately seen gold as a new avenue for investment due to its price escalating in the international market which in turn has helped prices increase in the domestic market too.
Meanwhile, the central bank also called a meeting of bullion traders, bankers' association and the central bank today. "Due to the absence of the bankers' association, the meeting will be held again to discuss some practical problems being faced by traders lately," Shakya added.
"The central bank's move might ease supply, albeit negligibly," said Nepal Gold and Silver Dealers' Association (Negosida) president Tej Ratna Shakya, adding that the increased import limit is not sufficient to meet the current market demand which has been increasing.
Due to the wedding season, the current market demand stands at 40 kg per day, though rising prices had led to a decrease in demand by 25 per cent a couple of months back. But during the off season, the import limit of 20 kg per day, will be sufficient to meet demands, he added.
Traders have been asking the central bank to increase the daily import limit to 30 kg or open gold imports through Open General License (OGL) that could help meet the rising demand.
Last year, the government had banned the import of the precious yellow metal as excessive imports had bled its coffers of US dollars pushing the Balance of Payment (BoP) to a negative zone.
Apart from the traditional use of gold for ornaments, investors have lately seen gold as a new avenue for investment due to its price escalating in the international market which in turn has helped prices increase in the domestic market too.
Meanwhile, the central bank also called a meeting of bullion traders, bankers' association and the central bank today. "Due to the absence of the bankers' association, the meeting will be held again to discuss some practical problems being faced by traders lately," Shakya added.
Past warnings on income inequality, trade imbalances, commodities dependence ring true
Experts marking the 30th anniversary of one of the world’s more influential economic annuals said that themes long sounded in UNCTAD’s Trade and Development Report retain current prominence – particularly those citing the questionable wisdom of unbridled free markets.
Other prominent themes concerned the persistence of trade imbalances, the risks of overdependence on commodities exports, the risks of premature liberalisation of capital flows, the need for new mechanisms to deal with sovereign debt, and the problems posed by income inequality.
The report, first published by UNCTAD in 1981 – when it explored the themes of 'world development in historical perspective' and 'the world economy in transition' – was celebrated with a day of panel debates reviewing its origins and evolving ideas, its approach to development strategies, its macroeconomic reasoning, and its evolving theories on international economic governance.
The seminar 'Thinking development' and served as a prelude to the April 23 release of a publication of the same title during the UNCTAD XIII quadrennial conference in Doha, Qatar. It will review in depth three decades of the report’s theories and analysis. The Trade and Development Report ‘is UNCTAD’s original flagship report’, said president of the organisation’s Trade and Development Board Anthony Mothae Maruping, as he opened the meeting.
former secretary-general of the organisation Rubens Ricupero, termed the Trade and Development Report ‘an encyclopedia of development thought’ and said that over the years, as neoliberal economic reforms swept the world, the publication often was a lonely voice calling for an ‘active role of the State’ in spurring the kind of stable economic growth that leads to rising living standards in poor countries. The 2008 financial crisis and resulting recession have proven the worth of that unorthodox and sometimes controversial thinking, speakers said.
“The reasoning is that you need a State, a government, to have an idea, a plan for the economy, a design, and an economic policy strategy that makes sense, given the domestic and international constraints,” explained director of UNCTAD’s Division on Globalisation and Development Strategies and principal author of the last eight editions of the report Heiner Flassbeck. “That is the basic argument of the Trade and Development Report in recent years,” he said, adding that in addition to being influential, the report also ‘is often ignored. The Trade and Development Report is always provocative and challenging. Sometimes, if you’re ignored, it’s the result of a challenge that hits at orthodox opinion – that hits at the core of the matter. You show people the empirical evidence to back up what you’re claiming and they simply don’t know what to say.”
A current example is the case of widening economic inequality under global economic forces, noted Flassbeck and Carlos Fortin, a former UNCTAD deputy secretary-general. “The 1997 Trade and Development Report were about issues of income distribution and the effects of globalisation on income distribution and employment,” Fortin said, adding that it continues to be pertinent today. Growing wage inequality between skilled and unskilled labour is becoming an increasing problem. And that report warned about a hollowing out of the middle class. This goes a long way towards describing the current situation – and it was written in 1997.
"The focus of the Trade and Development Report 2012, to be published in September, is income inequality,” Flassbeck added.
Professor of Applied Economics at the University of Kent (UK) Anthony Thirwall noted that ‘the free trade orthodoxy still ignores the balance-of-payments consequences of trade. “The idea that the balance of payments (BoP) adjusts automatically – the fact is, it often doesn’t,” he said, adding that he thinks that global imbalances are bad for the health of the world economy. “The Trade and Development Report have always been at the forefront of warning about these dangers.”
Thirwall said another consistent Trade and Development Report theme has been the importance for developing nations of enabling their economies to produce significant goods for export other than commodities, whose prices are historically unstable.
“To put it crudely,” he said, “it makes a difference to a country whether it exports cabbages or computers.” Remarking on current concerns about a ‘jobless recovery’ from the global recession, chairperson of the Centre for Economic Studies and Planning of the School of Social Sciences at Jawaharlal Nehru University in New Delhi Jayati Ghosh said the Trade and Development Report has noted in recent years that “Growth isn’t necessarily linked with job creation. Perhaps the time has come for Trade and Development Report to stop being against the mainstream. Its ideas need to become mainstream.“
And the Report’s recent calls for reform of the international financial and monetary systems so that 2008 crisis does not recur drew support from advisor to the Presidency of the Central Bank of Argentina Arturo O’Connell, speaking in his personal capacity.
Among other things, O’Connell expressed concerns about the limitations of the G-20 countries in setting rules for the global economy. “It is only a self-appointed forum supported by a jungle of working groups, without any power to take binding decisions, instead working through peer pressure,” he said, calling for ‘a rule-based decision-making system supported by a dedicated, independent Secretariat.’
Echoing those comments, assistant secretary-general of the UN Department for Economic Development Jomo Kwame Sundaram, told the meeting, “We are living in a world where G-20 leaders are constantly looking over their shoulders to see what markets will say, which constrains effective leadership for a strong and sustained recovery when the world economy needs bold Rooseveltian leadership more than ever.”
Other prominent themes concerned the persistence of trade imbalances, the risks of overdependence on commodities exports, the risks of premature liberalisation of capital flows, the need for new mechanisms to deal with sovereign debt, and the problems posed by income inequality.
The report, first published by UNCTAD in 1981 – when it explored the themes of 'world development in historical perspective' and 'the world economy in transition' – was celebrated with a day of panel debates reviewing its origins and evolving ideas, its approach to development strategies, its macroeconomic reasoning, and its evolving theories on international economic governance.
The seminar 'Thinking development' and served as a prelude to the April 23 release of a publication of the same title during the UNCTAD XIII quadrennial conference in Doha, Qatar. It will review in depth three decades of the report’s theories and analysis. The Trade and Development Report ‘is UNCTAD’s original flagship report’, said president of the organisation’s Trade and Development Board Anthony Mothae Maruping, as he opened the meeting.
former secretary-general of the organisation Rubens Ricupero, termed the Trade and Development Report ‘an encyclopedia of development thought’ and said that over the years, as neoliberal economic reforms swept the world, the publication often was a lonely voice calling for an ‘active role of the State’ in spurring the kind of stable economic growth that leads to rising living standards in poor countries. The 2008 financial crisis and resulting recession have proven the worth of that unorthodox and sometimes controversial thinking, speakers said.
“The reasoning is that you need a State, a government, to have an idea, a plan for the economy, a design, and an economic policy strategy that makes sense, given the domestic and international constraints,” explained director of UNCTAD’s Division on Globalisation and Development Strategies and principal author of the last eight editions of the report Heiner Flassbeck. “That is the basic argument of the Trade and Development Report in recent years,” he said, adding that in addition to being influential, the report also ‘is often ignored. The Trade and Development Report is always provocative and challenging. Sometimes, if you’re ignored, it’s the result of a challenge that hits at orthodox opinion – that hits at the core of the matter. You show people the empirical evidence to back up what you’re claiming and they simply don’t know what to say.”
A current example is the case of widening economic inequality under global economic forces, noted Flassbeck and Carlos Fortin, a former UNCTAD deputy secretary-general. “The 1997 Trade and Development Report were about issues of income distribution and the effects of globalisation on income distribution and employment,” Fortin said, adding that it continues to be pertinent today. Growing wage inequality between skilled and unskilled labour is becoming an increasing problem. And that report warned about a hollowing out of the middle class. This goes a long way towards describing the current situation – and it was written in 1997.
"The focus of the Trade and Development Report 2012, to be published in September, is income inequality,” Flassbeck added.
Professor of Applied Economics at the University of Kent (UK) Anthony Thirwall noted that ‘the free trade orthodoxy still ignores the balance-of-payments consequences of trade. “The idea that the balance of payments (BoP) adjusts automatically – the fact is, it often doesn’t,” he said, adding that he thinks that global imbalances are bad for the health of the world economy. “The Trade and Development Report have always been at the forefront of warning about these dangers.”
Thirwall said another consistent Trade and Development Report theme has been the importance for developing nations of enabling their economies to produce significant goods for export other than commodities, whose prices are historically unstable.
“To put it crudely,” he said, “it makes a difference to a country whether it exports cabbages or computers.” Remarking on current concerns about a ‘jobless recovery’ from the global recession, chairperson of the Centre for Economic Studies and Planning of the School of Social Sciences at Jawaharlal Nehru University in New Delhi Jayati Ghosh said the Trade and Development Report has noted in recent years that “Growth isn’t necessarily linked with job creation. Perhaps the time has come for Trade and Development Report to stop being against the mainstream. Its ideas need to become mainstream.“
And the Report’s recent calls for reform of the international financial and monetary systems so that 2008 crisis does not recur drew support from advisor to the Presidency of the Central Bank of Argentina Arturo O’Connell, speaking in his personal capacity.
Among other things, O’Connell expressed concerns about the limitations of the G-20 countries in setting rules for the global economy. “It is only a self-appointed forum supported by a jungle of working groups, without any power to take binding decisions, instead working through peer pressure,” he said, calling for ‘a rule-based decision-making system supported by a dedicated, independent Secretariat.’
Echoing those comments, assistant secretary-general of the UN Department for Economic Development Jomo Kwame Sundaram, told the meeting, “We are living in a world where G-20 leaders are constantly looking over their shoulders to see what markets will say, which constrains effective leadership for a strong and sustained recovery when the world economy needs bold Rooseveltian leadership more than ever.”
Sunday, February 19, 2012
Government aims at Rs 110 billion aid commitment
Finance Ministry has expected Rs 110 billion foreign aid commitment within the current fiscal year, but without institutionalisation of foreign aid management, it will lack effectiveness as usual.
Launching the Detailed Action Plan for Dr Baburam Bhattarai’s much-ambitious Immediate Action Plan for Economic Development and Prosperity, finance secretary Krishnahari Baskota has said that the Foreign Aid Department of Finance Ministry will work towards increasing bilateral and multilateral aid and get commitment for Rs 110 billion in the next six months.
"The department will also work out new Foreign Aid Policy within two months to involve development partners in the country’s economic development,” he said, without elaborating how the country in transition will absorb the aid, as without increasing aid absorption capacity, the commitment on aid will neither help boost development activities and propel growth nor generate employment and reduce poverty.
The country has received increased commitments in recent years, according to Prof Dr Bishwambher Pyakuryal. "However, the government, on one hand lacks capacity to spend and on the other, lack of institutionalisation has made the aid ineffective," he said, adding that there should be a permanent institution under every ministry to monitor aid for its effective utilisation and output.
The country has received 10 times more loan in just three years time, whereas grant has seen slow increase from 2008-09 to 2010-11.
"Foreign aid mobilisation with a demand-driven approach towards the prioritised sectors has been a key challenge in the recent years proving that getting commitment is not enough," Pyakuryal added.
According to the figures of the Finance Ministry, there has been a huge gap in aid commitment and disbursement due to lack of absorptive capacity.
The country had received aid commitment of Rs 106.10 billion — including grant and loan — in the last fiscal year. But according to the central bank, the country has received only Rs 26.21 billion foreign grants on cash basis, which was a mere 3.9 per cent increment compared to a fiscal year ago.
Similarly, the country had received Rs 96.60 billion commitment — including loan and grants from bilateral and multilateral agencies — in the fiscal year 2009-10, but it had received only one fourth of the commitment that stood at Rs 25.23 billion grant only, according to the central bank data.
The figures revealed that disbursement of the committed aid has not been encouraging.
According to the central bank, the country has, in the first five months of the current fiscal year 2011-12, received foreign cash loans of Rs 1.23 billion and cash grants of Rs 15.40 billion, whereas signed commitments worth Rs 58.82 billion in the first five months of the current fiscal year.
The increasing commitment
Fiscal Year — Grant — Loan — Total
2008-09 — Rs 43.09 billion — Rs 4.87 billion — Rs 47.97 billion
2009-10 — Rs 70.25 billion — Rs 26.35 billion — Rs 96.60 billion
2010-11 — Rs 64.73 billion — Rs 41.36 billion — Rs 106.10 billion
(Source: Finance Ministry)
Launching the Detailed Action Plan for Dr Baburam Bhattarai’s much-ambitious Immediate Action Plan for Economic Development and Prosperity, finance secretary Krishnahari Baskota has said that the Foreign Aid Department of Finance Ministry will work towards increasing bilateral and multilateral aid and get commitment for Rs 110 billion in the next six months.
"The department will also work out new Foreign Aid Policy within two months to involve development partners in the country’s economic development,” he said, without elaborating how the country in transition will absorb the aid, as without increasing aid absorption capacity, the commitment on aid will neither help boost development activities and propel growth nor generate employment and reduce poverty.
The country has received increased commitments in recent years, according to Prof Dr Bishwambher Pyakuryal. "However, the government, on one hand lacks capacity to spend and on the other, lack of institutionalisation has made the aid ineffective," he said, adding that there should be a permanent institution under every ministry to monitor aid for its effective utilisation and output.
The country has received 10 times more loan in just three years time, whereas grant has seen slow increase from 2008-09 to 2010-11.
"Foreign aid mobilisation with a demand-driven approach towards the prioritised sectors has been a key challenge in the recent years proving that getting commitment is not enough," Pyakuryal added.
According to the figures of the Finance Ministry, there has been a huge gap in aid commitment and disbursement due to lack of absorptive capacity.
The country had received aid commitment of Rs 106.10 billion — including grant and loan — in the last fiscal year. But according to the central bank, the country has received only Rs 26.21 billion foreign grants on cash basis, which was a mere 3.9 per cent increment compared to a fiscal year ago.
Similarly, the country had received Rs 96.60 billion commitment — including loan and grants from bilateral and multilateral agencies — in the fiscal year 2009-10, but it had received only one fourth of the commitment that stood at Rs 25.23 billion grant only, according to the central bank data.
The figures revealed that disbursement of the committed aid has not been encouraging.
According to the central bank, the country has, in the first five months of the current fiscal year 2011-12, received foreign cash loans of Rs 1.23 billion and cash grants of Rs 15.40 billion, whereas signed commitments worth Rs 58.82 billion in the first five months of the current fiscal year.
The increasing commitment
Fiscal Year — Grant — Loan — Total
2008-09 — Rs 43.09 billion — Rs 4.87 billion — Rs 47.97 billion
2009-10 — Rs 70.25 billion — Rs 26.35 billion — Rs 96.60 billion
2010-11 — Rs 64.73 billion — Rs 41.36 billion — Rs 106.10 billion
(Source: Finance Ministry)
Global gold demand up
Global demand for gold in 2011 rose to 4,067.1 tonnes worth an estimated $ 205.5 billion — the first time that global demand has exceeded $ 200 billion and the highest tonnage level since 1997, according to the annual report of World Gold Council.
The main driver of the increase was the investment sector where annual demand was 1,640.7 tonnes, up by five per cent, on the previous record set in 2010 and with a value of $ 82.9 billion.
The pre-eminent markets for investment demand in 2011 were India, China and Europe. Central banks continued the trend established in 2010 of being net buyers of gold.
“From the figures of 2011, we can see that there were two main factors driving the results: Asian growth and optimism on one hand, and western desire to protect assets against uncertainty on the other," managing director of Investment Marcus Grubb has been quoted as saying. "Looking particularly at Asia, there was a major boost to the overall figures from the increase in Chinese demand, which is a trend that we see continuing over the next year."
It is likely that China will emerge as the largest gold market in the world in terms of demand for the first time, in 2012. "What is certain is that the long-term fundamentals for gold remain strong, with a diverse and growing demand base, coupled with constrained supply side activity," the report quotes him.
The main driver of the increase was the investment sector where annual demand was 1,640.7 tonnes, up by five per cent, on the previous record set in 2010 and with a value of $ 82.9 billion.
The pre-eminent markets for investment demand in 2011 were India, China and Europe. Central banks continued the trend established in 2010 of being net buyers of gold.
“From the figures of 2011, we can see that there were two main factors driving the results: Asian growth and optimism on one hand, and western desire to protect assets against uncertainty on the other," managing director of Investment Marcus Grubb has been quoted as saying. "Looking particularly at Asia, there was a major boost to the overall figures from the increase in Chinese demand, which is a trend that we see continuing over the next year."
It is likely that China will emerge as the largest gold market in the world in terms of demand for the first time, in 2012. "What is certain is that the long-term fundamentals for gold remain strong, with a diverse and growing demand base, coupled with constrained supply side activity," the report quotes him.
ADB vice president wraps up Nepal visit
The Asian Development Bank (ADB) will continue to support Nepal’s economic reforms and development agenda while the country strives to complete the ongoing peace and constitution drafting process, said ADB vice president of Operations Xiaoyu Zhao, at the end of his three-day visit to the country.
"The increase in assistance provided by ADB to Nepal in recent years testifies to ADB's strong commitment to Nepal's development and poverty reduction efforts," said Zhao.
During his meetings with Prime Minister Dr Baburam Bhattarai and other senior government officials, he stressed that it was crucial for Nepal to continue with its economic reforms to reduce poverty, address development challenges and work to achieve sustainable economic growth for the ongoing peace process and stability.
Zhao also visited the Melamchi Water Supply Project and congratulated the government for its commitment to complete the project, and said ADB was pleased that the work to complete the construction of the tunnel was progressing well on all fronts. "ADB remains committed to providing necessary support to the Nepali government to ensure that the project is completed despite the long delays it has experienced," he added.
Zhao met the Finance Minister, Minister of Environment, chief secretary and other senior government officials during his three-day visit.Zhao joined ADB in August 2008, and heads ADB's Operations Group 1 which includes the South Asia Regional Department and the Central and West Asia Regional Department.
Prior to joining ADB, Zhao was the deputy governor of the Export-Import Bank of the People’s Republic of China. He also served as the executive director for the People’s Republic of China at ADB from March 1999 to September 2002.
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic and environmentally sustainable growth, and regional integration. Established in 1966, it is jointly owned by 67 members — 48 from the region.
"The increase in assistance provided by ADB to Nepal in recent years testifies to ADB's strong commitment to Nepal's development and poverty reduction efforts," said Zhao.
During his meetings with Prime Minister Dr Baburam Bhattarai and other senior government officials, he stressed that it was crucial for Nepal to continue with its economic reforms to reduce poverty, address development challenges and work to achieve sustainable economic growth for the ongoing peace process and stability.
Zhao also visited the Melamchi Water Supply Project and congratulated the government for its commitment to complete the project, and said ADB was pleased that the work to complete the construction of the tunnel was progressing well on all fronts. "ADB remains committed to providing necessary support to the Nepali government to ensure that the project is completed despite the long delays it has experienced," he added.
Zhao met the Finance Minister, Minister of Environment, chief secretary and other senior government officials during his three-day visit.Zhao joined ADB in August 2008, and heads ADB's Operations Group 1 which includes the South Asia Regional Department and the Central and West Asia Regional Department.
Prior to joining ADB, Zhao was the deputy governor of the Export-Import Bank of the People’s Republic of China. He also served as the executive director for the People’s Republic of China at ADB from March 1999 to September 2002.
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic and environmentally sustainable growth, and regional integration. Established in 1966, it is jointly owned by 67 members — 48 from the region.
Saturday, February 18, 2012
Sanima Bank's share trading to resume soon
Share holders of the newly upgraded commercial bank - Sanima Bank - will be able to trade their shares at the stock exchange within the next two weeks.
Trading of then Sanima Bikas Bank had been suspended since 12 June, 2010 when it had formally started the process to upgrade as per Nepal Rastra Bank (NRB)'s order to avoid any plausible manipulation in share prices.
NRB stamped the final approval on the transformation of the national level development bank to the 32nd commercial bank, Sanima Bank, last week.
"We have already written a letter to Nepal Stock Exchange (Nepse) to start the process for the resumption of share trading which will resume within the next couple of weeks," said chief executive of Sanima Bank Kumar Lamsal.
The stock exchange has a listing committee that will determine the come back price of the bank's shares as it has asked for the resumption of trading, said an official at Nepse, adding that the price will be fixed according to Nepse' calculation mechanism.
The last share price of the bank stood at Rs 497 per share before closing of its trading. Since then the bank has issued rights shares that tend to bring down share prices, so we can expect the opening price to be lower than the last traded price, said Lamsal.
The central bank regulation requires financial institutions seeking to upgrade or merge to suspend their share trading at Nepse.
Earlier, when NMB Bank, DCBL Bank and Kist Bank were still finance companies and looking to upgrade to commercial banks, share prices of these institutions were manipulated, pushing prices unnaturally high.
Sanima was established as a national level development bank in 2004 and is promoted by Non Resident Nepalis. The bank's annual general meeting had decided to upgrade the development bank to a commercial bank in December 2009. In order to increase the capital to Rs two billion, it had issued rights shares on the basis of 1:1.5 ratio.
The bank then had a paid up capital of Rs 806 million. Subsequent bonus and rights issues have raised the bank's paid up capital to Rs 2.02 billion as per the requirement set by the central bank for a class 'A' financial institution.
Trading of then Sanima Bikas Bank had been suspended since 12 June, 2010 when it had formally started the process to upgrade as per Nepal Rastra Bank (NRB)'s order to avoid any plausible manipulation in share prices.
NRB stamped the final approval on the transformation of the national level development bank to the 32nd commercial bank, Sanima Bank, last week.
"We have already written a letter to Nepal Stock Exchange (Nepse) to start the process for the resumption of share trading which will resume within the next couple of weeks," said chief executive of Sanima Bank Kumar Lamsal.
The stock exchange has a listing committee that will determine the come back price of the bank's shares as it has asked for the resumption of trading, said an official at Nepse, adding that the price will be fixed according to Nepse' calculation mechanism.
The last share price of the bank stood at Rs 497 per share before closing of its trading. Since then the bank has issued rights shares that tend to bring down share prices, so we can expect the opening price to be lower than the last traded price, said Lamsal.
The central bank regulation requires financial institutions seeking to upgrade or merge to suspend their share trading at Nepse.
Earlier, when NMB Bank, DCBL Bank and Kist Bank were still finance companies and looking to upgrade to commercial banks, share prices of these institutions were manipulated, pushing prices unnaturally high.
Sanima was established as a national level development bank in 2004 and is promoted by Non Resident Nepalis. The bank's annual general meeting had decided to upgrade the development bank to a commercial bank in December 2009. In order to increase the capital to Rs two billion, it had issued rights shares on the basis of 1:1.5 ratio.
The bank then had a paid up capital of Rs 806 million. Subsequent bonus and rights issues have raised the bank's paid up capital to Rs 2.02 billion as per the requirement set by the central bank for a class 'A' financial institution.
Friday, February 17, 2012
'India, Nepal, Bhutan, Pakistan can produce 200GW power'
SAFTA to move ahead
"India, Nepal, Bhutan and Pakistan have a combined hydropower potential of 200 Giga Watt (GW), of which more than three-quarters is yet to be harnessed," according to Indian commerce minister Anand Sharma.
Addressing the sixth South Asia Free Trade Agreement (SAFTA) ministerial council in Islamabad, Pakistan on Thursday he said that India has made a strong pitch for setting up a $300-billion trans-national power grid in South Asia which would enable the region to trade in electricity.
“We need to work together to harness this potential not only for following the path of sustainable development but also as a source of cost-effective power supply to retain our competitiveness in manufacturing,” he said, adding that a trans-national power grid across South Asia will not only ensure energy security in the region but also result in substantial cost saving.
Sharma pointed out that South Asia has a huge infrastructure deficit, which will need massive capital flows. "We need to work in a policy environment that permits easier cross-border investment flows, which perhaps is even more important than cross-border trade,” he said.
In the last decade, outbound foreign direct investment (FDI) from India has been $120 billion and yet more than 90 per cent of it was directed out of South Asia. "We believe that greater capital flows within the region will have a transformational impact for growth and development of our economies,” he added.
The minister said the SAARC agreement on trade and services could serve as a catalyst for cross-border investment in several sectors, including energy, tourism, telecom, IT enabled services, education and health. "The agreement should be expedited to private commercial capital flows."
India also brought up the issue for a better arrangement to enable cross-border movement of cargo vehicles in the region through a multilateral motor vehicle agreement.Sharma also pointed out that New Delhi has addressed concerns of all Least-Developed Countries (LDCs) of South Asia as all items of their interest are now allowed for import into the country at zero duty. "Many other countries in the region need to reciprocate the policy," he added.
In an oblique reference to Pakistan, Sharma lamented that many nations of the region import substantially from India and 'we do not get trade preference under SAFTA'. However, he said Pakistan had initiated steps to grant most-favoured nation status to India is a positive step that will help move the SAFTA ahead.
"India, Nepal, Bhutan and Pakistan have a combined hydropower potential of 200 Giga Watt (GW), of which more than three-quarters is yet to be harnessed," according to Indian commerce minister Anand Sharma.
Addressing the sixth South Asia Free Trade Agreement (SAFTA) ministerial council in Islamabad, Pakistan on Thursday he said that India has made a strong pitch for setting up a $300-billion trans-national power grid in South Asia which would enable the region to trade in electricity.
“We need to work together to harness this potential not only for following the path of sustainable development but also as a source of cost-effective power supply to retain our competitiveness in manufacturing,” he said, adding that a trans-national power grid across South Asia will not only ensure energy security in the region but also result in substantial cost saving.
Sharma pointed out that South Asia has a huge infrastructure deficit, which will need massive capital flows. "We need to work in a policy environment that permits easier cross-border investment flows, which perhaps is even more important than cross-border trade,” he said.
In the last decade, outbound foreign direct investment (FDI) from India has been $120 billion and yet more than 90 per cent of it was directed out of South Asia. "We believe that greater capital flows within the region will have a transformational impact for growth and development of our economies,” he added.
The minister said the SAARC agreement on trade and services could serve as a catalyst for cross-border investment in several sectors, including energy, tourism, telecom, IT enabled services, education and health. "The agreement should be expedited to private commercial capital flows."
India also brought up the issue for a better arrangement to enable cross-border movement of cargo vehicles in the region through a multilateral motor vehicle agreement.Sharma also pointed out that New Delhi has addressed concerns of all Least-Developed Countries (LDCs) of South Asia as all items of their interest are now allowed for import into the country at zero duty. "Many other countries in the region need to reciprocate the policy," he added.
In an oblique reference to Pakistan, Sharma lamented that many nations of the region import substantially from India and 'we do not get trade preference under SAFTA'. However, he said Pakistan had initiated steps to grant most-favoured nation status to India is a positive step that will help move the SAFTA ahead.
Asia-Pacific winning against poverty, slow to reduce hunger
The Asia-Pacific region has made great strides in reducing poverty and is moving fast towards other development goals, but levels of hunger and child and maternal mortality are still high, according to a United Nations and Asian Development Bank (ADB) report released here today.
The Asia-Pacific region has already reached the Millennium Development Goal (MDG) of halving the incidence of poverty, and reducing the proportion of people living on less than $1.25 per day from 50 to 22 per cent between 1990 and 2009, according to the latest assessment of regional progress towards the MDGs published by ADB, the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) and the United Nations Development Programme (UNDP).
The region has also achieved some other MDG indicators ahead of the target year of 2015. These include promoting gender equality in education, reducing HIV prevalence, stopping the spread of tuberculosis, increasing forest cover, reducing consumption of ozone-depleting substances and halving the proportion of people without access to safe drinking water.
However, while strong economic dynamism has driven regional success in poverty reduction, even fast growing countries continue to lose shocking numbers of children before their fifth birthday, and thousands of mothers die unnecessarily while giving birth, the report reveals.
The report, Accelerating Equitable Achievement of the MDGs: Closing the Gaps in Health and Nutrition in Asia and the Pacific warns that at the present rate of progress, the region as a whole is unlikely to meet MDGs related to eradicating hunger, reducing child mortality and improving maternal health, among others.
“It is absolutely unacceptable that amid the unprecedented economic growth in recent history, disparities within and between countries are growing in our region and mothers and children are dying unnecessarily. We must redouble our efforts to promote inclusive growth and work for achieving the MDGs by 2015,” said Bindu Lohani, ADB’s vice-president for Knowledge Management and Sustainable Development.
If governments are to raise standards of health they will have to focus much more sharply on the needs of the poor and vulnerable, says the report.“We are in a race against time, with just three years left to achieve the MDGs. The good news though, is that our analysis shows many of these goals can still be reached with a redoubling of effort in the time remaining until 2015,” said ESCAP executive secretary and UN Under-Secretary-General Noeleen Heyzer via video message at the report launch.
“On our goal of reducing child malnutrition, for instance, we need less than 2% annual improvement in all 14 off-track countries to meet the goal. We are so close to the finishing line - it is time for a big final push to 2015 on the MDGs.”
“It is clear that achieving health outcomes requires interventions in health, but more importantly outside the health sector to include water, nutrition, education and gender empowerment,” stated UN assistant secretary general and UNDP Associate Administrator and director for Asia and the Pacific Ajay Chhibber.
The report reveals striking disparities between and within sub-regions, countries and even social groups in their progress towards MDGs. While South Asia as a whole is on track for just nine MDG indicators, Sri Lanka is on track for 15 indicators and outperforms the sub-region.
While the number of people without access to safe drinking water in the region fell from 856 million to 466 million between 1990 and 2008, the region still accounts for more than half the total developing world population lacking safe drinking water. Asia-Pacific countries were also home to more than 70 per cent of people without access to sanitation in the developing world in 2008.
According to the report, insufficient spending on health is a major cause of poor health outcomes. Inadequate health staffing and ineffective public health spending are also responsible. Women’s literacy and education levels, access to clean water, improved sanitation and basic infrastructure, like better roads, also play a crucial role in improved public health.Factors outside the health sector also influence health achievements. Good governance is important, and countries that are effective in controlling corruption tend to have better health results.
The report notes that many countries can speed up progress with just a little effort. Fourteen off-track Asia-Pacific countries need to accelerate progress by less than two percentage points annually to reach the target of halving the proportion of underweight children by 2015.
The joint report outlines an eight-point agenda to fast-track progress towards the health MDGs. This requires addressing the social determinants of health inequities and vulnerabilities; establishing an equitable, accessible, responsive and integrated primary health care system; and improving preventive, promotive and curative mother and child health services.
The Asia-Pacific region has already reached the Millennium Development Goal (MDG) of halving the incidence of poverty, and reducing the proportion of people living on less than $1.25 per day from 50 to 22 per cent between 1990 and 2009, according to the latest assessment of regional progress towards the MDGs published by ADB, the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) and the United Nations Development Programme (UNDP).
The region has also achieved some other MDG indicators ahead of the target year of 2015. These include promoting gender equality in education, reducing HIV prevalence, stopping the spread of tuberculosis, increasing forest cover, reducing consumption of ozone-depleting substances and halving the proportion of people without access to safe drinking water.
However, while strong economic dynamism has driven regional success in poverty reduction, even fast growing countries continue to lose shocking numbers of children before their fifth birthday, and thousands of mothers die unnecessarily while giving birth, the report reveals.
The report, Accelerating Equitable Achievement of the MDGs: Closing the Gaps in Health and Nutrition in Asia and the Pacific warns that at the present rate of progress, the region as a whole is unlikely to meet MDGs related to eradicating hunger, reducing child mortality and improving maternal health, among others.
“It is absolutely unacceptable that amid the unprecedented economic growth in recent history, disparities within and between countries are growing in our region and mothers and children are dying unnecessarily. We must redouble our efforts to promote inclusive growth and work for achieving the MDGs by 2015,” said Bindu Lohani, ADB’s vice-president for Knowledge Management and Sustainable Development.
If governments are to raise standards of health they will have to focus much more sharply on the needs of the poor and vulnerable, says the report.“We are in a race against time, with just three years left to achieve the MDGs. The good news though, is that our analysis shows many of these goals can still be reached with a redoubling of effort in the time remaining until 2015,” said ESCAP executive secretary and UN Under-Secretary-General Noeleen Heyzer via video message at the report launch.
“On our goal of reducing child malnutrition, for instance, we need less than 2% annual improvement in all 14 off-track countries to meet the goal. We are so close to the finishing line - it is time for a big final push to 2015 on the MDGs.”
“It is clear that achieving health outcomes requires interventions in health, but more importantly outside the health sector to include water, nutrition, education and gender empowerment,” stated UN assistant secretary general and UNDP Associate Administrator and director for Asia and the Pacific Ajay Chhibber.
The report reveals striking disparities between and within sub-regions, countries and even social groups in their progress towards MDGs. While South Asia as a whole is on track for just nine MDG indicators, Sri Lanka is on track for 15 indicators and outperforms the sub-region.
While the number of people without access to safe drinking water in the region fell from 856 million to 466 million between 1990 and 2008, the region still accounts for more than half the total developing world population lacking safe drinking water. Asia-Pacific countries were also home to more than 70 per cent of people without access to sanitation in the developing world in 2008.
According to the report, insufficient spending on health is a major cause of poor health outcomes. Inadequate health staffing and ineffective public health spending are also responsible. Women’s literacy and education levels, access to clean water, improved sanitation and basic infrastructure, like better roads, also play a crucial role in improved public health.Factors outside the health sector also influence health achievements. Good governance is important, and countries that are effective in controlling corruption tend to have better health results.
The report notes that many countries can speed up progress with just a little effort. Fourteen off-track Asia-Pacific countries need to accelerate progress by less than two percentage points annually to reach the target of halving the proportion of underweight children by 2015.
The joint report outlines an eight-point agenda to fast-track progress towards the health MDGs. This requires addressing the social determinants of health inequities and vulnerabilities; establishing an equitable, accessible, responsive and integrated primary health care system; and improving preventive, promotive and curative mother and child health services.
Nepal, finally, buys time to pass pending three bills
Due to international lobbying, Nepal escaped the blacklisting from the Financial Action Task Force (FATF) — the global anti-money laundering watchdog — but only for a short time till next plenary.
"Nepal has sought two-month extension to pass three pending bills that are key to fight money laundering," according to a source at the central bank.
Prime Minister Dr Baburam Bhattarai has lobbied with Kathmandu-based envoys of FATF member countries that can have a say in the global anti-money laundering watchdog for the time extension for one last time.
FATF meeting that concluded today in Paris has however blacklisted 15 countries. The meeting started on February 13 decided on Nepal’s fate today, the source said, adding that there was a high possibility of Nepal being either downgraded to 'high-risk zone' or black listed (the public statement) from the current risk zone but the international lobbying has saved the country.
"But Nepal has to fulfill its commitment and pass the three pending bills — Mutual Legal Assistance Bill, Extradition Bill and Bill Against Organised Crime — that are among the major commitments to FATF in fighting the flow of dirty money till the next face-to-face meeting — in two months — that will forward the proposal to the plenary that will be held in June, on Nepal's final decision. "If the country could not pass the bills, it will certainly be blacklisted in the June meeting," the source said, adding that nothing can save the country then.
Due to the UCPN-Maoist, the country has been failing to fulfill the international commitment, despite repeated pressures and time extension.
However, the UCPN-Maoist-led government has tabled the bills in the House on February 13 and was supposed to start discuss today, despite the pressure from its own lawmakers who fear it could be used against them, but the discussion could not take place.
Prime Minister Bhattarai today morning called Speaker Subash Chandra Nembang and requested him not to start discussion on the bills today, due to UCPN-Maoist internal rift. "Had the government and opposition started discussion today, we were set the obstruct the House, according to UCPN-Maoist leader CP Gajurel, who is close to vice chairman of UCPN-Maoist Mohan Baidhya. "The party is against the bills and wants the government to take it back from the House."
However, the main opposition Nepali Congress has asked the government to amend the Extradition Bill as the government has removed six key offences related to organised crime from the bill. The NC is but for the passing of the bills that are vital to check flow of dirty money and create investment friendly environment.
The government’s failure in fulfilling its international commitment in fighting flow of dirty money is going to cost the country dearly apart from the financial sector that is going to feel the heat the most, apart from the flow of foreign investment.Similarly, the donors will also include more stringent conditionalities for aid and grants once the country is blacklisted. Apart from the financial sector that will be hit hard as they cannot have any international transactions, in case of failure in approving the bills, the country will lose its international markets as the cost of exports will go up making Nepal's exports expensive.
Earlier, Nepal had committed FATF to approve these Bills coupled with other reforms by December 2011, but the country — passing through transition phase — has not been able to keep its promise.
FATF review
KATHMANDU: In February 2010, Nepal made a high-level political commitment to work with the FATF and APG to address its strategic AML/CFT deficiencies. The FATF has determined that certain strategic AML/CFT deficiencies remain. Nepal should continue to work on implementing its action plan to address these deficiencies, including by adequately criminalising money laundering and terrorist financing under recommendation 1 and special recommendation II; establishing and implementing adequate procedures to identify and freeze terrorist assets under special recommendation III; implementing adequate procedures for the confiscation of funds related to money laundering under recommendation 3; enacting and implementing appropriate mutual legal assistance legislation under recommendation 36; ensuring a fully operational and effectively functioning Financial Intelligence Unit under recommendation 26 and establishing adequate STR reporting obligations for money laundering and FT under recommendation 13 and special recommendation IV. The FATF encourages Nepal to address its remaining deficiencies and continue the process of implementing its action plan.
"Nepal has sought two-month extension to pass three pending bills that are key to fight money laundering," according to a source at the central bank.
Prime Minister Dr Baburam Bhattarai has lobbied with Kathmandu-based envoys of FATF member countries that can have a say in the global anti-money laundering watchdog for the time extension for one last time.
FATF meeting that concluded today in Paris has however blacklisted 15 countries. The meeting started on February 13 decided on Nepal’s fate today, the source said, adding that there was a high possibility of Nepal being either downgraded to 'high-risk zone' or black listed (the public statement) from the current risk zone but the international lobbying has saved the country.
"But Nepal has to fulfill its commitment and pass the three pending bills — Mutual Legal Assistance Bill, Extradition Bill and Bill Against Organised Crime — that are among the major commitments to FATF in fighting the flow of dirty money till the next face-to-face meeting — in two months — that will forward the proposal to the plenary that will be held in June, on Nepal's final decision. "If the country could not pass the bills, it will certainly be blacklisted in the June meeting," the source said, adding that nothing can save the country then.
Due to the UCPN-Maoist, the country has been failing to fulfill the international commitment, despite repeated pressures and time extension.
However, the UCPN-Maoist-led government has tabled the bills in the House on February 13 and was supposed to start discuss today, despite the pressure from its own lawmakers who fear it could be used against them, but the discussion could not take place.
Prime Minister Bhattarai today morning called Speaker Subash Chandra Nembang and requested him not to start discussion on the bills today, due to UCPN-Maoist internal rift. "Had the government and opposition started discussion today, we were set the obstruct the House, according to UCPN-Maoist leader CP Gajurel, who is close to vice chairman of UCPN-Maoist Mohan Baidhya. "The party is against the bills and wants the government to take it back from the House."
However, the main opposition Nepali Congress has asked the government to amend the Extradition Bill as the government has removed six key offences related to organised crime from the bill. The NC is but for the passing of the bills that are vital to check flow of dirty money and create investment friendly environment.
The government’s failure in fulfilling its international commitment in fighting flow of dirty money is going to cost the country dearly apart from the financial sector that is going to feel the heat the most, apart from the flow of foreign investment.Similarly, the donors will also include more stringent conditionalities for aid and grants once the country is blacklisted. Apart from the financial sector that will be hit hard as they cannot have any international transactions, in case of failure in approving the bills, the country will lose its international markets as the cost of exports will go up making Nepal's exports expensive.
Earlier, Nepal had committed FATF to approve these Bills coupled with other reforms by December 2011, but the country — passing through transition phase — has not been able to keep its promise.
FATF review
KATHMANDU: In February 2010, Nepal made a high-level political commitment to work with the FATF and APG to address its strategic AML/CFT deficiencies. The FATF has determined that certain strategic AML/CFT deficiencies remain. Nepal should continue to work on implementing its action plan to address these deficiencies, including by adequately criminalising money laundering and terrorist financing under recommendation 1 and special recommendation II; establishing and implementing adequate procedures to identify and freeze terrorist assets under special recommendation III; implementing adequate procedures for the confiscation of funds related to money laundering under recommendation 3; enacting and implementing appropriate mutual legal assistance legislation under recommendation 36; ensuring a fully operational and effectively functioning Financial Intelligence Unit under recommendation 26 and establishing adequate STR reporting obligations for money laundering and FT under recommendation 13 and special recommendation IV. The FATF encourages Nepal to address its remaining deficiencies and continue the process of implementing its action plan.
Thursday, February 16, 2012
Finance Ministry fails to submit foreign aid details
An officer from the Office of Auditor General blamed the Finance Ministry for disobeying the Constitution.
According to the Constitution, the Finance Minister has to submit the detailed information of foreign aid inflow and expenses to the Office of the Auditor General and also to the Parliament but neither the Finance Minister not the ministry is giving any details of the aid flow and expenses, said Mohadutta Timilsina of the Office of Auditor General, during an interaction on Aid Transparency organised by Freedom Forum, in the capital today.
If only the ministry follows the Constitution, there could be more transparency of foreign aid that will help make it effective, he added. "The real allocation is never known to the Auditor General, which is against the Constitution."
In the fiscal year 2009-10, a finance minister presented a report of a technical assistance in the House, he said, without revealing the name of technical assistance and the minister. "The report failed to mention some 87.5 per cent spending of the total Rs 17.19 billion technical assistance that had 6.3 per cent spending on consultants, 3.57 per cent on goods and services, and 2.7 per cent on training and seminars," he said, giving an example of transparency of foreign aid, "The 87.5 per cent expenses was under the others heading."
"Once transparency is insured, the foreign aid could be more effective, economist Dr Chiranjivi Nepal said, adding that the country has been receiving foreign aid since last six decades, but there has been no visible impact of the aid.
The remittance has contributed more to the poverty reduction instead of foreign aid, Nepal said. "The foreign aid has neither contributed to economic development nor in the employment generation."
"The foreign aid that is not in the priority of the country has made Nepal more dependent and weakened the government," he said, "If the donors are serious in Nepal's development, they should strengthen the system, become transparent, and harmonise among themselves. "We also need Foreign aid management system for more effective results."
Freedom Forum is conducting a research on aid transparency, said chairman of the Forum Taranath Dahal. "The result of the research will help make the donors more transparent," he said, adding that transparency will lead to the effectiveness of the foreign aid that is key for the country's development activities, as it shares a major chunk of the budget.
AMP in pipeline
KATHMANDU: The Finance Ministry is working on Aid Management Platform (AMP) to make the foreign aid transparent, said facilitator for aid management and coordination under the Foreign Aid Coordination Division of Finance Ministry Julien Chevillard. "The project under the UNDP will help increase transparency, though it will not have off-budget aid," he said, adding that transparency will lead to the accountability too. The AMP — that will collect data in a detailed manner — will be useful for the donors and government agencies in the beginning but could go public by the end of the current fiscal year, he added.
According to the Constitution, the Finance Minister has to submit the detailed information of foreign aid inflow and expenses to the Office of the Auditor General and also to the Parliament but neither the Finance Minister not the ministry is giving any details of the aid flow and expenses, said Mohadutta Timilsina of the Office of Auditor General, during an interaction on Aid Transparency organised by Freedom Forum, in the capital today.
If only the ministry follows the Constitution, there could be more transparency of foreign aid that will help make it effective, he added. "The real allocation is never known to the Auditor General, which is against the Constitution."
In the fiscal year 2009-10, a finance minister presented a report of a technical assistance in the House, he said, without revealing the name of technical assistance and the minister. "The report failed to mention some 87.5 per cent spending of the total Rs 17.19 billion technical assistance that had 6.3 per cent spending on consultants, 3.57 per cent on goods and services, and 2.7 per cent on training and seminars," he said, giving an example of transparency of foreign aid, "The 87.5 per cent expenses was under the others heading."
"Once transparency is insured, the foreign aid could be more effective, economist Dr Chiranjivi Nepal said, adding that the country has been receiving foreign aid since last six decades, but there has been no visible impact of the aid.
The remittance has contributed more to the poverty reduction instead of foreign aid, Nepal said. "The foreign aid has neither contributed to economic development nor in the employment generation."
"The foreign aid that is not in the priority of the country has made Nepal more dependent and weakened the government," he said, "If the donors are serious in Nepal's development, they should strengthen the system, become transparent, and harmonise among themselves. "We also need Foreign aid management system for more effective results."
Freedom Forum is conducting a research on aid transparency, said chairman of the Forum Taranath Dahal. "The result of the research will help make the donors more transparent," he said, adding that transparency will lead to the effectiveness of the foreign aid that is key for the country's development activities, as it shares a major chunk of the budget.
AMP in pipeline
KATHMANDU: The Finance Ministry is working on Aid Management Platform (AMP) to make the foreign aid transparent, said facilitator for aid management and coordination under the Foreign Aid Coordination Division of Finance Ministry Julien Chevillard. "The project under the UNDP will help increase transparency, though it will not have off-budget aid," he said, adding that transparency will lead to the accountability too. The AMP — that will collect data in a detailed manner — will be useful for the donors and government agencies in the beginning but could go public by the end of the current fiscal year, he added.
Unilever resumes operations after 11 days
Unilever Nepal — the Hetauda-based multinational company — resumed operations from today following a 11-day long wage and benefit dispute between workers and the management.
"The gates at Unilever opened at 8am today," said company secretary at Labour, Transport, Industry, Commerce and Supply Sub-committee of Legislative Parliament Ambar Bahadur Thapa, today.
"Unilever's management is positive about the development and issues will be settled at the negotiation table," he assured, adding that their application to the Ministry of Industry to close down the factory was just a formality. "We don’t have any intention to close down the company and escape from the genuine demands of the workers."
Lawmaker Jip Chhiring urged the company to look into the demands put forth by workers and to fulfil them according to existing laws. "Workers should get good wages and benefits and the management has to fulfil their legitimate demands. A loss or recession should not be the cause for not hiking salaries," he said.
However, he assured that the committee would pressure the government to revise the salary of workers. He added that subsidies should be provided by the government to companies that provide better salaries to workers. "I know Rs 6,200 is not enough for a family today," he said.
Federation of Nepalese Chambers of Commerce and Industry (FNCCI) director Hansh Raj Pandey urged the sub-committee to solve the labour dispute through a long-term programme and strategy. "Labour disputes are the major obstacles for the development of the industrial sector in Nepal, so it needs a comprehensive focus from the government," he said.
Ministry of Labour and Transport Management secretary Som Lal Subedi said that the workers' demands was a genuine collective bargaining framework. "The management's irresponsible behaviour was the problem because workers had submitted their demands a month ago according to the labour laws," he said, explaining that it was a matter of low motivation and absence of dialogue with workers that led to the shutdown of Unilever. He urged the management of Unilever to be transparent and flexible for a better relation with workers.
"The company is open. Workers are ready to settle their demands through talks, so Unilever should be more flexible to retain their confidence," he said. Lawmakers participating in the discussion urged Unilever to evaluate their salary and benefits according to other multinationals rather than the minimum wage of the country.
"Ministry of Industry and Ministry of Labour and Transport Management should start a fresh round of talks for a sustainable solution to the conflict," said president of the sub-committee Shanti Basnet Adhikari. The committee directed the government to amend the labour laws to make them compatible with the current situation.
Likewise, the committee decided to inspect Unilever to explore the root cause of the situation. "We also want to listen to the workers before arriving at any conclusion," she said.
"The gates at Unilever opened at 8am today," said company secretary at Labour, Transport, Industry, Commerce and Supply Sub-committee of Legislative Parliament Ambar Bahadur Thapa, today.
"Unilever's management is positive about the development and issues will be settled at the negotiation table," he assured, adding that their application to the Ministry of Industry to close down the factory was just a formality. "We don’t have any intention to close down the company and escape from the genuine demands of the workers."
Lawmaker Jip Chhiring urged the company to look into the demands put forth by workers and to fulfil them according to existing laws. "Workers should get good wages and benefits and the management has to fulfil their legitimate demands. A loss or recession should not be the cause for not hiking salaries," he said.
However, he assured that the committee would pressure the government to revise the salary of workers. He added that subsidies should be provided by the government to companies that provide better salaries to workers. "I know Rs 6,200 is not enough for a family today," he said.
Federation of Nepalese Chambers of Commerce and Industry (FNCCI) director Hansh Raj Pandey urged the sub-committee to solve the labour dispute through a long-term programme and strategy. "Labour disputes are the major obstacles for the development of the industrial sector in Nepal, so it needs a comprehensive focus from the government," he said.
Ministry of Labour and Transport Management secretary Som Lal Subedi said that the workers' demands was a genuine collective bargaining framework. "The management's irresponsible behaviour was the problem because workers had submitted their demands a month ago according to the labour laws," he said, explaining that it was a matter of low motivation and absence of dialogue with workers that led to the shutdown of Unilever. He urged the management of Unilever to be transparent and flexible for a better relation with workers.
"The company is open. Workers are ready to settle their demands through talks, so Unilever should be more flexible to retain their confidence," he said. Lawmakers participating in the discussion urged Unilever to evaluate their salary and benefits according to other multinationals rather than the minimum wage of the country.
"Ministry of Industry and Ministry of Labour and Transport Management should start a fresh round of talks for a sustainable solution to the conflict," said president of the sub-committee Shanti Basnet Adhikari. The committee directed the government to amend the labour laws to make them compatible with the current situation.
Likewise, the committee decided to inspect Unilever to explore the root cause of the situation. "We also want to listen to the workers before arriving at any conclusion," she said.
Chaudhary Group to start retail chain
Chaudhary Group (CG) is launching its retail and supply chain CG Mart soon.
The CG Mart – Retail and distribution Division of the Group — will be the warmest and friendliest retailer and distributer for convenience and high quality brands in the Nepal, said operational manager of CG Mart Dewas Yonjon. "It is all set to enter into the retail sector with the introduction of its chain of supermarkets."
"It has started last year and started to deal with 30 stock keeping units, various brands and has plan to increase most sought in near future," he said, adding that currently it is busy on starting its own retail store CG Mart’s convenience store which is a unique concept.
CG Mart convenience store that can be called corner store, corner shop or bodega is a small store or shop in a built up area where we stock a range of everyday items such as groceries, toiletries, alcoholic and soft drinks, and may also offer money order, wire transfer services and ATM facilities in future.
CG Mart has plans to create Nepal’s first retail brand the only convenience store that serves in-store prepared food products with dine-in corner for consumers, targeting the middle class households in Kathmandu Metropolitan city. "Currently, it is very aggressive in the introduction of new retail brand and products in the market," he added.
The CG Mart – Retail and distribution Division of the Group — will be the warmest and friendliest retailer and distributer for convenience and high quality brands in the Nepal, said operational manager of CG Mart Dewas Yonjon. "It is all set to enter into the retail sector with the introduction of its chain of supermarkets."
"It has started last year and started to deal with 30 stock keeping units, various brands and has plan to increase most sought in near future," he said, adding that currently it is busy on starting its own retail store CG Mart’s convenience store which is a unique concept.
CG Mart convenience store that can be called corner store, corner shop or bodega is a small store or shop in a built up area where we stock a range of everyday items such as groceries, toiletries, alcoholic and soft drinks, and may also offer money order, wire transfer services and ATM facilities in future.
CG Mart has plans to create Nepal’s first retail brand the only convenience store that serves in-store prepared food products with dine-in corner for consumers, targeting the middle class households in Kathmandu Metropolitan city. "Currently, it is very aggressive in the introduction of new retail brand and products in the market," he added.
Wednesday, February 15, 2012
Nepal seeks two months time extension from FATF
Nepal has lobbied to get two months extension from Financial Action Task Force (FATF) to pass the pending three Bills that are key to fight money laundering.
According to a source close to the Prime Minister Dr Baburam Bhattarai, Nepal has lobbied with the FATF member countries that can have a say in the global anti-money laundering watchdog for the time extension for the last time.
The FATF meeting that has been going on in Paris from February 13 will last till February 17, when it decides on Nepal's fate either to down-grade it to high-risk zone or black list it.Despite repeated commitments and time extension, Nepal has failed to pass the three key Bills — Mutual Legal Assistance Bill, Extradition Bill and Bill Against Organised Crime — that are among the major commitments to the FATF in fighting the flow of dirty money.The UCPN-Maoist led government has tabled the Bills in the House on February 13 and is planning to pass on February 17, despite the pressure from its own lawmakers as they fear it could be used against them.
Meanwhile, the government has tabled the Extradition Bill removing six key issues under ‘Not to be Considered Political Offence," blamed the main opposition Nepal Congress (NC) that has supported the Bills on Monday. "The government has tabled Extradition Bill removing six essential issues relating to organised crime for its vested interest," according to the NC parliamentary party meeting today in Singh Durbar.
"Earlier, there were 20 issues listed under the section that are not considered political offences," the NC leaders claimed, adding that the government has removed homicide, offence of making physical damage by using weapons and other risky substances, offence of using and manufacturing explosive substances intending to damage life and property, offence of arms and ammunitions, offence of using arms to be free from lawful detention and arrest and offence of illegal detention, taking hostage, kidnapping and seizure from the section.
"If these offences are considered political offences, the political parties and criminal groups will enjoy state of impunity," NC lawmaker Ramesh Lekhak said, adding that UCPN-Maoists removed the 'serious' issues with ill intention that its party workers and leaders might be dragged under the offences, if the party opted for ‘revolt’ in the future.
Since these are serious crime against humanity and serious human rights offences, they should be included under non-political criminal offences," the NC demanded.
The NC, according to parliamentary party spokesperson Nabindra Raj Joshi, has called a meeting of parties outside the government tomorrow morning to prepare common standing on the removed key six issues.
"We are serious in passing the three Bills related to money laundering at the earliest with the inclusion of these issues,” Joshi added.
The three Bills under the UN Convention that Nepal had earlier ratified are very important for Nepal to pass to escape the blacklisting. Currently, Nepal is in the risk zone and it has only tow options — in absence of passing of the Bills — either to be blacklisted or downgraded to the high-risk zone that will cost Nepal dearly.
Nepal had sought one year extension to pass the three Bills by December 2011, after it failed to pass a year ago. Since, the country has ratified key UN Conventions — International Convention for the Suppression of the Financing of Terrorism-1999 and UN Convention Against Transnational Organised Crime — in June 2011, the FATF had agreed on time extension but Nepal needs to prepare Acts according to the Conventions soon.
In absence of passing of the Bills, international banks could block the bank accounts of Nepali diplomatic missions abroad apart from dishonouring letter of credit (LC) that would hit country's international trade.
Similarly, the foreign grants will be completely halted and the donors will charge high interest on loan as they will switch to commercial loans instead of current soft loans.
Nepal will be completely isolated from the international financial sector, after the FATF black lists it, as the international community will treat it like the Iran and North Korea, both black listed by the FATF.
The Bills will help Nepal check flow of dirty money and create investment environment, though both the Bills — Mutual Legal Assistance Bill and Extradition Bill — will come into effect only after Nepal enters into a separate agreement with any country. Similarly, to develop healthy financial system and boost international trade and attract Foreign Direct Investment (FDI), the Bill Against Organised Crime is key.
Meanwhile, President Dr Ram Baran Yadav today during the meeting with three senior leader of Nepal Congress, CPN-UML and UCPN-Maoist urged them not to let the country blacklisted.
According to a source close to the Prime Minister Dr Baburam Bhattarai, Nepal has lobbied with the FATF member countries that can have a say in the global anti-money laundering watchdog for the time extension for the last time.
The FATF meeting that has been going on in Paris from February 13 will last till February 17, when it decides on Nepal's fate either to down-grade it to high-risk zone or black list it.Despite repeated commitments and time extension, Nepal has failed to pass the three key Bills — Mutual Legal Assistance Bill, Extradition Bill and Bill Against Organised Crime — that are among the major commitments to the FATF in fighting the flow of dirty money.The UCPN-Maoist led government has tabled the Bills in the House on February 13 and is planning to pass on February 17, despite the pressure from its own lawmakers as they fear it could be used against them.
Meanwhile, the government has tabled the Extradition Bill removing six key issues under ‘Not to be Considered Political Offence," blamed the main opposition Nepal Congress (NC) that has supported the Bills on Monday. "The government has tabled Extradition Bill removing six essential issues relating to organised crime for its vested interest," according to the NC parliamentary party meeting today in Singh Durbar.
"Earlier, there were 20 issues listed under the section that are not considered political offences," the NC leaders claimed, adding that the government has removed homicide, offence of making physical damage by using weapons and other risky substances, offence of using and manufacturing explosive substances intending to damage life and property, offence of arms and ammunitions, offence of using arms to be free from lawful detention and arrest and offence of illegal detention, taking hostage, kidnapping and seizure from the section.
"If these offences are considered political offences, the political parties and criminal groups will enjoy state of impunity," NC lawmaker Ramesh Lekhak said, adding that UCPN-Maoists removed the 'serious' issues with ill intention that its party workers and leaders might be dragged under the offences, if the party opted for ‘revolt’ in the future.
Since these are serious crime against humanity and serious human rights offences, they should be included under non-political criminal offences," the NC demanded.
The NC, according to parliamentary party spokesperson Nabindra Raj Joshi, has called a meeting of parties outside the government tomorrow morning to prepare common standing on the removed key six issues.
"We are serious in passing the three Bills related to money laundering at the earliest with the inclusion of these issues,” Joshi added.
The three Bills under the UN Convention that Nepal had earlier ratified are very important for Nepal to pass to escape the blacklisting. Currently, Nepal is in the risk zone and it has only tow options — in absence of passing of the Bills — either to be blacklisted or downgraded to the high-risk zone that will cost Nepal dearly.
Nepal had sought one year extension to pass the three Bills by December 2011, after it failed to pass a year ago. Since, the country has ratified key UN Conventions — International Convention for the Suppression of the Financing of Terrorism-1999 and UN Convention Against Transnational Organised Crime — in June 2011, the FATF had agreed on time extension but Nepal needs to prepare Acts according to the Conventions soon.
In absence of passing of the Bills, international banks could block the bank accounts of Nepali diplomatic missions abroad apart from dishonouring letter of credit (LC) that would hit country's international trade.
Similarly, the foreign grants will be completely halted and the donors will charge high interest on loan as they will switch to commercial loans instead of current soft loans.
Nepal will be completely isolated from the international financial sector, after the FATF black lists it, as the international community will treat it like the Iran and North Korea, both black listed by the FATF.
The Bills will help Nepal check flow of dirty money and create investment environment, though both the Bills — Mutual Legal Assistance Bill and Extradition Bill — will come into effect only after Nepal enters into a separate agreement with any country. Similarly, to develop healthy financial system and boost international trade and attract Foreign Direct Investment (FDI), the Bill Against Organised Crime is key.
Meanwhile, President Dr Ram Baran Yadav today during the meeting with three senior leader of Nepal Congress, CPN-UML and UCPN-Maoist urged them not to let the country blacklisted.
Revenue mobilisation misses target
Going by the figures of the seventh month, the government seems to almost meet the target of revenue mobilisation, though it falls short of couple of billions in its target.
"By the seventh month, the Finance Ministry has been able to mobilise Rs 128.5 billion revenue, according to the preliminary data," said finance secretary Krishnahari Baskota. "The target for the seventh month was Rs 131 billion and the annual target is Rs 248 billion."
Similarly, the month-wise target for the seventh month was Rs 18.5 billion, but the ministry has been able to mobilise Rs 18 billion, he said, being hopeful of meeting the annual target for this fiscal year.
Last fiscal year, the government fell short of its revenue target due to massive revenue leakages and VAT — the highest contributor to the revenue — fraud cases.
But this fiscal year's seventh month witnessed Rs 40 billion VAT mobilisation, which is 104 per cent of the target, the finance secreatary said, adding that the ministry has been able to mobilise Rs 23 billion in customs — that is 102 per cent of the target — Rs 26.25 billion in Income tax — that is 103 per cent of the target — whereas the slowdown in land and housing transactions and vehicle sales hit the registration and transport tax.
"The ministry mobilised only 75 per cent to Rs 4.25 billion in the registration and transport tax," he added. "The poor financial health of Nepal Oil Corporation (NOC) and Nepal Electricity Authority (NEA) hit the non-tax mobilisation as the ministry has been able to mobilise only 90 per cent to Rs 18.5 billion of its target under non-tax."
The technically insolvent Nepal Oil Corporation has been instead of paying the government, asking for loan every month to maintain smooth supply of the petroleum products.
Similarly, the Nepal Electricity Authority is also in bad financial health leading to massive accumulative losses and has become unable to contribute to the government coffer.
Similarly, apart from registration and transportation tax and non-tax, the excise, is also the poor performer that could not meet the target pulling the overall target down to Rs 2.5 billion shortfall.
The ministry has been able to mobilise Rs 17 billion excise, which is only 93 per cent of the target.
"By the seventh month, the Finance Ministry has been able to mobilise Rs 128.5 billion revenue, according to the preliminary data," said finance secretary Krishnahari Baskota. "The target for the seventh month was Rs 131 billion and the annual target is Rs 248 billion."
Similarly, the month-wise target for the seventh month was Rs 18.5 billion, but the ministry has been able to mobilise Rs 18 billion, he said, being hopeful of meeting the annual target for this fiscal year.
Last fiscal year, the government fell short of its revenue target due to massive revenue leakages and VAT — the highest contributor to the revenue — fraud cases.
But this fiscal year's seventh month witnessed Rs 40 billion VAT mobilisation, which is 104 per cent of the target, the finance secreatary said, adding that the ministry has been able to mobilise Rs 23 billion in customs — that is 102 per cent of the target — Rs 26.25 billion in Income tax — that is 103 per cent of the target — whereas the slowdown in land and housing transactions and vehicle sales hit the registration and transport tax.
"The ministry mobilised only 75 per cent to Rs 4.25 billion in the registration and transport tax," he added. "The poor financial health of Nepal Oil Corporation (NOC) and Nepal Electricity Authority (NEA) hit the non-tax mobilisation as the ministry has been able to mobilise only 90 per cent to Rs 18.5 billion of its target under non-tax."
The technically insolvent Nepal Oil Corporation has been instead of paying the government, asking for loan every month to maintain smooth supply of the petroleum products.
Similarly, the Nepal Electricity Authority is also in bad financial health leading to massive accumulative losses and has become unable to contribute to the government coffer.
Similarly, apart from registration and transportation tax and non-tax, the excise, is also the poor performer that could not meet the target pulling the overall target down to Rs 2.5 billion shortfall.
The ministry has been able to mobilise Rs 17 billion excise, which is only 93 per cent of the target.
Tuesday, February 14, 2012
Investment Board plans incentives packages to lure investors
The Investment Board is working on sector-wise project profiles with economic benefit to cost, investors' tracking system, and communication strategies to lure investment in the country.
"The meeting chaired by Prime Minister Dr Baburam Bhattarai today discussed on possible incentives — on the basis of employment they create, size of the investment and region where it will be based — to attract the investment in commercially viable projects," said chief executive of the Investment Board.
"We are preparing a transparent incentives framework to make the country more lucrative for the investors," he said, adding that the modules will be ready by the end of the current fiscal year.
The country is observing the fiscal year 2012-13 as Nepal Investment Year aiming to attract Rs 600 billion foreign investment that could propel the economic growth to the double digit.
Apart from the economic benefit to cost module, the board is also preparing a investor tracking system — before investment and after investment — to create database that will help analyse the issues and problems and continuously support the investors throughout, said Pant, who has a long experience on investment.
"We are also preparing a communication strategy that will help local community aware of the benefits of the projects in their locality," he said, adding that it will help them better understand advantages of the projects in their locality before the project starts.
The Prime Minister, during the meeting, opined that the country needs investment — both domestic and foreign — to create employment and boost the current sluggish economic growth.
There are enormous opportunities in Nepal as it is one of the richest countries in terms of natural resources. But the country has failed to exploit the resources. The government has formed Investment Board to capitalise the opportunities and create a conducive environment for investment.
The board is chaired by the Prime Minister and three ministers — finance, industry and forest — are the members alongwith the vice chairman of the National Planning Commission, governor of the central bank and the chief secretary.
"The meeting chaired by Prime Minister Dr Baburam Bhattarai today discussed on possible incentives — on the basis of employment they create, size of the investment and region where it will be based — to attract the investment in commercially viable projects," said chief executive of the Investment Board.
"We are preparing a transparent incentives framework to make the country more lucrative for the investors," he said, adding that the modules will be ready by the end of the current fiscal year.
The country is observing the fiscal year 2012-13 as Nepal Investment Year aiming to attract Rs 600 billion foreign investment that could propel the economic growth to the double digit.
Apart from the economic benefit to cost module, the board is also preparing a investor tracking system — before investment and after investment — to create database that will help analyse the issues and problems and continuously support the investors throughout, said Pant, who has a long experience on investment.
"We are also preparing a communication strategy that will help local community aware of the benefits of the projects in their locality," he said, adding that it will help them better understand advantages of the projects in their locality before the project starts.
The Prime Minister, during the meeting, opined that the country needs investment — both domestic and foreign — to create employment and boost the current sluggish economic growth.
There are enormous opportunities in Nepal as it is one of the richest countries in terms of natural resources. But the country has failed to exploit the resources. The government has formed Investment Board to capitalise the opportunities and create a conducive environment for investment.
The board is chaired by the Prime Minister and three ministers — finance, industry and forest — are the members alongwith the vice chairman of the National Planning Commission, governor of the central bank and the chief secretary.
GOMA approves Asian organic standard for increased market access
Global Organic Market Access (GOMA) meeting has approved the Asian Regional Organic Standard (AROS).
The next step is for the Asian Regional Organic Standard to be recognised formally by governments in the region including Nepal. The working group issued a declaration at the conclusion of meeting calling for such recognition and recommending that the Standard be adopted as the common standard in South Asian Association for Regional Cooperation (SAARC) and Association of Southeast Asian Nations (ASEAN) as a regionally harmonised organic standard.
The Standard is equivalent to the Common Objectives and Requirements for Organic Standards, an international tool established through GOMA to ease organic trade.
The working group consists of public and/or private-sector representatives from Bhutan, the Lao People’s Democratic Republic, Thailand, Viet Nam, Malaysia, India, Indonesia, China, the Republic of Korea, Japan, Hong Kong (China), the Philippines, Cambodia, Nepal and Sri Lanka.
The GOMA Asia Working Group, which consists of government officials and farmers and other representatives of the region’s private sector in organic agriculture, has day before yesterday approved the standard, developed over two years that covers organic crop production, processing and labeling.
The working group members have already initiated the ASEAN adoption process. AROS is on the agenda of the next Task Force on ASEAN Standards on Horticulture Produce meeting, set for April 24–26 in Hanoi that will send it to the ASEAN Working Group on Crops and then to the ASEAN senior officers meeting later this year.
Of an estimated two million certified organic farmers worldwide, some 80 per cent are in developing countries; 34 per cent in Africa; 29 per cent in Asia and 17 per cent in Latin America, according to the market access.In addition, developing countries account for 73 per cent of land certified for organic wild collection and beekeeping. Countless other developing country farmers practice organic agriculture without being formally certified.
"Organic agriculture relies on healthy soils and active agro-ecological management rather than on the use of inputs with adverse effects such as artificial pesticides and fertilizers," it said, adding that it combines tradition, innovation and science.
Among the benefits of organic farming are higher incomes, more stable and nutritious diets, higher soil fertility, reduced soil erosion, better resilience to climate extremes like drought and heavy rainfall, greater resource efficiency, lower carbon footprints, less dependence on purchased external inputs and reduced rural-urban migration.
Ten years of a public-private effort to expand the range of places where developing-country farmers can sell their organic products has been reviewed at a two day conference — yesterday and today — in Nuremberg, Germany.High-level officials and experts, including director of the UNCTAD Division on International Trade in Goods and Services, and Commodities Guillermo Valles discussed on progress made and practical means for further surmounting technical barriers to the marketing of organic products – a sector that already accounts for sales of $60 billion annually.
Organic production that is certified assures buyers that the product has been produced in accordance with organic standards. Certified organic products can fetch higher prices for farmers in developing countries — typically they earn from 15 to 150 per cent more than conventional products. Increasingly, they can be traded internationally in robust markets. Minor differences in organic standards and certification requirements can hinder this trade. Harmonisation and equivalence — that is, mutual recognition of different standards and conformity assessment systems — are a means of overcoming these differences so that markets for organic products continue to grow.
Deputy director-general of the WTO Harsha Singh; assistant director-general of the Food and Agriculture Organisation of the United Nations (FAO) Alexander Mueller; and deputy secretary of the Department of Agriculture of the USA Kathleen Merrigan also addressed the meeting.Co-sponsored by BioFach, the world’s largest organic trade show and conference took place just before the 2012 BioFach is held in Nuremberg. A partnership to promote global organic market access was established at a February 2002 conference of UNCTAD, FAO and the International Federation of Organic Agriculture Movements (IFOAM), the international umbrella organisation for the organic sector.From 2003 to 2008, the three organisations convened the International Task Force on Harmonisation and Equivalence in Organic Agriculture (ITF) – a platform for dialogue between public and private institutions involved in organic trade and regulation.
The Task Force conducted in-depth analyses and developed recommendations and practical tools to ease the international flow of organic goods. The partners’ collaboration to further develop and promote uptake of International Task Force outcomes has helped to change mindsets and the landscape of international organic trade.
The EU references the Task Force’s tools and incorporates the principle of equivalency into its new system for approving organic imports. That makes it more likely that organic produce from developing countries will be accepted for import into the EU. And it makes it easier for organic production to be tailored to local agro-ecological and socio-economic conditions.
Similarly, IFOAM, the international organic private-sector standard-setter, now focuses on building a family of standards that meet key common objectives of organic systems, but with space for local adaptation.
The US and the EU have each signed organic equivalency agreements with Canada and will reportedly announce another agreement soon. Together the three markets account for 95 per cent of global certified organic sales, sourced worldwide. The US-Canada agreement particularly benefits developing countries because it includes acceptance of organic goods from third parties – that is, if such imported produce is recognised as organic by one country it can be sold as organic in both.
There is a major trend towards developing and applying regional organic standards. Such efforts are under way in East Africa, the Pacific, Central America, and South and South-East Asia. Farmers meeting regional standards are able to sell their produce in other countries in the region.
The next step is for the Asian Regional Organic Standard to be recognised formally by governments in the region including Nepal. The working group issued a declaration at the conclusion of meeting calling for such recognition and recommending that the Standard be adopted as the common standard in South Asian Association for Regional Cooperation (SAARC) and Association of Southeast Asian Nations (ASEAN) as a regionally harmonised organic standard.
The Standard is equivalent to the Common Objectives and Requirements for Organic Standards, an international tool established through GOMA to ease organic trade.
The working group consists of public and/or private-sector representatives from Bhutan, the Lao People’s Democratic Republic, Thailand, Viet Nam, Malaysia, India, Indonesia, China, the Republic of Korea, Japan, Hong Kong (China), the Philippines, Cambodia, Nepal and Sri Lanka.
The GOMA Asia Working Group, which consists of government officials and farmers and other representatives of the region’s private sector in organic agriculture, has day before yesterday approved the standard, developed over two years that covers organic crop production, processing and labeling.
The working group members have already initiated the ASEAN adoption process. AROS is on the agenda of the next Task Force on ASEAN Standards on Horticulture Produce meeting, set for April 24–26 in Hanoi that will send it to the ASEAN Working Group on Crops and then to the ASEAN senior officers meeting later this year.
Of an estimated two million certified organic farmers worldwide, some 80 per cent are in developing countries; 34 per cent in Africa; 29 per cent in Asia and 17 per cent in Latin America, according to the market access.In addition, developing countries account for 73 per cent of land certified for organic wild collection and beekeeping. Countless other developing country farmers practice organic agriculture without being formally certified.
"Organic agriculture relies on healthy soils and active agro-ecological management rather than on the use of inputs with adverse effects such as artificial pesticides and fertilizers," it said, adding that it combines tradition, innovation and science.
Among the benefits of organic farming are higher incomes, more stable and nutritious diets, higher soil fertility, reduced soil erosion, better resilience to climate extremes like drought and heavy rainfall, greater resource efficiency, lower carbon footprints, less dependence on purchased external inputs and reduced rural-urban migration.
Ten years of a public-private effort to expand the range of places where developing-country farmers can sell their organic products has been reviewed at a two day conference — yesterday and today — in Nuremberg, Germany.High-level officials and experts, including director of the UNCTAD Division on International Trade in Goods and Services, and Commodities Guillermo Valles discussed on progress made and practical means for further surmounting technical barriers to the marketing of organic products – a sector that already accounts for sales of $60 billion annually.
Organic production that is certified assures buyers that the product has been produced in accordance with organic standards. Certified organic products can fetch higher prices for farmers in developing countries — typically they earn from 15 to 150 per cent more than conventional products. Increasingly, they can be traded internationally in robust markets. Minor differences in organic standards and certification requirements can hinder this trade. Harmonisation and equivalence — that is, mutual recognition of different standards and conformity assessment systems — are a means of overcoming these differences so that markets for organic products continue to grow.
Deputy director-general of the WTO Harsha Singh; assistant director-general of the Food and Agriculture Organisation of the United Nations (FAO) Alexander Mueller; and deputy secretary of the Department of Agriculture of the USA Kathleen Merrigan also addressed the meeting.Co-sponsored by BioFach, the world’s largest organic trade show and conference took place just before the 2012 BioFach is held in Nuremberg. A partnership to promote global organic market access was established at a February 2002 conference of UNCTAD, FAO and the International Federation of Organic Agriculture Movements (IFOAM), the international umbrella organisation for the organic sector.From 2003 to 2008, the three organisations convened the International Task Force on Harmonisation and Equivalence in Organic Agriculture (ITF) – a platform for dialogue between public and private institutions involved in organic trade and regulation.
The Task Force conducted in-depth analyses and developed recommendations and practical tools to ease the international flow of organic goods. The partners’ collaboration to further develop and promote uptake of International Task Force outcomes has helped to change mindsets and the landscape of international organic trade.
The EU references the Task Force’s tools and incorporates the principle of equivalency into its new system for approving organic imports. That makes it more likely that organic produce from developing countries will be accepted for import into the EU. And it makes it easier for organic production to be tailored to local agro-ecological and socio-economic conditions.
Similarly, IFOAM, the international organic private-sector standard-setter, now focuses on building a family of standards that meet key common objectives of organic systems, but with space for local adaptation.
The US and the EU have each signed organic equivalency agreements with Canada and will reportedly announce another agreement soon. Together the three markets account for 95 per cent of global certified organic sales, sourced worldwide. The US-Canada agreement particularly benefits developing countries because it includes acceptance of organic goods from third parties – that is, if such imported produce is recognised as organic by one country it can be sold as organic in both.
There is a major trend towards developing and applying regional organic standards. Such efforts are under way in East Africa, the Pacific, Central America, and South and South-East Asia. Farmers meeting regional standards are able to sell their produce in other countries in the region.
Monday, February 13, 2012
Nepal may escape blacklisting
Nepal might escape black listing as the Parliament is planning to pass the three key Bills that are key in fighting flow of dirty money, on Friday.
Despite UCPN-Maoist lawmakers boycott today, the government tabled three Bills — Mutual Legal Assistance Bill, Extradition Bill and Bill Against Organised Crime — that are among Nepal's major commitments to the global anti-money laundering watchdog Financial Action Task Force (FATF) in fighting money laundering.
The FATF is meeting in its headquarters in Paris from today to take stock of member countries' and territories' progress on their commitments in joining hands globally in fighting money laundering and terrorist financing and will decide the fate of Nepal on Friday, the day Parliament has set to pass the Bills.
"We wanted the government to take a fast track route and pass the Bills today," said main opposition Nepali Congress chief whip Laxman Ghimire. “If the country is black listed, the government must take the blame, as the lawmakers of the party that is leading the government is opposing the Bills,’ fearing that they could be used against the UCPN-Maoist in future.
The three Bills under the UN Convention are very important for Nepal to pass to escape the blacklisting. Currently, Nepal is in the risk zone and it has only tow options — in absence of passing of the Bills — either to be blacklisted or downgraded to the high-risk zone costing Nepal dearly.
Nepal had sought one year extension to pass the three Bills by December 2011, after it failed to pass a year ago. Since, the country has ratified key UN Conventions — International Convention for the Suppression of the Financing of Terrorism-1999 and UN Convention Against Transnational Organised Crime — in June 2011, the FATF has agreed on time extension but Nepal needs to prepare Acts according to the Conventions but it has been delayed due to UCPN-Maoist intra-party rift.
In absence of passing of the three Acts, international banks could block the bank accounts of Nepali diplomatic missions abroad apart from dishonouring letter of credit (LC) that would hit imports.
"The foreign grants will be completely halted and the donors will charge high interest on loan as they will switch to commercial loans instead of current soft loans, which will hit the budgetary support," according to finance secretary Krishnahari Baskota.
"Nepal will be completely isolated from the international financial sector, after the FATF black lists it, as the international community will treat it like the Iran and North Korea — both black listed by the FATF — though the FATF is only the global anti-money laundering watchdog," he said, adding that Nepl has not touched 33 of the 40 plus nine commitments of the FATF.
The Acts will help Nepal check flow of dirty money and create investment environment, though both the Bills — Mutual Legal Assistance Bill and Extradition Bill — will come into effect only after Nepal enters into a separate agreement with any country.
Similarly, to develop healthy financial system and boost international trade and attract Foreign Direct Investment (FDI), the Bill Against Organised Crime will support.
Despite UCPN-Maoist lawmakers boycott today, the government tabled three Bills — Mutual Legal Assistance Bill, Extradition Bill and Bill Against Organised Crime — that are among Nepal's major commitments to the global anti-money laundering watchdog Financial Action Task Force (FATF) in fighting money laundering.
The FATF is meeting in its headquarters in Paris from today to take stock of member countries' and territories' progress on their commitments in joining hands globally in fighting money laundering and terrorist financing and will decide the fate of Nepal on Friday, the day Parliament has set to pass the Bills.
"We wanted the government to take a fast track route and pass the Bills today," said main opposition Nepali Congress chief whip Laxman Ghimire. “If the country is black listed, the government must take the blame, as the lawmakers of the party that is leading the government is opposing the Bills,’ fearing that they could be used against the UCPN-Maoist in future.
The three Bills under the UN Convention are very important for Nepal to pass to escape the blacklisting. Currently, Nepal is in the risk zone and it has only tow options — in absence of passing of the Bills — either to be blacklisted or downgraded to the high-risk zone costing Nepal dearly.
Nepal had sought one year extension to pass the three Bills by December 2011, after it failed to pass a year ago. Since, the country has ratified key UN Conventions — International Convention for the Suppression of the Financing of Terrorism-1999 and UN Convention Against Transnational Organised Crime — in June 2011, the FATF has agreed on time extension but Nepal needs to prepare Acts according to the Conventions but it has been delayed due to UCPN-Maoist intra-party rift.
In absence of passing of the three Acts, international banks could block the bank accounts of Nepali diplomatic missions abroad apart from dishonouring letter of credit (LC) that would hit imports.
"The foreign grants will be completely halted and the donors will charge high interest on loan as they will switch to commercial loans instead of current soft loans, which will hit the budgetary support," according to finance secretary Krishnahari Baskota.
"Nepal will be completely isolated from the international financial sector, after the FATF black lists it, as the international community will treat it like the Iran and North Korea — both black listed by the FATF — though the FATF is only the global anti-money laundering watchdog," he said, adding that Nepl has not touched 33 of the 40 plus nine commitments of the FATF.
The Acts will help Nepal check flow of dirty money and create investment environment, though both the Bills — Mutual Legal Assistance Bill and Extradition Bill — will come into effect only after Nepal enters into a separate agreement with any country.
Similarly, to develop healthy financial system and boost international trade and attract Foreign Direct Investment (FDI), the Bill Against Organised Crime will support.
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