Tuesday, April 30, 2013

Government claims there will be no plan holiday

Finance minister Shankar Koirala said there will be no plan holiday, assuaging the serious concerns of development partners.
Trying to satisfy development partners — during the Local Donor Meeting here today — regarding their concern on a 'plan holiday' due to the vacant National Planning Commission (NPC) at a crucial time when the third Three Year Interim Plan (2013-16) needs to be finalised, he said the government will appoint planning commission members including the vice chair soon.
The planning commission that remains vacant after vice chair Deependra Bahadur Kshetry and three members resigned on April 22, has not been able to call the meeting of National Development Council that will finalise the draft of the third Three Year Interim Plan.
Koirala, however, asked the development partners — who are waiting for the finalised draft of the plan — to align their respective country strategy papers in line with the government's development map.
Asking the development partners to also follow the Development Cooperation Report (DCR) 2013, which has concluded that foreign aid has been widely fragmented and not aligned to the government's ongoing second Three Year Interim Plan (2010-13), he blamed untimely and low disbursement, lack of effective oversight and low absorptive capacity as the key impediments to effective mobilisation of foreign aid.
"Aid effectiveness is key with accountability," he said, adding that effectiveness of foreign aid is also a concern of development partners that have been helping Nepal for the last six decades.
The development partners, however, asking the government to focus on four key areas as stop-gap measures to continue mutual accountability, transparency and aid effectiveness, asked for an update on the preparation status of the next three-year interim plan.
"The plan will provide the framework for long-term partnership and commitment of development partners, especially in the context of their next country partnership strategies," said World Bank (WB) country manager for Nepal Tahseen Sayed, speaking on behalf of the development partners.
She also asked the government to focus on budget and portfolio management for maximum development results; economic planning and programming; accountability and governance; and Foreign Aid Policy and aid effectiveness. "By adopting the MfDR approach in the plan, with associated results framework, greater harmonisation and alignment will take place," said Sayed, adding that more rapid progress in establishing a medium-term expenditure framework, with stronger linkages to budget allocation and outputs would bring more discipline and better oversight in managing the expenditure programme.
"We have recently seen unprecedented consensus among top political leaders on hydropower development and the government can use the opportunity to take administrative, legislative, and institutional measures to support hydropower development, including mechanisms for meaningful consultations with the local population," she added.
Hailing the release of the Auditor General's report on time, the development partners also asked the government to form an extraordinary committee — as an interim measure — to play the role of Public Accounts Committee (PAC) consisting of qualified personnel to scrutinise accounts and take necessary actions until a regular PAC is established.
On the occasion, they also welcomed and hailed the sharing of contours of the draft Foreign Aid Policy. "We understand that finalising the policy, in consultation with development partners, is a key priority of the government to bring more clarity with regard to foreign aid management," Sayed said.

Food prices likely to drop

Food prices are likely to drop in the coming days, due to satisfactory winter harvest, according to a report.
"Prices of commodities such as wheat and barley which are in the process of harvesting will likely start declining," according to a joint report published by UN World Food Programme (WFP), Ministry of Agriculture Development, Federation of Nepalese Chambers of Commerce and Industries (FNCCI) and Consumer Interest Protection Forum.
"However, prices of lean season staple foods such as rice are likely to remain high until the next harvest," the report said.
"The outlook of winter crops, which are in the process of harvesting, is so far normal, with anticipation of a marginal increase as compared to last year which will, favourably, affect food availability and prices," it added.
In the markets monitored by the ministry and WFP, retail prices of most commodities showed a marginal increase over the past one month.
The national average price of coarse rice and wheat flour increased by 1.9 per cent and 2.4 per cent, respectively. The price of most commodities as compared to the previous month and the same period last year indicated an upward trend.
Increasing food prices have also put pressure on overall inflation that continued to remain at double digit. The food and beverage price index measured by Nepal Rastra Bank (NRB) stayed at 11.3 per cent in mid-March that had increased by 4.2 per cent a year ago.
The year-on-year inflation, as measured by the consumer price index increased by 10.2 per cent in the review period compared to seven per cent in the corresponding period of the previous year.
Under the items of the food and beverage group, the price index of meat and fish sub-group increased by a higher rate of 17.1 per cent during the review month as compared to an increase of 5.8 per cent in the corresponding month of the previous year.
Similarly, during the review period, price indices of cereal grains and legume varieties increased by 12.9 per cent and 12.6 per cent, respectively. Such indices had decreased by 2.4 per cent and 1.8 per cent, respectively, in the corresponding month of the previous year.

Monday, April 29, 2013

FM asks IFC to increase investment in hydropower

Finance Minister Shankar Koirala has asked the development partners to increase their aid in hydropower development, apart from focusing on grant rather than loan.
During a meeting with the representatives of IFC — the private sector lending arm of the World Bank — he asked the International Finance Corporation (IFC) to increase investment in hydropower in Nepal.
The country is currently reeling under scheduled load-shedding of around 10 hours a day that has made cost of production more expensive making Nepali products un competitive in the domestic as well as international markets.
The power shortage — apart from labour troubles — has become a chronic problem hitting the manufacturing sector hard as the sector's contribution to the economy has seen continuous drop in the recent years. "In the current fiscal year 2012-13, the Central Bureau of Statistics has projected the manufacturing sectors' contribution to the gross domestic production (GDP) to drop to 6.17 per cent, whereas the sector had contributed some 8.50 to the GDP in the fiscal year 2001-02.
IFC resident representative in Nepal Valentino S Bagatsing, on the occasion, promised to increase IFC's investment in Nepal in the future. The IFC has been recently involved in policy reform programme apart from lending some of the private sector players. It is already investing in Nepal with a committed portfolio of $25 million that includes projects across various sectors like power, air transport, banking, microfinance, and trade finance lines.
Likewise, during the meeting with Asian Development Bank (ADB) resident representative in Nepal Kenichi Yokoyama at his office, Koirala has asked the one of the country's largest development partner to increase grant instead of loan.
However, Yokoyama, on the occasion, showed serious concern on vacant National Planning Commission (NPC) and the status of ADB-funded projects. The national think tank is currently vacant as the former Prime Minister Dr Baburam Bhattarai-led government-appointed vice chair Deependra Bahadur Kshtery and three members resigned last week.
In the absence of planning commission vice chair, the fate of draft third Three Year Interim Plan has also been uncertain. The incumbent government should either appoint a vice chair immediately and call the meeting of National Development Council to finalise the draft of third Three Year Interim Plan or the country will witness a plan holiday. The development partners are concerned on the government apathy on finalising the third Three Year Interim Plan that will help the development partners finalise their respective country strategy papers.

Govt-EIB to sign loan pact
KATHMANDU: The government and the European Investment Bank (EIB) will sign a loan agreement worth $70 million for the development of 140 MW Tanahun Hydro Project next week, according to Finance Ministry. The government and EIB have already completed negotiations for a loan of $70 million. The EIB will be the third lender to sign agreement for the development of Tanahun Hydropower after Asian Development Bank (ADB) and Japan International Cooperation Agency (JICA). The ADB and JICA are lending $170 million and $184 million, respectively. The government is planning to get $30 million loan from Abu Dhabi Fund for Development.

NTBs choke intra regional trade growth in South Asia

Non-tariff barriers (NTBs) have choked intra-regional trade as according to a study, elimination of tariffs in South Asia could help double intra-regional trade.
"The study conducted by CUTS International suggests that complete elimination of tariff under SAFTA may increase intra-regional trade by 1.6 times," said former commerce secretary and trade expert Purushottam Ojha, speaking at an interaction on 'Non-tariff barriers in South Asia and its remedy,' organised by South Asia Watch on Trade, Economics and Environment (SAWTEE), here in the valley today.
"Reduction in transport costs and other trade facilitation measures would entail the welfare gain to consumers on account of import value for SAARC member countries like Nepal, India, Pakistan, Bangladesh and Sri Lanka," he said, adding that non-tariff barriers are relatively non-transparent and unpredictable in relation to tariff barriers and measuring its effect on trade is more difficult.
Though South Asian nations have been gradually reducing tariffs under SAFTA, non-tariff barriers have become a major problem in increasing intra-regional trade. "Bureaucratic hurdles at customs points, delay and mal-intention of customs officials, and lack of infrastructure are some of the non-tariff barriers that have increased the cost of trade of Nepal with regional members," said Ojha, adding that Nepalis have failed to export herbs from Jumla and Humla as the state government of Uttar Pradesh, India, has made it compulsory to pay transit fee while transporting export consignment through their territory.
"Likewise, domestic pharmaceutical companies are unable to complete the arduous and time taking process for exporting their products to Bangladesh and India."
Nepal should strengthen national laboratories and human resources skills for accreditation of such laboratories, Ojha suggested. "Trade facilitation measures should be applied along with the concept of creating a regional transit transport network — which has been in talks since long but not materialised — within the region, and is key to regional integration."
Among the regional blocks in the world, the South Asian region is the least integrated, according to SAARC Chambers of Commerce and Industry vice president Pradeep Kumar Shrestha.
Free flow of goods and people will help regional integration, he said, adding that the next generation could live in a developed South Asia, if the current generation works hard and plants the seeds of economic integration and development.
Likewise, addressing the interaction, joint secretary at the ministry of commerce and supplies Jeebraj Koirala said that increasing non-tariff barriers, which are also against multilaterism, has hurt a country like Nepal that has a small basket of exportable products. "Non-tariff barriers are against the World Trade Organisation (WTO) norms," he said, adding that the number of non-tariff barriers have increased four times to 1,500 in 2012 from 1995, according to a global trade regime report.
Executive chairman of SAWTEE Dr Posh Raj Pandey, concluding the interaction, said that the sooner the South Asian countries act in reducing non-tariff barriers the more will intra-regional trade — that can integrate the poorest regional block and lead towards prosperity — increase.

e-Sewa starts e-Sewa Zone

e-Sewa has launched e-Sewa Zone with increased facilities for the consumers.
"After implementing the new system e-Sewa’s users can use the service without having any bank accounts," said F1 Soft International — the promoter of e-Sewa and Fonepay — chief executive Biswas Dhakal.
"People can either use mobile or internet to send or receive money to anyone; pay electricity, water or telephone bills, top-up balance in their mobile, pay internet bills, buy airplane tickets, deposit credit card amount, pay college or school fees or can shop," he added.
Users needed bank account earlier to use these services but now under e-Sewa Zone users no longer require any bank account, said director of Fonepay Asgar Ali, on the occasion.
"For this, company is expanding its agent’s network," he said, adding that the company has setup three super agents in Kathmandu and hundred agents nationwide, in first phase. "Within the next two months the company is planning to increase its super agents from three to ten in Kathmandu and one hundred to 1,000 agents nationwide."
The company is planning a minimum of three agents in one district before expanding its network further.
e-Sewa’s agents will do the customer registration and provide top-up facility to its existing users. Agents will get Rs 20 for every new customer registration but for that customers have to pay some amount.
“The amount will be given to agents by the company," Ali said. "Agents will use their own bank account to top-up the amount of registered e-Sewa users. The amount from agent’s bank account is transferred to the users account in e-Sewa and the users can spend the amount via e-Sewa."
Along with expanding its network e-Sewa is also planning to expand its merchants, who will install credit service machine. The company will pay Rs 500 to agents, who will promote to increase the number of merchants, where e-Sewa users can shop and transfer their amount for payment.
"We are trying to implement a system, were customers can shop and pay without even carrying cash," Dhakal said, adding that in digital payment, e-Sewa’s effective presence and popularity among the users has made it successful.