Wednesday, September 30, 2015

Nepal 3rd most competitive economy in South Asia

Nepal has improved its score in Global Competitiveness Index (GCI), becoming third most competitive economy in South Asia, according to a report.
According to the Global Competitiveness Report 2015-2016 published globally today by World Economic Forum, Nepal ranked 100 – with a score of 3.9 – among 140 economies in the world. With improved score, Nepal is the third most competitive counry for investment in South Asia. The more the score – measured from 1 to 7 – the more competitive is the economy.
With score of 3.8, Nepal was ranked 102 in the Global Competitiveness Report 2014-2015, among 144 economies in the world, the report said, adding that the macroeconomic environment, and health and education – two of the 12 pillars that gauge the competitiveness of the economy – have improved. "Nepal ranks among the factor-driven countries," said country coordinator for the report Prof Dr Ramesh Chandra Chitrakar.
India (55) is the most competitive economy followed by Sri Lanka (68) and Nepal (100) in South Asia. Bhutan ranks 105, Bangladesh is in 107th position and Pakistan ranks 126 in the index.
The set of institutions, policies, and factors determine the level of productivity of a country. The level of productivity, in turn, sets the level of prosperity that can be earned by an economy, Chitrakar added.
The ranking – based on the assessment of 140 economies on parameters such as infrastructure and institutions, macroeconomic environment, health and education, among others – claimed that quality of Nepal's institutions has also improved apart from macro-economic environment, health and education.
However, Nepal needs to improve its technological readiness and efficiency enhancers to graduate to the efficiency-driven economy from current-factor driven economy, he said, adding that the graduation of Nepal to developing country by 2022 will also be determined by the increased competence. "The report encourages the government to fix policy, institutions, and factors to make the economy more competitive or productive that can propel economic growth."
Switzerland, Singapore and the US are the top three ranked economies, unchanged from the previous year, according to the report. Three Asian countries – Singapore, Japan and Hong Kong – are in the top ten ranking of the report. Likewise, in Asia, Malaysia ranked 18th, up two places, Indonesia ranked 37th, down three notches, while Thailand ranked 32nd, down one position.
The report also stated that emerging and developing Asia is the world's fastest-growing region since 2005 but it will retain for medium term. "The region accounts for some 30 per cent of global GDP, with China alone accounting for 16 per cent," it reported, adding that ASEAN bloc is performing well, but no countries in SAARC is above the rank of 50.

Saturday, September 26, 2015

Government concerned over Indian blockade

Nepal has officially showed concern over 'India-imposed blockade' since last four days that has made the lives of Nepalis hard.
Foreign Ministry today – releasing a press note – said that the government is concerned over 'undue delay on the movement and clearance of cargo vehicles resulting in significant decrease in the flow of essential goods to Nepal from India via different border checkpoints for last few days.'
"It decreased flow has been noted particularly since September 23, whereas the security situation in Tarai has remained the same for more than a month and now has been improving gradually,” the ministry said in a statement.
Minister for Health and Population Khaga Raj Adhikari – who is officiating foreign
minister in an absence of foreign minister Mahendra Pandey – during his meeting with ambassador of India to Nepal at the Foreign Ministry in Singha Durbar yesterday, had informed about the fact and requested for necessary cooperation from Indian government for early release of cargo vehicles stuck at border checkpoints on the Indian side, according to the ministry.
A handful of vehicles – with perishable goods – were allowed to enter Nepal through Mechi and Dhangadhi check point. "Due to the blockade, Nepalis have begun to feel shortage of daily supplies on the eve of festive season,” the ministry said, further adding that as many as 29 cargo vehicles carrying perishable goods had managed to enter Nepal yesterday and the day before through Bhairahawa checkpoint.
The ministry also informed that 17 cargo vehicles, including three with petroleum products, through Mechi checkpoint and 25 cargo vehicles, including 20 with petroleum products, through Dhangadhi check point could enter Nepal, today.
"The situation of supply, however, has not improved ever since," it said, adding, "Not a single cargo vehicle could enter Nepal through Biratnagar, Birgunj, Bhairahawa, Krishnanagar and Nepalgunj checkpoints until 5 pm today."
India has – showing its displeasure over promulgation of constitution through Constituent Assembly (CA) on September 20 – blocked cargo vehicles, including petroleum products, despite agreement to supply petroleum products to Nepal Oil Corporation (NOC) by Indian Oil Corporation (IOC), the sole supplier of petroleum products to Nepal. India sent a 7-point recommendation to add in the constitution, which Nepali leaders rejected. The Indian bureaucracy has taken the issue as its prestige issue and entered into ego-war with a tiny landlocked neighbour Nepal.
"Hundreds of vehicles carrying petroleum products and other essential goods are awaiting clearance to enter Nepal on the Indian side of the border,” the statement added, “Tankers have not been filled up with petroleum products."
Large number of vehicles have not been allowed to enter the Indian side and due to which people in Nepali side have begun to feel shortage of daily supplies on the eve of festive season, the statement further read. "Given the friendly relations existing between the two countries, Nepal sincerely hopes that the India will take all necessary steps at the earliest to ensure uninterrupted entry of vehicles carrying essential supplies, including petroleum products, to Nepal as before. It also reiterated that there would not be any problem inside the Nepali territory for the transport vehicles and their personnel since arrangements are already in place for their security.
Though not permitting transit right to a landlocked country like Nepal is a breach of freedom of transit rights of landlocked countries. If India continues to impose embargo on Nepal, Nepal can lodge complaints in the multilateral trade mechanism as it is the right of landlocked country. The transit and free supply of consumables is Nepal’s right and India should facilitate it without any hindrance, according to the multilateral and bilateral agreement.

Friday, September 25, 2015

ADB to double annual climate financing to $6 billion by 2020

Asian Development Bank (ADB) president Takehiko Nakao today announced that ADB will double its annual climate financing to $6 billion by 2020, up from the current $3 billion. ADB's spending on tackling climate change will rise to around 30 per cent of its overall financing by the end of this decade.
ADB's announcement comes against the backdrop of a promise by developed countries to mobilize $100 billion every year from 2020 to counter climate change in developing countries.
Out of the $6 billion, $4 billion will be dedicated to mitigation through scaling up support for renewable energy, energy efficiency, sustainable transport, and building smart cities. The $2 billion will be for adaptation through more resilient infrastructure, climate-smart agriculture, and better preparation for climate-related disasters," ADB said in a press statement.
ADB's doubling of climate financing reflects its strategic priorities as well as the increase in its overall financing capacity by up to 50 per cent due to more efficient use of its balance sheet by combining the equities of its Ordinary Capital Resources and Asian Development Fund (concessional finance window) in 2017.
"World leaders gathering in New York this weekend will commit to achieving 17 historic Sustainable Development Goals (SDGs) by 2030 and ADB stands ready to be an important part of global efforts to finance these goals," Nakao said, adding that nowhere is tackling climate change more critical than in Asia and the Pacific, where rising sea levels, melting glaciers, and weather extremes like floods and droughts are damaging livelihoods and taking far too many lives.
SDG 13 specifically calls for urgent action to combat climate change and its impacts. Also, mitigating and adapting to a changing climate are key to most of the other goals including ending poverty, achieving food and water security, providing access to energy, and building sustainable cities.
Later this year, at the Conference of the Parties to the United Nations Framework Convention on Climate Change (COP21) in Paris, the international community is expected to finalize a new global climate agreement and the way to finance it.
In addition to scaling up its own climate financing, ADB will continue to explore new and innovative co-financing opportunities with public and private partners. For example, ADB will seek to mobilise concessional financing from the Green Climate Fund, which is becoming operational, for ADB's adaptation projects in poorer countries. ADB will tap institutional investment through private equity funds like the ADB-sponsored Asia Climate Partners. ADB will also issue more green bonds as an important source of funding for its climate operations.
Nakao stressed the importance of technology in tackling climate change, and said that ADB will adjust its procurement systems in order to facilitate the integration of cleaner and more advanced technology into its projects. ADB will also strengthen partnerships with centers of excellence across the world to provide its member countries with cutting-edge knowledge and expertise on climate change.

Thursday, September 24, 2015

Government working on to reopen Tatopani, Rasuwagadhi customs

The government has started preparation to reopen the customs with the northern neighbour China due to problem on the southern border.
The two customs offices along Nepal-China border – Tatopani and Rasuwagadi – have not been operational since the April 25 earthquake. But the unrest in Tarai for the past one-and-a-half months and fresh 'blockade' enforced by India has forced the government to expedite the process to reopen the two customs offices on China border. "The festive season next month has also forced the government," according to Ministry of Supplies.
The Chinese government is positive about reopening both the customs offices by October 15," secretary at the Ministry of Commerce and Supplies Naindra Prasad Upadhyay told a parliamentary committee on commerce today morning. "We had discussion with the Chinese officials yesterday too," he said, adding that the northern neighbour is ready to help Nepalis get enough supplies for festivities. The festivals – Dashain and Tihar – fall in the last week of October and the first half of November this year.
The unrest created by the Tarai-Madhes parties and India's 'blockade' is sure to make the lives of Nepalis hard – also due to hike in rices of essential supplies – during the festivities.
The agitating Tarai-Madhesh parties today disrupted supplies from the southern plains to pile pressure on the government. However, they forgot that the blockade will only widen their distance with Kathmandu and other region, as their protest will create shortage before the festivals.
Likewise, India has also halted more than 1,000 oil tankers and trucks with essential supplies from entering Nepal to express its dissatisfaction with political parties who didn't take Indian recommendations for the constitution.
Though India's Ministry of External Affairs has said that the Indian government has not prescribed any recommendations, the Indian media published New Delhi's 7-point recommendations to Nepal government.
According to customs officials, around 1,500 oil tankers from India used to enter Nepal every day from the Jogbani Customs Office. But there has been no movement for the past three days, creating shortage in Nepal. Long queues have started forming at petrol pumps as people rush to fill tanks of their bikes and cars fearing prolonged shortage.
Meanwhile, Nepal Oil Corporation (NOC) has also requested people to use public vehicles to lessen demand for petroleum products.
Due to the disturbance in southern plains – where there are major customs points – since more than last one and half months, revenue mobilisation has plunged by 35 per cent in Bhadra – the second month of the current fiscal year 2015-16, according to the Department of Customs.

Friday, September 18, 2015

Ghale announces candidacy for NRNA president for second term

The incumbent president of Non-Resident Nepalese Association (NRNA) Shesh Ghale has announced his candidacy for the post of president for second term.
Addressing a meeting in London yesterday late evening, Ghale said that he is contesting for the presidential post in the 7th NRNA Global Conference to be held in Kathmandu from October 14 to 17 due to pressure from his friends. "There are many unfinished jobs," he said, adding that his continuation will help complete many unfinished jobs started by him.
On the occasion, Ghale, one of the successful businessmen and Australia-based billionaire, said that Nepal is passing through hard times after the devastating earthquakes and subsequent aftershocks. "Nepal needs to carry out reconstruction works effectively," he said, adding that the pending issue of migrant Nepali workers, knowledge and skill transfer, and construction of NRNA building are some of the unfinished jobs that need to be completed.
Thanking the government for providing citizenship to NRNs through new constitution, he said that the ball is now on the court of NRNs. "Now, it is the turn of NRNs to prove that we care for our motherland," he added.
Since its establishment, NRNA had been lobbying for dual citizenship. Though NRNs claim to have invested heavily in Nepal, there are only a few who have invested in their motherland.
Ghale, along with founding president Upendra Mahato, former president Jiba Lamichhane, incumbent vice president Bhawan Bhatta, and a couple of NRNs have invested in Nepal. Ghale is building a five-star hotel in Kathmandu. Prime Minister Sushil Koirala had laid foundation stone of the 17-storey five-star Sheraton Kathmandu Hotel in October last year.

The hotel is being built with investment of Rs 8 billion. The hotel, which is expected to come into operation in February 2018, is being built by MIT Group Holdings Nepal – a member of the Ghale Group of Companies – which has diverse businesses in Australia and other countries.
Ghale has also been appointed Nepal's special envoy for reconstruction in the aftermath of the devastating earthquakes that floored down thousands of houses, infrastructures and heritage sites.

Thursday, September 17, 2015

A Nepali spends Rs 176 a day: Household Survey

A Nepali spends an average of Rs 176 but earns Rs 205 per day, according to a survey.
The fifth Household Survey conducted by the central bank revealed that daily savings of Nepalis stand at only Rs 29.

The outcomes of survey unveiled in Kathmandu today shows a Nepali family spends an average of Rs 25,928 every month. Average monthly earning of Nepali family is Rs 30,121.
A Nepali family has an average of 4.9 members, according to the census.
The spending pattern of Nepalis also revealed that they spend more on consumption compared to non-consumption. "A family spends Rs 23,883 per month on consumption," the survey reported, adding that their spending on non-consumption comes to an average of Rs 2,045. "The spending pattern of the rural and urban populace is not very much different in non-consumption."
The rural populace spends Rs 2,024 per month on non-consumption, whereas the urban populace spends Rs 2,063, according to the survey. However, rural families spend Rs 20,904 per month on consumption, compared to Rs 26,411 by urban families. The total spending of an urban family comes to Rs 28,474 per month, whereas a rural family spends a total of only Rs 22,928, making a difference of Rs 5,546 per family spending per month between urban and rural family, the survey revealed.
The survey, which is conducted every 10 years – by the central bank – to study income and expenditure pattern, has used Acquisition Approach. It has also included domestic production, barter, and gifts and service under consumption of goods and services.
Both the urban and rural family spends the most on food and non-alcoholic drinks, whereas they spend the least on alcohol, cigarette, and tobacco. The spending on house rent, water, gas, electricity and other fuels comes second both for urban and rural families.
Meanwhile, the central bank has also changed the weightage of food and non-food items for the calculation of Consumer Price Index (CPI) that is used to reflect inflation. The new weightage calculation will come into effect from the current fiscal year, Nepal Rastra Bank (NRB) said.

Wednesday, September 16, 2015

End of transition could lead to prosperity

If things go as planned, Nepal will get a new constitution on September 20 since it has been endorsed by overwhelming majority of two-thirds in the Constituent Assembly (CA) today.
The much-awaited supreme law of the country is expected to pave the way for a prosperous Nepal, according to business leaders, who, however, are still cautious about the Tarai unrest.
After continuous efforts of eight years, the CA finally approved the Constitution of Nepal 2015 by two-third majority today late evening. The promulgation of the new constitution on September 20 at 5 in the evening is expected to end the prolonged political transition that has bled the economy blue.
"It is indeed a historical moment," Pashupati Murarka, president of Federation of Nepalese Chambers of Commerce (FNCCI) said. Stating that he was hopeful that the promulgation of new constitution will be the stepping stone for a prosperous Nepal, Muraraka said that the country will now move forward with economic agenda. "Political parties will now have no excuse to focus on economic agenda," he added.
Private sector, however, knows that constitution is not a magic wand. "But it can be a base for a stable and prosperous Nepal," Murarka said.
Business leaders also said constitution can be amended to address concerns of Madhes-based parties and other disgruntled forces. "The amendment process should be made easier," senior vice president of Confederation of Nepalese Industries (CNI) Hari Bhakta Sharma said. He further said the new constitution should be the stepping stone toward a stable and prosperous Nepal. "The political parties should make clear that constitution is not an end, but a means to achieve economic prosperity," he said, adding that everyone should get a chance to earn a living and right to economic activities.
The constitution has ensured the right to economic freedom that can ensure people's access to economic opportunity. "Most of the ills of the society is also due to lack of opportunity," Sharma opined.
Everyday around 1,500 youths leave the country searching for greener pastures abroad due to lack of employment opportunity at home. The youths are the precious human capital – one of the assets of the country for development, according to pundits of development theory that states human capital, natural resources and capital as prerequisites for development of a country – have been wasting their productivity in foreign land.
More than 50 per cent of the population is youth – from age 15 to 35 – according to the recent census. The country also has abundant natural resources.
With the promulgation of new constitution, foreign investors will be eager to put their money into different projects in Nepal. It would, in turn, create more jobs within the country. More investment mean naturally more employment opportunity. The end of political transition will therefore create employment opportunities at home making the best use of youths.
More investment in mega projects and infrastructures will not only create employment opportunity but also push economic growth upwards. With increased investment, historical growth rate of 3.5 percent will also get a boost, according to business leaders.
Likewise, Nepal, which has set a target of graduating to a league of developing countries by 2022 from the current status of Least Developed Country (LDC), needs growth rate of more than 6 per cent growth which will no more be a distant dream.
The constitution is certainly not a panacea for all ills, but it can solve most of our problems, a hopeful Murarka said.

Saturday, September 12, 2015

Indefinite strike bleeding economy blue

Private sector representatives asked for security of their properties and end to indefinite strikes that has crippled the country since last one month bleeding the economy blue.
Federation of Nepalese Chambers of Commerce and Industry (FNCCI) said that the indefinite strike in Tarai is posing more risk to economy than the damage caused by devastating earthequake of April 25.
Briefing Prime Minister Sushil Koirala at his official residence Baluwater, today the delegation led by FNCCI president Pashupati Muraraka, said that the country’s business sector is sustaining daily losses of around Rs 20 million due to Tarat unrest.
Likewise, traders are forced to incur loss as cargo trucks have been left stranded leaving businesses with no option than to pay detention and demurrage charge, apart from other fines. According to study, a day of bandh causes the country loss of Rs 2.5 billion. The country has already lost around Rs 90 billion in last one month, which is almost equal to a year's export receipt.
Muraraka, on the occasion, also briefed the premier of private sector's request to the agitating parties. The economy is bledding blue, and the agitators are not giving ear to private sector, he said, asking Koirala to be serious. He also requested to create a business friendly environment and deliver confidence to the entrepreneurs for operating industrial establishments.
There has been increase in number of attacks against private properties and industrial establishments in the Tarai region, including incidences of protestors hurling petrol bombs and vandalising factory installations. They also asked the government to provide needful security to traders and their businesses during the time of bandhs and strikes.
Finance minister Dr Ram Sharan Mahat, minister for Physical Infrastructure and Transport Bimalendra Nidhi, and minister for Forest and Soil Conservation Mahesh Acharya were also present at the meeting.
Prime Minister Koiral, on the occasion, asked the delegation to submit a written suggestion on what they seek from the government. "The government is committed to help businesses and industries withsand such adverse environment," Koirala said, adding that the government is working tirelessly to address political demands raised by various groups and parties regarding the constitution drafting process.
He also informed the privatesector that the major parties have decided to slow down the constitution writing process in order to take disgruntled parties on board.
The government has however failed to control criminal activites in Tarai in the name of politics. The increasing politicisation of criminal activities in the Tarai in the last one month is not going to help solve the issues of Tarai and tarai Madhesh people, rather the region will be famous for gruesome killings and murders of security personals. Some politicisna might benefit from increasing impunity but most of the Tarai people will get nothing as they will continue to be deprived of opportunities for a decent life.

Thursday, September 3, 2015

ADB projects 5.5 per cent economic growth

Asian Development Bank (ADB) today projected Nepal's economy to grow by 5.5 per cent – some 0.5 percentage points lower than the government projection – in the current fiscal year.
Releasing Macroeconomic Update in Kathmandu today, the Manila-based multilateral donor, however, said that the growth depends on political situation, rainfall and reconstruction works.
"Under the first scenario, assuming a marginally better monsoon rainfall, modest pickup in actual implementation of reconstruction projects through the National Reconstruction Authority (NRA), gradual normalisation of political scenario, continuation of previous trend in spending capital budget, modest recovery of tourism related activities and slightly better services sector growth, GDP growth is forecast at 4.5 per cent," the update said.
"Under the second scenario, a slightly better rainfall – average over the last five years – and adequate paddy plantation in the main paddy plantation belts, robust pick up in manufacturing and construction activities propelled by accelerated spending by National Reconstruction Authority and improved capital budget execution by line ministries, normalisation of political scenario, and robust services sector performance – including robust remittance inflows and quick recovery of tourism related activities – GDP growth is forecast at 5.5 per cent," it added.
But the adverse political situation and the slow capital budget execution are the two major downside risks that could drastically lower growth forecast, according to ADB Resident Representative Kenichi Yokohama.
"Though ADB estimate is lower than the government's target of 6 per cent in the budget for the current fiscal year, the government can achieve its target, if agricultural output grows by 2.5 per cent – based on subnormal monsoon in the first half of the fiscal year, whereas non-agricultural output has to grow by at least 7.7 per cent, which is 4.1 percentage points higher than in the last fiscal year," the report said, adding that services output and industrial output should grow by over 6 per cent and at least 13.6 per cent, respectively, to meet the growth target.
"If the government can expedite the capital expenditure and reconstruction works, the economic growth could get a boost," Yokohama added.
Likewise, the multilateral donor agency has projected inflation to grow by 9.5 per cent in worst case scenario and 8.5 per cent in somewhat better supply.
"Under the first scenario, although non-food prices are expected to remain low as a result of continued lower fuel prices and stable price pressures in India, food inflation is projected to remain in double digit, resulting in overall inflation of 8.5 per cent," it said, adding that under the second scenario, moderate price pressures in India, and higher intensity of supply disruptions caused by political strikes and blocking of major trading and distribution networks would push up food prices even higher than the one considered under the first scenario, especially that of cereals, legumes, vegetables and fruits.
"Similarly, non-food prices is likely to escalate, particularly that of clothing and footwear, and furnishing and household equipment," he said, adding that these factors will likely push up inflation to about 9.5 per cent in the current fiscal year 2015-16.