Nepal slips in Doing Business ranking, still second easiest destination for business in South Asia

The business environment in Nepal has been deteriorating continuously in recent years, according to a global report.
Nepal has been ranked 107th in the World Bank’s Doing Business 2017 report compared to 99th last year. "The main reasons behind the drop are a decline in Nepal’s business regulatory environment and data revisions,” the report states. "Nonetheless, Nepal has second most favourable business environment in South Asia after Bhutan (73)."
On the distance to frontier metric, Nepal’s score went down from 59.36 in Doing Business 2016 to 58.88 in Doing Business 2017, using a comparable methodology. “It indicates a widening gap between Nepal’s regulatory environment and global best practices,” the report noted.
Under the method, rankings are determined by sorting the aggregate distance to frontier scores in various topics related to conducive business environment as considered by the World Bank, each comprising several indicators, giving equal weightage to each topic.
This indicates widening gap between Nepal’s regulatory environment and global best practices.
"More specifically, Doing Business finds Nepal made dealing with construction permits more difficult by increasing the cost of obtaining a building permit in 2015-16," it added.
However, on the positive side, Nepal also made exporting and importing easier by implementing ASYCUDA World, an electronic data interchange system.
Nepal has recently made progress in institutional reforms on several fronts that will take some time to be reflected in international rankings, the global report noted.
"For example, the government has commissioned a Cloud Infrastructure, introduced Public Key Infrastructure for Digital Signature and is close to launching an online registration and approval system for Foreign Direct Investment,” says the World Bank’s country manager for Nepal Takuya Kamata. "Wider public uptake of these systems can help ensure that these positive developments are captured in future rankings,” he added.
Nepal’s drop in ranking was also partially offset by changes in methodology. Apart from the regular 11 indicators that are used to rank economies, such as starting a business, dealing with construction permits, supply of electricity, property registration, easy availability of credit, protection for minority investors, paying taxes, trade across the borders, enforcing contracts, resolving insolvency and labour market regulations, the report has for the first time included a gender dimension in three sets of indicators: ‘Starting a Business’, ‘Registering Property’ and ‘Enforcing Contracts’. The Paying Taxes indicator set has been expanded to cover post-filing processes, such as tax audits and VAT refund.
High ease of doing business ranking means the regulatory environment is more conducive for setting up and operating a local firm.
South Asian countries have improved performance in the Doing Business areas of ‘Protecting Minority Investors’ – with an average rank of 80 – and ‘Starting a Business’ with an average of 100. Except for the Maldives, no economy in the South Asia region has a minimum capital requirement for starting a business, the report stated.

IFC wants to increase portfolio in Nepal

The International Finance Corporation (IFC) wants to increase its portfolio in Nepal.
During a meeting with finance secretary Shanta Raj Subedi in his office at Singha Durbar today, IFC country director Wendy Werner said that the IFC wants to increase its portfolio in Nepal to bring in qualitative change in Nepali lifestyle and socio-economic development.
He also urged for increased cooperation between the public and the private sector by developing private sector for infrastructure development and capacity enhancement. Likewise, financial stability, financial strengthening and financial access and inclusion are also some of the key areas that the IFC is helping Nepal, Werner said, adding that the IFC has always been in Nepal's favor for prosperity and development of Nepal.
He also discussed about the local currency bond that the Nepal government had allowed the IFC to issue in 2014.
In April 2014, the cabinet had endorsed the IFC's proposal of issuing local currency bonds worth Rs 50 billion – some $500 million – for a five-year period. The IFC had applied for the permit after the government issued a guideline in October 2013, authorising international financial institutions to issue such bonds.
As per the government's guideline, any international financial institution with AAA rating can issue Nepali rupee bonds. The guideline has included hydropower, agriculture, road, tourism and infrastructure sectors for local currency bond issuance. The IFC has been allowed to invest the money raised through bond in hydropower, tourism and agro business.
The IFC, which has already issued such bonds in 55 countries, has to complete the $500 million bond issuance by 2018. But the prolonged political transition has delayed issuance of local currency bond.
Thanking IFC for its continued support, finance secretary Subedi discussed many issues including local currency bond, power development bond, transmission lines and increased investment in energy, tourism, trade and financial sector reform with Werner.
Stating that only the strong, efficient and effective private sector can attract more domestic and foreign investment, Subedi asked the IFC to help strengthen the private sector. He also asked the IFC to invest on mega projects that can help generate employment, reduce poverty and propel economic growth.
"Since energy is the basis for economic growth, the government wants IFC to increase its investment in the energy sector," Subedi said, adding that the investment from IFC can help Nepal's strategy to achieve inclusive, high and sustainable economic development.

DfID extends 1.5m pounds to WFP for post-quake works

The Department for International Development (DfID) – a United Kingdom’s government agency that looks into overseas aid – has extended 1.5 million pounds to the United Nations World Food Programme (WFP) to support post-earthquake reconstruction works in Nepal.
The fund made available by the DfID will be used to rehabilitate six trails of 129-km and complete engineer assessments on a further six trails of 158-km in the areas that were most severely affected by the devastating earthquakes of April and May, 2015, according to a press statement issued today by the WFP.
The new trails will be built to withstand seasonal landslides as well as future earthquakes. The project will directly or indirectly benefit approximately 55,175 people living in the mountainous areas of Dhading, Gorkha, and Rasuwa.
“Nearly 18 months ago, the devastating earthquakes destroyed trails and roads in large swathes of rural Nepal, and the effects are still being felt today,” the statement quotes Pippa Bradford, WFP Nepal representative and country director, as saying. “WFP knows that access to trails helps communities reach markets and social services, and is inextricably linked to food security and economic development.”
Likewise, head of DfID Nepal Gail Marzetti, on the occasion said that investing in rural access, including with foot trails and bridges, is fundamental for the reconstruction effort in some of the most difficult to reach earthquake affected area.
WFP – the world’s largest humanitarian agency that fights hunger worldwide delivers food in emergencies and works with communities to build resilience – has been active in trail reconstruction across Nepal, most recently in its response to the 2015 earthquakes, when around 880-km of trails were either reopened or rehabilitated providing access for 130,000 people, the release added.

ब्यवसायिक वातावरण सुधार

नेपालले ब्यवसायिक वातावरण सुधारेर आफनो जस्तै समान अर्थतन्त्र भएका मुलुकको दाँजोमा प्रतिस्पर्धि भएमात्र वैदेसिक लगानी भित्रिने नेपालका लागी अमेरिकी राजदुत अलेना बी टेप्लिट्सको भनाइ छ।
आफनै निवासमा विहिबार साँझ पत्रकारहरुसंग कुरा गर्दै टेप्लिट्सले जोखिम कम गर्ने, कानुनी शासनको प्रत्याभुति गर्ने, सबैलाई बराबरीको मौका दिने, बौद्धिक सम्पत्तिको संरक्षण गर्ने तथा वैदेसिक लगानीकर्ताले आफनो नाफा सहज तथा समयमा नै लैजान पाउने वातावरणको सिर्जना भएमात्र बैदेसिक लगानीकर्ता नेपालप्रति आकर्षित हुने बताइन्। सरकारले वैदेसिक लगानीकर्तालाई नेपालमा नै लगानी गराउन उत्प्रेरित गर्ने वातावरण बनाउन वैदेसिक लगानीकर्ताले आफनो नाफा बेरेाकटोक लैजान पाउनु पर्ने बताइन्।
वैदेसिक लगानी तथा प्रबिधि हस्तान्तरण ऐनलाई विस्तापित गर्न बन्दै गरेको प्रस्तावित विधयेकलाई लक्षित गर्दै उनले वैदेसिक लगानीकर्तालाई आफनो नाफा लैजान अंकुश लगाउने प्रस्तावले पुँजिको स्वतन्त्रता हनन हुने भन्दै उनले ब्यवसायिले नयाँ सोचमा स्वतन्त्रतापुर्वक लगानी गर्ने वातावरण तथा पुजिको आवागमनलाई कुण्ठित नगर्ने वातावरण खोज्ने भएकोले आर्थिक नीतिहरुले ब्यवसायको स्वतन्त्रता हनन गर्ने तथा लगानीलाई संकुचित गर्ने वातावरण निर्माण गर्न नहुने उनको विचार छ।
यस्तै, प्रस्तावित विधयेकमा एक–द्धार प्रणलीको उल्लेख भएकोमा उनले स्वागत गर्दै यसले व्यवसायिको समय तथा कागजी कामको प्रकृया नछोटिने जनाइन्। यसको साटो अमेरिकी राजदुतले भारतमा झैं स्वचालित–द्धारको अवधारण राम्रो हुने पनि उनको धारणा रहेको छ। स्वचालित–द्धारले अनावस्यक कागजी प्रकृयाहरु छोट्टयाएर पारदर्सि प्रकृयाले लगानीलाई सहजीकरण गर्दछ, उनले भनिन्। स्वचालित–द्धारको अवधारणा कार्यान्वयमा ल्याएपछि भारतले सन् २०१५मा उल्लेख्य वैदेसिक लगान िभित्रयउएको उनले उदाहरण पनि दिइन्।
नेपालमा  संभावनाका अत्यन्त धेरै क्षेत्रहरु रहेतापनि सरकारकै आर्थिक नीतिमा वैदेसिक लगानी आउने वा नआउने उनको भनाइ थियो। पछिल्ला महिनाहरुमा आर्थिक विधएकहरु धमाधम सिव्कृत हुदै लगानीको वातावरण सुधार्नमा सरकारले प्रयास गरिरहेपनि आर्थिक ऐनहरुले आर्थिक गतिविधि बढाउन मद्दत गर्ने खालको भएमात्र नेपालमा लगान िबढ्ने र रोजगारीबृद्धि हुने भन्दै उनले नीजिक्षेत्र मैत्रि तथा लगानी मैत्री ऐन तथा कानुन निर्माण गर्न पनि  आग्रह गरिन्।
चालु आर्थिक वर्षको प्रथम महिनामा ५१ अर्ब ९० करोडमात्र रेमिटेन्स नेपाल भित्रिएको थियो जुन अघिल्लो साउनको ५३ अर्ब ३० करोडभन्दाकम हो। त्यसैले रेमिटेन्समा आधारित नेपाली अर्थतन्त्र पछिल्लो समय मध्यपर्ु्वमा देखिएको आर्थिक मन्दीको शिकार भए नेपालीहरुको लागी नेपालमा नै रोजगारी सिर्जना गर्न मद्धत हुने कानुन ल्याएमात्र नेपालको अर्थतन्त्र चलायमान हुने उनको भनाइ छ।

Nepal, China sign MoU on consumers’ rights, trade and commerce

Nepal and China today signed a Memorandum of Understanding (MoU) on the bilateral exchange of information on the areas of consumers’ rights protection, trade and commerce relations.
The MoU was signed by supplies minister Deepak Bohara and Minister of State Administration for Industry and Commerce of China Zhang Mao on behalf of their respective governments.
“The understanding is intended to initiating bilateral exchange of information on the areas of consumers’ rights protection, further stepping up of the implementation of existing rules and regulations in the areas, help create competitive market environment and more particularly, accentuate the trade relations between the two countries,” the ministry said in a press release.
The important areas of cooperation include, among others, the mutual exchange of information on newly effected rules and regulations, routinely hold consultations by officials on the matters of common concerns, information sharing on new practices of trade and commerce and periodic exchange visits by government officials, trade experts and consumer’s rights activists.
“The MoU would be a milestone in strengthening trade relations between the countries," said Bohara after signing the MoU. He further added that the Government of Nepal is consistently making efforts in protecting consumers ‘interests'.
Minister of the People’s Republic of China Zhang Mao, on the occasion, said that the MoU would reinforce traditional trade, and commerce relations between Nepal and China, and help protect interests of consumers of both the countries.
During the programme secretary of the Ministry of Supplies Prem Kumar Rai also opined that the MoU would be instrumental in underpinning trade and commerce relationship between the two friendly countries.

Nepal asks US to promote bilateral trade

Nepal has requested the US to increase investment in promoting trade between the two countries.
During a meeting held at the Commerce Ministry today, commerce minister Romi Gauchan Thakali asked US Ambassador to Nepal Alaina B Teplitz to increase investment in promoting bilateral trade as strengthening trade and business relations would be beneficial to both countries and their people.
He also called on the US side to extend investment, along with transfer of technology, in Nepal so as to increase the production and productivity of those products which have high export potential in the US market.
With the promulgation of the constitution by the Constituent Assembly last year, Nepal has embarked on the path of economic revolution, he said, adding that Nepal requires support from its development partners, including the USA, to expedite its economic growth and prosperity.
As new constitution adopts a liberal economic policy as the state’s main directive principle for economic advancement, Thakali called on US investors and entrepreneurs to capitalise Nepal’s conducive economic environment as ensured by the constitution.
Recalling some of the recently enacted acts and regulations, such as the Labour Act, the Industrial Enterprises Act, the Special Economic Zone Act, the minister said the present government was very much determined to create an investment-friendly environment and protect the interest of investors under all circumstances.
He urged the US to enhance its investment in the tourism, hydropower and agro-processing sectors which had ample potential for producers and exporters wishing to invest in those sectors. Thakali also urged the US ambassador to enhance US support to the government in implementing some of the key projects as envisioned in the recently-launched Nepal Trade Integration Strategy (NTIS) 2016 and the Nepal Trade Policy 2015.
He also expressed hope that the US would continue its support to Nepal for its development and help Nepal achieve its goal of graduating from the LDCs status by 2022.
Recalling understandings made at the second TIFA Council meeting held in Washington, DC, in June, he extended an invitation to the US side to participate in the third TIFA Council meeting scheduled to take place in Kathmandu next year.
Teplitz, on the occasion, expressed hope that bilateral trade and investment relations between the two nations would be further enhanced during her tenure. Mentioning that the US-Nepal friendship was based on trust, goodwill and mutual cooperation, Teplitz said the bond of mutual ties between the two countries had tremendously grown over the years.
Welcoming Thakali’s statement at the BIMSTEC Business Summit held in New Delhi on October 14, Teplitz also noted that the BIMSTEC process would be helpful for Nepal to enhance its connectivity and trade to other members of the region.
“The US stands ready to support Nepal in its development efforts,” she said. Calling TIFA a milestone document, Teplitz said that she hoped it would bring tremendous opportunities for businessmen and entrepreneurs from both sides in the days to come.
The ambassador expressed some of her government’s concerns, including the establishing of a one-stop service – single window – for investors, clarity on area of investment to be made by foreign investors, and the possible amount of return that can be taken back by the investors, among others, to be well-reflected in the proposed legislation of Foreign Investment Act being prepared by Nepal.
She also assured Thakali that she would convey his message to American investors and entrepreneurs about increasing their investment in tourism, hydropower and agro-processing industries. She said her country’s interest in extending support in value chain in the agriculture and intellectual property, among others.  
Commerce secretary Naindra Prasad Upadhaya and other senior officials from the ministry, and the Economic and Commercial Officer at the US Embassy in Kathmandu Kevin C Price were also present at the meeting.

Sebon directs Reliable to launch rights issue before getting acquired

Securities Board of Nepal (Sebon) – the capital market regulator – has asked Reliable Development Bank to launch rights issue before it is acquired by the Global IME Bank.
Reliable's 10th Annual General Meeting (AGM) held on July 1 had approved 1:1 rights shares and 10 per cent bonus share from the net profit earned in the last fiscal year.
Instead of launching rights issue, the development bank, however, had signed a Memorandum of Understanding (MoU) for its acquisition by the Global IME Bank.
"The beginning of acquisition process without distributing rights shares would hurt investors," Sebon said in a statement issued today.
The regulator also directed the national-level development bank registered in Kathmandu to launch rights issue before the acquisition as failure to do so would be against the interest of investors who bought the development bank's shares in anticipation of rights and bonus shares.
"Since the decision was price-sensitive and approved by the AGM, Reliable Development Bank cannot avoid its AGM's decision," the Sebon said in the statement.
Earlier on October 1, Global IME Bank chairman Chandra Dhakal and Reliable chairman Radhe Shyam Agrawal had signed the MoU on behalf of their respective organisations to complete the acquisition process within three months.
The Board is also planning to enforce a regulation that will bar listed companies from taking multiple corporate actions at once to rein in activities that could influence the capital market and hurt the interest of investors.
"If implemented, this regulation will prevent listed companies from reversing some of the crucial decisions made in the past," according to the capital market regulator that is mulling over introducing such a provision after a number of listed companies jumped in to roll out future plans without accomplishing the ongoing task.
According to the Sebon spokesperson Niraj Giri, the move is aimed at safeguarding the investors’ interest. "Sebon is also planning to enforce a code of conduct to discipline companies engaged in insider trading," he added.

Sebon directs Reliable to launch rights issue before getting acquired

Securities Board of Nepal (Sebon) – the capital market regulator – has asked Reliable Development Bank to launch rights issue before it is acquired by the Global IME Bank.
Reliable's 10th Annual General Meeting (AGM) held on July 1 had approved 1:1 rights shares and 10 per cent bonus share from the net profit earned in the last fiscal year.
Instead of launching rights issue, the development bank, however, had signed a Memorandum of Understanding (MoU) for its acquisition by the Global IME Bank.
"The beginning of acquisition process without distributing rights shares would hurt investors," Sebon said in a statement issued today.
The regulator also directed the national-level development bank registered in Kathmandu to launch rights issue before the acquisition as failure to do so would be against the interest of investors who bought the development bank's shares in anticipation of rights and bonus shares.
"Since the decision was price-sensitive and approved by the AGM, Reliable Development Bank cannot avoid its AGM's decision," the Sebon said in the statement.
Earlier on October 1, Global IME Bank chairman Chandra Dhakal and Reliable chairman Radhe Shyam Agrawal had signed the MoU on behalf of their respective organisations to complete the acquisition process within three months.
The Board is also planning to enforce a regulation that will bar listed companies from taking multiple corporate actions at once to rein in activities that could influence the capital market and hurt the interest of investors.
"If implemented, this regulation will prevent listed companies from reversing some of the crucial decisions made in the past," according to the capital market regulator that is mulling over introducing such a provision after a number of listed companies jumped in to roll out future plans without accomplishing the ongoing task.
According to the Sebon spokesperson Niraj Giri, the move is aimed at safeguarding the investors’ interest. "Sebon is also planning to enforce a code of conduct to discipline companies engaged in insider trading," he added.

FNCCI holding special general meeting on October 20

The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) is holding its special general meeting on Thursday to amend its statute.
With the term of the incumbent executive committee completing in mid-April, the FNCCI is amending its statute to automatically promote the senior vice president to the post of president.
As per the existing provision in the FNCCI Statute, FNCCI election, which is held every three years, elects the president, three vice-presidents – from Commodity, Districts and Associated sectors – and the executive committee. The senior vice president is elected by the executive committee from amongst the three vice presidents. But according to the amendment proposal, senior vice president will be directly elected like the three vice presidents, and s/he will be anonymous for president for the next term.
However, districts and municipal chambers have expressed reservations on the proposals.
They have been lobbying for the directly elected president as per the existing statute.
If the amendment proposal is approved by the special general meeting, incumbent senior vice president Bhawani Rana will become the 18th president of the FNCCI. She will also be the first women president to lead the umbrella organisation of the Nepali private sector.
The election in April will concentrate on the senior vice president, if the amendment is approved, according to FNCCI sources.
Incumbent president Pashupati Murarka unanimously became the 17th president of FNCCI on July 1, 2015 – for the remaining tenure of Pradeep Jung Pandey, who was elected president but had to step down due to legal cause – after other two candidates Bhaskar Raj Rajkarnikar and Bhawani Rana pulled out from the race. 

Himalaya Airlines to start regular flights to Yangon

Himalaya Airlines, a joint venture between Nepal and China, is planning to start direct flights from Kathmandu to Burma soon. The airline is planning to start the Kathmandu-Yangon flight by December.
Currently, around half million Nepali-speaking people live in Burma.
If domestic preparations and permit process goes as planned, the company will start operating flights from December, , according to an official from the airline. "This will help promote tourism industry in Nepal."
According to him, Yu Lu Bin, Myanmar ambassador to Nepal and vice-president of Himalaya Airlines Bijaya Shrestha recently discussed about the flight. "The company is ready for Kathmandu-Yangon flight,” the official said, adding that new aircraft would be added for direct flights.
Two weeks earlier, Ambassador Yu had said he would urge minister for Culture, Tourism and Civil Aviation Jeevan Bahadur Shahi to take the initiation for operating direct flights between the two countries.
Nepalis going to Burma for meditation and to be monk and Burmese coming to visit Lumbini are expected to be immensely benefited after direct flights come into operation.
Earlier, the airline had successfully launched its maiden flight to Colombo, Sri Lanka on October 1 carrying passengers directly to the destination.
The direct flight to Colombo that resumed after almost three decades flies twice a week, according to Shrestha. "We consider this to be another milestone for us as this will make Himalaya Airlines the only airline with scheduled flights to Colombo from Kathmandu,” he said, adding that the company anticipates that majority of the passengers will be businessmen and tourists from the two countries.
Himalaya’s third destination will be India’s capital New Delhi, according to the company.
The airline is preparing to fly to Delhi from October 30.
Himalaya Airlines, a full-service carrier, was established in August 2014. It had started scheduled flights from May 31, flying directly to Doha, Qatar. Apart from the opening of the Kathmandu/Colombo/Kathmandu route, the airline plans to operate regular flights to other destinations: Delhi, Yangon, Dammam, Beijing, Lhasa, Chengdu, Bangkok, Hong Kong and Dubai.
The airline currently uses 158 seat capacity aircraft A320-214 series for its flight.
HIF Aviation Investment and Yeti World Investment Pvt Ltd have invested on Himalaya Airlines that has got permission to fly to 14 countries. Nepali company has 51.01 percent and Tibet Airlines has 48.99 percent investment in Himalaya Airlines.

Chilime-Trisuli Transmission Line construction starts

The construction of 220 kV Chilime-Trishuli Transmission Line project has been launched officially today.
"The construction of the Chilime-Transmission Line is an important pilot contribution to the national grid," ambassador of the EU to Nepal Rensje Teerink said during the formal launch programme of construction project – of 65-million euro project (equivalent to Rs 7.67 billion) spans 27 km – in Kathmandu today.
"It will bring light and energy to homes, households and school children across the country," she added.
"Accelerated development in Nepal needs to keep clean energy as a top priority," she said, adding, "With a real sense of urgency, collective efforts should transform enormous potential into tangible reality."
"The South Asian region as a whole would benefit from the supply of clean energy, if regional cooperation projects could be put in place to harness this potential," she added.
The project is a joint undertaking of the European Union (EU), German Development Cooperation/KfW, European Investment Bank (EIB) and the government.
Energy Minister Janardan Sharma, on the occasion, said that the construction of the state of the art 220 kV double circuit transmission line is an excellent example of a strong partnership and collective efforts of Nepal government, the German Development Cooperation/KfW, the EU and the European Investment Bank (EIB).
The 220 KV Chilime-Trishuli Transmission Line project will include the construction of the 220/132 kV Trishuli 3 B Hub Substation, the construction of the 220/132 kV-Chilime Substation and the construction of the Chilime-Trishuli 220 kV double circuit Transmission Line (27 Km).
The transmission line project will be complemented by the construction of the Samundratar-Trishuli 3B Hub Transmission Line and Substation, at a cost of 270 million euros to which the EIB will contribute 95 million euros.
"In a holistic approach, the project focuses both on power generation and transmission from the Trishuli river basin,” minister Sharma said, stressing on the importance of completing the project in a timely manner for the benefit of Nepali people.
According to the press statement issued by the Delegation of the EU to Nepal, deputy chief of Mission and head of Cooperation at the German Embassy Jacqueline Groth highlighted Germany’s continued commitment to the Nepal's energy sector. Apart from its contribution to the transmission line project, German Development Cooperation will also support the upgrading of the Load Dispatch Centre in Kathmandu.
The upgrading will result in increase of supply of electricity fed into the national grid. It will reduce transmission losses and increase the reliability of the grid. As a result, the framework conditions for economic activities in Nepal will be improved especially for the industrial sector and small and medium enterprises.

Economic growth projection for Nepal – IMF: 4 per cent, ADB: 4.8 per cent and World Bank: 5 per cent against government target of 6.5 per cent

The International Monetary Fund (IMF) today projected 4 per cent economic growth for Nepal, whereas the World Bank (WB) projected 5 per cent for the current fiscal year.
The IMF and the World Bank forecast comes almost a fortnight after another multilateral development partner – the Asian Development Bank (ADB) – projected a growth of 4.8 per cent for the current fiscal year for Nepal.
However, the government has targeted to achieve an economic growth of 6.5 per cent in the current fiscal year.
Releasing the World Economic Outlook (WEO) today in Washington, DC, amid a press meet, the IMF made a forecast that Nepal’s gross domestic product (GDP) will rebound by 4 per cent only.
IMF has further lowered the economic growth forecast by 0.5 percentage points to 4 per cent from its April forecast, when it had claimed Nepal’s growth would rebound by 4.5 per cent in 2017.
The Fund had projected the Nepal economy to grow only by 0.5 per cent in the last fiscal year 2015-16, when the World Bank had estimated Nepal's growth at 0.6 per cent.
However, the Central Bureau of Statistics (CBS), has estimated Nepal saw an economic growth of 0.77 per cent in the last fiscal year, experiencing its slowest growth in the last 14 years.
In April, the IMF officials had said that they expected there was a good chance for growth to pick up once reconstruction started in earnest and border conditions normalised. The devastating 2015 earthquakes and economic blockade imposed by India had pushed down Nepal’s economic growth by 0.77 per cent in the fiscal year 2015-16.
However, IMF’s downward revision of growth forecast comes at a time when reconstruction has failed to gather momentum as expected. "Weak capital spending, slowing remittances, political uncertainty and other number of head winds that we see in Nepal have led us for the conservative projections,” a deputy director at the Research Department of IMF Gian Maria Milesi-Ferreti said.
Meanwhile, the World Bank was a bit more optimistic about Nepal’s economic growth in a separate report by the World Bank released today, the multilateral development partner projects an economic growth of 5 per cent in the current fiscal year. The World Bank has attributed improvement in the agriculture, construction and reconstruction to cause a rebound in the growth rate.
"Agriculture and construction are expected to improve on the account of a good monsoon as well as increased disbursements of housing reconstruction grants, the report '‘Investment Reality Check’ reads. "Coupled with increased government spending, this is expected to push the fiscal year 2016-17 growth to 5 per cent and to remain in line with potential thereafter."
"The rebound in growth is on the back of a normal monsoon that will boost agricultural output and supported by increased investment – both public and private – as the political process stabilises and earthquake recovery gathers speed. "Manufacturing in particular is expected to get some boost starting from the current fiscal year with the apparels and garment industry getting a duty free access in the US market,” it adds.
Nepal has had a difficult year due to the earthquake, border disruptions with India, and reduced remittances, the World Bank noted.
However, Nepal’s projected growth rate is far below the growth rate projected for the South Asia region. Led by solid performance in India, the economic growth is expected to gradually accelerate to 7.3 per cent in the current fiscal year from 7.1 per cent in the last fiscal year, according to the World Bank report.
According to the twice-a-year South Asia Economic Focus, the region remains a global growth hotspot and has proven resilient to external head winds such as China’s slowdown, uncertainty around stimulus policy in advanced economies, and slowing remittances. The main challenges remain domestic, and include policy uncertainty as well as fiscal and financial vulnerabilities.
“A reality check reveals that private investment – a key future growth driver across South Asia – is yet to be ignited to sustain and further increase economic growth,” said World Bank South Asia Region’s vice president Annette Dixon. "Countries will need to activate the full potential of private investment and exports to accelerate economic activity further, reduce poverty and boost prosperity."
Given its weight in the region, India sets the pace for South Asia as a whole. Its economic activity is expected to accelerate to 7.7 per cent in 2016-17, after maintaining a solid 7.6 per cent in 2015-16. "This performance is based on solid growth contributions from consumption, boosted by normal monsoon and civil service pay revisions. Over the medium term, accelerated infrastructure spending and a better investment climate may help increase private investment and exports.
A reality check on the state of private investment in South Asia shows that the region has fallen short of expectations. Mobilising domestic savings remains key at the aggregate level.
However, remittances and foreign direct investment prove very effective on a per-dollar basis, and the region should make the most of them.
India can further rely on public infrastructure to crowd-in private investment, while finance may constrain investment in Pakistan. The business cycle matters all across the region, providing a potential accelerator from GDP growth to investment growth. Ultimately, the investment climate sets the broader stage. “Alas, most South Asian economies suffer from a challenging business environment and some are subject to broader uncertainty and insecurity, which is detrimental to investor confidence,” it said.  
“Political economy risks are widespread across South Asia, and uncertainty will need to be managed, particularly with a view to creating an attractive environment for domestic and foreign investment alike,” World Bank South Asia Region’s chief economist Martin Rama, said. "Delivering the necessary energy, infrastructure, and regulatory improvements remains critically important to increasing private investment, thus boosting job creation and reducing poverty."

ADB, government launch project for reconstruction of earthquake-hit schools

Minister for Education D R Poudel and country director of the Nepal Resident Mission of the Asian Development Bank (ADB) Kenichi Yokoyama today laid the foundation stone for the reconstruction of Shree Kali Devi Primary School in Kavre district.
This marks the launch of the start of reconstruction of schools destroyed and damaged by the 2015 earthquakes in Nepal under the Earthquake Emergency Assistance Project (EEAP) jointly financed by ADB and the government.
The earthquake damaged 7,923 public schools in 31 districts, rendering over 33,131 classrooms useless and leaving another 14,297 partially destroyed.
Speaking at the programme, Poudel said the reconstruction of schools would provide an enabling environment in which students will be able to learn better with no fear in the back of their minds. “The government is committed to rebuilding all the schools by 2018, as this is linked directly to the future of students and the country,” Poudel said.
“Under this project, the schools will be rebuilt to be earthquake-resilient should another similar tragedy occur," Yokohama said, adding that the students will also have more learning space, furniture, and education material so education facilities are also improved.
The reconstruction of schools under the ADB project in eight of the 14 districts worst-hit by the tremors will increase school attendance which fell after the earthquakes.
The reconstruction of Shree Kali Devi Primary School is taking place under the $232 million EEAP to rebuild schools, strategic and district roads, and district government buildings. $200 million comes from ADB and $32 million from the government.
“We are prepared to provide more funds for school reconstruction once implementation gains momentum at the field level,” Yokoyama added.
Established 28 years ago, Shree Kali Devi Primary School was hit by the earthquakes that destroyed five classrooms and the toilet block. The school will be rebuilt by November 2017 at a cost of Rs 28 million.
The EEAP has already designed and completed the bidding documents for 34 other primary and secondary schools.
The preparation of designs for 100 more secondary schools is underway while the designs for a further 200 secondary schools will start before the end of 2016.
Similarly, six contracts for the reconstruction of 22 primary schools have been awarded, and two contracts for 13 primary, secondary schools are in procurement stages.

प्रतिस्पर्धी क्षमतामा भुटानले जित्यो नेपाललाई

राजनीतिक अस्थिरता, पूर्वाधारको अभाव, भ्रष्टाचार, असक्षम कर्मचारीतन्त्र तथा नीतिगत अस्थिरताका कारण व्यवसाय गर्ने वातावरण बिग्रँदै गएकोले नेपालले आफनो प्रतिस्पर्धी क्षमता गुमाउँदै गएको छ ।
वल्र्ड एकोनोमिक फोरमद्वारा हालै सार्वजनिक विश्वको प्रतिस्पर्धी क्षमता २०१६ का अनुसार नेपाल गत वर्षभन्दा सूचकांकमा एक तह माथि उक्ले पनि दक्षिण एसियाको तेस्रो प्रतिस्पर्धी अर्थतन्त्रबाट तल झरेर चौथो हुन पुगेको छ ।
निरन्तरको राजनीतिक संक्रमण तथा औद्योगिक असुरक्षा तथा ऊर्जाजस्ता अत्यावश्यक पूर्वाधार अभावले पनि नेपालको प्रतिस्पर्धी क्षमतामा ह्रास आएको हो । गत वर्षको प्रतिवेदन अनुसार नेपालको दक्षिण एसियामा भारत तथा श्रीलंकापछि प्रतिस्पर्धी अर्थतन्त्र रहेकोमा यस वर्ष भुटानले उछिनेको हो । विश्वको प्रतिस्पर्धी क्षमता २०१६ को सूचकांक अनुसार दक्षिण एसियामा भारत ३९औं स्थानमा, श्रीलंका ७१औं स्थानमा र भुटान ९७औं स्थानमा रहेका छन् । नेपाल भने १३८ राष्ट्रको सूचीमा ३.८७ अंकका साथ ९८औं स्थानमा छ । नेपालभन्दा पछाडि बंगलादेश १०६ स्थानमा र पाकिस्तान १२२ स्थानमा छन् ।
विश्वको प्रतिस्पर्धी क्षमता २०१५ मा नेपाल १४० राष्ट्रको सूचीमा १००औं स्थानमा थियो । सूचकांकको आधारमा नेपाल एक स्थान उक्ले पनि दक्षिण एसियाका अन्य देशको दाँजोमा प्रतिस्पर्धि क्षमता भने गुमाउँदै गएको हो ।
पछिल्ला सरकारहरु आर्थिक मुद्दामा भन्दा राजनीतिक मुद्दामा बढी केन्द्रित हुनु, संविधानसभाबाट संविधान जारी भएपछि आर्थिक क्रान्तिको पालो भने तापनि अझै राजनीतिक संक्रमणकाल लम्बिनु तथा आर्थिक सुधारको दोस्रो चरणले अपेक्षा गरेअनुरुप गति लिन नसक्नुले पनि नेपालको प्रतिस्पर्धी क्षमता घटेको हो ।
यति हुँदाहुँदै पनि, प्रतिवेदनका अनुसार, नेपाल दक्षिण एसियामै सबैभन्दा राम्रो बृहत आर्थिक वातावरण भएको देशमा पर्छ । त्यस्तै, स्वास्थ्य तथा प्राथमिक शिक्षामा पनि नेपाल दोस्रो उत्कृष्ट छ ।
‘तर, पूर्वाधारको विषयमा भने नेपाल अत्यन्त नाजुक रहेको प्रतिवेदनले जनाएको छ । नेपालमा पूर्वाधारको गुणस्तर खस्केको छ,’ प्रतिवेदन भन्छ । 
प्रत्येक वर्ष वल्र्ड एकोनोमिक फोरमद्वारा सार्वजनिक गरिने विश्वको प्रतिस्पर्धी क्षमता सूचकांक आधारभूत आवश्यकता, सक्षमता अभिवृद्धि तथा नविन खोज र विकास जस्ता ३ प्रमुख सूचकका आधारमा तयार गरिन्छ । 
यस वर्षको प्रतिवेदन अनुसार नेपाल आधारभूत आवश्यकता र सक्षमता अभिवृद्धि दुवै सूचकमा ९८औं स्थानमा र नविन खोज र विकासको सूचकमा अत्यन्त कमजोर अर्थात १२७औं स्थानमा छ ।
यी ३ सूचक अन्तर्गत पनि विश्वको प्रतिस्पर्धी क्षमता सूचकांकले १२ वटा आधारशिलाका आधारमा प्रत्येक देशको प्रतिस्पर्धी क्षमता मापन गछ । आधारभूत आवश्यकता अन्तर्गत संस्था, पूर्वाधार, बृहत् आर्थिक वातावरण तथा, स्वास्थ्य तथा प्राथमिक शिक्षा पर्छन् । यस्तै, सक्षमता अभिवृद्धि सूचकअन्तर्गत उच्च शिक्षा तथा तालिम, वस्तु बजारको क्षमता, श्रम बजारको क्षमता, वित्त बजार विकास, प्राविधिक रुपमा तयारी र बजारको आकारका आधारमा कुनै पनि देशको अर्थतन्त्रको प्रतिस्पर्धी क्षमता मापन गरिन्छ । माथि उल्लेखित आधारमध्ये यस सूचकअन्तर्गत वित्त बजार विकासबाहेक अन्य उच्च शिक्षा तथा तालिम, वस्तु बजारको क्षमता, श्रम बजारको क्षमता, प्राविधिक रुपमा तयारी तथा बजारको आकारमा नेपालको स्थिति त्यत्ति राम्रो छैन ।
तेस्रो नविन खोज र विकास सूचकले कुनै पनि देश विकासको क्रममा अगाडि बढेपछि मात्र महŒव राख्दछ । नेपालजस्ता अर्थतन्त्रको लागि यो सूचकको खासै महत्व छैन किनकि अर्थतन्त्र सबल हुदै जाँदामात्र नविन खोज, अनुसन्धान तथा विकासको अर्थ रहन्छ । 
विश्व प्रतिस्पर्धी क्षमता सूचकांक २०१५ मा १४० देशमध्ये १००औं रहेको नेपाल त्यसभन्दा अघिल्लो वर्ष १४४ देशमध्ये १०२औं स्थानमा थियो । प्रतिवेदनले स्विजरल्यान्डमा संसारको सबैभन्दा प्रतिस्पर्धी अर्थतन्त्र रहेको जनाएको छ । सिंगापुर दोस्रो तथा अमेरिका तेस्रो सबैभन्दा प्रतिस्पर्धी अर्थतन्त्र भएका देश हुन् ।
अर्थतन्त्र प्रतिस्पर्धी भएपछि विदेशी लगानीकर्ताको आकर्षण बढ्नुका साथै देशको आर्थिक स्तर पनि बढ्ने प्रतिवेदनले जनाएको छ ।

Extreme poverty worldwide falls

A new World Bank study on poverty and shared prosperity says that extreme poverty worldwide continues to fall despite the lethargic state of the global economy.
But the study warns that given the projected growth trends, reducing high inequality may be a necessary component to reaching the world's goal of ending extreme poverty by 2030.
According to the inaugural edition of 'Poverty and Shared Prosperity' - a new series that will report on the latest and most accurate estimates and trends in global poverty and shared prosperity annually, nearly 800 million people lived on less than $1.90-a-day in 2013. That is around 100 million fewer extremely poor people than in 2012. “Progress on extreme poverty was driven mainly by East Asia and Pacific, especially China and Indonesia, and by India,” the report reads, adding that half of the world's extreme poor now live in Sub-Saharan Africa, and another third live in South Asia.
In 60 out of the 83 countries covered by the new report, average incomes for people living in the bottom 40 per cent of their countries went up between 2008 and 2013 despite the financial crisis. Importantly, these countries represent 67 per cent of the world's population.
"It's remarkable that countries have continued to reduce poverty and boost shared prosperity at a time when the global economy is underperforming - but still far too many people live with far too little," said World Bank Group president Jim Yong Kim. "Unless we can resume faster global growth and reduce inequality, we risk missing our World Bank target of ending extreme poverty by 2030," he said, adding that the message is clear: to end poverty, we must make growth work for the poorest, and one of the surest ways to do that is to reduce high inequality, especially in those countries where many poor people live.

Kathmandu-Colombo direct flight begins

The Himalaya Airlines – a private sector air service providing company – has begun Kathmandu-Colombo, Sri Lanka direct flight service from today.
The airlines, which has been operating its daily flight service from and to Kathmandu-Doha Qatar, has expanded next service to Colombo with its Airbus 320 series 9N-ALN. "The aircraft took off today to Colombo at 11.30 with 31 passengers on board," informed Business general manager of the airlines Raju KC. "The airbus is returning Kathmandu from Colombo carrying 102 passengers today."
With Himalaya Airlines – a Nepal-China joint venture – direct flight on Colombo-Kathmandu flight, the domestic air transport connected the two South Asian cities after 28 years.
It was an initiative to bring both cities closer and boost tourism, trade and investment opportunities between Nepal and Sri Lanka," KC added.
Sri Lankan ambassador to Nepal WS Perera and secretary general of Federation of Chamber of Commerce and Industry of Sri Lanka Ajith D Perera were among the passengers on the inaugural flight.