South Asia lags behind despite huge potential

Despite huge potential, South Asia lagged behind compared to other regional groups, according to the experts.
There is immense economic potential in the region," vice chair of National Planning Commission Prof Dr Govind Raj Pokhrel said addressing a two-day regional consultation on 'Deepening Economic Cooperation in South Asia: Expectations from the 18th SAARC Summit' here in Kathmandu today.
Stressing on improving trade facilitation to boost intra-regional trade, he also highlighted on the potential of regional energy cooperation. The recent efforts of the government to promote energy cooperation with India are indication in the right direction, which could further facilitate regional energy cooperation, he added.
The programme – being organised as a side-event to the 18th SAARC Summit to provide useful recommendations to deepen economic cooperation in South Asia – was organised by South Asia Watch on Trade, Economics and Environment (SAWTEE), National Planning Commission and Federation of Nepalese Chamber of Commerce and Industry (FNCCI), in collaboration with
German Cooperation for Development (GIZ), CUTS International, India Council for Research on International Economic Relations (ICRIER), and Friedrich Eburt Stiftung.
President of FNCCI Pradeep Jung Pandey, on the occasion, provided an account of the barriers faced by the business community in conducting trade within South Asia. He also stressed the need to go beyond trade in goods and also look as how to exploit the untapped potential of the services sector.
More important he pointed out the need for greater economic as well as people-to-people connectivity in the region, and argued that normalised trade relation between India and Pakistan is necessary for South Asian Association for Regional Cooperation (SAARC) to move forward.
Inaugurating the programme, chief guest and minister of Foreign Affairs Mahendra Bahadur Pandey said that SAARC has long dreamed of deeper regional cooperation for economic growth and prosperity and has also undertaken initiatives to facilitate trade and investment, and improve regional connectivity. "However, several constraints like financial and investment-related, largely affect the efficient implementation of trade and transport facilitation measures," he added.
Expressing hope that SAARC would undertake necessary steps to promote intra-regional investments and attract foreign direct investments (FDIs), Pandey said that through the effective implementation of the SAARC Agreement on Trade in Services (SATIS), SAARC could see higher growth in the services sector.
Most countries in the region have failed to meet the Millennium Development Goals (MDGs), he said, emphasising that the SAARC Development Goals (SDG) should be aligned with the Sustainable Development Goals in line with the post-2015 development agenda.
He also highlighted the necessity to take mitigation and adaptive measures to address the threat of climate change, which is going to impact, among others, food security of the region.
Strengthening of regional cooperation on this front is essential, he said, expressing hope that the 18th SAARC Summit would be able to send across a strong message that SAARC leaders are ready to revitalise and implement all past initiatives undertaken by SAARC to deepen regional integration.
Likewise, an independent analyst from India Major General (Retd) Ashok Mehta, on the occasion, rightly highlighted the role of track-II approach in moving forward relevant issues to track-I. He spoke about the Kathmandu Declaration signed at the 3rd SAARC Summit, and how SAARC went against its original Charter to address the issue of peacekeeping, which was viewed as a security issue and was thus beyond SAARC mandate.
He also advocated for a collective regional stance on peacekeeping issues at the UN, through the formation of a regional consultative mechanism to discuss the issue at the political, academic and field level. "It would pave the way for enhanced economic cooperation," he added.
Despite the existence of SAARC, progress in deepening regional integration has been frustratingly slow and gains have only been modest, said executive chairman of SAWTEE Dr Posh Raj Pandey speaking as the chair of inaugural session.
Therefore, what is needed to move SAARC forward is political will and sincere commitments at the highest level, he said, adding that informal trade in the region being substantially higher than formal trade is testimony of policy-induced trade barriers, which need to be overcome to make SAARC a truly economically integrated region.
Importantly, he stressed the need to reinvent the regional development paradigm with inclusiveness.
Earlier, executive director of SAWTEE Dr Hiramani Ghimire welcoming the participants said that the regional consultation is an opportunity to discuss what can realistically be done to enhance economic cooperation in South Asia, and provide recommendations for the 18th SAARC Summit.
The two-day discussion will see more than 60 participants, including researchers, policy makers, private sector representatives and media from different South Asian countries are participating in the regional consultation.
They will brain-storm on issues like trade and transport facilitation, and transit; non-tariff barriers; trade, gender and technology transfer; India-Pakistan trade relations; intra-regional investment cooperation; and regional cooperation for energy security.

SAARC, GIZ agree to boost trade in region

South Asian Association for Regional Cooperation (SAARC) and the German Development Ahency (GIZ) today signed a memorandum of understanding (MoU) aiming at promoting trade and economic collaboration in the region.

SAARC secretary-general Ahmed Saleem and GIZ Country Director for Nepal Roland F Steurer signed the MoU today on behalf of their respective institutions.
“We are at a crucial stage in SAARC for deepening economic, trade and financial cooperation among the member countries,” Saleem said, at the signing ceremony.
The MoU envisages cooperation between the two institutions in promoting intra-regional trade and economic integration in the South Asian region that is the least economically integrated region in the world.

Earlier in 2003, the SAARC had signed another memorandum of Understanding with the National Metrology Institute of Germany to promote collaboration among SAARC member countries in metrology, standards, testing, quality management, accreditation and certification.

New road to spur development, improve lives in Baitadi

The Ministry of Peace and Reconstruction together with the UN World Food Programme (WFP) and German development agency — Gesellschaft für Internationale Zusammenarbeit (GIZ) — today inaugurated a new road that connects remote villages of Baitadi district in the far-west, providing communities with better access to markets, health centres, schools and other key facilities.

"Roads provide vital access and mobility to poor rural communities," said WFP Nepal representative Nicole Menage. "With the opening of the new road, people will have improved access to social services," she said, adding that it will stimulate the local economy, improve lives and reduce geographic isolation.

With funding support from the European Union Food Facility, construction of the 32-km Dehimandu-Giregada Rural Road Construction Project started in 2009.

GIZ, under the guidance of the Ministry of Peace and Reconstruction and WFP collaborated to provide work opportunities to participants who received food — rice and lentils — and cash in exchange for their labour. More than 5,000 poor households have already benefited each year from the food and cash transfers, and many more are benefiting from the opportunities created by the new road.

GIZ and WFP are long-term partners in the implementation of community-based livelihood projects in Nepal. Under the commission of the German Federal Ministry for Economic Cooperation and Development, GIZ provides technical expertise, equipment and skilled labour to ensure the quality of the road, taking into consideration social, environmental, health and safety aspects.

Local development officer Ram Datta Pandey hailed the completion of the new road that will transform people’s life for the better and will contribute in the development of the region in the years ahead.

Till date, a 25-km stretch has been completed — the remaining seven kilometres will be finished by September. By connecting seven remote villages — Dehimandu, Gwalek, Nagarjun, Rodidewal, Amchaur, Kulau and Giregada — the road will benefit more than 47, 000 people and promote social and economic development.

"The inputs from WFP and the German government complemented each other in a perfect way," said GIZ programme manager Claudia Maier, on the occasion.

"On one hand, people were able to bridge their food gap instantly and on the other, they profited from plenty of new long-term income opportunities," she said, adding that agriculture production has gone up significantly and many families earn additional money since they have completed vocational training. "The changes will motivate people to manage their lives independently in the future."

Between 2007 and 2012, WFP constructed or repaired nearly 3,000-km of roads and trails linking rural communities to markets and towns in the most isolated regions in the country.

WFP programmes reach about 500,000 people every month in Nepal, mainly in the mid- and far-western hills and mountains, helping people meet their immediate food needs and to improve their living conditions by providing employment opportunities on infrastructure projects designed to bolster resilience and self-reliance.

Joint secretary of the ministry of peace and reconstruction Bharat Prasad Poudyal, WFP Nepal representative Nicole Menage, GIZ country director Roland F Steurer and GIZ programme manager Claudia Maier apart from local government officials and community members were present in the programme.

With peace at sight, country shifts priority, development partners follow the suit

With peace at sight at last, the country now seems to be moving ahead with economic agendas — that was at the back burner for long — and so are the country's development partners.
"The country, in its shift from the traditional approach, will ask the development partners — both bilateral and multilateral — to support us for economic growth, employment creation and inclusive growth," said finance secretary Krishnahari Baskota before flying to Manila to take part in the ADB meeting.
Similarly, Germany, one of the largest bilateral donors, that has been focusing on health, renewal energy and good governance, has also hinted at shifting its focus to job creation by strengthening the private sector. "Instead of local governance sector that is overcrowded at present, we are interested in supporting Nepal on youth employment by strengthening the private sector," according to a source
at the German aid agency.
The German government is holding a consultative meeting with Nepal in June, when it will officially discuss the new programmes," the source said, adding that the discussion will be, however, endorsed in October.
Several other bilateral and multilateral donors including the US, EU and India are supporting the country in strengthening the private sector to create employment.
"As the peace process is coming to a logical conclusion, we are shifting our priorities too," the source added.
Nepal receives foreign aid from a diverse group of donors, including OECD-DAC donors, international financial institutions, UN agencies, global vertical funds and providers of South-South cooperation. "They made a total disbursement amounting to $1.08 billion in fiscal year 2010-11," according to the Development Cooperation Report 2010-11.
"Approximately 58 per cent of the resources came from multilateral donors, while 36 per cent came from OECD-DAC bilateral donors and over six per cent from bilateral South-South cooperation partners," the report stated, adding that Germany contributed 2.5 per cent to the total disbursement.
Similarly, the top five multilateral donors were the World Bank Group ($256.1 million), Asian Development Bank ($184.4 million), UN Country Team ($112.5 million), EU ($42.4 million) and Global Fund to fight AIDS, Tuberculosis and Malaria (GFATM) ($19 million) last fiscal year, it reported.
"About 70 per cent of the foreign aid was disbursed for on-budget projects," Baskota said.
However, the Herfindahl index for donor portfolios is generally low, with only one third of donors achieving a score above 0.3. "For donors with an annual disbursement volume of over $10 million, the best performers are Korea, Germany, India, GFATM and the EU," the report said, adding that the Herfindahl index is the sum of the squares of the 'market shares' of the various projects in the portfolio. "If the result is close to one, the portfolio is very concentrated, whereas the result close to zero means the portfolio is very fragmented."
Nepal received the largest amount of foreign aid in the education sector in the last fiscal year. "Four sectors — education, local development, health, and road transportation — received more than $100 million each in the last fiscal year," the first report on foreign aid for fiscal year 2010-11 stated.

Employment creation will halt migration

Creating more employment back home will help halt the current trend of migration by youth and their potential can be utilised for sustainable development and poverty reduction, according to experts.
Speaking at the inauguration of the six-day 'Training Programme on Improving Stakeholder Relations' in Dhangadhi today, secretary at the Ministry of Industry Uma Kant Jha stressed on the importance of utilising and optimising the potential of Nepali youth. "The country should tap their energy instead of impelling them to migrate abroad for foreign employment because it isn’t a permanent solution for sustainable development and poverty reduction," he said. "Though the country has been receiving huge remittance, Nepal will fall into the remittance trap in the long run."
The purpose of the training programme that runs till March 23 is to promote Private Public Dialogue (PPD) and the Nepal Business Forum (NBF) which is led by the prime minister.
The training was inaugurated by former prime minister Lokendra Bahadur Chand, who also hails from the region. Chand, on the occasion, launched the training manual on 'Improving Stakeholder Relations' that was prepared on the initiation of Federation of Nepalese Chambers of Commerce and Industries (FNCCI) and German International Cooperation (GIZ).
Chand appreciated FNCCI, GIZ and the World Bank Group for considering the Far Western Development Region and its corridors in their economic development priorities.Similarly, vice president of FNCCI Bhawani Rana, said that the event is a milestone towards establishing a forum in the Far West, a region that has been neglected by successive governments. "There is huge potential in the region which has been suffering from a mass exodus of youth due to the lack of employment," she said, adding that the German government and GIZ who are involved in enterprise development and creating youth employment, agriculture value chains and private sector promotion, could help the region develop.Programme manager of GIZ Include Horst Ammann expressed his commitment towards supporting the Far Western Region for economic development by focusing on the private sector.
Joint secretary at the Ministry of Industry and the focal person of NBF Anil Kumar Thakur explained about the process of NBF and the government’s commitment in promoting the private sector.
Similarly, senior private sector development specialist of IFC Laura Watson, president of Far Western Regional Chambers of Commerce and Industry Nara Bahadur Chand and CDO of Kailali district also spoke on the occasion.Participants of the district chamber of commerce and industries, district development committees and Department of Cottage and Industries from the Mid-Western and Far-Western Development Regions will be exposed to the five modules related to Private Public Dialogue – Communication, Negotiation, Workplace Cooperation, Conflict Management and Effective Advocacy.
The event is supported by the German International Cooperation Inclusive Development of the Economy (GIZ Include) Programme.

Farmers get double price for organic tea

Farmers are getting double price for orthodox tea green leaves after being quality certified.
"They are being paid up to Rs 60 per kg of green leaves," said senior programme officer at the Inclusive Development of the Economy (Include) of Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) Arun Rana.
"The amount is more than double the average for orthodox tea green leaves," he said, adding that the Private Public Partnership for Organic Tea Promotion in Ilam has been successful in making tea farmers more quality aware.
"In addition, both the Sunderpaani and Kolbung Cooperatives get additional payments per kg to cover their office expenses," Rana added.
Under the promotion programme, the IMO/EU certification has also enhanced the capacity of organic farming for more than 200 farmers. "Of them 166 tea farmers are certified as organic first time in Nepal and additional 62 farmers are in the stage of conversion," he added.
Through the project, Gorkha Tea Estate has been able to capacitate over 200 smallholder-farmer households towards attaining future market security and they are fetching almost double to Rs 45 to Rs 50, the market average rate for a kg of green leaves.
The successful Private Public Partnership has brought about notable results in the orthodox tea green leaves' farmers due to GIZ Private Public Partnership Project that has not not only be scaled up in the tea subsector but also needs to be replicated in other agriculture subsectors, according to chairman of Gorkha Tea Estate — the first IMO (Switzerland based) and EU certified organic tea in Nepal — Uday Chapagain.
An initiative of GIZ, the 'Organic production of high quality tea in rural areas of Nepal' is a partnership between Gorkha Tea Estate and Tee Geschwender.
Germans tea consumption has increased to 4,500 tonne per annum from earlier 500 tonne, Thomas Holz of Tee Geschwender said, adding that the Germans prefer the quality tea. "Nepali green orthodox tea has great potential as Nepal produces various types of green tea," he added. "With a little more effort Nepal can export more to Germany." Tee Geschwender is one of the biggest tea retailers in Germany with about 25 per cent of the specialised tea trade.