Sunday, March 29, 2015

Nepal to graduate to developing country from LDC before deadline

Nepal is going to graduate 'technically' to developing country status from the current Least Developed Country (LDC) status before the deadline of 2022.
Nepal has met two – out of the three – criterion to graduate to the developing country, informed National Planning Commission member Swarnim Wagle.
Of the three, a LDC has to meet atleast two criterion – Economic Vulnerability Index (EVI) and Human Assets Index (HAI) – or one criteria that is per capita gross national income (GNI) – to graduate to the developing country, according to the  UN Committee for Development Policy. But for that a country’s per capita GNI should be twice the UN threshold that is $1,242. But, UN data revealed that Nepal’s per capita gross national income stands at $659, which is way below the UN threshold.
Nepal has met Economic Vulnerability Index (EVI) and Human Assets Index (HAI) to graduate to developing country, concluded the meeting of UN Committee for Development Policy – a body under the UN Department of Economic and Social Affairs – held in New York on March 23-27.
However, Nepal has failed to meet the first criteria that is per capita gross national income (GNI), which should be $1,242 or more, which is fixed by the UN for 2015, though it has met the two other criterion.
Human Assets Index (HAI) – that is the level of the human capital present in a country that includes indicators on gross secondary enrollment ratio, and under-nourishment, under-five mortality and literacy rates – needs to be 66 or above to be eligible for graduation. Nepal scored 68.7, which is 2.7 points more than the UN threshold.
Likewise, Economic Vulnerability Index (EVI) – that measures a country’s vulnerability to external economic and environmental shocks using the eight indicators – should be 32 or less for graduation. Nepal scored 26.8, which is below the UN threshold of 32.
"Since Nepal has met the two non-income criteria, it can graduate on technical grounds,” Wagle said, adding that Nepal is now under review. "Nepal will have to sustain these achievements till 2018, when the UN will conduct another review. If it is able to sustain the current achievement, the UN Economic and Social Council will forward the proposal on Nepal’s graduation to the UN General Assembly in 2018."
The country will then formally graduate to developing countries after three years by 2021, after formal decision by the UN General Assembly. However, graduation to developing country will make Nepal unfit to get benefit that it is receiving as a LDC. Thus Nepal needs to increase its competitive capacity and increase domestic production by investing more on physical infrastructure and industries.
The planning commission has reset the deadline to 2022 – bringing it down by eight years from 2030 – last year during the third three-year interim plan.
Nepal now needs to propel economic growth to sustain the achievements and elevate it to middle income country by 2030 from the current low income country, Wagle added.

Saturday, March 28, 2015

China announces fresh $146 million aid for Nepal

China has announced a fresh aid package of RMB 900 million (around $145 million) for Nepal.
The decision was taken during a 30-minute meeting between Chinese President Xi Jinping and President Ram Baran Yadav today on sidelines of the Boao Forum for Asia in South China's Hainan Province. President Yadav is currently at Hainan and met Chinese President for the first time since Nepal replaced monarchy and became a republic in 2008.
The northern neighbour had last week announced to increase its annual grant to Nepal by over five-fold from RMB 150 million to RMB 800 million (nearly $128 million) to give further boost to its economic agenda in Nepal.
"The package is in addition to the annual grant and will be used to improve the 115-km long Araniko highway that connects both the nations," according to deputy spokesperson at the Foreign Ministry Lekha Nath Bhattarai. "Likewise, China will also be training some 1,500 Nepalis in technical and non-technical sectors over the next five years."
Not long ago, India has – during the prime minister Narendra Modi's visit – also increased a line of credit worth $1 billion to Nepal.
Nepal's increased economic engagement with both northern and southern neighbours is expected to propel development activities in the land-locked country and bridge the infrastructure gap.
Nepal has already expressed its willingness to be part of major Chinese initiatives like the $40 billion Silk Road Economic Belt – that is expected to improve China's connectivity to Europe through a maze of road, rail and port network – and Asian Infrastructure Investment Bank (AIIB). In fact, Nepal is also going to be a founding member of the Bank.
Chinese President on the occasion also welcomed Nepal to participate in the Belt and Road cooperation. "China-Nepal relationship is a model of peaceful coexistence and mutually beneficial cooperation between big and small countries," Xi said, welcoming President Yadav to the annual conference. "China is willing to be Nepal's good friend of mutual respect and mutual support, good partner of common development and common prosperity and good neighbour of mutual assistance in security," he said, suggesting that the two countries should strengthen cooperation in traffic interconnectivity, infrastructure, hydropower development, modernisation of agriculture, science and technology. "China is also willing to negotiate Free Trade Agreement (FTA) with Nepal at an early date."
Calling on both the countries to enhance law-enforcement and security cooperation, Xi asked to be well prepared for a series of commemorative activities as this year marks the 60th anniversary of the establishment of China-Nepal diplomatic ties.
He also called on to beef up cooperation in the areas of youth exchanges and tourism and enhance coordination on multilateral occasions to safeguard their common interests.
China appreciates Nepal's firm support on issues concerning China's core interests, including issues related to Tibet and Taiwan, the Chinese President said, also supporting Nepal's effort in safeguarding independence, sovereignty and territorial integrity. Likewise, President Xi also voiced the hope that Nepal would not allow any forces to use its territory to engage in anti-China separatist activities.
Replying President Xi, President Yadav said Nepal would never allow its territory to be used by any anti-China activities. Nepal also supports China's initiatives of jointly building the Silk Road Economic Belt and 21st-Century Maritime Silk Road, apart from Asian Infrastructure Investment Bank, he said, adding that strengthening cooperation between South Asian Association of Regional Cooperation (SAARC) and China will help promote regional interconnectivity and economic development.
However, China wish to join SAARC at the last year's SAARC grouping's conference at Kathmandu was foiled by India.
Likewise, President Yadav, on the occasion, also said that poverty, hunger and deprivation still exist in many countries. Urging for concerted efforts to resolve the problems he stressed to create a more stable, secure and prosperous future for Asia by ending poverty, hunger and disparities. “Peace and poverty cannot go together," he said, adding that development of the continent as a whole has to, therefore, be a common goal and all countries must find space and resources to grow and prosper.
Saying that lack of adequate infrastructure, low level of industrial base, inadequate capital, lack of technological know-how and shortage of skilled human resources and low level of productive capacity were the problems of Nepal's economy, the President stated such things have resulted in lack of qualitative change in the living standard of people despite the abundance of natural and human resources with enormous potentials of tourism, hydropower and agriculture development options.
The President also appealed the international business community to invest in Nepal as the country offers a liberal and attractive regime for investment.

Wednesday, March 25, 2015

Kathmandu features in TripAdvisor's top destinations list

TripAdvisor – world's largest travel site – has listed Kathmandu in the list of 25 destinations in its 'Travelers' Choice Destinations 2015'.
The site has listed Kathmandu at the 19th position. Kathmandu – the only South Asian city in the list – is surrounded by a valley full of historic sites, ancient temples, shrines, and fascinating villages," TripAdvisor has written. The site has also suggested tourists to visit Durbar Square's monuments, enjoy mountain trekking, and explore Thamel area and shops for exquisite work by local artisans. "Kathmandu Valley is rich in its cultural and historical heritage."
"These world-class destinations chosen by our community are rich in history, culture and beauty and offer endless sights to explore," chief marketing officer for TripAdvisor Barbara Messing said in the statement. "TripAdvisor has surfaced value hotel options that can be booked from the site, along with fantastic places to eat and play to help travelers discover these cities."
TripAdvisor lists the top 25 destinations using an algorithm that took into account the quantity and quality of reviews and ratings for hotels, restaurants and attractions in destinations worldwide, gathered over a 12-month perio, by the travelers.
Marrakech – a city of Morocco – has topped of the list, climbing five steps compared to last year, according to the TripAdvisor.
Similarly, Siem Reap (Cambodia), Istanbul (Turkey), Hanoi (Vietnam), Prague (Czech Republic), London (England), Rome (Italy) Buenos Aires (Argentina), Paris (France), Cape Town (South Africa), New York (United States), Zermatt (Switzerland), Barcelona (Spain), Goreme (Turkey), Ubud (Indonesia), Cuso (Peru), St. Petersburg (Russia), Bangkok (Thailand), Athens (Greece), Budapest (Hungary), Queenstown (New Zealand), Hong Kong, Dubai (United Arab Emirates) and Sydney (Australia) are in the top destinations to visit in 2015, stated the TripAdvisor that has more than 200 million reviews and opinions covering more than 4.5 million accommodations, restaurants and tourist attractions.

Thursday, March 19, 2015

Government appoints Chiranjivi Nepal as 16th governor of central bank

Ending a month-long speculation, the government today appointed Dr Chiranjivi Nepal as the governor of the central bank. The meeting of the Council of Ministers held today evening decided to pick Nepal as the governor of Nepal Rastra Bank (NRB).
The recommendation committee under finance minister Dr Ram Sharan Mahat had yesterday evening recommended three names – senior deputy governor Gopal Kafle, deputy governor Maha Prasad Adhikari and Prime Minister Sushil Koirala's economic advisor Nepal – for the prestigious post for next five years.
Nepal, who became the 16th governor of the central bank leaving behind a half dozen aspirants, is a liberal economist and holds post-graduate in labour relations economics from Banaras Hindu University.
Nepal will now replace outgoing governor Dr Yubaraj Khatiwada, who took his retirement from today after completing his five-year tenure. Nepal will, however, take charge from Sunday.
Some bankers, economists and former bureaucrats were also in the race for the highly-coveted post of the central bank governor even before the formation of the recommendations panel was formed by the cabinet, according to the Nepal Rastra Bank Act, on February 24.
The committee led by Mahat had the first governor of the central bank Himalaya Shumsher JB Rana and senior economist and former central bank board member Parthibeshwar Timilsina as members.
Earlier, newly appointed governor Nepal (52) was economic advisor to the Finance Ministry in the election government of Khila Raj Regmi. Likewise, he was also advisor to the Foreign Ministry, and chairman of the Securities Board of Nepal (SEBON) during 2007-2009 under the then Prime Miniter Girija Prasad Koirala.
He had worked with the private sector too as he was advisor to the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), Confederation of Nepalese Industires (CNI) and Nepal Chambers of Commerce (NCC) once upon a time.
According to the newly appointed governor Nepal, his top priority will be to give continuity to the fiscal stability measures introduced by his predecessor Khatiwada. However, it is not an easy cake for Nepal as Khatiwada is handing over a relatively stable financial sector. Second, will be to increase confidence of the public in the banking and financial system, he said, adding that handling foreign exchange reserves and balance of payments against the backdrop of a ballooning trade deficit and decreasing remittance inflow growth rate will be yet another challenge.
Likewise, capital flight through over-and-under invoicing and rerouting it back to the country as foreign investment, and fighting against the flow of black money are yet another challenges Nepal has to face in coming months.
His another challenge will be to strike better coordination among National Planning Commission, Finance Ministry and central bank. Central bank as the economic advisor to the government and planning commission as the policy think-tank of the government has to be on the same page for the better execution of the government policies for better output.
Similarly, the new governor has to build good rapport with the banks and financial institutions as they had love-hate relations with Khatiwada.