Nepal holds investment opportunities discussion in Tokyo

Nepali Embassy in Tokyo organised a one-day seminar on Investment Opportunities in Nepal today.

The economic cooperation can bring people of both the countries more closer, said Nepali ambassador to Japan Madan Kumar Bhattarai, addressing the interaction.

Nepal has embarked on a new phase of political development, he said, adding that the successful CA election last November and the formation of a new elected government have raised hopes for a stable government. "The new government gives priority to the economic development."

The government is also keen to facilitate foreign investment creating business-friendly environment, the envoy added.

Highlighting the government's policy and programmes, on the occasion, Nepal Investment Board chief executive Radhesh Pant explained that the government had studied the competitive advantageous areas for growth.

Assuring full support from the board, he also called on the Japanese business community to invest in the areas that have competitive advantages.

Japanese ambassador to Nepal Masashi Ogawa, senior officials from the Foreign Ministry of Japan, Japanese businessmen and representatives of the corporate sector took active part in the interaction.

Central bank receives bid worth Rs 31.3b for Rs 19.50 billion reverse repo

The Rs 19.5 billion reverse repo – a financial instrument to mop up excess liquidity for short term from the market – today has received bids worth Rs 31.3 billion from 20 banks and financial institutions today.

Though the central bank has projected to contain inflation under 7.5 per cent , the excess liquidity has been fuelling the inflation forcing the central bank to repeatedly issue reverse repo to mop up excess liquidity from the banks.

Due to excess liquidity the inflation has surged to 10.3 per cent in the fifth month of the current fiscal year as the government and central bank both failed to contain the inflation.

According to the latest data, the banks and financial institutions have around Rs 40 billion at present. The low borrowing from the private sector due to low capital expenditure by the government and second Constituent Assembly (CA) election has flooded the money back to banking channel.

The central bank has fixed an interest rate of 0.41 per cent for the reverse repo, though the rate is fixed through open bidding.

The central bank has also lowered the Cash Reserve Ratio to four per cent for the banks giving them enough room to invest but the low credit demand has made them sit on the cash pile that has forced the Nepal Rastra Bank (NRB) absorb surplus funds from the banks and financial institutions.

Prolonged political transition hit economic development

Prolonged political transition and experiments have forced Nepal miss economic growth agenda, according to finance minister.

Addressing an interaction on 'Future Economic Roadmap for Federal Nepal,' organised by Confederation of Nepalese Industries (CNI) here today, finance minister Shankar Prasad Koirala said that most of the governments wasted time managing the conflict and missed the chance to develop the country. "Except for a fraction of time – during 1992-1995 after democratic movement – the successive governments since 1940 have been more involved in managing conflict."

The incumbent government has managed the transitional economy and is waiting to handover a healthy economy back to the elected government soon, he added. "Political stability and economic growth is directly related to each other."

Claiming that without investment-friendly environment, only the promises and speeches could not help develop a country, he said that there is no option to agreement on minimum economic agenda on health, education, energy, infrastructure development among the political parties. "After the successful completion of second Constituent Assembly (CA) election, there has been a light at the end of tunnel that the investment-friendly environment is on cards. The elected new government will carry the baton and encourage more investment in the country," Koirala said, claiming that the incumbent government has done some remarkable job to completely end the problem of load-shedding in next three years.
However, former finance minister and Nepali Congress leader Dr Ram Sharan Mahat, on the occasion said that a strong government can change the course of economic development. "The weak government can neither ensure law and order nor fulfil its promises," he said, development is not possible without stopping lawlessness completely. "Skill and policy are more important for the development in the current world than natural resources."
Saying that the flawed thinking among the people that only government is the power, he said that everyone is searching for white-collar job and no one is ready to do blue-collar job. "The table-job has eroded the productivity of labours."
Every finance minister has allocated budget for social security but there is no proper accounts of where the budget has been spent," he added.

Likewise, another former finance minister Surendra Pandey, said that the focus on energy and infrastructure will help create enough employment in the country.
Though I belong to the schooling of revolutionary land reform and distribution of land to poor, I realised that one can distribute only one's property not others," he said, adding that the schooling of distribution was wrong. "The state must be strong enough to implement its policies."
The minimum economic agenda will find no opposers, said another former finance minister and UCPN-Maoist leader Barshaman Pun. "The successive governments failed to kick start economic development, even after political change," he said, adding that his party will support the government on the basis of its performance on economic development and good governance.
Confederation of Nepalese Industries (CNI) president emeritus Binod Chaudhary, on the occasion, blasted the political parties for delay in forming the government. "The political parties have failed to learn the lesion," he said, hailing the incumbent government for helping float the economy smoothly.

Tourist arrivals in December decrease

No wonder the tourist arrivals by air in the last month of the year 2013 decreased due to travel advisory by the major markets on their own projection of unrest during and after the second Constituent Assembly (CA) election on November 19.

Immigration Office at the Tribhuvan International Airport (TIA) revealed that visitor arrivals in December 2013 by air have decreased by 4.9 per cent to 42,601 compared to the same month last year, when some 2,173 more visitors to a total of 44,774 have entered Nepal by air.

The European, American and Chinese market that saw negative trend has hit the total arrivals, though the South Asian market has shown positive growth of 1.6 per cent with a total of 13,521 international visitors, who visited Nepal in December compared to the total arrival figures 13,302 in December 2012.

Bangladesh by 40.3 per cent and Sri Lanka by 49.4 per cent compared to the figures of 2012 of the same month has contributed to the SAARC positive arrivals growth. "The negative growth has been recorded in Indian market by one per cent and Pakistan by 67.2 per cent in compared to December, 2012," the Nepal Tourism Board (NTB) that compiles the data and publishes revealed.

Likewise, Asia segment – other than SAARC region – has also shown a negative growth by 3.1 per cent in total, though Malaysia (up by 10 per cent), Chinese Taipei (up by 3.2 per cent) and Thailand (up by 3.3 per cent) with a significant decrease on Chinese arrivals down by 9.3 per cent compared to the figures of last December.

European segment has posted weaker arrival figures and have registered overall negative growth by 8.7 per cent as arrivals from Belgium, Italy, Norway, Russia, Spain, Switzerland, and Sweden, have posted positive growths, whereas arrivals from Czech Republic, Denmark, France, Germany, the Netherlands and the UK have shown  negative growths.
However, the Oceania and America region  have witnessed a negative growth of 16.3 per cent and 6.1 per cent, respectively.

Nepal had observed a sustained growth in international tourist arrivals since June 2009 but suffered a decline in the second half of 2013. Experts suggest that the decrease in arrivals in November might also be due to the inconsistent air fare to and from Nepal to major gateways. The decline also reflects the volatile nature of international tourist movement which is easily affected by factors like cost of traveling, travel season and many other internal and external issues.

Tourist arrivals drop in November

As expected the number of foreign visitors to Nepal via air has decreased in November due to travel advisory of the UK and the US during the second Constituent Assembly (CA) election.

"The number of foreign tourists to Nepal via air dropped by 7.01 per cent or 4,166 – compared to the figures of the same month last year – to 55,245 last month," the figures of the Immigration Office, Tribhuwan International Airport (TIA) revealed. "Last Novemer, some 59,411 foreign tourists had visited Nepal via air."

Nepal had been observing a sustained growth in international tourist arrivals since June 2009 but started suffering a decline in the second half of 2013 may be due to the inconsistent air fare to and from Nepal to major gateways and coinciding with the CA election on November 19, Nepal Tourism Board said, adding that the decline also reflects the volatile nature of international tourists' movement which is easily affected by factors such as cost of traveling, the situation at the destination country, the global economic trends and traveling spirit of international visitors

Although, the IMF has estimated that the global economic growth is in low gear, the international tourist arrivals have shown increases of five per cent in the first eight months compared to the same period of 2012, according to UNWTO. The Asia and the Pacific region recorded six per cent more arrivals, which is largely due to the high growth of the South-East Asia region (by 12 per cent).
likewise, the number of Nepalese arrivals in November from TIA has also declined by 27 per cent compared to the same month last year. "A total of 52,970 Nepalis arrived in Nepal in November, against last November's 72,735," it said, expecting that the next year might see improvement in tourist arrivals in Nepal as it is heading towards stability.