Himalayan consensus summit concludes

The fourth edition of Himalayan Consensus Summit concluded today with six sessions and three presentations. The summit – an annual event bringing together pioneers, business and financial leaders across the region to forge pragmatic ways to local challenges – was hosted by the Himalayan Consensus Institute, Hong Kong with Nepal Economic Forum (NEF) as its secretariat.
The annual summit stands atop the Himalayan Consensus process that was initiated with the issuance of the Himalayan Consensus Declaration in November 2014, according to the organisers. "The process symbolises a unique paradigm focused on keeping socio-economic development abreast with environmental conservation in one of the world’s most economically dynamic, environmentally fragile and socially vulnerable regions that is the Himalayan region."
The process concentrates on Himalayan knowledge and traditions and channelises the same through the summit to achieve solutions in the form of concrete outcomes that are pragmatic, policy-driven as well as applicable and adapted by the concerned governments in the region.
The Summit this year was supported by Peak Re, a reinsurance company based in Hong Kong and the Swiss Agency for Development and Cooperation SDC as the principal sponsors. Altai Himalaya, Embassy of Australia in Nepal, Embassy of Federal Republic of Germany Kathmandu, European Union in Nepal, Himalayan General Insurance, International Labour Organisation (ILO) Country Office for Nepal and The Asia Foundation were the sponsors.
The Summit – cantered on the emerging concept of Himalayan Circular Economy – witnessed various presentations on impacts of climate change in the Hindu Kush Himalayan region. Likewise, speakers in other sessions highlighted the much needed transformation towards a prosperous and low-carbon development in the region and its effects on the contemporary developmental issues, particularly in the Himalayan region.
As four of the states in the Himalayan region are preparing to graduate from the least developed country status by 2025, one of the presentations in the summit analysed ‘the future of work’. ILO Country Office for Nepal director Richard S Howard, on the occasion, stressed that more investments need to be poured into peoples’ capabilities, institutions of work and decent and sustainable work.

Blockade institutionalised ‘black economy’: Experts

Experts said that the five month long blockade not only fueled the black economy and corruption but also institutionalised them.
Speaking at an interaction on ‘Post Disaster Assessment: Blockade 2015-16’ organised jointly by Nepal Economic Forum (NEF) and Alliance for Social Dialogue in Kathmandu today, they also said that the society has accepted black economy and corruption as the government was seen to support the black market activities during the period.
Journalists and political commentator Chandrakishore Jha, who is based in Birgunj, pointed that protection provided by the state to key players of the black market was a reason for the uncontrolled flourishing of the black market. He said the state had been Kathmandu-centric and indifferent to the concerns of the bordering areas, which were exemplified by the fact that during the blockade, getting supplies to Kathmandu was viewed as the priority, ignoring the people along the border towns who were also suffering as a result of the supply shock.
On the social front, he said social relations should be viewed as a key capital in the economy but dissatisfaction in the Tarai-Madhes, which gave rise to the blockade as a by-product, has heightened the discord in social relations.
Likewise, Janakpur-based social researcher and political commentator Surendra Labh said the social acceptance of the black economy exposed the society to dangers of that becoming the dominant norm. He talked about how corrupt attitude is celebrated in our society and our socialization process congratulates people geared toward materialism. Labh also talked about how different categories of people perceived the blockade differently and how it was important to view the blockade as a by-product of the discord brewing in the Tarai-Madhes.
On the occasion, NEF advisory board-member and professor at the South Asian University Mallika Shakya talked about the importance of understanding the difference in perception of the blockade from the capital and the border towns. In the context of the blockade and the black market that emerged during this period, she noted that the corrupt elite had captured and adapted the informal economy’s ways of operation to extract financial gains out of crisis situations. She also stressed on the need to view the blockade ordeal through the lenses of ‘South Asianness’.
The impact of the embargo that continued from September to February was felt across the economy as essential imports were stuck on the Indian side of the border and crippling fuel shortages badly hit the production, distribution and consumption processes of the economy, according to a report 'Post Disaster Assessment: Blockade 2015-16' prepared by the NEF and Alliance for Social Dialogue. "The private sector suffered losses totaling a staggering Rs 202.5 billion ($1.96 billion) – equivalent to almost a quarter of the current fiscal year’s budget – as a result of the blockade," it added.
For more than a year now, the Nepali economy has been gasping for breath as multiple challenges choked the country one after the other. The devastating earthquakes of 2015 claimed close to 9,000 lives and injured more than 22,000 inflicted enormous costs – estimated at $7 billion – on the economy and is expected to push close to 700,000 people below the poverty line.
Just months later, constitution-related protests in the Tarai-Madhesh region which culminated with the border blockade came as another major shock to the economy and the society at large. As the trade blockade continued, with vital supplies to the landlocked country virtually cut-off, the resultant energy crisis made its impact felt across all sectors of the economy.
On one hand, essential imports like medicines and fuel was not allowed to enter the country, and on the other hand, the crippling shortage of fuel adversely affected production, distribution, and consumption processes of the economy.
On the occasion, member of parliament and the chairman of the Parliamentary Development Committee Rabindra Adhikari stressed the importance of trade and transit diversification. He said the country cannot be truly sovereign till the day it diversifies trade and transit and moves away from excessive dependence on a single trading partner for essential commodities. Sharing his experiences of travelling across the postal highway in the Tarai, he identified it as a lifeline for national integration, highlighting that infrastructural connectivity should play a key role for integrating different geographic regions and thereby promoting overall national integration.
The key themes that emerged during the course of the discussions revolved around the need for social transformation in order to prevent corrupt attitudes becoming the new normal, moving toward a self-reliant economy through diversification of trade and transit, and demanding accountability from the government.
The longer term implications of the blockade could be much more complex and adverse, the speakers said, brainstorming in an attempt to trace the blockade’s ramifications and provide a fresh pair of lenses to the discourse.

Govt set to amend tax system to encourage M&A

The government is planning some incentives to facilitate Merger and Acquisitions (M&A).
"The government -- after its bitter experiences from the past -- is planning to bring some changes in tax system to facilitate merger and acquisitions," said finance secretary Ramehwor Khanal, speaking at an interactive session on 'Appreciating Mergers & Acquisitions' organised by National Banking Training Institute (NBTI) and Nepal Economic Forum (NEF) here in the capital today.
Mergers & Acquisitions are slowly becoming the buzzwords in Nepali business-o-sphere but due to various constraints like taxes are the hindrances. "Thus, the government has also been thinking of giving tax rebate as a sweetener," Khanal added.
"Domestic banks should merge and have bigger capital base to increase their competitiveness," he said adding that after January, Nepal is open to international banks for wholesale banking.
"Thus, it's important for local banks to be stronger and prepare for the competition," he said adding that the M&A could reduce the cost of operations, though in Nepal merger has been also difficult due to egos and prestige issues among the chairmen and CEOs.
"The cultural integration, technology adaptation, and the huge cost are some of the serious issues that could spoil the M&A scene," said Suman Rayamajhi co-founder of the Beed Investment.
"Despite various hurdles, M&A is inevitable," he said adding that there has to be lots of homework and pre-and -post merger planning for a successful merger.
However, the rate of success of M&A across the globe is at 15 per cent only.
Sujit Mundul, CEO of the Standard Chartered Bank Nepal, sharing his experience of merger between the Standard Chartered Bank and Grindlays Bank agreed that the rate of successful merger is very low.
Sujeev Shakya, president of NEF, urged the government to bring some soaps like tax rebate and golden hand-shake to facilitate the mergers, as it is the need of the hour.
"It's the right time to discuss the mergers as rights issues are being under-subscribed and liquidity crunch is hurting the banking sector," said Siddhanta Raj Pandey, CEO of Ace Development Bank and board member of NBTI. "However, the government's revised tax system and labour law will decide the fate of possible mergers," he added.

PEs spend more on staff
KATHMANDU: Talking about the cost on employees, finance secretary said that per capita expenditure on the Public Entreprises (PEs) is much more. "The PEs spent Rs 50,000 per head," he said adding that it is much more than any private institutions that are considered better pay masters. "Even the loss-making PEs are spending Rs 25,000 per head," Khanal added. "The productivity of the employees is however less than the money spent on them." —HNS