East African community to discuss regional cyberlaw

The East African Community (EAC) Task Force on Cyberlaws will meet in Mombasa, Kenya on March 28–30 to discuss the next phase in putting into effect laws endorsed by countries of the region to smooth the conduct of business through information and communication technologies (ICTs).
The meeting will be followed by a March 31- April 1 briefing for members of the Parliament of Kenya on selected legal and regulatory issues relating to e-commerce, m-commerce and business operations conducted by mobile devices, said the UNCTAD press note.
The opening session of the briefing will be attended by the Kenyan minister of information and communication technology, Samuel Poghisio.
The Task Force meeting, organised jointly by the EAC secretariat and UNCTAD, will review progress in implementing the Cyberlaw Framework’s Phase I, which covers electronic transactions, electronic signatures and authentication, data protection and privacy, consumer protection, and computer crime.
In addition, officials will consider a draft framework for Phase II, which focuses on intellectual property rights, competition, e-taxation and information security.
The intent is to finalise the draft and submit it for adoption by relevant EAC institutions. Thirty-five members of the task force will attend, including representatives from the Ministry of East African Cooperation and national officials from Ministries of Justice, Law Reform Commissions, ICT Ministries, and regulatory institutions dealing with telecommunications, revenue and competition. Other participants will come from the East African Business Council and the East African Legislative Assembly. Also, representatives from the United Nations Economic Commission for Africa (UNECA) and the United Nations Commission on International Trade Law (UNCITRAL) will attend. The framework for Phase I of the harmonization project was endorsed by the EAC Council of Ministers last November. Developing country officials are increasingly aware of the need to adapt and harmonize legislation to take into account the Internet economy and the potential of both e-commerce and m-commerce for boosting domestic and cross-border business.
UNCTAD supports activities to build the capacities of developing countries in the ICT field. In East Africa and other regions, it has helped lawmakers prepare cyberlaws that protect both consumers and businesses, and encourage economic growth. EAC member countries have taken a number of steps to adapt legislation to the increased use of ICTs, in particular mobile phones, for business and financial operations. The briefing of members of the Kenyan Parliament will cover legal and regulatory issues relating to e-commerce and m-commerce, and review the EAC cyberlaw harmonization process. The briefing, organized by the Commission on Communications of Kenya and UNCTAD, aims not only to accelerate the process of enacting draft cyberlaws, but to ensure proper implementation and subsequent administration of the EAC framework.

The briefing is particularly relevant because delivery of the Government’s development strategy, Vision 2030, depends in great part on ICT platforms. The strategy also includes major targets related to regional trade. The Government has shown strong determination to advance on cyberlaw reforms, given the increasing use of mobile phones within the country forfinancial transactions. Kenya is currently deploying many new mobile money services and applications following the introduction of its M-PESA – a mobile-phone based money transfer service – in 2007. These latest activities on cyberlegislation are being funded by the Government of Finland, which since 2006 has supported EAC efforts to harmonize cyberlaws.

Supplementary Budget in offing, lawmakes at dark

The government is bringing Supplementary Budget by Friday, but the parliamentarians have no clue of who is preparing the budget and where.
"Even the Finance Ministry is being kept in dark,” claimed the parliamentarians.
But Dr Dilli Raj Khanal, a member of the Supplementary Budget preparatory team that also has Dr Sriram Poudel and Dr Dinesh Chandra Devkota, said that they are bringing Supplementary Budget by the end of this week.
Khanal also claimed that Supplementary Budget will address current economic anomalies, and stimulate exports encouraging private sector investment, though there is less time to implement it.
The fiscal year has only four months. "Due to less time to implement the budget, it will be realistic, he added.
“Evaporation of exports has bled the economy,” Khanal said, adding that the fiscal policy must stimulate exports’ share in the total trade that has dropped to 14 per cent.
“It will also address the current liquidity crunch in the banks and increase their lending capacity to the productive sector,” he said, adding that without new investment on productive sectors more employment could not be created.
The current ordinance budget presented by Surendra Pandey lacked vision as it has come without programme and policy, he justified the need of the Supplementary Budget that he thinks will expedite capital expenditure and stimulate economic activities.
However, parliamentarians today raised hell over the style of budget preparation in the Legislature Parliament.
At a time when there is only four months left in the fiscal year, the government is bringing Supplementary Budget, said Dr Ram Sharan Mahat, the Nepali Congress lawmake objecting the style of budget preparation. "We have heard that the Supplementary Budget is being prepared in ‘Guerrilla style,” he said, adding that a new economic policy is need of the hour to boost production and create conducive investment environment.
The production sector is perfoming poorly due to regular power outage, labour problems and lack of government initiatives.
Tabling a Proposal of Public Interest, Mahat seconded by Dr Prakash Chandra Lohani and Binod Chaudhary urged to boost the investors’ confidence, stop capital fligh and contain the price hike.
The consumption expenditure to GDP ratio has increased and gross national saving is shrinking, Mahat said, adding that industries are being closed blocking the no new employment opportunities, due to plunge in exports Forex reserve has dropped and the country is moving towards uncertain future.
Similarly Binod Chaudhary, CPN-UML lawmaker, said that the government has to create conducive environment for the industries to propel the economic growth.
The then finance minister Surendra Pandey had brought Rs 337.9 billion budget through ordinance for the fiscal year 2010-11, four months late than the schedule.

GDP growth in last 10 years

Nepal's GDP growth in last 10 years

2001-02 – 0.16 per cent
2002-03 – 3.77 per cent
2003-04 – 4.41 per cent
2004-05 – 3.23 per cent
2005-06 – 3.73 per cent
2006-07 – 2.75 per cent
2007-08 – 5.80 per cent
2008-09 – 3.77 per cent
2009-10 – 3.97 per cent
2010-11 – 3.47 per cent (projection)

Nepal's GDP per capita in last 10 years

2001-02 -- $259
2002-03 -- $255
2003-04 -- $261
2004-05 -- $293
2005-06 -- $328
2006-07 -- $350
2007-08 -- $390
2008-09 -- $465
2009-10 -- $556
2010-11 -- $642

GDP Growth: Economic growth is the increase of per capita gross domestic product (GDP) or other measures of aggregate income, typically reported as the annual rate of change in real GDP. Economic growth is primarily driven by improvements in productivity, which involves producing more goods and services with the same inputs of labor, capital, energy and materials. Economists draw a distinction between short-term economic stabilization and long-term economic growth. The topic of economic growth is primarily concerned with the long run. The short-run variation of economic growth is termed the business cycle.

GDP Per Capita: Per capita income or income per person is the numerical quotient of income divided by population, in monetary terms. It is a measure of all sources of income in an economic aggregate of a country. It does not measure income distribution or wealth.

PAC directs Casinos not to allow Nepalis, strictly

Public Accounts Committee (PAC) under the Legislature-Parliament today reiterated its earlier direction to revoke licences of those casinos that have not adhered to the strict ruling of the committee not to allow Nepalis in the casinos, and have not paid their dues.
The parliamentary committee also directed the concerned ministries to recover dues by auctioning casinos' property, ensure rights of staffs currently working in casinos, keep entry records of visitors and present Casino Regulation within a week before the committee.
The committee reiterating its decision of December 28, 2010 and January 27, directed Finance Ministry, Tourism Ministry and Inland Revenue Department to present the update every 15 days.
Earlier on January 27, the parliamentary committee has directed the Tourism Ministry to revoke the licence of the casinos, if they didnot pay their dues within 35 days. "However, the casinos are still operating without paying dues and allowing Nepalis in to play against the law of the land and directives of the committee," said Constituent Assembly (CA) member Dhan Raj Gurung.
After the committee's decree, some casions have cleared their dues, some have paid only a little and others have disobeyed, he said, adding that the earlier directives should be implemented immediately. "If casinos will not pay, the hotels that have been granted licence to operate casino will pay." The casinos have paid Rs 512 million after the committees decree to revoke the licence, if they donot pay their dues.
"However, some of the casino owners are out of touch disobeying the parliamentary committee," another CA member Lal Babu Pandit said, accusing them of trying to influence the politicians and bureaucracy to seek amnesty.
"If the committee does not bring them to book, government coffer will hit hard," he added.
Most of the parliamentarians showed serious concern over social security of staff, who are employed in the casinos that have not paid their dues.
"To safeguard social security of some 7,000 to 8,000 staff, the assets of those casinos -- that have not paid by the deadline -- have to be auctioned and staff be paid their salary," said CA member Narayan Dahal. "Some of the casinos have not paid their staff since four months. One staff is reportedly committed suicide yesterday as he was frustrated with the casino that did not pay his salary."
Though parliamentarians came heavily on the casinos, they opined that the tourism sector should not be discouraged as the five-star hotels that have the licence to operate casinos are paying their taxes regularly. "Casinos have to be regulated and brought to book without discouraging tourism sector," they said. The parliamentarians also thanked tourism minintry for closing mini-casinos after their order.

Casino Anna gets new investor
KATHMANDU: Casino Anna has got new investor Shivam Intex Hotel and Restaurent Pvt Ltd owned by Arun Kumar Singh and Ashok Wassan. "We have got the new company -- that has registered itself yesterday formally -- to operate Casino Anna," said Nepal Tourism, Hotel, Casino and Restaurent Workers' Union executive member Krishna Pandey. Shivam Intex Hotel and Restaurent Pvt Ltd bought 50 per cent share from Nepal Recreation Centre (NRC) that was operating the casino earlier and is brining investment from India.

Central Bank declares Gorkha Development Bank 'troubled', to send Samjhana Finance to liquidation

The central bank declared Gorkha Development Bank a 'troubled financial institution' and decided to send Samjhana Finance to liquidation.
The central bank’s board of directors meeting today evening has taken the decision under the Nepal Rastra Bank Act that gives the central bank the right to declare any banks and financial institutions troubled in case of financial discrepancies.
The bank will now be restricted to mobilise deposits and float loans after being declared a troubled financial institution.
Gurkha Development Bank (Nepal) Ltd -- promoted by British Gurkhas had been in trouble after a scandal over ‘embezzlement’ of Rs 130 million by its former executive director D B Bomjan and other staffers.
The bank replaced its ‘tainted’ executive director Bomjan and his team with chairman Nirmal Gurung in the second week of March. But last week, Bomjan again took over ‘forcefully’ replacing Gurung.
The central bank could not remain silence in such cases as the banks and financial institutions are losing their focus from good governance and regulatory compliance and involved in petty interest exposing the depositors’ money to risk.
Earlier, the central bank had directed Gurkha Development Bank to prepare a Due Diligence Report after former executive director DB Bamjan was found to have been involved in embezzlement while issuing credit to a customer Panchalal Maharjan.
Recently most of the banks and financial institutions have come into trouble after they failed in maintain good governance.
Similarly, the central bank decided to send Samjhana Finance after its explanation could not satisfy the central bank. The finance company submitted its explanation with proposal of new management that would take the management over and run it but central bank rejected the proposal and today decided to send it to the liquidation.
After declaring Samjhana Finance a troubled financial institution, the central bank has last year restricted it to mobilise deposits and float loans on the basis of its weak capital base and high non-performing asset.
The Banepa-headquartered finance company has an outstanding loan worth Rs 210 million and its non-banking assets stands at Rs 300 million.

Anti-Money Laundering case gone wrong

A man claims 'illegal money' in the US Court, dupes Nepal's finance ministry, foreign ministry and central bank easily and 'gets away' with $1 million, almost.
Its not the case of poor communication between the authorities rather a case of how deep the coruption is rooted in the bureaucracy and how one can 'influnce' the ministries and even the central bank.
Though, the central bank is still silence on the issue, the finance ministry has asked the Nepali embassy in Washington to get the detailed information on the case and forward the report to the US Court that the ministry sent today through courier.
The US Court had asked central bank and finance ministry on the claim of Asim Khatri Chhetri (KC) but the responsible authorities never received the letter.
"It proves that strong lobbying of KC inside the central bank and finance ministry," a senior central bank official said, adding that the letter never reached central bank governor or finance secretary but made its way back to the US Court that gave verdict on the basis of the
However, today the ministry has directed Nepali embassy in washington DC to hold talks with the US authority and clarify the government's stand on the case that is a clear case of money laundering.
In his petition to the US Court, KC had sought retrieval of the money he paid to Wu Lixian, a Chinese national for supplying logistics to the Nepal Army and Nepal Police.
The money was received in 2008 by Nepal Bangladesh Bank, Bhaisepati branch in the account of Chinese national Wu. But the bank suspecting something fishy reported the central bank instead of paying it to him.
"Neither the purchase has been made in Nepal nor the goods were delivered in Nepal," the finance ministry said, adding that the money has been however transferred to Nepal in a Nepali bank. "It is a clear case of Anti-Money Laundering but handled in a most unfortunate way."
But, this time around KC has 'almost' received the money after the US Court in New York issued a verdict in his favour two weeks ago.
Based on the court's verdict, Chase Bank that made the payment on July 14, 2008 had deducted $1 million from an account of Nepal Rastra Bank in New York to make the payment.

Revenue and Anti-Money Laundering Department gets cases
KATHMANDU: After the Anti-Money Laundering Act came into effect, the Revenue and Anti-Money Laundering Department has investigated 62 case. "Of them, three are finalised," said Mahesh Prasad Dahal, director general of the department. "Of the three also, one was fined Rs 600,000 as he could not provide the source of income of Rs 300,000," he said, adding that the remaining two got clean chit from the Special Court.

GDP growth declines, GDP per capita doubles

In the last five years, income of a Nepali citizen has doubled from $350 to $642, if we go by the country’s gross domestic product (GDP) per capita but the GDP growth rate has seen no encouraging growth as it is hovering below four per cent in an average. In a country where more than half of the population lives below the international poverty line of $1.25 a day, the rate of unemployment and underemployment approaches half of the working-age population forcing the citizens to move to Malaysia and Gulf states in search of work, and the general standard of living enjoyed by the average Nepali citizen has been deteriorating over the years, the growth in GDP per capita could be confusing to some extent.
“The GDP per capita is a measure of all sources of income in an economic aggregate of a country including the remittance,” said director of the National Accounts Division at the Central Bureau of Statistics (CBS) Suman Raj Aryal.
“However, the remittance is not the component of the GDP,” he added. “That explains the increasing gap between rising GDP per capita and lower GDP growth.
”The country had received Rs 231.72 billion remittance -- apart from pension and other such income from out of Nepal -- in the fiscal year 2009-10 and Rs 118.44 billion by the first six months of the current fiscal year. The key reason of rising GDP per capita but lower GDP growth is also rising consumerism. “The consumption is increasing,” he said, adding that the widening gap between the rising GDP per capita and lowering GDP growth is remittance is being wasted on consumption rather than on productive sector.
The consumption expenditure to GDP ratio that was 90 per cent in 2006-07 has increased to 93.3 per cent this fiscal year, according to the CBS report, revealing that the consumption is increasing. However, gross national saving as percentage of GDP is shrinking to 30 per cent against almost 35 per cent in the 2008-09.
“The decrease in national savings will also make the country dependent on outer resources for development activities,” he said, suggesting the policy makers to take it seriously and divert remittance to the productive sector that can help capital formation and contribute to the GDP too that is projected to grow by 3.47 per cent in the current fiscal year.
Federation of Nepalese Chambers of Commerce and Industry (FNCCI) president Kush Kumar Joshi agreed. “The only remedy is to create conducive environment for investment and encourage production,” Joshi said, adding that agriculture alone cannot save the economy as the economy has diversified in the recent years.
"Other sectors like financial intermediaries emerged in the recent past, however, he opined that giving a boost to the manufacturing sector –that is expected to grow by a mere 1.47 per cent – is the only pills for the current economic ills.

GDP per capita
2006-07 -- $350
2007-08 -- $390
2008-09 -- $465
2009-10 -- $556
2010-11 -- $642

GDP growth
2006-07 -- 2.75 per cent
2007-08 -- 5.80 per cent
2008-09 -- 3.77 per cent
2009-10 -- 3.97 per cent
2010-11 -- 3.47 per cent