Government hikes gold import duty

To check the cross border smuggling, the government today revised the custom duty in the imports of gold upwards.

After India hiked the duty in the fiscal policy, there has been rise in the cross border smuggling of the precious yellow metal.
A cabinet meeting today hiked the import duty of gold to Rs 2,300 per 10 gram from Rs 1,500.
Earlier, the government had revised the custom duty on imports of gold to
Rs 1,500 from Rs 1,000 per 10 gm and to Rs 4,600 from Rs 2,400 per kg of silver in February.
According to Nepal Gold and Silver Dealers’ Association (Negosida), with the hike in the imports duty, the gold price might go up by around Rs 500 per tola (11.644 gm).
The gold and silver traders had been demanding Rs 2,500 hike in the custom duty on gold to check cross border smuggling due to lower customs duty in Nepal than in India. After India had hiked the custom duty on standard gold to four per cent from two per cent, and customs duty on non-standard gold to 10 per cent from five per cent in its budget in March.

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.

Central bank seeks assistance in fight against flow of dirty money

The central bank has asked the donors, especially International Monetary Fund (IMF), to continue their help in reforming the laws and increase capacity of the supervisory bodies that could help in fighting against the flow of dirty money.
The IMF has been helping Nepal to reform anti-money laundering laws, increase supervisory capacity of the Financial Information Unit (FIU) under the central bank, apart from preparing the national strategy, which the country has already prepared with the help of IMF.
The IMF is providing technical assistance to Nepal in executing the national strategy, according to the central bank.
Nepal Rastra Bank governor Dr Yubraj Khatiwada appraised the annual meeting of the steering committee of anti-money laundering-combating the financing of terrorism (AML-CFT) Topical Trust Fund under the IMF's coordination about developments in Nepal on the issues of legal reforms regarding the anti-money laundering.
Over a dozen donors were present in the meeting on Tuesday in Doha, where they welcomed Nepal's progress on fighting the flow of dirty money, despite various challenges. But they also asked Nepal to implement its earlier promises as soon as possible.
Meanwhile, a team led by central bank deputy governor Maha Prasad  Adhikari is going to New Delhi on Monday to take part in the face-to-face interaction to be held on May 8.
Nepal will present its current status on its move towards fighting against the flow of dirty money during the face-to-face, according to the central bank. Though, the country has ratified AML UN conventions, it has still to pass the three key Bills — Mutual Legal Assistance Bill, Extradition Bill and Bill Against Organised Crime — that are among the major commitments to the Financial Action Task Force (FATF)
that is an inter-governmental body established in 1989 by the ministers of its member jurisdictions to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system. It is therefore a 'policy-making body' which works to generate the necessary political will to bring about national legislative and regulatory
reforms in these areas.
Similarly, the FATF's decision making body — the FATF Plenary — meets three times every year. This year it met in February in Paris and granted time extension to Nepal to pass the three remaining Bills. The new recommendations it passed in February meeting can also help combat corruption.
The renewed February mandate will allow the FATF — through its global network of 187 partner countries — to ensure that all are doing their part to make the international financial system off-limits to criminals, terrorists and others threats to financial stability.

ADB secures more than $12bn to help Asia's poorest

The Asian Development Bank (ADB) has secured Special Drawing Rights 7.9 billion ($12.4 billion) for the next four-year phase of its concessional development fund that will provide critical financial support to fight poverty in the Asia and Pacific region.
The contributions to the Asian Development Fund (ADF), which will cover ADB operations from 2013 to 2016, represent an increase of 11.1 per cent in SDR (9.5 per cent in US dollar terms) from the fund’s previous four-year period.
"ADF borrowers face significant development challenges, and have fewer  resources of their own to address them. We particularly appreciate the strong support and generosity of our donor countries in view of the difficult challenges many are facing at home themselves,” said ADB president Haruhiko Kuroda.
The ADF will help improve the lives of millions of Asia’s poorest through inclusive and environmentally sustainable growth, including improved access to education, social safety nets and the development of clean and renewable energy. They will also seek to narrow the development gaps and rising income inequality, and help vulnerable countries cope with shocks such as rising food and fuel prices, natural disasters and conflict.
The ADF will also be used to promote gender mainstreaming, good governance, food security, private sector development, and stronger regional cooperation. Special attention will be given to countries affected by conflict and smaller island states with fragile economies.
Donors agreed to establish a Disaster Response Facility under ADF on a pilot basis to support the poorest countries in responding to natural disasters. The ADF continues to be a critical source of finance for badly needed economic and social infrastructure improvements. Over the next four-year period, for example, almost 16,000 kilometers of road are expected to be upgraded, opening up new economic opportunities and better access to social services for over 20 million people. More than 2.5 million students will benefit from school improvement programs or other direct support to the education sector. And many new households will be connected to electricity (over 340,000), served with water
supply (560,000) and sanitation (440,000).
"ADF support will go a long way in helping countries like Bangladesh provide critically needed social services to our citizens," said Bangladesh Finance Minister Abul Maal Abdul Muhith. "We will redouble our efforts to deliver results and bring better opportunities and a brighter future to our people, especially to the poorest communities."
Bangladesh is one of the largest recipients of ADF resources and was one of six ADF recipient countries who participated in the negotiations.
ADB has adopted various measures in recent years as part of its continuing efforts to improve the efficiency and effectiveness of its development assistance, including in its ADF operations. These include a results-focused management system, more flexible business processes, improved communication and accountability of policies and enhanced gender mainstreaming in its operations.

Hotel Soaltee gets new general manager

Nalin Mandiratta has been appointed as the new general manager of the Soaltee Crowne Plaza.
He joined the Soaltee Crowne Plaza from Crowne Plaza Rohini New Delhi,  where he was the pre-opening and opening general manager. "As a general manager of Soaltee Crowne Plaza Kathmandu, he will be responsible towards the overall operations and management of this 282
room hotel," according to the hotel that is that is one of the listed hotels at the Nepal Stock Exchange (Nepse).
Hotel Soaltee has listed 17,908,990 units of shares at a face value of Rs 10 per unit that was last traded at Rs 197 per unit on April 2. "At
the ending of the quarter on March 31, the hotel has posted Rs 163.43 million profit before tax and Rs 120.21 million profit after tax," according to the hotel's third quarter's financial statistics.
"Sailing on the sustained tourist arrivals, the hotel has been able to  increase its total income by 11.78 per cent compared to the same period of last fiscal year."
Soaltee Crowne Plaza Kathmandu — a five star deluxe hotel — is managed
by InterContinental Hotels Group PLC boasts an array of amenities with 282 rooms, seven meeting spaces, city’s finest specialty restaurants and bars, state-of- the-art fitness centre, beauty salon along with various recreational facilities, which makes it an ideal destination for both business and leisure travellers.
"Mandiratta key focus will be to continue on the path of providing branded experience to the guests by implementing true InterContinental Hotels standards at the hotel," according to the hotel. "He is also focused towards developing a robust training plan for the development of hotel staff and continues on the product development initiatives of the hotel."
He has been with the IHG for over two years and has more than 20 years
of experience in the hospitality industry with significant expertise in the hotel operations, across the reputed hotel brands like Hilton, Marriott and Carlson hotels at various senior management positions.
Mandiratta, who holds a diploma in Hotel Management from the Institute  of Hotel Management Catering Technology and Applied Nutrition, Bangalore also, has Bachelor of Arts degree from the Delhi University.

Market concentration to hit trade

Market and product concentration will again hit the country's international trade hard anytime.
The country has earned almost half of the total export receipt from around nine products which means export concentration has increased, which could hit the total export earning anytime again like before, in the absence of product diversification. Similarly, one fourth of the total export receipt comes from India increasing the country's vulnerability due to single market concentration.
Woolen carpets, textiles, readymade garments, pashmina, pulses, zinc sheet, jute goods, polyester yarn and cardamom are the products that fetched over a billion rupees each to make up almost half of the total export earnings in the first eight months of the current fiscal year.
"However, single market concentration is more vulnerable to international trade than product concentration," said trade expert Ratnakar Adhikari. “Product diversification is also necessary to mitigate the risk but the current international trade of the country is more vulnerable due to single market concentration on India,” he said, adding that Nepal's current export to India stands at around 70
per cent of the total exports.
Earlier too, Nepali exports of readymade garments plunged — hurting the economy and employment after the MFN status granted by the US to Nepal expired in 2004 — due to single market concentration.
"In the first eight months of the current fiscal year, exports to India alone stood at Rs 32.59 billion and exports to other countries stood at Rs 15.96 billion making a total of Rs 48.56 billion worth of exports," according to the central bank data.
Exports to India went up by 14.5 per cent compared to an increase of 10.1 per cent in the same period of the previous fiscal year and exports to other countries increased by 13.5 per cent against a decrease of 1.7 per cent in the same period of the last fiscal year.
Exports of textiles, polyester yarn, GI pipe, stone and sand, and cardamom contributed to an increase in export to India, whereas woolen carpets, readymade garments, pashmina, Nepali paper and paper products, and tanned skin contributed to the increase in exports to other countries.
However, merchandise imports also increased by 16.6 per cent to Rs 295.24 billion, against an increase of 1.2 per cent to Rs 253.13 billion in the same period of the last fiscal year.
On the import side, the country has a more dismal scenario as the total export receipt of Rs 48.56 billion is not enough to pay for a single petroleum product import bill as the country has imported petroleum products worth Rs 58.01 billion in the first eight months of the current fiscal year.
"Similarly, trade deficit with India increased by 11.5 per cent compared to a growth of 28.2 per cent in the same period of the last fiscal year, whereas trade deficit with other countries increased by 28.9 per cent against a drop of 30.9 per cent in the same period of the previous year," the central bank said, adding that an increase in import growth led to a reduction in the export to import ratio to 16.4 per cent from 16.8 per cent a year ago.
"The total trade deficit has gone up by 17.1 per cent to Rs 246.68 billion."


Top Five exports to third countries
1. Woolen Carpet — Rs 4.60 billion
2. Readymade garments — Rs 3.06 billion
3. Pashmina — Rs 2.08 billion
4. Pulses — Rs 1.40 billion
5. Tanned skin — Rs 429.7 million
(Source: Nepal Rastra Bank)

Top Five exports to India
1. Textiles — Rs 3.11 billion
2. Zink Sheet — Rs 2.92 billion
3. Jute goods — Rs 2.71 billion
4. Polyster yarn — Rs 2.56 billion
5. Cardmom — Rs 1.98 billion
(Source: Nepal Rastra Bank)

South Asian arrivals propel tourist inflow up

Propelled by the strong and sustained South Asian arrivals by air, the country witnessed a sustained tourist inflow in April.
"Visitor arrivals by air in April have increased by 14.3 per cent — to 59,415 — compared to the same month last year, according to the figures released by Immigration Office, Tribhuvan International Airport (TIA).
The arrivals from South Asian region have shown positive growth of 35.4 per cent with mixed performance. "The arrivals from India and Pakistan went up by 44.5 per cent and 14.8 per cent, respectively whereas arrivals from Bangladesh and Sri Lanka dropped by 12.9 per cent and 41.2 per cent, respectively," the data compiled by the Nepal Tourism Board revealed, adding that a sustained growth of 36.8 per cent has been observed in the arrivals from the South Asian region
during the first four months of this year compared to the same period last year.
Similarly, Asia — except South Asian region — saw overall rise of 16.7 per cent. Except for Thailand — that dropped by 14.7 per cent — almost all the markets have shown positive trend with China (up by 42.9 per cent), Malaysia (up by 16.8 per cent), Singapore (up by 5.7 per cent) and Japan (up by 13.1 per cent) compared to the same month last year.
"Between January and April, the arrivals from Asia rose by 21.1 per cent compared to the same period last year," it added.
As far as the long haul markets, Europe registered overall positive growth of 3.2 per cent compared to the same month last year with total visitor arrivals of 19,286. "Arrivals from Denmark, Germany, Italy, Russia and Sweden were up by 4.9 per cent, 5.5 per cent,115.8 per cent, 83.1 per cent and 4.7 per cent, respectively," it said, adding that the Netherlands, France, UK were some of the major markets to register negative growths in April.
The figures show increasing trend in the visitor arrivals from Australia ( up by 4.7 per cent) whereas the arrivals from New Zealand dropped by 9.5 per cent. However, the US and Canada, both the markets have registered positive growth of 9.8 per cent and 39.1 per cent, respectively.
Overall in the four months period of January-April, India grew at an average of 43.9 per cent, China (up by 38.3 per cent), Germany (40.3 per cent), France (up by 8.4 per cent), UK (up by four per cent) and US (up by 10.7 per cent).
The visitor arrivals totaled 207,961 between January and April, up by 23.1 per cent compared to the same period last year as the country received a total of 39,003 more tourists between January and April this year in comparison to the same period last year.
A total of 67,810 foreign tourists departed from the international airport in April, whereas some 58,483 Nepalis arrived and some 72,726 Nepalis departed from the Tribhuvan International Airport in April.