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.

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.

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.

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.

Department of Money Laundering Investigation to investigate 5.4 billion black money stashed in HSBC Switzerland

Department of Money laundering Investigation is going to investigate the Rs 5.40 billion black money stashed in the accounts of eight Nepalis at HSBC bank in Switzerland.
"Black money stashed in or out of the country comes into the jurisdiction of the Department of Money laundering Investigation, according to the Anti-Money Laundering Act," informed director general of the department Kewal Bhandari.
It is illegal to park money earned through illegal means at any domestic or foreign banks”, he said, adding that the government can seek information of the accountholders with the Switzerland government. "Since Nepal is a party of Financial Action Task Force, it could seek information on black money parked anywhere in the world."
Nepal had passed Anti-Money Laundering Act with Legal Mutual Agreement Act to check the flow of black money, according to the country's commitment to the FATF, the international watchdog of the flow of illegal money.
Though, there has been a rumor since Panchayat regime that Nepalis have been stashing away their cash in Swiss banks, the political transition after 1990 movement, the trend increased.
'Swiss Leak' has leaked the information of over $1 million black money parked in HSBC Bank of Switzerland. Though, it has failed to name the eight Nepalis, it has leaked that some $54 million has been stashed in 12 confidential accounts on the names of eight Nepalis. Of the 203 countries, Nepal is 116th   among the countries having private account in HSBC Switzerland. Illegal earnings from criminal activities and proceeds from corruption are routed to Swiss banks through various channels.
Leaked by a computer expert of the HSBC Bank in Switzerland in 2007, the list has as many as 100,000 people from various countries with black money in the bank.
The documents obtained by the International Consortium of Investigative Journalists (ICIJ) via Le Monde, had earlier in 2013 too, too revealed 13 Nepalis having their accounts in the Swiss bank.
The government has established the Department of Money Laundering and Investigation according to the commitment in the Anti-Money Laundering Act. However, the frequent changes of the chief of the department, due to political pressure, has made the department ineffective in investigation of black money.
As the Swiss Leak revealed who-is-who in its list of black money depositors, the British bank HSBC Holdings Plc admitted failings by its Swiss subsidiary. HSBC Bank has been blamed for advising account holders to deposit money by dodging tax or misappropriating government or public fund.
Swiss private banking industry, long known for its secrecy, operated differently in the past and this may have resulted in HSBC having had 'a number of clients that may not have been fully compliant with their applicable tax obligations,' said the bank in its statement.

Sagarmatha lands at TIA, NAC gets first Airbus

The ailing national flag carrier today added Airbus A320-200 aircraft – after 27 years – to its international fleet.
Nepal Airlines Corporation's (NAC) new aircraft 'Sagarmatha' landed here today at 4.31 evening amid a huge fanfare at the Tribhuvan International Airport (TIA). The aircraft with the call sign 9N-AKW was welcomed by water cannon salute, traditional music and dance.
As the aircraft neared the hanger, the crowd – including European diplomats, NAC and CAAN staff – cheered, a Pandit chanted Sanskrit mantras and the cameras started flashing..
After Tourism and Civil Aviation minister Deepak Chandra Amatya-led team of 18 – including NAC chair Shiva Sharan Neupane, managing director Madan Kharel and engineers from NAC and Civil Aviation Authority of Nepal (CAAN) – got off the aircraft, they also received a grand applause.
The Airbus A320-200 aircraft yesterday started its maiden flight from the Airbus plant in Hamburg of Germany and landed at Kathmandu today after a stopover in the Qatari Capital Doha for over a night.
The first of the two Airbus – purchased by the NAC from French Airbus Company – has 158-seat with eight seats in business class. It was flown into Kathmandu by Airbus pilot and Captain Shrawan Rijal.
NAC had sent six pilots for necessary training and orientation to fly the Airbus – as they have been flying Boeings 757 for last more than two-and-ahalf-decade – to France. But three of them returned without completing the training, and Captain Rijal and RP Dhakal are still under orientation. They need to complete 50 hours of flight before taking a complete charge by themselves, he added. "The corporation will train more captains and co-pilots."
The second Airbus will arrive within April, he informed.
"The arrival of the new aircraft will help the ailing national flag carrier add new international routes," he said, adding that the first destination of the aircraft will be New Delhi on February 25.
The corporation had cancelled flights to New Delhi – the most profitable sector – and Dubai after one of its two ageing Boeing 757s – Gandaki and Karnali acquired in 1987 and 1988 – started facing regular technical glitch.
Currently, Nepal Airlines operates flights to only four international destinations – Doha, Kuala Lumpur, Bangkok and Hong Kong sectors – with the two age-old Boeings. Due to lack of aircraft, the corporation has been fast losing its international market share that plunged to less than 3 per cent.
"We are hopeful that the arrival of the new aircraft will help increase NAC's market share," he said, adding that the corporation has already unveiled a 10-year plan hoping to restore our lost glory. "In the second phase, NAC plans to start flights to Guangzhou, Dubai, Mumbai and Bangalore."
Currently, some 28 international airlines fly to Kathmandu but still Kathmandu is expensive destination for foreigners shying them away to cheaper destinations. "The new addition will also help NAC enhance both its service delivery and competence level," he added. "We aim to add more aircraft to our international fleet in the future,” Kharel said, indicating to the corporation’s plan to purchase even a wide-body aircraft in the future.
Likewise, Airbus’s vice-president for customer affairs David Dufrenois, on the occasion, said that he had never seen such encouraging welcome. "It is new partnership for Airbus," he said, hoping to have an extended partnership with NAC in the days to come.
NAC had signed purchase agreement with Airbus for two aircraft on June 27, 2013. Kharel and Sheel Sukla, senior sales director of Airbus, had signed the agreement after a long debate and legal hurdles.
Though, the corporation had started process to acquire aircraft for international operation some six years ago international bidding, it was stuck between the corporate rivelary between the American company Boeing and European company Airbus.
The then managing director of the corporation Sugat Ratna Kansakar was blamed for pre-paying Airbus 'illegally' and sent to jail by the anti-corruption watchdog, Commission for Investigation of Abuse of Authority (CIAA). But the court dismissed the charges against Kansakar and paved the way for NAC to move ahead with the agreement with European company Airbus.
However, legal delay has cost the corporation more due to price escalation. The NAC has made a full payment of Rs 7.20 billion, Kharel said, adding that the NAC has also made pre-payment for the second Airbus.
The catalogue price of two Airbus A320-200 is around Rs 15 billion. As part of the agreement, Airbus is providing free training to NAC´s engineers and pilots.
NAC has borrowed Rs 10 billion from Employees' Provident Fund (EPF) at 12 per cent interest per annum to finance purchase of the aircraft. According to the agreement, NAC has to pay back the loan within 15 years. The payment calendar starts after the corporation starts operation of the new aircraft.
Similarly, on the occasion, minister Amatya said that the rapid expansion of global tourism market has made it necessary for Nepal to enhance quality of aviation service by making more punctual and credible. "We have emphasised the importance of 'air safety' and prioritised it in our policy,” he added.
The newly acquired A320 has wing tip devices, which, according to Airbus, will deliver unbeatable economics and up to four per cent reduction in fuel burn. It is fitted with twin V2500-A5 SelectOne engines, the aircraft has 158 seats including eight in business class. The aircraft is fitted with fuel-saving winglets, named Sharklet by Airbus, that reduces fuel burn by up to four per cent. Likewise, it has the state-of-the-art Required Navigation Performance (RVP) technologies that allows the aircraft to fly precisely along predefined routes that is beneficial for operations at high altitude airports like Kathmandu. The aircraft is a member of the Airbus' benchmark single-aisle aircraft family, A320 is one of the best selling commercial jetliners. Airbus has built 6,415 A320s as of January 30.
Regular political bickering in the national flag carrier by the post-1990 government made the NAC lose its credibility. The NAC that currently operates a fleet of two ageing Boeing 757 on international route, also has recently acquired one MA 60 and one Harbin Y12E from china, apart from two Twin Otters on domestic routes. It is adding four more China-made aircrafts for its domestic fleet.

India lifts ban on high value IC notes with cap but it takes time to come into effect in Nepal

The Reserve Bank of India – the central bank of India – today allowed Indians to carry high value denomination notes while travelling to Nepal and Bhutan with a cap of Rs 25,000 on the total amount. Though, India has lifted the ban, Nepal is yet to formally revoke the legal restriction to come into effect in Nepal.
The necessary amendments have been carried out in the regulations to permit this, the Reserve Bank of India (RBI) said in a statement.
However, the central bank will request the government to publish a notice in Nepal Gazette – that has earlier on June 26, 2000 published notice banning the 500 and 1,000 Indian currency notes in Nepal – before the high value denomination Indian currency notes are allowed into Nepal, said executive director of Foreign Exchange Management Department of Nepal Rastra Bank Bhisma Raj Dhungana. "We will request the government next week to cancel the earlier notice," he added.
Indian citizens can travel to Nepal with Rs 500 and Rs 1,000 denomination notes as well after the government publishes a notice in Nepal Gazette allowing it into Nepal.
Following the request from Indian government to curb the smuggling of counterfeit currency, the government had imposed ban on carrying 500 and 1,000 denomination Indian currency notes in Nepal in 2000.
According to Foreign Exchange Act, a person possessing Indian currency notes of 500 and 1,000 denomination can be imprisoned two years, the police will seize the currency and in addition to fine of equal amount.
Nepal had been long requesting India to lift the ban as it has created inconvenience to Nepalis workers in India and Indian tourists travelling to Nepal. They were only allowed to carry Indian currency notes of Rs 100 denomination, but there was no limit on the amount.
Indian Prime Minister Narendra Modi, while inaugurating National Trauma Centre of Bir Hospital in November 2014, had announced to allow high value Indian currency notes to allow in Nepal.