Nepal has stressed on broader connectivity among the SAARC nations to increase intra-regional trade.
Speaking at the fifth SAARC Finance Ministers’ meeting in Dhaka yesterday, finance minister Barsha Man Pun said that closer economic integration in the SAARC region can only be achieved by strengthening physical infrastructure especially by developing roads and rail corridors between and among the SAARC member states.
"Thimphu SAARC summit had underscored the need for collaborative efforts to achieve greater intra-regional connectivity,” he reminded, adding that the year 2010-2020 has also been declared as the ‘Decade of Intra-regional Connectivity in SAARC’. "The region needs to work harmoniously for closer economic integration in terms of monetary and fiscal measures like currency convertibility, common custom union, harmonisation of standards, and reduction of tariff and non-tariff barriers, and most importantly investment promotion in key economic sectors in the region for the common goal."
Bangladesh Prime Minister Sheikh Hashina was the chief guest for the inaugural session of the meeting that discussed more efficient, focused, time-bound and people centric activities for the tangible benefits to more than 1.5 billion people of the region.
"SAARC Development Fund is a manifestation of the commitment to move SAARC process forward, with project based approach, so that the region will be able to deliver direct benefits to its people," he said, stressing the need for early operationalisation of the economic and infrastructure windows of the Fund.South Asia is suffering from energy deficit to sustain economic growth rate, he said, adding, "to meet the ever increasing energy demand, a comprehensive and holistic approach is required for the development of renewable and alternative sources of energy available in the region."
He also urged to speed up the concept of ‘SAARC Energy Ring’ and the regional energy trade, studied by SAARC Experts Group and come out with concrete projects proposals for implementation.
During the 17th SAARC Summit in Addu, Maldives, the leaders have promised to chart out a proposal for greater flow of financial capital and intra-regional long-term investments and the finance ministers also emphasised on the intra-regional trade that is very low at present.
Nepal-Bangladesh bilateral trade
KATHMANDU: Nepal has asked for tariff concession for apple, pulse and mostly agriculture products with Bangladesh. “Bangladesh has offered some duty facilities to Bhutan and it can be replicated in the case of Nepal too,” Bangladeshi finance minister Abul Maal Abdul Muhith said, adding that Kathmandu has also asked Dhaka to join it as equity partner in a power generation plant. "We discussed flood control management and energy cooperation in the meeting," he said. "Bangladesh is planning to allow Nepali trucks to go up to Mongla Port to facilitate trade. Now the trucks can enter 200 metres inside Bangladesh territory. Bangladesh and Nepal have necessary infrastructure for transit but a 17-km slice of Indian territory between the two borders lies in dilapidated condition. India informed Bangladesh it has negotiations with Nepal and Bhutan to finalise routes, and New Delhi will take necessary action in line with our recommendations." The minister, however, said it is not possible to provide transit facility without improving infrastructure.
Tuesday, January 31, 2012
Monday, January 30, 2012
DDC hikes milk price
Dairy Development Corporation (DDC) increased price of pasteurised milk by Rs 4 and Rs 6 per liter effective from tomorrow.
A half-liter blue and green packet of DDC milk will cost Rs 24 and Rs 28 respectively in the Kathmandu valley, Biratnagar and Hetauda from tomorrow, general manager of DDC Siya Ram Singh said, adding that it will cost Rs 23 and Rs 27 in other parts of the country.
As the farmers wanted price of milk, they are selling, increase due to rising costs, the DDC has been compelled to rise the price, he added. "We have also decided to hike the procurement price between Rs 2.60 and Rs 4 per litre."
The procurement price of fresh milk will be now Rs 32 to Rs 35 per liter, depending on fat and solids not fat (SNF), Singh said, adding that DDC is preparing to raise the price of other milk products like cheese, butter, curd, ghee, paneer due to rise in fresh milk price.
The state owned dairy has been buying 250,000 liters of fresh milk daily from farmers through Milk Supply Schemes in 42 districts across the country. The MMS under the DDC milk supply network are in Dhangadi, Nepalgunj, Butwal, Hetauda, Janakpur, Biratnagar and Kathmandu.Some 800 Milk Producers Cooperative Societies operated by the farmers are supplying milk to over 60 chilling centres of DDC.
"Out of the total 250,000 liters of milk collected across the country, the capital consumes half," he added.
A half-liter blue and green packet of DDC milk will cost Rs 24 and Rs 28 respectively in the Kathmandu valley, Biratnagar and Hetauda from tomorrow, general manager of DDC Siya Ram Singh said, adding that it will cost Rs 23 and Rs 27 in other parts of the country.
As the farmers wanted price of milk, they are selling, increase due to rising costs, the DDC has been compelled to rise the price, he added. "We have also decided to hike the procurement price between Rs 2.60 and Rs 4 per litre."
The procurement price of fresh milk will be now Rs 32 to Rs 35 per liter, depending on fat and solids not fat (SNF), Singh said, adding that DDC is preparing to raise the price of other milk products like cheese, butter, curd, ghee, paneer due to rise in fresh milk price.
The state owned dairy has been buying 250,000 liters of fresh milk daily from farmers through Milk Supply Schemes in 42 districts across the country. The MMS under the DDC milk supply network are in Dhangadi, Nepalgunj, Butwal, Hetauda, Janakpur, Biratnagar and Kathmandu.Some 800 Milk Producers Cooperative Societies operated by the farmers are supplying milk to over 60 chilling centres of DDC.
"Out of the total 250,000 liters of milk collected across the country, the capital consumes half," he added.
Sunday, January 29, 2012
Buddha Air to fly to Varanasi from March 1
Buddha Air is starting its Kathmandu-Varanasi flight from March 1 and Kolkata from September.
"We are starting flights to Varanasi from March 1, whereas we are also preparing to start Kolkata flight as our next destination this year during September,” said marketing chief at Buddha Air Rupesh Joshi.
Buddha Air will operate weekly four flight to Varanasi, on Sundays, Tuesdays, Thursdays, and Saturdays. "We have targeted both Nepali and Indian tourists willing to visit the religious place of both the countries,” Joshi added.
The airlines will fly at three in the afternoon to Varanasi with opening airfare of Rs 5,031.
"Our primary focus is to make successful operations of international flights," he said, adding that they are more focused on quality service than business.
Buddha Air has, however, suspended its flight to Lucknow in India currently due to offseason, while it is operating charter flights to Paro in Bhutan
“We are also requesting for route permission for Lucknow from Pokhara and are hopeful that we will be able to operate our flights from Pokhara within next two months,” he informed.
Buddha Air will operates ATR-42 (47 seater) and ATR-72 (70 seater) to Varanasi, according to the number of passenger. The airlines operates Deech1900 D (18 seater) for domestic flights.
"We are starting flights to Varanasi from March 1, whereas we are also preparing to start Kolkata flight as our next destination this year during September,” said marketing chief at Buddha Air Rupesh Joshi.
Buddha Air will operate weekly four flight to Varanasi, on Sundays, Tuesdays, Thursdays, and Saturdays. "We have targeted both Nepali and Indian tourists willing to visit the religious place of both the countries,” Joshi added.
The airlines will fly at three in the afternoon to Varanasi with opening airfare of Rs 5,031.
"Our primary focus is to make successful operations of international flights," he said, adding that they are more focused on quality service than business.
Buddha Air has, however, suspended its flight to Lucknow in India currently due to offseason, while it is operating charter flights to Paro in Bhutan
“We are also requesting for route permission for Lucknow from Pokhara and are hopeful that we will be able to operate our flights from Pokhara within next two months,” he informed.
Buddha Air will operates ATR-42 (47 seater) and ATR-72 (70 seater) to Varanasi, according to the number of passenger. The airlines operates Deech1900 D (18 seater) for domestic flights.
Saturday, January 28, 2012
Government plans to bring Energy Crisis Act
The government is planning to bring a Energy Crisis Act that can address energy crisis and expedite hydropower generation.
The Act will guarantee the security issues and encourage investors construct the hydropower projects in war footing, said Prime Minister Dr Baburam Bhattarai speaking at his official residence here today.
Energy is the key to propel economic growth and the government — to achieve double digit growth as it is not satisfied with the current sluggish growth — will also increase current Power Purchasing Agreement (PPA) of the projects that could be completed by next couple of years, he said, adding that the government's plan will help expedite some 2,500 MW hydropower projects. “We are planning some incentive packages and tax waiver too."
The energy producers have been asking the government to revise the PPA of some projects, due to rising cost.
The Indian power producers GMR and Sutlaj will also get the government green signal soon, he added.
Defending his much ambitious 'Immediate Action Plan for Economic Growth and Prosperity' that he brought on Thursday, he said that it was a symbolic message that there is still hope and let's not be hopeless.
“We need investments — both foreign and domestic — to fuel the economic growth," said the UCPN-Maoist ideologue, who is planning to attract $1 billion in six months. “The domestic investment is not enough for the double digit growth, though we have abundant natural and human capital."
The government is clear on its economic policy though, there might be some confusion due to intra-party feud in the UCPN-Maoist, he accepted.“Economic growth is supplement to the peace and Constitution.
"Growth with employment and social justice is the main object of the government with sectoral focus on agriculture, tourism, energy and infrastructure, the premier clarified. “But without transformation in the traditional agriculture that contributes one third to the GDP and employs one third of the population, it's not possible to achieve growth.”
The government proposed 14 projects of national pride will get the necessary budget from transferring the budget after the second four-month's evaluation meeting, he vowed, though he could not clarify implementation of these projects. The successive governments’ programmes remained in the paper gathering dust due to lack of effective implementation.
NAC to get aircraft
KATHMANDU: The government is committed to buy aircraft for the ailing national flag carrier, said Prime Minister Dr Baburam Bhattarai. “The Nepal Airlines Corporation (NAC) will also see management overhaul," he said, adding that the new aircraft will give boost to the tourism industry. Tourism can create employment and help propel growth but due to lack of aircraft and political bickering in the national flag carrier, the country could not benefit from the rising number of tourists inflow.
No subsidy on petro products
KATHMANDU: The Prime Minister also said that the government will not provide subsidy on petroleum products. The current system could not last long as the government is mulling over promoting alternatives energy sources and adjusting the prices of petroleum products. The subsidy on petroleum products that is imported makes no sense, he said, adding that there is no alternative to the price adjustment according to the international market.
The Act will guarantee the security issues and encourage investors construct the hydropower projects in war footing, said Prime Minister Dr Baburam Bhattarai speaking at his official residence here today.
Energy is the key to propel economic growth and the government — to achieve double digit growth as it is not satisfied with the current sluggish growth — will also increase current Power Purchasing Agreement (PPA) of the projects that could be completed by next couple of years, he said, adding that the government's plan will help expedite some 2,500 MW hydropower projects. “We are planning some incentive packages and tax waiver too."
The energy producers have been asking the government to revise the PPA of some projects, due to rising cost.
The Indian power producers GMR and Sutlaj will also get the government green signal soon, he added.
Defending his much ambitious 'Immediate Action Plan for Economic Growth and Prosperity' that he brought on Thursday, he said that it was a symbolic message that there is still hope and let's not be hopeless.
“We need investments — both foreign and domestic — to fuel the economic growth," said the UCPN-Maoist ideologue, who is planning to attract $1 billion in six months. “The domestic investment is not enough for the double digit growth, though we have abundant natural and human capital."
The government is clear on its economic policy though, there might be some confusion due to intra-party feud in the UCPN-Maoist, he accepted.“Economic growth is supplement to the peace and Constitution.
"Growth with employment and social justice is the main object of the government with sectoral focus on agriculture, tourism, energy and infrastructure, the premier clarified. “But without transformation in the traditional agriculture that contributes one third to the GDP and employs one third of the population, it's not possible to achieve growth.”
The government proposed 14 projects of national pride will get the necessary budget from transferring the budget after the second four-month's evaluation meeting, he vowed, though he could not clarify implementation of these projects. The successive governments’ programmes remained in the paper gathering dust due to lack of effective implementation.
NAC to get aircraft
KATHMANDU: The government is committed to buy aircraft for the ailing national flag carrier, said Prime Minister Dr Baburam Bhattarai. “The Nepal Airlines Corporation (NAC) will also see management overhaul," he said, adding that the new aircraft will give boost to the tourism industry. Tourism can create employment and help propel growth but due to lack of aircraft and political bickering in the national flag carrier, the country could not benefit from the rising number of tourists inflow.
No subsidy on petro products
KATHMANDU: The Prime Minister also said that the government will not provide subsidy on petroleum products. The current system could not last long as the government is mulling over promoting alternatives energy sources and adjusting the prices of petroleum products. The subsidy on petroleum products that is imported makes no sense, he said, adding that there is no alternative to the price adjustment according to the international market.
Friday, January 27, 2012
JEC explores possibilities in expansion of bilateral cooperation
Both Nepali and Indian private sector are extremely bullish on expanding economic cooperation between the two countries.
The prospects are very encouraging and opportunities numerous, according to the participants of the recently concluded meeting of the Joint Economic Council (JEC) that has apex bodies of private sectors of both the countries.
"Several Indian companies engaged in the fields of education and power expressed their interests in investing in Nepal, said Federation of Nepalese Chambers of Commerce and Industry (FNCCI) president Suraj Vaidya in the meeting held in Kolkata on January 25.
Nepal has given special attention to attract investments from India and has recently set up a Board of Investment under the chairmanship of Prime Minister Dr Baburam Bhattarai, apart from observing 2012-13 as Nepal Investment Year.
The JEC has also decided to organise Road Shows in different cities of India to attract investments and market the 50 projects identified by Nepal.
"I am strongly hopeful that there would be more Indian investments in Nepal in near future in hydropower, infrastructure, tourism, education and healthcare," Vaidya said, adding that Nepal wants to reverse the trade deficit trend through more Indian investments.Nepal has a huge trade gap in the trade with India. The trade deficit in the fiscal year 2010-11 amounted to $3,020 million against $2,376 million in a fiscal year ago.
The JEC that includes FNCCI and Confederation of Indian industry (CII) felt that efforts should be made to reduce the trade gap as much as possible. It also decided to commission a study by a reputed research agency which would recommend ways and means in enhancing Nepal’s exports to India and identify resulting benefits to both the countries.
The co-chairman of JEC Padma Jyoti requested India to consider making available an additional 100 MW of power to partly overcome the current demand supply gap in Nepal. He also requested Indian government's intervention in early completion of the Dhalkebar-Muzaffarpur transmission line.
The meeting also discussed imposition of CVD on exports from Nepal, easier connectivity for movement of goods, facilitating opening of Nepali banks in India.
The JEC also met chairman of Kolkata Port Trust M L Meena, chief commissioner of Kolkata customs Deepa Dasgupta and commissioner of customs Gurdeep Singh and discussed on facilitation of early clearance of Nepali cargo at the Kolkata port by streamlining the procedures and removing the unnecessary processes.
Nepal is very highly dependent on Kolkata-Haldia ports for movement of its exports and imports and the delays in the ports resulted in higher cost to Nepali traders.
Consulate General of Nepal at Kolkata Chandra Kumar Ghimire, who was also in the meetings said that there has been a huge positive response from India to address issues concerning trade and investments.
He added that there should be regular meeting with Customs and Port Authorities in Kolkata to resolve the industry specific problems.
JEC also decided that CII would organise a CEO’s mission to Nepal in April to participate in Nepal’s Industry and Commerce Day. It also requested to organise 'A Made in India Show' in Kathmandu in September-October this year.
The JEC had earlier met in October 2011 in New Delhi and will have its next meeting in April in Kathmandu.
The prospects are very encouraging and opportunities numerous, according to the participants of the recently concluded meeting of the Joint Economic Council (JEC) that has apex bodies of private sectors of both the countries.
"Several Indian companies engaged in the fields of education and power expressed their interests in investing in Nepal, said Federation of Nepalese Chambers of Commerce and Industry (FNCCI) president Suraj Vaidya in the meeting held in Kolkata on January 25.
Nepal has given special attention to attract investments from India and has recently set up a Board of Investment under the chairmanship of Prime Minister Dr Baburam Bhattarai, apart from observing 2012-13 as Nepal Investment Year.
The JEC has also decided to organise Road Shows in different cities of India to attract investments and market the 50 projects identified by Nepal.
"I am strongly hopeful that there would be more Indian investments in Nepal in near future in hydropower, infrastructure, tourism, education and healthcare," Vaidya said, adding that Nepal wants to reverse the trade deficit trend through more Indian investments.Nepal has a huge trade gap in the trade with India. The trade deficit in the fiscal year 2010-11 amounted to $3,020 million against $2,376 million in a fiscal year ago.
The JEC that includes FNCCI and Confederation of Indian industry (CII) felt that efforts should be made to reduce the trade gap as much as possible. It also decided to commission a study by a reputed research agency which would recommend ways and means in enhancing Nepal’s exports to India and identify resulting benefits to both the countries.
The co-chairman of JEC Padma Jyoti requested India to consider making available an additional 100 MW of power to partly overcome the current demand supply gap in Nepal. He also requested Indian government's intervention in early completion of the Dhalkebar-Muzaffarpur transmission line.
The meeting also discussed imposition of CVD on exports from Nepal, easier connectivity for movement of goods, facilitating opening of Nepali banks in India.
The JEC also met chairman of Kolkata Port Trust M L Meena, chief commissioner of Kolkata customs Deepa Dasgupta and commissioner of customs Gurdeep Singh and discussed on facilitation of early clearance of Nepali cargo at the Kolkata port by streamlining the procedures and removing the unnecessary processes.
Nepal is very highly dependent on Kolkata-Haldia ports for movement of its exports and imports and the delays in the ports resulted in higher cost to Nepali traders.
Consulate General of Nepal at Kolkata Chandra Kumar Ghimire, who was also in the meetings said that there has been a huge positive response from India to address issues concerning trade and investments.
He added that there should be regular meeting with Customs and Port Authorities in Kolkata to resolve the industry specific problems.
JEC also decided that CII would organise a CEO’s mission to Nepal in April to participate in Nepal’s Industry and Commerce Day. It also requested to organise 'A Made in India Show' in Kathmandu in September-October this year.
The JEC had earlier met in October 2011 in New Delhi and will have its next meeting in April in Kathmandu.
Gold imports falls to three times
Gold import has plunged by almost three times in last three years.
"The country imported Rs 9.87 billion worth gold in the first five months of the current fiscal year compared to Rs 25.54 billion in the same period of fiscal year 2009-10," according to the central bank.
However, in the same period last fiscal year, the precious yellow metal has seen a whopping drop to Rs 1.33 billion due to government ban on the import that has hit the dollar reserve due to cross border flow at the cost of import duty difference.
Currently, the domestic market is witnessing a shortage of the gold fuelling the price despite the price in the international market has been decreasing.
"The banks are not been able to supply according to the market demand fuelling the price in the market," Nepal Gold and Silver Dealers Association president Tej Ranta Shakya said, adding that Nabil Bank's 50 kg gold was sold out in an hour on Wednesday and Prime Commercial Bank's 50 kg was also sold out yesterday and there is no gold today in the market that will put the pressure of price hike on Sunday.
"Despite rising price, the domestic market's appetite has started to increase also due to marriage season," he added.
Similarly, gold had another positive year in the international market, ending nine per cent higher in US dollar price terms and rising even further in most currencies, according to World Gold Council report 2011.
In spite of an interim increase in volatility, which affected all financial markets, gold outperformed a large number of asset classes – reinforcing its role as a foundation asset in portfolio construction, it said, adding that gold provided liquidity when investors needed it the most, acting as a risk management vehicle and also served as a currency hedge throughout the year, in particular against the US dollar.
While such inverse relationship pushed gold prices down toward the end of 2011, in part driven by profit taking and portfolio rebalancing, it is believed that gold fundamentals of supply and demand remain robust, according to the report that expect it continue to support its demand.
After a tumultuous year in financial markets around the world, gold was one of few asset classes to deliver positive returns.
Gold’s price appreciation was generally higher in currencies other than the US dollar, especially in developing markets, with the exception of China, as they saw marked declines of their currencies against the US dollar in the latter part of the year.
True to its role as a vehicle for diversification and risk management, gold outperformed a large majority of assets, including oil, on a risk-adjusted basis during a year of marked uncertainty and increased volatility. However, gold’s performance was not all smooth sailing throughout the year, particularly during the latter months.
Many investors saw gold as one of the few assets able to preserve capital and protect against tail risks, increasing their participation in the market especially during the summer and by early August, gold had broken the $1,800 per ounce level and reached a record high of $1,895 per ounce on the London PM fix on September 6, having traded as high $1,921 per ounce intra-day.
In all, gold’s price pullback of 15 per cent was labeled by some commentators as a break in gold’s multi-year trend. On the contrary, a careful analysis of gold’s historical performance shows that it has experienced various pullbacks over the last 10 years.
"The country imported Rs 9.87 billion worth gold in the first five months of the current fiscal year compared to Rs 25.54 billion in the same period of fiscal year 2009-10," according to the central bank.
However, in the same period last fiscal year, the precious yellow metal has seen a whopping drop to Rs 1.33 billion due to government ban on the import that has hit the dollar reserve due to cross border flow at the cost of import duty difference.
Currently, the domestic market is witnessing a shortage of the gold fuelling the price despite the price in the international market has been decreasing.
"The banks are not been able to supply according to the market demand fuelling the price in the market," Nepal Gold and Silver Dealers Association president Tej Ranta Shakya said, adding that Nabil Bank's 50 kg gold was sold out in an hour on Wednesday and Prime Commercial Bank's 50 kg was also sold out yesterday and there is no gold today in the market that will put the pressure of price hike on Sunday.
"Despite rising price, the domestic market's appetite has started to increase also due to marriage season," he added.
Similarly, gold had another positive year in the international market, ending nine per cent higher in US dollar price terms and rising even further in most currencies, according to World Gold Council report 2011.
In spite of an interim increase in volatility, which affected all financial markets, gold outperformed a large number of asset classes – reinforcing its role as a foundation asset in portfolio construction, it said, adding that gold provided liquidity when investors needed it the most, acting as a risk management vehicle and also served as a currency hedge throughout the year, in particular against the US dollar.
While such inverse relationship pushed gold prices down toward the end of 2011, in part driven by profit taking and portfolio rebalancing, it is believed that gold fundamentals of supply and demand remain robust, according to the report that expect it continue to support its demand.
After a tumultuous year in financial markets around the world, gold was one of few asset classes to deliver positive returns.
Gold’s price appreciation was generally higher in currencies other than the US dollar, especially in developing markets, with the exception of China, as they saw marked declines of their currencies against the US dollar in the latter part of the year.
True to its role as a vehicle for diversification and risk management, gold outperformed a large majority of assets, including oil, on a risk-adjusted basis during a year of marked uncertainty and increased volatility. However, gold’s performance was not all smooth sailing throughout the year, particularly during the latter months.
Many investors saw gold as one of the few assets able to preserve capital and protect against tail risks, increasing their participation in the market especially during the summer and by early August, gold had broken the $1,800 per ounce level and reached a record high of $1,895 per ounce on the London PM fix on September 6, having traded as high $1,921 per ounce intra-day.
In all, gold’s price pullback of 15 per cent was labeled by some commentators as a break in gold’s multi-year trend. On the contrary, a careful analysis of gold’s historical performance shows that it has experienced various pullbacks over the last 10 years.
South Asia propels Asia-pacific tourism growth
South Asia led the Asia/Pacific tourist arrivals in November.
South Asia was the star growth performer, followed by Southeast Asia, Northeast Asia and the Pacific, all of which saw tourism demand improve albeit at different rates of growth, according to Pacific Asia Travel Association, for the first eleven months of the year.
Travel demand to South Asia was particularly strong with growth of 15 per cent for the month of October — year-on-year — however the momentum stalled a little in November when the aggregate gain fell to nine per cent. With the exception of India, all reporting destinations within this sub-region showed outstanding results with double-digit growth during the month of November.
A number of destinations in the region set new records for monthly foreign visitor volumes including the Maldives (22 per cent) and Nepal (17 per cent) in October and Sri Lanka (26 per cent) increment in November, according to the preliminary results by the PATA that showed a collective increase of six per cent year-on-year for international arrivals into Asia/Pacific destinations during each of the months of October and November 2011.
The momentum is expected to continue for the rest of the year and paves the way for an expected full-year arrivals gain of five per cent to six per cent in 2011, above the global growth figure of four per cent, it said.
The overall international visitor arrivals count to the wider Asia Pacific region — which includes North America — is expected to reach around 430 million for 2011.
Southeast Asia recorded a relatively slower close on the year with growth of seven per cent and three per cent in October and November 2011 respectively. A number of factors were responsible for this result, most particularly the flooding that occurred across many destinations.
Growth in international arrivals into Northeast Asia saw gains of five per cent in October and eight per cent in November — the strongest monthly growth recorded during the first eleven months of 2011.
The Pacific posted a three per cent increase during October 2011 as the lingering impact of the Rugby World Cup helped drive foreign arrivals to New Zealand, which registered close on a 17 per cent increase during that month. The Pacific had a sluggish year with expected year-on-year growth in arrivals expected to be largely flat for calendar year 2011.
South Asia was the star growth performer, followed by Southeast Asia, Northeast Asia and the Pacific, all of which saw tourism demand improve albeit at different rates of growth, according to Pacific Asia Travel Association, for the first eleven months of the year.
Travel demand to South Asia was particularly strong with growth of 15 per cent for the month of October — year-on-year — however the momentum stalled a little in November when the aggregate gain fell to nine per cent. With the exception of India, all reporting destinations within this sub-region showed outstanding results with double-digit growth during the month of November.
A number of destinations in the region set new records for monthly foreign visitor volumes including the Maldives (22 per cent) and Nepal (17 per cent) in October and Sri Lanka (26 per cent) increment in November, according to the preliminary results by the PATA that showed a collective increase of six per cent year-on-year for international arrivals into Asia/Pacific destinations during each of the months of October and November 2011.
The momentum is expected to continue for the rest of the year and paves the way for an expected full-year arrivals gain of five per cent to six per cent in 2011, above the global growth figure of four per cent, it said.
The overall international visitor arrivals count to the wider Asia Pacific region — which includes North America — is expected to reach around 430 million for 2011.
Southeast Asia recorded a relatively slower close on the year with growth of seven per cent and three per cent in October and November 2011 respectively. A number of factors were responsible for this result, most particularly the flooding that occurred across many destinations.
Growth in international arrivals into Northeast Asia saw gains of five per cent in October and eight per cent in November — the strongest monthly growth recorded during the first eleven months of 2011.
The Pacific posted a three per cent increase during October 2011 as the lingering impact of the Rugby World Cup helped drive foreign arrivals to New Zealand, which registered close on a 17 per cent increase during that month. The Pacific had a sluggish year with expected year-on-year growth in arrivals expected to be largely flat for calendar year 2011.
Thursday, January 26, 2012
Government rolls back petroleum products’ prices
Ministry of Commerce and Supplies today rolled back prices of petroleum products announced last week, following the weeklong students’ protest.
Nepal Oil Corporation — directed by the ministry — reduced price of petrol by Rs 3 per litre, diesel and kerosene by Rs 4 and cooking gas by Rs 85 per cylinder to be effective from today. Petrol will now cost Rs 112 per litre, diesel and kerosene Rs 81 per litre and cooking gas Rs 1,415 per cylinder in the market, according to minister for commerce and supplies Lekh Raj Bhatta.
The government had on January 18 decided to jack up prices of all petroleum products due to the extreme volatile international market and massive loss of the state oil monopoly, according to the minister.
In the sharpest ever one-time increase, the state oil monopoly decided to jack up the price of petrol by Rs 10, diesel and kerosene by Rs 9 and cooking gas by Rs 175. The state oil monopoly had fixed he rate of petrol Rs 115 per litre, diesel and kerosene Rs 85 per litre and cooking gas Rs 1500 per cylinder in the market.
“The government had increased prices by about 10 per cent but is scaling that back to about a five per cent increase,” minister Bhatta said.
Nepal Oil Corporation — directed by the ministry — reduced price of petrol by Rs 3 per litre, diesel and kerosene by Rs 4 and cooking gas by Rs 85 per cylinder to be effective from today. Petrol will now cost Rs 112 per litre, diesel and kerosene Rs 81 per litre and cooking gas Rs 1,415 per cylinder in the market, according to minister for commerce and supplies Lekh Raj Bhatta.
The government had on January 18 decided to jack up prices of all petroleum products due to the extreme volatile international market and massive loss of the state oil monopoly, according to the minister.
In the sharpest ever one-time increase, the state oil monopoly decided to jack up the price of petrol by Rs 10, diesel and kerosene by Rs 9 and cooking gas by Rs 175. The state oil monopoly had fixed he rate of petrol Rs 115 per litre, diesel and kerosene Rs 85 per litre and cooking gas Rs 1500 per cylinder in the market.
“The government had increased prices by about 10 per cent but is scaling that back to about a five per cent increase,” minister Bhatta said.
Government prescribes pills for economic ills
The government has brought Immediate Action Plan today for 'a great leap forward', though its first relief measure brought some five months ago failed to cheer the people.
The country has prepared the foundation for the economic growth in the first six months of the current fiscal year, said Prime Minister Dr Baburam Bhattarai, launching the 'Immediate Action Plan for Economic Development and Prosperity' here today.
The ambitious Plan has prescribed one-and-a-half dozen sectors with a special focus on agriculture, forestry, tourism, energy, physical infrastructure, rural infrastructure and urban development, investment promotion, international trade, promotion of domestic products and private sector and New Nepal Initiatives for the economic development.
"The government will launch four campaigns — investment promotion, economic growth with wider base, employment creation, and social security — for its four priorities Peace, Constitution, Good governance and Prosperity," he said, adding that the country has challenges, however, with the uptimum utilisation of available resources the country can move ahead in time bound manner to boost the current sluggish economic growth with some half-a-million employment creation.
"The government will mobilise one million volunteers — mostly the students — as a national volunteers under the District Development Committee (DDC) under New Nepal Initiative," the Premier said, adding that the volunteers can select the districts according to their choice. "The government will request every citizen to donate one day salary and NRNs to donate $10 for the New Nepal Initiative Fund that will help create jobs, and boost economic growth by investing on infrastructure.
The government has vowed to invite $1 billion worth foreign investments in next six months, read the ambitious Plan that has promised to increase the contribution of industrial sector to 10 per cent from current 1.4 per cent to the gross domestic production (GDP).
Similarly, the traditional agriculture will be modernise with stress on establishing chemical fertiliser industry and herbs process centres and land reform programme that will boost the contribution of agriculture's contribution to five per cent from current four per cent to the GDP, the Plan read. "The government will also declare 2013 as Agriculture Year to promote the sector.
"The premier also promised that Nepal will sign Bilateral Investment Promotion and Protection Agreement (BIPPA) with China, South Asian countries and atleast five developed countries to create confidence among the foreign investors, apart from requesting them to invest in second international airport, east-west railway, Kathmandu-Terai fast track. He also highlighted 14 infrastructure projects —including Sikta, Rani Jamara and Babai irrigation projects — as ‘Projects of National Pride’.
The government has also highlighted 10 challenges including corruption, lawlessness and bureaucratic delay, energy crisis, slow industrialisation, rising unemployment, lack of infrastructure, low economic growth, traditional agriculture system and low foreign investment and promised to fight them.
Similarly, the government has prescribed financial sector reform, capital market, housing, Millennium Development Goals (MDGs), poverty alleviation and social security and respectable foreign employment, resource management for the economic development. "Promoting these sectors will give a 'big push' to translate the people's aspirations into reality," he added.
However, the economists dubbed the Prime Minister's move as a populist as the programmes is collected from the budget but has no budgetary allocation.
The country has prepared the foundation for the economic growth in the first six months of the current fiscal year, said Prime Minister Dr Baburam Bhattarai, launching the 'Immediate Action Plan for Economic Development and Prosperity' here today.
The ambitious Plan has prescribed one-and-a-half dozen sectors with a special focus on agriculture, forestry, tourism, energy, physical infrastructure, rural infrastructure and urban development, investment promotion, international trade, promotion of domestic products and private sector and New Nepal Initiatives for the economic development.
"The government will launch four campaigns — investment promotion, economic growth with wider base, employment creation, and social security — for its four priorities Peace, Constitution, Good governance and Prosperity," he said, adding that the country has challenges, however, with the uptimum utilisation of available resources the country can move ahead in time bound manner to boost the current sluggish economic growth with some half-a-million employment creation.
"The government will mobilise one million volunteers — mostly the students — as a national volunteers under the District Development Committee (DDC) under New Nepal Initiative," the Premier said, adding that the volunteers can select the districts according to their choice. "The government will request every citizen to donate one day salary and NRNs to donate $10 for the New Nepal Initiative Fund that will help create jobs, and boost economic growth by investing on infrastructure.
The government has vowed to invite $1 billion worth foreign investments in next six months, read the ambitious Plan that has promised to increase the contribution of industrial sector to 10 per cent from current 1.4 per cent to the gross domestic production (GDP).
Similarly, the traditional agriculture will be modernise with stress on establishing chemical fertiliser industry and herbs process centres and land reform programme that will boost the contribution of agriculture's contribution to five per cent from current four per cent to the GDP, the Plan read. "The government will also declare 2013 as Agriculture Year to promote the sector.
"The premier also promised that Nepal will sign Bilateral Investment Promotion and Protection Agreement (BIPPA) with China, South Asian countries and atleast five developed countries to create confidence among the foreign investors, apart from requesting them to invest in second international airport, east-west railway, Kathmandu-Terai fast track. He also highlighted 14 infrastructure projects —including Sikta, Rani Jamara and Babai irrigation projects — as ‘Projects of National Pride’.
The government has also highlighted 10 challenges including corruption, lawlessness and bureaucratic delay, energy crisis, slow industrialisation, rising unemployment, lack of infrastructure, low economic growth, traditional agriculture system and low foreign investment and promised to fight them.
Similarly, the government has prescribed financial sector reform, capital market, housing, Millennium Development Goals (MDGs), poverty alleviation and social security and respectable foreign employment, resource management for the economic development. "Promoting these sectors will give a 'big push' to translate the people's aspirations into reality," he added.
However, the economists dubbed the Prime Minister's move as a populist as the programmes is collected from the budget but has no budgetary allocation.
Wednesday, January 25, 2012
Government revises growth downward
The government has revised its growth target downward to 4.5 per cent from five per cent.
"The economy will grow by 4.5 per cent," said finance minister Barsha Man Pun, during the mid-term evaluation of budget for the current fiscal year 2011-12. "The agriculture sector will grow by 4.75 — thanks to good monsoon — and the non-agriculture will grow by 4.25 per cent," he said, adding that the financial indictaors are improving and encouraging, though he is not satisfied.
The Asian Development Bank and the World Bank has projected the economy to grow by 3.6 per cent — in the current fiscal year — against the government's target of five per cent in the budget for the current fiscal year.
The gross domestic product (GDP) growth has seen continuous fall in the last three consecutive fiscal years and stood at 3.5 per cent in the last fiscal year 2010-11, from 3.97 per cent a fiscal year ago, mainly due to low manufacturing growth that has been hit by the regular hours of power outage, labour management dispute and government's inability to spend on the development works.
"However, this fiscal year — also due to timely budget — the government has been able to spend Rs 111.13 billion that is 28.87 per cent of the total budget outlay of Rs 384.90 billion," he said, adding that the development expenditure, however, stood at Rs 9.56 billion that is 13.17 per cent of the total budget, which could not propel the growth. "I am not satisfied with the development expenses, though it is 140.44 per cent more than last fiscal year's same period's development expenses," Pun said.
The timely budget has also help boost the liquidity in the banking system but the private sector investment has contracted as it has been reluctant in borrowing due to higher interest rates.
The deposit mobilisation of banks and financial institutions increased by nine per cent — Rs 73.77 billion — during the five months of the current fiscal year, against the same period last fiscal year's increase of two per cent — Rs 14.87 billion — but loan and advances of banks and financial institutions increased by only 4.3 per cent — Rs 36.54 billion — compared to the growth rate of 5.8 per cent — Rs 43.24 billion — in the same period of the last fiscal year," according to the central bank.
The low borrowing by the private sector will hit the economic growth hard, though the finance minister painted a rosy picture of the economy.
The growth in agriculture sector will, however, help ease the food price hike that will contribute in bringing the inflation down to the target of — monetary and fiscal policy — seven per cent, said Nepal Rastra Bank governor Dr Yub Raj Khatiwada. The mid-term evaluation has estimated the inflation between seven per cent to eight per cent.
The government has, however, failed to meet the revenue mobilisation target. "By the six months of the current fiscal year, the government has been able to mobilise Rs 111.03 billion revenue that is 98.32 per cent of its target, though the government will meet its annual target of Rs 241.77 billion," said finance secretary Krishnahari Baskota.
The government is bringing its much awaited programmes to fuel development activities and propel economic growth tomorrow, though its relief package and financial discipline already failed to cheer the people.
Plunging economic growth
2007-08 — 5.80 per cent
2008-09 — 3.77 per cent
2009-10 — 3.97 per cent
2010-11 — 3.5 per cent
2011-12 — 4.5 (revised projection)
(Source: Central Bureau of Statistics)
"The economy will grow by 4.5 per cent," said finance minister Barsha Man Pun, during the mid-term evaluation of budget for the current fiscal year 2011-12. "The agriculture sector will grow by 4.75 — thanks to good monsoon — and the non-agriculture will grow by 4.25 per cent," he said, adding that the financial indictaors are improving and encouraging, though he is not satisfied.
The Asian Development Bank and the World Bank has projected the economy to grow by 3.6 per cent — in the current fiscal year — against the government's target of five per cent in the budget for the current fiscal year.
The gross domestic product (GDP) growth has seen continuous fall in the last three consecutive fiscal years and stood at 3.5 per cent in the last fiscal year 2010-11, from 3.97 per cent a fiscal year ago, mainly due to low manufacturing growth that has been hit by the regular hours of power outage, labour management dispute and government's inability to spend on the development works.
"However, this fiscal year — also due to timely budget — the government has been able to spend Rs 111.13 billion that is 28.87 per cent of the total budget outlay of Rs 384.90 billion," he said, adding that the development expenditure, however, stood at Rs 9.56 billion that is 13.17 per cent of the total budget, which could not propel the growth. "I am not satisfied with the development expenses, though it is 140.44 per cent more than last fiscal year's same period's development expenses," Pun said.
The timely budget has also help boost the liquidity in the banking system but the private sector investment has contracted as it has been reluctant in borrowing due to higher interest rates.
The deposit mobilisation of banks and financial institutions increased by nine per cent — Rs 73.77 billion — during the five months of the current fiscal year, against the same period last fiscal year's increase of two per cent — Rs 14.87 billion — but loan and advances of banks and financial institutions increased by only 4.3 per cent — Rs 36.54 billion — compared to the growth rate of 5.8 per cent — Rs 43.24 billion — in the same period of the last fiscal year," according to the central bank.
The low borrowing by the private sector will hit the economic growth hard, though the finance minister painted a rosy picture of the economy.
The growth in agriculture sector will, however, help ease the food price hike that will contribute in bringing the inflation down to the target of — monetary and fiscal policy — seven per cent, said Nepal Rastra Bank governor Dr Yub Raj Khatiwada. The mid-term evaluation has estimated the inflation between seven per cent to eight per cent.
The government has, however, failed to meet the revenue mobilisation target. "By the six months of the current fiscal year, the government has been able to mobilise Rs 111.03 billion revenue that is 98.32 per cent of its target, though the government will meet its annual target of Rs 241.77 billion," said finance secretary Krishnahari Baskota.
The government is bringing its much awaited programmes to fuel development activities and propel economic growth tomorrow, though its relief package and financial discipline already failed to cheer the people.
Plunging economic growth
2007-08 — 5.80 per cent
2008-09 — 3.77 per cent
2009-10 — 3.97 per cent
2010-11 — 3.5 per cent
2011-12 — 4.5 (revised projection)
(Source: Central Bureau of Statistics)
FDI inflows to South Asia rise by one-third
South Asia received Foreign Direct Investment (FDI) inflows of around $43 billion last year.
South Asia, East Asia and South-East Asia received inflows of around $43 billion, $209 billion, and $92 billion, respectively, according to UNCTAD’s Global Investment Trends Monitor that was released today.
"FDI flows to developing Asia, excluding West Asia, rose by 11 per cent in 2011, despite a slowing down in the latter part of the year," it said, adding that with a 16 per cent increase, South-East Asia continued to outperform East Asia in growth of FDI, while South Asia saw its inflows rise by one-third after a slide in 2010. FDI to China rose by eight per cent to an estimated $124 billion ($116 billion in the non-financial sector) as a result of increasing flows to non-financial services, though FDI growth in the country slowed down in the last two months of 2011.
"Despite turmoil in the world economy, global FDI inflows rose by 17 per cent in 2011 to $1.5 trillion, surpassing their pre-crisis average, based on preliminary UNCTAD estimates," the organisation said. "FDI inflows increased in all major economic groupings - developed, developing and transition economies."
Developing and transition countries continued to account for half of global FDI in 2011 as their inflows reached a new record high, driven mainly by investments in Latin America (up by 35 per cent) and in transition economies (up by 31 per cent), it said, adding that Africa — the region with the highest number least developed countries — continued to experience a decline in FDI.
UNCTAD estimated that FDI flows will climb moderately in 2012 to around $1.6 trillion, but will remain short of the all-time peak of $2 trillion reached in 2007. However, the organisation said the fragile recovery of the world economy in 2011 – with growth tempered by the debt crisis in developed countries, the uncertainties surrounding the future of the euro, and rising financial market turbulence – will have an impact on FDI flows in 2012.
Both cross-border mergers and acquisitions and greenfield investments slipped in the last quarter of 2011, UNCTAD figures indicated. "All these factors suggest that significant risks and uncertainties for further FDI growth in 2012 remain in place."
During 2011, many countries continued to implement policy changes aimed at further liberalising and facilitating FDI entry and operations, but also introduced new measures regulating FDI, according to the UNCTAD’s global FDI quarterly index that remained steady during 2011, underscoring the increased stability of flows witnessed during the year.
Unlike foreign portfolio flows that have dramatically started to decline in the third quarter of 2011, FDI flows maintained their upward trends at least until this period.
However, as preliminary data from cross-border Merger and Acquisitions (M&A) and greenfield investment projects suggest, FDI flows are expected to slow down in the fourth quarter of 2011.
South Asia, East Asia and South-East Asia received inflows of around $43 billion, $209 billion, and $92 billion, respectively, according to UNCTAD’s Global Investment Trends Monitor that was released today.
"FDI flows to developing Asia, excluding West Asia, rose by 11 per cent in 2011, despite a slowing down in the latter part of the year," it said, adding that with a 16 per cent increase, South-East Asia continued to outperform East Asia in growth of FDI, while South Asia saw its inflows rise by one-third after a slide in 2010. FDI to China rose by eight per cent to an estimated $124 billion ($116 billion in the non-financial sector) as a result of increasing flows to non-financial services, though FDI growth in the country slowed down in the last two months of 2011.
"Despite turmoil in the world economy, global FDI inflows rose by 17 per cent in 2011 to $1.5 trillion, surpassing their pre-crisis average, based on preliminary UNCTAD estimates," the organisation said. "FDI inflows increased in all major economic groupings - developed, developing and transition economies."
Developing and transition countries continued to account for half of global FDI in 2011 as their inflows reached a new record high, driven mainly by investments in Latin America (up by 35 per cent) and in transition economies (up by 31 per cent), it said, adding that Africa — the region with the highest number least developed countries — continued to experience a decline in FDI.
UNCTAD estimated that FDI flows will climb moderately in 2012 to around $1.6 trillion, but will remain short of the all-time peak of $2 trillion reached in 2007. However, the organisation said the fragile recovery of the world economy in 2011 – with growth tempered by the debt crisis in developed countries, the uncertainties surrounding the future of the euro, and rising financial market turbulence – will have an impact on FDI flows in 2012.
Both cross-border mergers and acquisitions and greenfield investments slipped in the last quarter of 2011, UNCTAD figures indicated. "All these factors suggest that significant risks and uncertainties for further FDI growth in 2012 remain in place."
During 2011, many countries continued to implement policy changes aimed at further liberalising and facilitating FDI entry and operations, but also introduced new measures regulating FDI, according to the UNCTAD’s global FDI quarterly index that remained steady during 2011, underscoring the increased stability of flows witnessed during the year.
Unlike foreign portfolio flows that have dramatically started to decline in the third quarter of 2011, FDI flows maintained their upward trends at least until this period.
However, as preliminary data from cross-border Merger and Acquisitions (M&A) and greenfield investment projects suggest, FDI flows are expected to slow down in the fourth quarter of 2011.
Monday, January 23, 2012
Aid for Trade needs to redefine for output
The poor trade performance has made analysts critical about the effectiveness of Aid for Trade (AfT).
“The Aid for Trade includes factors that contribute both directly and indirectly to trade,” senior trade analyst Dr Posh Raj Pandey said.
“But the aid that directly contributes to the trade should only be considered under Aid for Trade,” he opined, adding, though the aid for infrastructure that will in the long run contribute to trade is also included in the Aid for Trade.
According to the OECD data, the country has received $173.55 million in 2009 but its output has not been yet visible that has called for redefining of Aid for Trade policy.
Of the total amount disbursed Rs 173.55 million — though $292.50 million was committed by the donors — only 0.8 per cent aid has gone to the trade policy and regulation, whereas almost half of the aid that is 45.7 per cent goes to transport and storage, energy generation supply gets 31.7 per cent and agriculture, forestry and fishing get 13.5 per cent.
“We should consider only such aid that directly contributes to trade under the Aid for Trade,” he added.
However, Nepal faces supply-side constraints that severely limit its ability to benefit from trade, and the donors may be concentrating on infrastructure and transport.
According to the OECD data, the country has received $89.1 million in 2007 — though the donors had committed $224.5 million — out of which, the transport and storage got 18.2 per cent, which has gone up to 45.7 per cent in 2009.
Aid for Trade refers to a subset of development assistance designed to help the developing countries address supply-side bottlenecks and boost their capacity to take advantage of expanded trade opportunities as it comprises aid that finances trade-related technical assistance, trade-related infrastructure, and productive capacity building.
Developed countries and development partners’ support for product development programmes, development of trade infrastructure like inland clearance depots, container freight stations, special economic zones, roads and other forms of transportation in order to enhance trade capacity, apart from enhancing the quality of infrastructure for test and certification of products, capacity building for trade negotiations and institutional development are key but they have to define core trade issue and help boost it.
“Infrastructure will not only help boost trade, it will boost overall socio-economic development,” Pandey said, asking for a new approach that could be more output oriented and boost core trade.
According to ‘Evaluating Aid for Trade on the Ground: Lessons from Nepal’ study also, Aid for Trade in Nepal has only been partially effective.
“The potential effectiveness of Aid for Trade has been hampered by various factors, internal factors — like low absorptive capacity; limited progress in making Aid for Trade programmes and projects financially and institutionally sustainable; and the need for more ownership by government agencies and the private sector — and external factors like lack of coordination among donors, bureaucratic hurdles on the part of donors, rampant use of parallel programme implementation units bypassing the recipient government mechanism, slow progress in the use of country systems, and the broadness of definition of Aid for Trade.
“To bridge the gap between commitments and disbursements, the government needs to have a national level co-ordination,” he said, adding that inter governmental agency cooperation will help absorb more aid forcing the donors to bridge the gap.
Though, Aid for Trade is bettering the lives, its integration in broader development strategies, with objectives focusing on competitiveness, economic growth and poverty reduction has made it less output oriented and out of the focus.
Sectorwise share
Transport and storage — 45.7 per cent
Energy generation, supply — 31.7 per cent
Agriculture, forestry, fishing — 13.5 per cent
Industry — 3.9 per cent
Banking, financial services — 3.5 per cent
Trade policy and regulation — 0.8 per cent
Business, other services — 0.5 per cent
Communications — 0.2 per cent
(In total Aid for Trade commitments, 2009. Source: OECD)
Commitment vs Disbursement
Year — Commitment — Disbursement
2007 — $224.5 million — $89.1 million
2009 — $292.50 million — $173.55 million
(Source: OECD)
“The Aid for Trade includes factors that contribute both directly and indirectly to trade,” senior trade analyst Dr Posh Raj Pandey said.
“But the aid that directly contributes to the trade should only be considered under Aid for Trade,” he opined, adding, though the aid for infrastructure that will in the long run contribute to trade is also included in the Aid for Trade.
According to the OECD data, the country has received $173.55 million in 2009 but its output has not been yet visible that has called for redefining of Aid for Trade policy.
Of the total amount disbursed Rs 173.55 million — though $292.50 million was committed by the donors — only 0.8 per cent aid has gone to the trade policy and regulation, whereas almost half of the aid that is 45.7 per cent goes to transport and storage, energy generation supply gets 31.7 per cent and agriculture, forestry and fishing get 13.5 per cent.
“We should consider only such aid that directly contributes to trade under the Aid for Trade,” he added.
However, Nepal faces supply-side constraints that severely limit its ability to benefit from trade, and the donors may be concentrating on infrastructure and transport.
According to the OECD data, the country has received $89.1 million in 2007 — though the donors had committed $224.5 million — out of which, the transport and storage got 18.2 per cent, which has gone up to 45.7 per cent in 2009.
Aid for Trade refers to a subset of development assistance designed to help the developing countries address supply-side bottlenecks and boost their capacity to take advantage of expanded trade opportunities as it comprises aid that finances trade-related technical assistance, trade-related infrastructure, and productive capacity building.
Developed countries and development partners’ support for product development programmes, development of trade infrastructure like inland clearance depots, container freight stations, special economic zones, roads and other forms of transportation in order to enhance trade capacity, apart from enhancing the quality of infrastructure for test and certification of products, capacity building for trade negotiations and institutional development are key but they have to define core trade issue and help boost it.
“Infrastructure will not only help boost trade, it will boost overall socio-economic development,” Pandey said, asking for a new approach that could be more output oriented and boost core trade.
According to ‘Evaluating Aid for Trade on the Ground: Lessons from Nepal’ study also, Aid for Trade in Nepal has only been partially effective.
“The potential effectiveness of Aid for Trade has been hampered by various factors, internal factors — like low absorptive capacity; limited progress in making Aid for Trade programmes and projects financially and institutionally sustainable; and the need for more ownership by government agencies and the private sector — and external factors like lack of coordination among donors, bureaucratic hurdles on the part of donors, rampant use of parallel programme implementation units bypassing the recipient government mechanism, slow progress in the use of country systems, and the broadness of definition of Aid for Trade.
“To bridge the gap between commitments and disbursements, the government needs to have a national level co-ordination,” he said, adding that inter governmental agency cooperation will help absorb more aid forcing the donors to bridge the gap.
Though, Aid for Trade is bettering the lives, its integration in broader development strategies, with objectives focusing on competitiveness, economic growth and poverty reduction has made it less output oriented and out of the focus.
Sectorwise share
Transport and storage — 45.7 per cent
Energy generation, supply — 31.7 per cent
Agriculture, forestry, fishing — 13.5 per cent
Industry — 3.9 per cent
Banking, financial services — 3.5 per cent
Trade policy and regulation — 0.8 per cent
Business, other services — 0.5 per cent
Communications — 0.2 per cent
(In total Aid for Trade commitments, 2009. Source: OECD)
Commitment vs Disbursement
Year — Commitment — Disbursement
2007 — $224.5 million — $89.1 million
2009 — $292.50 million — $173.55 million
(Source: OECD)
FATF warns Nepal of blacklisting
Financial Action Task Force (FATF) — a global anti-money laundering agency — has warned Nepal to implement its commitments in fighting against the flow of dirty money or will be black listed.
During a meeting of FATF/Asia-Pacific Regional Review group's face-to-face meeting last week, the global body has threatened Nepal to black list, after the country failed to fulfill its past promises on deadline.
Nepal had promised to update the Acts and laws against the flow of dirty money and ratify remaining two Bills under UN conventions — Mutual Legal Assistance Bill and Extradition Bill that are still in the parliament — by the end of 2011, but could not walk the talk forcing the regional meeting to propose some two dozen reforms."The meeting proposed some 22 reforms, but we agreed on three reforms — legal reform, strengthening of Financial Information Unit (FIU) under the central bank and strengthening of banking reports — for the time being as the country is passing through a transition phase," according a participants at the meeting that took place in Sydney, Australia.
Nepal — led by secretary at the Prime Minister's Office Trilochan Uprety — has presented its progress report in the meeting. Central bank deputy governor Maha Prasad Adhikari, secretary at the Ministry of Law Bhesraj Sharma, three joint secretaries of the Finance Ministry and FIU's deputy director Hari Prasad Nepal took part in the meeting.
Earlier, prescribed by the global anti-money laundering agency, the parliament has already ratified two UN Conventions — International Convention for the Suppression of the Financing of Terrorism-1999 and UN Convention Against Transnational Organised Crime — in June, 2011. But it needs to prepare Acts according to the Conventions.
Now, Nepal must meet its commitments by 2012 February 13, where the FATF is going to meet in Paris. The FATF Plenary and Working Group Meetings on October 24-28, 2011 in Paris, France had broadly discussed on July, 2011's 14th annual meeting of Asia/Pacific Group on Money Laundering (APG) report and forwarded the progress report to the FATF plenary for further discussions.Nepal is one of the Asia/Pacific Group on Money Laundering (APG) members in the FATF Plenary as it is not an independent member of FATF.
The Paris plenary had discussed on consideration of policy issues relating to the current review of the FATF standards; matters relevant to the fourth round of evaluations (commencing after 2012); and international cooperation issues with respect to a number of countries — including some APG members — and determining the way forward for jurisdictions that have strategic and other deficiencies in their domestic AML/CFT frameworks.
Of the total 40 plus nine compliance of Financial Action Task Force (FATF), Nepal has still to fulfill most of them.
During a meeting of FATF/Asia-Pacific Regional Review group's face-to-face meeting last week, the global body has threatened Nepal to black list, after the country failed to fulfill its past promises on deadline.
Nepal had promised to update the Acts and laws against the flow of dirty money and ratify remaining two Bills under UN conventions — Mutual Legal Assistance Bill and Extradition Bill that are still in the parliament — by the end of 2011, but could not walk the talk forcing the regional meeting to propose some two dozen reforms."The meeting proposed some 22 reforms, but we agreed on three reforms — legal reform, strengthening of Financial Information Unit (FIU) under the central bank and strengthening of banking reports — for the time being as the country is passing through a transition phase," according a participants at the meeting that took place in Sydney, Australia.
Nepal — led by secretary at the Prime Minister's Office Trilochan Uprety — has presented its progress report in the meeting. Central bank deputy governor Maha Prasad Adhikari, secretary at the Ministry of Law Bhesraj Sharma, three joint secretaries of the Finance Ministry and FIU's deputy director Hari Prasad Nepal took part in the meeting.
Earlier, prescribed by the global anti-money laundering agency, the parliament has already ratified two UN Conventions — International Convention for the Suppression of the Financing of Terrorism-1999 and UN Convention Against Transnational Organised Crime — in June, 2011. But it needs to prepare Acts according to the Conventions.
Now, Nepal must meet its commitments by 2012 February 13, where the FATF is going to meet in Paris. The FATF Plenary and Working Group Meetings on October 24-28, 2011 in Paris, France had broadly discussed on July, 2011's 14th annual meeting of Asia/Pacific Group on Money Laundering (APG) report and forwarded the progress report to the FATF plenary for further discussions.Nepal is one of the Asia/Pacific Group on Money Laundering (APG) members in the FATF Plenary as it is not an independent member of FATF.
The Paris plenary had discussed on consideration of policy issues relating to the current review of the FATF standards; matters relevant to the fourth round of evaluations (commencing after 2012); and international cooperation issues with respect to a number of countries — including some APG members — and determining the way forward for jurisdictions that have strategic and other deficiencies in their domestic AML/CFT frameworks.
Of the total 40 plus nine compliance of Financial Action Task Force (FATF), Nepal has still to fulfill most of them.
Global uncertainty may hit Nepal hard
Nepal might feel the heat of global uncertainty, according to the International Labour Organisation (ILO).
"The global uncertainty stemming from the euro area sovereign debt crisis and the continuing weakness of the US economy has negative implications for all countries, including those in the South Asia region, particularly those dependent on remittances and tourism like Nepal," said the Global Employment Trends 2012 released today by the ILO.
South Asia that now accounts for almost half of the world’s working poor — estimated to be at 46.2 per cent in 2011 — faces the challenge of high degree of informality that persists despite strong growth, as unemployment is not the main labour market challenge in the region.
The unemployment rate in South Asia is estimated to have been just 3.6 per cent in 2011, down from 3.8 per cent a year before, it said, "Similar to other regions, the unemployment rate is higher for youth at 9.9 per cent and women 4.8 per cent."
In the South Asian context, it is the persistence of low-productivity, low-pay jobs, which are mostly located in the agricultural and urban informal sectors as most of the population continues to derive a livelihood from agriculture.
In 2010, agriculture sector accounted for 51.4 per cent of employment, although it is down by almost 11 percentage points from the share in 1991 (62.2 per cent). As of 2010, industry and services accounted for just 20.7 and 27.9 per cent of workers in South Asia, respectively.
Accelerating the movement of poor people out of agriculture into more productive jobs in the non-farm sector remains one of the most critical priorities for the region, suggested the report.
The main challenges in South Asia is to increase labour productivity, to ensure that incomes are rising and poverty is falling, and create enough jobs for a growing working-age population, which is expanding by around two per cent every year. "With almost 60 per cent of the population under the age of 30, South Asian governments are seeking to take advantage of the demographic dividend and not let it become a cause of poor labour market outcomes and, ultimately, conflict and insecurity, it added.
Similarly, the world faces the 'urgent challenge' of creating 600 million productive jobs over the next decade in order to generate sustainable growth and maintain social cohesion, according to the annual report of the ILO. "After three years of continuous crisis conditions in global labour markets and against the prospect of a further deterioration of economic activity, there is a backlog of global unemployment of 200 million," stated the ILO annual report 'Global Employment Trends 2012: Preventing a deeper jobs crisis'.
Moreover, the report said more than 400 million new jobs will be needed over the next decade to absorb the estimated 40 million growth of the labour force each year. The Global Employment Trends Report also said the world faces the additional challenge of creating decent jobs for the estimated 900 million workers living with their families below the $-2-a-day poverty line, mostly in developing countries.
The report said 74.8 million youth aged 15-24 were unemployed in 2011, an increase of more than four million since 2007. It adds that globally, young people are nearly three times as likely as adults to be unemployed. The global youth unemployment rate, at 12.7 per cent, remains a full percentage point above the pre-crisis level.
"The global uncertainty stemming from the euro area sovereign debt crisis and the continuing weakness of the US economy has negative implications for all countries, including those in the South Asia region, particularly those dependent on remittances and tourism like Nepal," said the Global Employment Trends 2012 released today by the ILO.
South Asia that now accounts for almost half of the world’s working poor — estimated to be at 46.2 per cent in 2011 — faces the challenge of high degree of informality that persists despite strong growth, as unemployment is not the main labour market challenge in the region.
The unemployment rate in South Asia is estimated to have been just 3.6 per cent in 2011, down from 3.8 per cent a year before, it said, "Similar to other regions, the unemployment rate is higher for youth at 9.9 per cent and women 4.8 per cent."
In the South Asian context, it is the persistence of low-productivity, low-pay jobs, which are mostly located in the agricultural and urban informal sectors as most of the population continues to derive a livelihood from agriculture.
In 2010, agriculture sector accounted for 51.4 per cent of employment, although it is down by almost 11 percentage points from the share in 1991 (62.2 per cent). As of 2010, industry and services accounted for just 20.7 and 27.9 per cent of workers in South Asia, respectively.
Accelerating the movement of poor people out of agriculture into more productive jobs in the non-farm sector remains one of the most critical priorities for the region, suggested the report.
The main challenges in South Asia is to increase labour productivity, to ensure that incomes are rising and poverty is falling, and create enough jobs for a growing working-age population, which is expanding by around two per cent every year. "With almost 60 per cent of the population under the age of 30, South Asian governments are seeking to take advantage of the demographic dividend and not let it become a cause of poor labour market outcomes and, ultimately, conflict and insecurity, it added.
Similarly, the world faces the 'urgent challenge' of creating 600 million productive jobs over the next decade in order to generate sustainable growth and maintain social cohesion, according to the annual report of the ILO. "After three years of continuous crisis conditions in global labour markets and against the prospect of a further deterioration of economic activity, there is a backlog of global unemployment of 200 million," stated the ILO annual report 'Global Employment Trends 2012: Preventing a deeper jobs crisis'.
Moreover, the report said more than 400 million new jobs will be needed over the next decade to absorb the estimated 40 million growth of the labour force each year. The Global Employment Trends Report also said the world faces the additional challenge of creating decent jobs for the estimated 900 million workers living with their families below the $-2-a-day poverty line, mostly in developing countries.
The report said 74.8 million youth aged 15-24 were unemployed in 2011, an increase of more than four million since 2007. It adds that globally, young people are nearly three times as likely as adults to be unemployed. The global youth unemployment rate, at 12.7 per cent, remains a full percentage point above the pre-crisis level.
World faces a 600 million jobs challenge, warns ILO
The world faces the 'urgent challenge' of creating 600 million productive jobs over the next decade in order to generate sustainable growth and maintain social cohesion, according to the annual report on global employment by the International Labour Organisation (ILO).
"After three years of continuous crisis conditions in global labour markets and against the prospect of a further deterioration of economic activity, there is a backlog of global unemployment of 200 million," says the ILO in its annual report 'Global Employment Trends 2012: Preventing a deeper jobs crisis'.
Moreover, the report says more than 400 million new jobs will be needed over the next decade to absorb the estimated 40 million growth of the labour force each year. The Global Employment Trends Report also said the world faces the additional challenge of creating decent jobs for the estimated 900 million workers living with their families below the $2-a-day poverty line, mostly in developing countries. "Despite strenuous government efforts, the jobs crisis continues unabated, with one in three workers worldwide — or an estimated 1.1 billion people — either unemployed or living in poverty," said ILO director-general Juan Somavia. "What is needed is that job creation in the real economy must become our number one priority."
The report says the recovery that started in 2009 has been short-lived and that there are still 27 million more unemployed workers than at the start of the crisis. The fact that economies are not generating enough employment is reflected in the employment-to-population ratio — the proportion of the working-age population in employment — which suffered the largest decline on record between 2007 (61.2 per cent) and 2010 (60.2 per cent).
At the same time, there are nearly 29 million fewer people in the labour force now than would be expected based on pre-crisis trends. If these discouraged workers1 were counted as unemployed, then global unemployment would swell from the current 197 million to 225 million, and the unemployment rate would rise from six per cent to 6.9 per cent.
The report paints three scenarios for the employment situation in the future. The baseline projection shows an additional 3 million unemployed for 2012, rising to 206 million by 2016. If global growth rates fall below two per cent, then unemployment would rise to 204 million in 2012.
In a more benign scenario, assuming a quick resolution of the euro debt crisis, global unemployment would be around one million lower in 2012. Young people continue to be among the hardest hit by the jobs crisis. Judging by the present course, the report says, there is little hope for a substantial improvement in their near-term employment prospects.
Global Employment Trends 2012 says 74.8 million youth aged 15-24 were unemployed in 2011, an increase of more than 4 million since 2007. It adds that globally, young people are nearly three times as likely as adults to be unemployed. The global youth unemployment rate, at 12.7 per cent, remains a full percentage point above the pre-crisis level.
"There has been a marked slowdown in the rate of progress in reducing the number of working poor," the report concludes, adding that nearly 30 per cent of all workers in the world — more than 900 million — were living with their families below the $2-poverty line in 2011, or about 55 million more than expected on the basis of pre-crisis trends.
"Of these 900 million working poor, about half were living below the $1.25 extreme poverty line. The number of workers in vulnerable employment 2 globally in 2011 is estimated at 1.52 billion, an increase of 136 million since 2000 and of nearly 23 million since 2009."
Among women, 50.5 per cent are in vulnerable employment, a rate that exceeds the corresponding share for men (48.2).
Favourable economic conditions pushed job creation rates above labour force growth, thereby supporting domestic demand, in particular in larger emerging economies in Latin America and East Asia.
The labour productivity gap between the developed and the developing world — an important indicator measuring the convergence of income levels across countries — has narrowed over the past two decades, but remains substantial: Output per worker in the Developed Economies and European Union region was $72,900 in 2011 versus an average of $13,600 in developing regions.
"These latest figures reflect the increasing inequality and continuous exclusion that millions of workers and their families are facing," Somavia said, adding, "Whether we recover or not from this crisis will depend on how effective government policies ultimately are. And policies will only be effective as long as they have a positive impact on peoples' lives."
The report calls for targeted measures to support job growth in the real economy, and warns that additional public support measures alone will not be enough to foster a sustainable recovery.
"Policy-makers must act decisively and in a coordinated fashion to reduce the fear and uncertainty that is hindering private investment so that the private sector can restart the main engine of global job creation," the report says, warning that in times of faltering demand further stimulus is important and it can be done in a way that does not put the sustainability of public finances at risk.
"After three years of continuous crisis conditions in global labour markets and against the prospect of a further deterioration of economic activity, there is a backlog of global unemployment of 200 million," says the ILO in its annual report 'Global Employment Trends 2012: Preventing a deeper jobs crisis'.
Moreover, the report says more than 400 million new jobs will be needed over the next decade to absorb the estimated 40 million growth of the labour force each year. The Global Employment Trends Report also said the world faces the additional challenge of creating decent jobs for the estimated 900 million workers living with their families below the $2-a-day poverty line, mostly in developing countries. "Despite strenuous government efforts, the jobs crisis continues unabated, with one in three workers worldwide — or an estimated 1.1 billion people — either unemployed or living in poverty," said ILO director-general Juan Somavia. "What is needed is that job creation in the real economy must become our number one priority."
The report says the recovery that started in 2009 has been short-lived and that there are still 27 million more unemployed workers than at the start of the crisis. The fact that economies are not generating enough employment is reflected in the employment-to-population ratio — the proportion of the working-age population in employment — which suffered the largest decline on record between 2007 (61.2 per cent) and 2010 (60.2 per cent).
At the same time, there are nearly 29 million fewer people in the labour force now than would be expected based on pre-crisis trends. If these discouraged workers1 were counted as unemployed, then global unemployment would swell from the current 197 million to 225 million, and the unemployment rate would rise from six per cent to 6.9 per cent.
The report paints three scenarios for the employment situation in the future. The baseline projection shows an additional 3 million unemployed for 2012, rising to 206 million by 2016. If global growth rates fall below two per cent, then unemployment would rise to 204 million in 2012.
In a more benign scenario, assuming a quick resolution of the euro debt crisis, global unemployment would be around one million lower in 2012. Young people continue to be among the hardest hit by the jobs crisis. Judging by the present course, the report says, there is little hope for a substantial improvement in their near-term employment prospects.
Global Employment Trends 2012 says 74.8 million youth aged 15-24 were unemployed in 2011, an increase of more than 4 million since 2007. It adds that globally, young people are nearly three times as likely as adults to be unemployed. The global youth unemployment rate, at 12.7 per cent, remains a full percentage point above the pre-crisis level.
"There has been a marked slowdown in the rate of progress in reducing the number of working poor," the report concludes, adding that nearly 30 per cent of all workers in the world — more than 900 million — were living with their families below the $2-poverty line in 2011, or about 55 million more than expected on the basis of pre-crisis trends.
"Of these 900 million working poor, about half were living below the $1.25 extreme poverty line. The number of workers in vulnerable employment 2 globally in 2011 is estimated at 1.52 billion, an increase of 136 million since 2000 and of nearly 23 million since 2009."
Among women, 50.5 per cent are in vulnerable employment, a rate that exceeds the corresponding share for men (48.2).
Favourable economic conditions pushed job creation rates above labour force growth, thereby supporting domestic demand, in particular in larger emerging economies in Latin America and East Asia.
The labour productivity gap between the developed and the developing world — an important indicator measuring the convergence of income levels across countries — has narrowed over the past two decades, but remains substantial: Output per worker in the Developed Economies and European Union region was $72,900 in 2011 versus an average of $13,600 in developing regions.
"These latest figures reflect the increasing inequality and continuous exclusion that millions of workers and their families are facing," Somavia said, adding, "Whether we recover or not from this crisis will depend on how effective government policies ultimately are. And policies will only be effective as long as they have a positive impact on peoples' lives."
The report calls for targeted measures to support job growth in the real economy, and warns that additional public support measures alone will not be enough to foster a sustainable recovery.
"Policy-makers must act decisively and in a coordinated fashion to reduce the fear and uncertainty that is hindering private investment so that the private sector can restart the main engine of global job creation," the report says, warning that in times of faltering demand further stimulus is important and it can be done in a way that does not put the sustainability of public finances at risk.
Higher prices for agricultural goods fail to lead to economic diversification
Ways must be found for poor nations to retain more of the value derived from the farm goods and natural resources that are the mainstays of many of their economies, experts said at the third Global Commodities Forum.
Speakers said that despite a decade’s worth of oscillating but largely rising prices, the so-called commodity dependent developing countries (CDDCs) – countries whose commodities exports represent more than 60 per cent of their merchandise exports – have been unable to use the higher profits earned from exports to diversify their economies and broadly raise living standards.
The Forum — hosted by UNCTAD and based on the theme 'Harnessing development gains from commodities production and trade', continues through Tuesday.
UNCTAD secretary-general Supachai Panitchpakdi, opening the meeting, said that there has been ongoing debate on diversification for CDDCs. "From 2002–2010, the number of CDDCs increased from 85 to 91," he said, adding, "While we have been trying to find ways to advise countries to be less commodity dependent, CDDCs have actually become more heavily dependent on commodities exports, and the number of countries that are dependent has increased."
"The issue is how to use the benefits that come from higher prices so that they serve “long-term development purposes”, he said. Royalties and wages earned by developing countries from commodities frequently are only a small portion of the final sales prices of the finished goods made from them.
The bulk of the profits accrues overseas.Supachai said the mining of natural resources in developing countries, for example, often results in 'enclave economies' that do not generate broad economic spillover benefits for the host nations. Ways should be found "to spawn wider economic activities" coming from mining, he said, so that more of the upgrading of these natural resources occurs domestically, creating jobs — and jobs that pay higher wages.Vice president of the UNCTAD Trade and Development Board Ibrahim Al-Adoofi said that the Forum is part of broad efforts preparing the way for the UNCTAD XIII quadrennial conference to be held in Doha on April 21-26.
The theme of the Forum reflects the theme of UNCTAD XIII, which is 'development-centred globalisation'.
"New developments in the global economy have exposed the limitations in our current development model," Al-Adoofi said, adding that it was necessary to steer commodities development efforts in new directions.
On the occasion, director of the Agricultural and Commodities Division of the World Trade Organisation (WTO) Clem Boonekamp said commodities trade is directly connected to the issue of food security — "a fundamental responsibility of all of us. The irony is that almost a billion people a day go to bed hungry, yet there is enough food. There are a number of problems that get in the way. "While not the solution in itself, trade must be part of a comprehensive effort to ensure food security, he said.
Negotiations at WTO, including those under the Doha Round, are part of an effort to 'level the playing field' for trade in farm goods, he said, so that the system is efficient and food is able to move smoothly from where it is grown to where it is needed.
One challenge 'is trade-distorting domestic subsidies' for agriculture in developed nations that enable farmers there to 'outcompete' farmers in developing countries who otherwise would produce food that is price competitive, he said, adding that it hinders a potential for developing countries to grow their economies.Similarly, director of the Trade and Markets Division of the Food and Agriculture Organisation of the UN David Hallam said that there was increasing recognition of the importance of the connection of agricultural markets with other markets, for example with energy markets, because of climbing biofuel production, and with financial markets. "But one thing that has remained constant is the continuing poverty of many small commodities producers around the world.
The 'financialisation' of commodities markets — meaning the increasing use of such goods as food as an asset class for speculative investment — was mentioned by several of the morning’s speakers.
Supachai said the issue 'is not settled yet'. "There is a need to study the matter to ensure that speculation in commodities 'does not result in excessive movements in prices," he added.
Following the opening plenary, the Forum began a series of more topical debates, beginning with a review of 'recent developments in international commodities trade – their impacts and implications'.
Panellists said the long-standing problem of price volatility had been a noteworthy feature of commodities markets once again in 2011, driven in part by political and financial developments, as well as by the various effects of weather on harvests and by varying demand for raw materials for industrial production in keeping with the uneven recovery from the global recession.
Steps that might reduce price volatility include boosting transparency in markets; building a level playing field for trade and investments, and making sure that sufficient and affordable financing is available for commodities trade despite the fallout from the Euro region debt crisis, speakers said.
Other topics to be addressed in plenary sessions and panel debates over the next two days include the sovereign debt crisis and its impacts on commodities production and trade, trade-related financial innovations, key challenges facing commodity-dependent developing countries, expanding access to markets and trade-enabling tools, and practical examples of harnessing gains from commodity value chain development.
Speakers said that despite a decade’s worth of oscillating but largely rising prices, the so-called commodity dependent developing countries (CDDCs) – countries whose commodities exports represent more than 60 per cent of their merchandise exports – have been unable to use the higher profits earned from exports to diversify their economies and broadly raise living standards.
The Forum — hosted by UNCTAD and based on the theme 'Harnessing development gains from commodities production and trade', continues through Tuesday.
UNCTAD secretary-general Supachai Panitchpakdi, opening the meeting, said that there has been ongoing debate on diversification for CDDCs. "From 2002–2010, the number of CDDCs increased from 85 to 91," he said, adding, "While we have been trying to find ways to advise countries to be less commodity dependent, CDDCs have actually become more heavily dependent on commodities exports, and the number of countries that are dependent has increased."
"The issue is how to use the benefits that come from higher prices so that they serve “long-term development purposes”, he said. Royalties and wages earned by developing countries from commodities frequently are only a small portion of the final sales prices of the finished goods made from them.
The bulk of the profits accrues overseas.Supachai said the mining of natural resources in developing countries, for example, often results in 'enclave economies' that do not generate broad economic spillover benefits for the host nations. Ways should be found "to spawn wider economic activities" coming from mining, he said, so that more of the upgrading of these natural resources occurs domestically, creating jobs — and jobs that pay higher wages.Vice president of the UNCTAD Trade and Development Board Ibrahim Al-Adoofi said that the Forum is part of broad efforts preparing the way for the UNCTAD XIII quadrennial conference to be held in Doha on April 21-26.
The theme of the Forum reflects the theme of UNCTAD XIII, which is 'development-centred globalisation'.
"New developments in the global economy have exposed the limitations in our current development model," Al-Adoofi said, adding that it was necessary to steer commodities development efforts in new directions.
On the occasion, director of the Agricultural and Commodities Division of the World Trade Organisation (WTO) Clem Boonekamp said commodities trade is directly connected to the issue of food security — "a fundamental responsibility of all of us. The irony is that almost a billion people a day go to bed hungry, yet there is enough food. There are a number of problems that get in the way. "While not the solution in itself, trade must be part of a comprehensive effort to ensure food security, he said.
Negotiations at WTO, including those under the Doha Round, are part of an effort to 'level the playing field' for trade in farm goods, he said, so that the system is efficient and food is able to move smoothly from where it is grown to where it is needed.
One challenge 'is trade-distorting domestic subsidies' for agriculture in developed nations that enable farmers there to 'outcompete' farmers in developing countries who otherwise would produce food that is price competitive, he said, adding that it hinders a potential for developing countries to grow their economies.Similarly, director of the Trade and Markets Division of the Food and Agriculture Organisation of the UN David Hallam said that there was increasing recognition of the importance of the connection of agricultural markets with other markets, for example with energy markets, because of climbing biofuel production, and with financial markets. "But one thing that has remained constant is the continuing poverty of many small commodities producers around the world.
The 'financialisation' of commodities markets — meaning the increasing use of such goods as food as an asset class for speculative investment — was mentioned by several of the morning’s speakers.
Supachai said the issue 'is not settled yet'. "There is a need to study the matter to ensure that speculation in commodities 'does not result in excessive movements in prices," he added.
Following the opening plenary, the Forum began a series of more topical debates, beginning with a review of 'recent developments in international commodities trade – their impacts and implications'.
Panellists said the long-standing problem of price volatility had been a noteworthy feature of commodities markets once again in 2011, driven in part by political and financial developments, as well as by the various effects of weather on harvests and by varying demand for raw materials for industrial production in keeping with the uneven recovery from the global recession.
Steps that might reduce price volatility include boosting transparency in markets; building a level playing field for trade and investments, and making sure that sufficient and affordable financing is available for commodities trade despite the fallout from the Euro region debt crisis, speakers said.
Other topics to be addressed in plenary sessions and panel debates over the next two days include the sovereign debt crisis and its impacts on commodities production and trade, trade-related financial innovations, key challenges facing commodity-dependent developing countries, expanding access to markets and trade-enabling tools, and practical examples of harnessing gains from commodity value chain development.
Sunday, January 22, 2012
NPC paints bleak picture of development projects
Chairing the National Development Problems Solution Committee Prime Minister Dr Baburam Bhattarai showed his concern over delay in implementation of the priority one projects.
The meeting of National Planning Commission (NPC) today reviewed the development projects and concluded that development projects were not implemented according to their goal. The government has, in the current fiscal year, earmarked Rs 3,440 billion through various ministries for 228 projects unde3r priority one.
“It was sheer irresponsibility of the planning commission to be unaware of some 42 projects under priority one, the premier said, directing the concerned ministries to find its reason and report within a week.
He was also disappointing that only 14 per cent of the budget was released for capital expense in four months. Questioning why the budget was not spent, he directed the ministers to study the projects recording below 50 per cent progress and take a carrot and stick policy.
“The trend of imposing projects from the centre should be ended," he said, warning not to repeat the same mistakes again.
However, most of the ministers speaking at the meeting blamed delay in budget release, frequent transfer of employees, lack of qualified and technical human resource, lack of inter-ministerial coordination, absence of secretaries in some 500 VDCs, problems of awarding compensation to land while constructing and widening road and lack of doctors and health workers as obstacles to acceleration of the development projects.
NPC vice chair Deependra Bahadur Kshhetri had presented the progress reports in the meeting.
The meeting of National Planning Commission (NPC) today reviewed the development projects and concluded that development projects were not implemented according to their goal. The government has, in the current fiscal year, earmarked Rs 3,440 billion through various ministries for 228 projects unde3r priority one.
“It was sheer irresponsibility of the planning commission to be unaware of some 42 projects under priority one, the premier said, directing the concerned ministries to find its reason and report within a week.
He was also disappointing that only 14 per cent of the budget was released for capital expense in four months. Questioning why the budget was not spent, he directed the ministers to study the projects recording below 50 per cent progress and take a carrot and stick policy.
“The trend of imposing projects from the centre should be ended," he said, warning not to repeat the same mistakes again.
However, most of the ministers speaking at the meeting blamed delay in budget release, frequent transfer of employees, lack of qualified and technical human resource, lack of inter-ministerial coordination, absence of secretaries in some 500 VDCs, problems of awarding compensation to land while constructing and widening road and lack of doctors and health workers as obstacles to acceleration of the development projects.
NPC vice chair Deependra Bahadur Kshhetri had presented the progress reports in the meeting.
Saturday, January 21, 2012
Hike in fuel surcharge pushes airfare up
Domestic airlines are increasing fuel surcharge that will increase the airfare by Rs 55 to Rs 200 following the price-hike in air turbine fuel (ATF).
Nepal Oil Corporation (NOC) has increased Rs 5 per liter in ATF on Wednesday, taking the ATF price to Rs 105 per liter. With this, the ATF price has increased by Rs 50 per liter in two years. Domestic airlines had increased the fuel surcharge up to Rs 775 following the increment of Rs 10 per liter in May last year.
Largest domestic airline Buddha Air has announced new airfare, which will be effective from Saturday whereas other airlines including Yeti, Guna and Agni are preparing to hike the airfare shortly.
“With the increment in ATF, fuel surcharge will increase in the range of Rs 60 to Rs 200,” executive marketing manager of Buddha Air Rupesh Joshi said.
However, another domestic player Yeti Airlines has not yet decided anything on increasing airfare so far. Agni Air and Guna Air officials are increasing their new airfare effective from Monday.
According to the regulations, airlines can increase fuel surcharge when ATF price is increased by more than Rs 4 per litre. Similarly, Civil Aviation Authority of Nepal (CAAN) reviews airfare every two years on the basis of inflation rate, fuel price and maintenance cost.
Nepal Oil Corporation (NOC) has increased Rs 5 per liter in ATF on Wednesday, taking the ATF price to Rs 105 per liter. With this, the ATF price has increased by Rs 50 per liter in two years. Domestic airlines had increased the fuel surcharge up to Rs 775 following the increment of Rs 10 per liter in May last year.
Largest domestic airline Buddha Air has announced new airfare, which will be effective from Saturday whereas other airlines including Yeti, Guna and Agni are preparing to hike the airfare shortly.
“With the increment in ATF, fuel surcharge will increase in the range of Rs 60 to Rs 200,” executive marketing manager of Buddha Air Rupesh Joshi said.
However, another domestic player Yeti Airlines has not yet decided anything on increasing airfare so far. Agni Air and Guna Air officials are increasing their new airfare effective from Monday.
According to the regulations, airlines can increase fuel surcharge when ATF price is increased by more than Rs 4 per litre. Similarly, Civil Aviation Authority of Nepal (CAAN) reviews airfare every two years on the basis of inflation rate, fuel price and maintenance cost.
Textile entrepreneurs want to link productivity, wages
Textile entrepreneurs requested the government to create a link between the productivity of the workers and their wages, at a time when a new Labour Act is being prepared by the Ministry of Labour and Transport Management to replace the existing Act that was implemented in 1992.
It would help entrepreneurs to fix salaries of workers on the basis of output of their work, if a provision to give wages on the basis of productivity is mentioned in the new Labour Law, chairman of Jyoti Group Padma Jyoti said, during an interaction organised by Federation of Nepalese Chambers of Commerce and Industry (FNCCI) here in the Valley today.
Jyoti Group has several industries including spinning mills.
The entrepreneurs are complaining of rising production cost due to hike in salary, despite the productivity has been taking a plunge.
At present, salaries in both formal and informal sectors are determined through negotiations between the trade unions and the management. "But the procedure overlooks productivity factor and it only fuels price rise, without any concrete effort to improve quality of output," the employers said, adding that continuation of existing practice would result in giving rewards to non-performing employees, who become liability for the firms.
"It would finally lead to less labour productivity and give bad image for the country in the global market," they said.
The employers also suggested that some limit needs to be imposed on the workers right to collective bargaining through trade unions for resolution of several disputes, including those related to pay-scale.
Employers also gave a call for framing a separate law for export-oriented industries, including handicraft sector and readymade garments. "It should have provisions to ensure that production in such industries remain unaffected throughout the year," they urged.
In recent years, domestic ready garment sector has not been doing well but in the first five months of the current fiscal year, the country witnessed a 43.8 per cent growth in readymade garments exports compared to the same period last fiscal year, according to the central bank data.
It would help entrepreneurs to fix salaries of workers on the basis of output of their work, if a provision to give wages on the basis of productivity is mentioned in the new Labour Law, chairman of Jyoti Group Padma Jyoti said, during an interaction organised by Federation of Nepalese Chambers of Commerce and Industry (FNCCI) here in the Valley today.
Jyoti Group has several industries including spinning mills.
The entrepreneurs are complaining of rising production cost due to hike in salary, despite the productivity has been taking a plunge.
At present, salaries in both formal and informal sectors are determined through negotiations between the trade unions and the management. "But the procedure overlooks productivity factor and it only fuels price rise, without any concrete effort to improve quality of output," the employers said, adding that continuation of existing practice would result in giving rewards to non-performing employees, who become liability for the firms.
"It would finally lead to less labour productivity and give bad image for the country in the global market," they said.
The employers also suggested that some limit needs to be imposed on the workers right to collective bargaining through trade unions for resolution of several disputes, including those related to pay-scale.
Employers also gave a call for framing a separate law for export-oriented industries, including handicraft sector and readymade garments. "It should have provisions to ensure that production in such industries remain unaffected throughout the year," they urged.
In recent years, domestic ready garment sector has not been doing well but in the first five months of the current fiscal year, the country witnessed a 43.8 per cent growth in readymade garments exports compared to the same period last fiscal year, according to the central bank data.
Meet to consider how developing countries enhance benefits from exports of farm goods
A two-day meeting in Geneva will focus on how poor countries can gain more lasting value from their exports of agricultural products and natural resources. The third annual UNCTAD Global Commodities Forum will attract government ministers, academics, development economists and business leaders in the field of commodities. They are discussing higher credit costs as a result of the fallout from the Euro-zone debt crisis, which is raising loan rates globally, and mounting food and petroleum bills for poor nations.
Many developing countries are heavily dependent on exports of basic farm goods and natural resources. Since 2002, the number of countries whose commodity exports represents more than 60 per cent of merchandise exports has risen from 85 to 91.
Commodity prices increased considerably over that period. Yet climbing commodity prices appear to have had limited positive impacts on living standards in exporting countries. Many commodity dependent developing countries (CDDCs) are also classified as least developed countries (LDCs), and even during the global economic boom, rates of extreme poverty in LDCs declined only from 58 per cent in 2002 to 53 per cent in 2007 – and this was before the world food and financial crises.
The World Bank estimates that the recent resurgence in food prices, which in 2011 reached levels approaching their 2008 peaks, has pushed an additional 44 million people worldwide into extreme poverty. The theme of the conference is “Harnessing development gains from commodities production and trade”.
While a part of the increase in the number of CDDCs to 91 is due to the rising prices of commodity exports, it also indicates that the commodities boom generally has not resulted in a diversification of economic production and exports, as recommended by development economists.
Diversification is recommended in part because commodity prices are historically volatile, leaving these nations vulnerable to sudden drops in the prices of their major exports – or to sudden price increases for commodities they must import, on which they are also often heavily dependent.
Most CDDCs, for example, are net importers of oil and food. Prices for oil climbed from $20 per barrel in 2002 to $132.50 in July 2008, fell to $42 in early 2009, but climbed back to $105.36 in November 2011. In late 2011, prices for many staple food crops matched or even exceeded their levels during the much-publicized 2008 food crisis.
The food price index of the Food and Agriculture Organisation of the United Nations, an average of staple food costs, increased from 90 in 2002 to 200 in 2008, fell as low as 157 in 2009 and then climbed to 238 in February 2011. Wheat prices escalated from $192 per ton in 2006 to $326 in 2008, fell during the global recession, then rose to $311 per ton in August 2011 before declining to $273 per ton in November.
Continued price volatility in commodities markets recently has prompted high-level collaborative international action, including most recently by the United Nations High-level Task Force and the Group of Twenty.
Another reason economic diversification is recommended for CDDCs is because the processing of raw materials and basic foods into higher-quality goods is where the highest economic returns lie. In many cases, commodity-exporting countries receive only a small proportion of the final sales price of their commodities on world markets.
The bulk of the revenues accrue to those involved in refining and processing the products overseas. A major topic of debate at the Forum will therefore be how CDDCs can carry out more of the commodities 'value chain' within their own borders.
One barrier to diversification in CDDCs has been that the rising costs of the commodities that have to be imported to a great extent offset rising revenues from the commodities that are exported. Oil imports are an especially critical factor, as higher energy costs affect everything from farming machinery to industry. Development economists also say that government policies on how to invest royalties earned through commodities exports can have a major effect on whether CDDCs are able to diversify.
The Forum will consist of two parallel streams of meetings. The Plenary A stream will focus on the overall theme of how to derive stable economic growth and rising living standards from commodities trade.
The Parallel B stream will concentrate on the issue of improving the abilities of CDDCs to process raw commodities into finished products that yield higher economic returns. The Forum will emphasise practical project implementation, and the programme includes sessions devoted to case studies of successful commodity-related development projects, as well sessions aimed at identifying new projects and possibilities.
Many developing countries are heavily dependent on exports of basic farm goods and natural resources. Since 2002, the number of countries whose commodity exports represents more than 60 per cent of merchandise exports has risen from 85 to 91.
Commodity prices increased considerably over that period. Yet climbing commodity prices appear to have had limited positive impacts on living standards in exporting countries. Many commodity dependent developing countries (CDDCs) are also classified as least developed countries (LDCs), and even during the global economic boom, rates of extreme poverty in LDCs declined only from 58 per cent in 2002 to 53 per cent in 2007 – and this was before the world food and financial crises.
The World Bank estimates that the recent resurgence in food prices, which in 2011 reached levels approaching their 2008 peaks, has pushed an additional 44 million people worldwide into extreme poverty. The theme of the conference is “Harnessing development gains from commodities production and trade”.
While a part of the increase in the number of CDDCs to 91 is due to the rising prices of commodity exports, it also indicates that the commodities boom generally has not resulted in a diversification of economic production and exports, as recommended by development economists.
Diversification is recommended in part because commodity prices are historically volatile, leaving these nations vulnerable to sudden drops in the prices of their major exports – or to sudden price increases for commodities they must import, on which they are also often heavily dependent.
Most CDDCs, for example, are net importers of oil and food. Prices for oil climbed from $20 per barrel in 2002 to $132.50 in July 2008, fell to $42 in early 2009, but climbed back to $105.36 in November 2011. In late 2011, prices for many staple food crops matched or even exceeded their levels during the much-publicized 2008 food crisis.
The food price index of the Food and Agriculture Organisation of the United Nations, an average of staple food costs, increased from 90 in 2002 to 200 in 2008, fell as low as 157 in 2009 and then climbed to 238 in February 2011. Wheat prices escalated from $192 per ton in 2006 to $326 in 2008, fell during the global recession, then rose to $311 per ton in August 2011 before declining to $273 per ton in November.
Continued price volatility in commodities markets recently has prompted high-level collaborative international action, including most recently by the United Nations High-level Task Force and the Group of Twenty.
Another reason economic diversification is recommended for CDDCs is because the processing of raw materials and basic foods into higher-quality goods is where the highest economic returns lie. In many cases, commodity-exporting countries receive only a small proportion of the final sales price of their commodities on world markets.
The bulk of the revenues accrue to those involved in refining and processing the products overseas. A major topic of debate at the Forum will therefore be how CDDCs can carry out more of the commodities 'value chain' within their own borders.
One barrier to diversification in CDDCs has been that the rising costs of the commodities that have to be imported to a great extent offset rising revenues from the commodities that are exported. Oil imports are an especially critical factor, as higher energy costs affect everything from farming machinery to industry. Development economists also say that government policies on how to invest royalties earned through commodities exports can have a major effect on whether CDDCs are able to diversify.
The Forum will consist of two parallel streams of meetings. The Plenary A stream will focus on the overall theme of how to derive stable economic growth and rising living standards from commodities trade.
The Parallel B stream will concentrate on the issue of improving the abilities of CDDCs to process raw commodities into finished products that yield higher economic returns. The Forum will emphasise practical project implementation, and the programme includes sessions devoted to case studies of successful commodity-related development projects, as well sessions aimed at identifying new projects and possibilities.
Friday, January 20, 2012
Remittance inflow sees sustainable increase
The remittances inflow has seen almost eight times increase in five months.
"Workers' remittance increased by 37.9 per cent to Rs 133.19 billion in the fifth month of the current fiscal year," according to the central bank that claimed that the increase has seen a growth of 11.3 per cent during the same period of last fiscal year.
On a monthly basis, the remittance inflows increased by 9.7 per cent in mid-December compared to the value of the a month ago of the current fiscal year. In US dollar terms, the remittance inflow increased by 30 per cent to $1.72 billion compared to a growth of 14.2 per cent during the same period last fiscal year, revealed Nepal Rastra Bank's five month's data.
The increase in the remittance inflow will be equal to over 20 per cent of the gross domestic product (GDP).
The World Bank’s Migration and Development Brief — released after the fifth meeting of the Global Forum on Migration and Development in Geneva — projected that the small and low-income countries like Nepal tend to receive more remittances as a share of their gross domestic product (GDP).
Despite the global economic crisis that has impacted private capital flows, remittance flows to developing countries have remained resilient, posting an estimated growth of eight per cent in 2011," it said, adding that remittance flows to all developing regions have grown this year, for the first time since the financial crisis.
Though the remittance costs continue to remain high, especially in small nations like Nepal, where remittances provide a life line to the poor, according to the World Bank, there is a pressing need to improve data on remittances at the national and bilateral corridor level to more accurately monitor progress towards the ‘5 by 5’ remittance cost reduction objective.
According to the central bank, under transfers, pension receipts, however declined by 19.6 per cent to Rs 10.93 billion. "Similarly, under the financial account, foreign direct investment (FDI) flow recorded Rs 3.20 billion compared to Rs 3.58 billion in the same period a year ago," the central bank said, adding that the growth in remittance inflow also pushed the gross foreign exchange reserves by 35.4 per cent to Rs 368.63 billion from a level of Rs 272.15 billion at mid-July 2011, against the declined of two per cent to Rs 263.43 billion during the same period last fiscal year.
There has been no significant changes in the export import situation as the country exported Rs 30.06 billion worth merchandise and imported Rs 177.79 billion worth merchandise.
"The exports rose by 11.5 per cent against an increase of eight per cent to Rs 26.96 billion during the same period of last fiscal year, whereas the merchandise imports increased by 15.5 per cent to Rs 177.79 billion against 1.6 per cent to Rs 153.97 billion during the same period of the last fiscal year," the central bank said.
However, the central bank claimed that Balance of Payment (BoP) has recorded the highest ever surplus of Rs 61.19 billion during the five months of the current fiscal year compared to a deficit of Rs 3.76 billion during the same period of last fiscal year, though the trade deficit has not seen any narrowing.
The remittance inflow
First Month — Rs 17.7 billion
Second Month — Rs 47.33 billion
Third Month — Rs 75.88 billion
Fourth Month — Rs 103.20 billion
Fifth Month — Rs 133. 19 billion
(Source: Nepal Rastra Bank)
"Workers' remittance increased by 37.9 per cent to Rs 133.19 billion in the fifth month of the current fiscal year," according to the central bank that claimed that the increase has seen a growth of 11.3 per cent during the same period of last fiscal year.
On a monthly basis, the remittance inflows increased by 9.7 per cent in mid-December compared to the value of the a month ago of the current fiscal year. In US dollar terms, the remittance inflow increased by 30 per cent to $1.72 billion compared to a growth of 14.2 per cent during the same period last fiscal year, revealed Nepal Rastra Bank's five month's data.
The increase in the remittance inflow will be equal to over 20 per cent of the gross domestic product (GDP).
The World Bank’s Migration and Development Brief — released after the fifth meeting of the Global Forum on Migration and Development in Geneva — projected that the small and low-income countries like Nepal tend to receive more remittances as a share of their gross domestic product (GDP).
Despite the global economic crisis that has impacted private capital flows, remittance flows to developing countries have remained resilient, posting an estimated growth of eight per cent in 2011," it said, adding that remittance flows to all developing regions have grown this year, for the first time since the financial crisis.
Though the remittance costs continue to remain high, especially in small nations like Nepal, where remittances provide a life line to the poor, according to the World Bank, there is a pressing need to improve data on remittances at the national and bilateral corridor level to more accurately monitor progress towards the ‘5 by 5’ remittance cost reduction objective.
According to the central bank, under transfers, pension receipts, however declined by 19.6 per cent to Rs 10.93 billion. "Similarly, under the financial account, foreign direct investment (FDI) flow recorded Rs 3.20 billion compared to Rs 3.58 billion in the same period a year ago," the central bank said, adding that the growth in remittance inflow also pushed the gross foreign exchange reserves by 35.4 per cent to Rs 368.63 billion from a level of Rs 272.15 billion at mid-July 2011, against the declined of two per cent to Rs 263.43 billion during the same period last fiscal year.
There has been no significant changes in the export import situation as the country exported Rs 30.06 billion worth merchandise and imported Rs 177.79 billion worth merchandise.
"The exports rose by 11.5 per cent against an increase of eight per cent to Rs 26.96 billion during the same period of last fiscal year, whereas the merchandise imports increased by 15.5 per cent to Rs 177.79 billion against 1.6 per cent to Rs 153.97 billion during the same period of the last fiscal year," the central bank said.
However, the central bank claimed that Balance of Payment (BoP) has recorded the highest ever surplus of Rs 61.19 billion during the five months of the current fiscal year compared to a deficit of Rs 3.76 billion during the same period of last fiscal year, though the trade deficit has not seen any narrowing.
The remittance inflow
First Month — Rs 17.7 billion
Second Month — Rs 47.33 billion
Third Month — Rs 75.88 billion
Fourth Month — Rs 103.20 billion
Fifth Month — Rs 133. 19 billion
(Source: Nepal Rastra Bank)
Global internet users reach 2.1 billion in 2011
The number of internet users worldwide reaches 2.1 billion in 2011, with under 25s accounting for 45 per cent of all users, according to data released by website monitoring company Pingdom.
The number of fixed (wired) broadband subscriptions worldwide reached 591 million in 2011, with the number of active mobile broadband subscriptions reaching 1.2 billion. The number of e-mail accounts worldwide reaches 3.15 billion, with Microsoft Outlook (27.6 per cent) the most popular e-mail client. The total number of websites worldwide reached 555 million as of December 2011, with 300 million websites added in 2011.
The number of fixed (wired) broadband subscriptions worldwide reached 591 million in 2011, with the number of active mobile broadband subscriptions reaching 1.2 billion. The number of e-mail accounts worldwide reaches 3.15 billion, with Microsoft Outlook (27.6 per cent) the most popular e-mail client. The total number of websites worldwide reached 555 million as of December 2011, with 300 million websites added in 2011.
Heifer Int'l launches $23.8m project
Heifer International — the global hunger nonprofit organisation — is launching a new $23.8 million project in Nepal, with the goal of assisting 138,000 small-scale farmers.
The project will focus on goat and dairy production, and on reducing reliance on imports for its protein needs, it said.
The project will work in 28 districts to build up goat and dairy enterprises over the course of five years. Demand for these products is high but the country depends on imports to satisfy the need. By strengthening local production, Heifer hopes to reduce the number of goats being imported into the country by about 30 per cent by the year 2016, and reduce milk imports by 10 per cent.
Heifer International will expand its work helping thousands of farmers move from vulnerability to self-reliance, said the project that aims to increase meat and milk productivity in the target areas through improved animal management techniques, and then help participants form trade alliances.
By forming community groups and cooperatives, farmers can better connect with buyers, Heifer added.
The project will employ Heifer's unique holistic training system to empower its participants for the long term. In addition to learning how to properly care for their animals, participants will be educated in areas like money management, gender equality, literacy, community collaboration and entrepreneurship.
With the foundation in place, small-scale farmers can not only feed their own families, but also work together to find larger markets for more dairy products.
Heifer International has worked in Nepal since 1977 to reduce poverty and build sustainable family enterprises with animals like sheep, goats, ducks and water buffalo. Now, Heifer is confident that in areas of where there is dire poverty, its new goat and dairy project can create transformative and lasting change.
The project will focus on goat and dairy production, and on reducing reliance on imports for its protein needs, it said.
The project will work in 28 districts to build up goat and dairy enterprises over the course of five years. Demand for these products is high but the country depends on imports to satisfy the need. By strengthening local production, Heifer hopes to reduce the number of goats being imported into the country by about 30 per cent by the year 2016, and reduce milk imports by 10 per cent.
Heifer International will expand its work helping thousands of farmers move from vulnerability to self-reliance, said the project that aims to increase meat and milk productivity in the target areas through improved animal management techniques, and then help participants form trade alliances.
By forming community groups and cooperatives, farmers can better connect with buyers, Heifer added.
The project will employ Heifer's unique holistic training system to empower its participants for the long term. In addition to learning how to properly care for their animals, participants will be educated in areas like money management, gender equality, literacy, community collaboration and entrepreneurship.
With the foundation in place, small-scale farmers can not only feed their own families, but also work together to find larger markets for more dairy products.
Heifer International has worked in Nepal since 1977 to reduce poverty and build sustainable family enterprises with animals like sheep, goats, ducks and water buffalo. Now, Heifer is confident that in areas of where there is dire poverty, its new goat and dairy project can create transformative and lasting change.
South Korea grants $2m for Lumbini development
The Government of Republic of Korea has agreed to provide $2 million in grant assistance to Nepal for the master plan of the Lumbini World Peace City Preservation and Development.
Finance Secretary Krishna Hari Banskota and Korean Ambassador to Nepal IL-Doo Kim signed a Memorandum of Understanding today on behalf of their respective governments.
The main objectives of the project are to contribute to respecting the outstanding universal value of Lumbini, the birthplace of Lord Buddha, to conserve the cultural and historic environment and cultural heritages in a more proper way, to present metaphysical foundation templates for the use in design of the Lumbini World Peace City, to create Lumbini as world peace city, a city of Buddhist teaching and learning, by sharing Korea's experience and knowledge.
The project would be implemented within a period of one and half years from the date of its commencement. Ministry of Federal Affairs, Constituent Assembly, Parliamentary Affairs and Culture, and the Korea International Cooperation Agency (KOICA) would be the implementing agencies for the project on behalf of Nepal and Korea, respectively.
Finance Secretary Krishna Hari Banskota and Korean Ambassador to Nepal IL-Doo Kim signed a Memorandum of Understanding today on behalf of their respective governments.
The main objectives of the project are to contribute to respecting the outstanding universal value of Lumbini, the birthplace of Lord Buddha, to conserve the cultural and historic environment and cultural heritages in a more proper way, to present metaphysical foundation templates for the use in design of the Lumbini World Peace City, to create Lumbini as world peace city, a city of Buddhist teaching and learning, by sharing Korea's experience and knowledge.
The project would be implemented within a period of one and half years from the date of its commencement. Ministry of Federal Affairs, Constituent Assembly, Parliamentary Affairs and Culture, and the Korea International Cooperation Agency (KOICA) would be the implementing agencies for the project on behalf of Nepal and Korea, respectively.
Thursday, January 19, 2012
Compliance burden fuels tax evasion trend
Due to increasing trend of robbing government coffer by ‘some business people’, the honest entrepreneurs feel ashamed as common people put them all in a basket and create negative perception of the private sector.
Post-1990 movement, the private sector has come forward very actively and in many sectors led alone, without government’s support, but post-2007 movement, the private sector has been in news more all for the wrong reasons. “It’s a trend,” according to finance secretary Krishnahari Baskota, “though such act will not benefit them in a long run.”
The revenue administration has brought some 1,700 more firms under its radar, without completion of its 518 firms’ investigation that according to it, will add some Rs 5 billion to government coffer, though, initial projection was double.
Government needs sustainable funding for social programmes and public investments to promote economic growth and development. Programmes providing health, education, infrastructure and other amenities are important to achieve a common goal of a prosperous, functional and orderly society. Those programmes require governments to raise revenue but the recent trend has hit the government coffer hard making it unable to even achieve its target.
The private sector plays an essential role in contributing to economic growth and prosperity as the companies contribute to socio-economic development by employing workers, improving the skills and knowledge base, buying from local suppliers and providing products and services that improve people’s lives and revenues through generating and paying taxes.
But the recent investigation of the revenue administration has revealed a huge revenue leakages by the private sector.
“Apart from trend, legal system, bureaucracy and lack of regular policy review also fuelled the leakages,” Baskota said, adding that the Finance Ministry is on a regular basis watching and improving the legal system, apart from strengthening bureaucracy. “The policy reform is also under consideration.”
But Nepal ranks in the 111st position among the 183 economies in Paying Taxes 2012 report of the World Bank. The Paying Taxes indicators being included in Doing Business report of the World Bank Group measures the ease of paying taxes for a small to medium-sized domestic company, in all of the 183 economies that it covers. The study measures three aspects of the tax system for business – one relating to the tax cost or the total tax rate and two to the compliance burden, the time spent on tax compliance and the number of tax payments.
In the tax cost indicator, Nepal ranks 49th, whereas in time spent on tax compliance it ranks 138th and in number of tax payments 120th position giving an indication where the government needs to focus.
The administrative burden and cost of complying with taxes is important from the business perspective, as well as the rate of tax paid. “One of the causes of low compliance may be due to more time taken to pay tax,” the finance secretary said, “But to make it easier, the Finance Ministry has upgraded itself to e-filing and one can file tax from the office or home without spending much time.”
The purpose of the Paying Taxes study is to provide data to inform discussion around tax policy, tax administration, and to encourage dialogue on reform. It shows that different administrative practices used by government play a key role in lowering or increasing the compliance burden and easing compliance burden to make tax collection more efficient.
According to the study, the less time business spends on tax compliance the more time it has to focus on building the business and contributing to economic growth.
However, the government can do much to reduce burden on business by simplifying the process making it less man-to-man contact that could help plug increasing leakages.
Post-1990 movement, the private sector has come forward very actively and in many sectors led alone, without government’s support, but post-2007 movement, the private sector has been in news more all for the wrong reasons. “It’s a trend,” according to finance secretary Krishnahari Baskota, “though such act will not benefit them in a long run.”
The revenue administration has brought some 1,700 more firms under its radar, without completion of its 518 firms’ investigation that according to it, will add some Rs 5 billion to government coffer, though, initial projection was double.
Government needs sustainable funding for social programmes and public investments to promote economic growth and development. Programmes providing health, education, infrastructure and other amenities are important to achieve a common goal of a prosperous, functional and orderly society. Those programmes require governments to raise revenue but the recent trend has hit the government coffer hard making it unable to even achieve its target.
The private sector plays an essential role in contributing to economic growth and prosperity as the companies contribute to socio-economic development by employing workers, improving the skills and knowledge base, buying from local suppliers and providing products and services that improve people’s lives and revenues through generating and paying taxes.
But the recent investigation of the revenue administration has revealed a huge revenue leakages by the private sector.
“Apart from trend, legal system, bureaucracy and lack of regular policy review also fuelled the leakages,” Baskota said, adding that the Finance Ministry is on a regular basis watching and improving the legal system, apart from strengthening bureaucracy. “The policy reform is also under consideration.”
But Nepal ranks in the 111st position among the 183 economies in Paying Taxes 2012 report of the World Bank. The Paying Taxes indicators being included in Doing Business report of the World Bank Group measures the ease of paying taxes for a small to medium-sized domestic company, in all of the 183 economies that it covers. The study measures three aspects of the tax system for business – one relating to the tax cost or the total tax rate and two to the compliance burden, the time spent on tax compliance and the number of tax payments.
In the tax cost indicator, Nepal ranks 49th, whereas in time spent on tax compliance it ranks 138th and in number of tax payments 120th position giving an indication where the government needs to focus.
The administrative burden and cost of complying with taxes is important from the business perspective, as well as the rate of tax paid. “One of the causes of low compliance may be due to more time taken to pay tax,” the finance secretary said, “But to make it easier, the Finance Ministry has upgraded itself to e-filing and one can file tax from the office or home without spending much time.”
The purpose of the Paying Taxes study is to provide data to inform discussion around tax policy, tax administration, and to encourage dialogue on reform. It shows that different administrative practices used by government play a key role in lowering or increasing the compliance burden and easing compliance burden to make tax collection more efficient.
According to the study, the less time business spends on tax compliance the more time it has to focus on building the business and contributing to economic growth.
However, the government can do much to reduce burden on business by simplifying the process making it less man-to-man contact that could help plug increasing leakages.
Are you ready to donate one day salary for country !
Finance Ministry is planning to create a fund from one day salary of employees to invest in national development.
"We are planning to make an appeal to donate employees one day salary voluntarily — from the President to all the employees — to create a fund," said Finance Minister Barsha Man Pun without elaborating the idea that either the government employee will be asked to donate or the employees from the private sector will also be asked to donate their one day salary.
Since the idea is only under consideration, I cannot elaborate on it, he told the reporters in his office at Singh Durbar today.
"But the President to Prime Minister and ministers will contribute to the fund," said Pun, refusing gently to explain on where the fund will be invested, what will be its mechanism and who will look after it.
However, according to a Finance Ministry source, the minister may be trying to involve all the citizen in the development process of the country. But he also failed to explain why anyone should donate one day salary though, voluntarily, without knowing the effective mechanism of the fund's use.
The finance minister also said that the ministry after the mid-term evaluation, that it is preparing, will issue a remaining half year's plans and programmes for the effective implementation of the budget to achieve the government target. "By the six month end, the government has been able to spend one-third of the capital budget, which is not satisfactory as it is not enough to propel the growth," he said, adding that the government is focusing on growth with employment.
The Finance Ministry is serious on large projects of over Rs 150 million like Ranijamara, Babai and Sikta irrigation projects, he said, adding that he personally is monitoring such 70 projects as according to the budget the finance minister is designated to look after the projects of over Rs 150 million.
"We are planning to make an appeal to donate employees one day salary voluntarily — from the President to all the employees — to create a fund," said Finance Minister Barsha Man Pun without elaborating the idea that either the government employee will be asked to donate or the employees from the private sector will also be asked to donate their one day salary.
Since the idea is only under consideration, I cannot elaborate on it, he told the reporters in his office at Singh Durbar today.
"But the President to Prime Minister and ministers will contribute to the fund," said Pun, refusing gently to explain on where the fund will be invested, what will be its mechanism and who will look after it.
However, according to a Finance Ministry source, the minister may be trying to involve all the citizen in the development process of the country. But he also failed to explain why anyone should donate one day salary though, voluntarily, without knowing the effective mechanism of the fund's use.
The finance minister also said that the ministry after the mid-term evaluation, that it is preparing, will issue a remaining half year's plans and programmes for the effective implementation of the budget to achieve the government target. "By the six month end, the government has been able to spend one-third of the capital budget, which is not satisfactory as it is not enough to propel the growth," he said, adding that the government is focusing on growth with employment.
The Finance Ministry is serious on large projects of over Rs 150 million like Ranijamara, Babai and Sikta irrigation projects, he said, adding that he personally is monitoring such 70 projects as according to the budget the finance minister is designated to look after the projects of over Rs 150 million.
ADBL to give bonus from next year
Agriculture Development Bank Ltd (ADBL) is planning to distribute bonus to shareholders from the next fiscal year.
The bank, after restructuring its negative net worth, will distribute bonus from next year, said chief executive officer Tej Bahadur Budhathoki in a press meet here today.
"Ministry of Finance has given consent to transfer Rs 3.86 billion from reserve fund and it will cover our loss," he said, adding that it will help ADBL to distribute bonus. The ministry has given the money to cover the cost of loans exemption to small farmer three years ago.
The bank has 228,174 shareholders at present. It has about Rs 37.21 billion deposits from 673,084 depositors spreading across the country, according to the bank that has increased its authorised capital to Rs 13 billion and paid up capital to Rs 9.47 billion, including proposed preferential share worth Rs 6.43 billion.
ADBL has floated loans worth Rs 340.83 billion in the last 45 years and was repaid Rs 300.45 billion. "We still have Rs 40.38 loans to 167,299 people," he said.The bank has diversified its investment from agriculture to businesses and industries in recent years to sustain in the competitive market. However, it is still giving priority to agriculture, Budhathoki said, adding that its 12 per cent to 15 per cent investment is still in agriculture sector.
ADBL is also restructuring its management along with other changes to tap large share in financial market. It has also upgraded its major branches – main office, corporate office, Thamel, Gaushala and Bode branches and Kathmandu regional office – to computerised system, apart from introducing new services like letter of credit (LC) and remittance service under brand name 'ADBL Remit.'
"We are also inviting strategic partner in next two years," he said, adding that a committee has been formed and that will prepare technical report in a next couple of months. "Its longtime partner Asian Development Bank (ADB) is providing technical support to the bank," according to the chief executive.
Meanwhile, ADBL has signed an agreement worth Rs 1 billion under Youth and Small Entrepreneur Self-reliant Fund (YSESF) and will mobilise it to youth seeking self-reliant from March. "ADBL is lending to individual, groups and organisations on the basis of viability of project," he added.
The bank, after restructuring its negative net worth, will distribute bonus from next year, said chief executive officer Tej Bahadur Budhathoki in a press meet here today.
"Ministry of Finance has given consent to transfer Rs 3.86 billion from reserve fund and it will cover our loss," he said, adding that it will help ADBL to distribute bonus. The ministry has given the money to cover the cost of loans exemption to small farmer three years ago.
The bank has 228,174 shareholders at present. It has about Rs 37.21 billion deposits from 673,084 depositors spreading across the country, according to the bank that has increased its authorised capital to Rs 13 billion and paid up capital to Rs 9.47 billion, including proposed preferential share worth Rs 6.43 billion.
ADBL has floated loans worth Rs 340.83 billion in the last 45 years and was repaid Rs 300.45 billion. "We still have Rs 40.38 loans to 167,299 people," he said.The bank has diversified its investment from agriculture to businesses and industries in recent years to sustain in the competitive market. However, it is still giving priority to agriculture, Budhathoki said, adding that its 12 per cent to 15 per cent investment is still in agriculture sector.
ADBL is also restructuring its management along with other changes to tap large share in financial market. It has also upgraded its major branches – main office, corporate office, Thamel, Gaushala and Bode branches and Kathmandu regional office – to computerised system, apart from introducing new services like letter of credit (LC) and remittance service under brand name 'ADBL Remit.'
"We are also inviting strategic partner in next two years," he said, adding that a committee has been formed and that will prepare technical report in a next couple of months. "Its longtime partner Asian Development Bank (ADB) is providing technical support to the bank," according to the chief executive.
Meanwhile, ADBL has signed an agreement worth Rs 1 billion under Youth and Small Entrepreneur Self-reliant Fund (YSESF) and will mobilise it to youth seeking self-reliant from March. "ADBL is lending to individual, groups and organisations on the basis of viability of project," he added.
UK pledges Rs 2.5 billion aid to peace process
The government of the United Kingdom today pledged to provide Rs 2.5 billion in grant to conclude Nepal's ongoing peace process.
Visiting International Development Secretary of the UK, Andrew Mitchell expressed commitment to provide financial assistance to Nepal during a meeting with Prime Minister today morning held in High View Resort in Dhulikhel. Prime Minister's secretariat said the UK will provide 20 million Pound Sterling for the Nepal Peace Trust Fund.
Visiting International Development Secretary of the UK, Andrew Mitchell expressed commitment to provide financial assistance to Nepal during a meeting with Prime Minister today morning held in High View Resort in Dhulikhel. Prime Minister's secretariat said the UK will provide 20 million Pound Sterling for the Nepal Peace Trust Fund.
Wednesday, January 18, 2012
Plan to attract Rs 500 billion worth investments
The government is planning to attract some Rs 500 billion worth investments under the ambitious Nepal Investment Year 2012-13 campaign.
"We are preparing a detail study of 50 mega projects," Investment Board chief executive Radhesh Pant, said here today.
The Board — that looks after only mega projects of above Rs 10 billion — has been actively working out on policy reforms and harmonisation, and preparing at least 50 project profiles that will bring some Rs 500 billion in the country that has been witnessing a sluggish growth since last three fiscal years. "The foreign investments will help propel economic growth," he added. "The country needs Rs 600 billion to achieve double digit growth."
"Large scale investment is crucial for economic growth," said Federation of Nepalese Chambers of Commerce and Industry (FNCCI) president Suraj Vaidya. "For growth of about eight per cent, we need 40 per cent of the gross domestic production (GDP) to go in the investment but our savings rate is very low," he said, reasoning for the foreign investment.
Despite various challenges, Nepal Investment Year will be a turning point to mobilise investment — both local and foreign — for the eonomic development, Vaidya said. "The campaign will help bring business and economy into the forefront and help initiate in garnering broad consensus on investment related policies and issues."
Nepal Investment Year will show the international investors that Nepal has investment-friendly environment and also identify its strong points as a potential investment destination.
The umbrella organisation of the private sector claims that it will also help identify the potential investors and network with them, apart from help Nepali investors connect with foreign investors.
As the global competition for investment is becoming more rigorous, the international investors seek incentives, Vaidya said, adding various countries have declared special incentives to lure foreign Direct Investment (FDI) as investors are choosy and capital is mobile.
The FNCCI will help the board work for the improvement in the investment climate, though the investment climate has improved in recent years, he added.
However, the political ownership is a major challenge, according to private sector. The Board might help create political consensus among the political parties to minimise the risk, as frequent changes in governments and of governments lead to policy instability and due to lack of ownership of the national campaign, the plans, promotion and marketing of the country might get hit.
The FNCCI has planned mega show — international investment conference — in 2013, investment portal as FDI information centre and hopeful of agreement of at least 10 mega projects within the event period, to support the national campaign that has envisioned to double the investment size, become one stop service to investors, increase domestic investment and FDI, bi-lateral, and multilateral aid in infrastructure sector like energy, road, irrigation and social service sector.
The Board has also formed Investment Promotion sub-committee led by Vaidya; Investment Project Identification sub-committee led by Pant; Act, Rules and Policies Revision sub-committee led by National Planning Commission vice chair Deependra Bahadur Kshetri to make the Nepal Investment Year a great success.
FNCCI priority sectors
•Water and water related projects
•Agriculture and Agri processing
•Infrastructure
•Tourism
•Services
•Mine and Minerals based Industry
"We are preparing a detail study of 50 mega projects," Investment Board chief executive Radhesh Pant, said here today.
The Board — that looks after only mega projects of above Rs 10 billion — has been actively working out on policy reforms and harmonisation, and preparing at least 50 project profiles that will bring some Rs 500 billion in the country that has been witnessing a sluggish growth since last three fiscal years. "The foreign investments will help propel economic growth," he added. "The country needs Rs 600 billion to achieve double digit growth."
"Large scale investment is crucial for economic growth," said Federation of Nepalese Chambers of Commerce and Industry (FNCCI) president Suraj Vaidya. "For growth of about eight per cent, we need 40 per cent of the gross domestic production (GDP) to go in the investment but our savings rate is very low," he said, reasoning for the foreign investment.
Despite various challenges, Nepal Investment Year will be a turning point to mobilise investment — both local and foreign — for the eonomic development, Vaidya said. "The campaign will help bring business and economy into the forefront and help initiate in garnering broad consensus on investment related policies and issues."
Nepal Investment Year will show the international investors that Nepal has investment-friendly environment and also identify its strong points as a potential investment destination.
The umbrella organisation of the private sector claims that it will also help identify the potential investors and network with them, apart from help Nepali investors connect with foreign investors.
As the global competition for investment is becoming more rigorous, the international investors seek incentives, Vaidya said, adding various countries have declared special incentives to lure foreign Direct Investment (FDI) as investors are choosy and capital is mobile.
The FNCCI will help the board work for the improvement in the investment climate, though the investment climate has improved in recent years, he added.
However, the political ownership is a major challenge, according to private sector. The Board might help create political consensus among the political parties to minimise the risk, as frequent changes in governments and of governments lead to policy instability and due to lack of ownership of the national campaign, the plans, promotion and marketing of the country might get hit.
The FNCCI has planned mega show — international investment conference — in 2013, investment portal as FDI information centre and hopeful of agreement of at least 10 mega projects within the event period, to support the national campaign that has envisioned to double the investment size, become one stop service to investors, increase domestic investment and FDI, bi-lateral, and multilateral aid in infrastructure sector like energy, road, irrigation and social service sector.
The Board has also formed Investment Promotion sub-committee led by Vaidya; Investment Project Identification sub-committee led by Pant; Act, Rules and Policies Revision sub-committee led by National Planning Commission vice chair Deependra Bahadur Kshetri to make the Nepal Investment Year a great success.
FNCCI priority sectors
•Water and water related projects
•Agriculture and Agri processing
•Infrastructure
•Tourism
•Services
•Mine and Minerals based Industry
World Bank projects 3.6 per cent growth
The economy will expand by 3.6 per cent in the current fiscal year, says the World Bank in the newly-released Global Economic Prospects 2012.
Though, the government has projected a growth rate of five per cent for the current fiscasl year, the report has reduced the growth forecast due to slower growth in the whole South Asian region.
In the last fiscal year, the country had witnessed a growth of 3.5 per cent.
"Following a vibrant 9.1 per cent growth rate in 2010, real GDP growth in South Asia decelerated to an estimated 6.6 per cent in 2011, with a sharp fall-off evident in industrial production and trade late in the year," it said.
"Nevertheless, regional growth is estimated to have exceeded the long-term average of six per cent (1998-2007), reflecting above trend activity in Bangladesh, India and Sri Lanka. The GDP growth is projected to ease further to 5.8 per cent in 2012 before strengthening to 7.1 per cent in 2013.
Accounting for about 80 per cent of South Asia’s GDP, India has led the regional slowdown as its GDP growth weakened to an estimated 6.8 per cent — at factor cost — in the fiscal year 2011-12, ending in March 2012, from 8.5 per cent in 2010-11. But the growth is projected to hold steady at 6.8 in 2012-13 before accelerating to 8.5 per cent in 2013-14 reflecting moderation in domestic demand, given a deceleration in investment growth that has faced headwinds of rising borrowing costs, high input prices, slowing global growth and heightened uncertainty.
Worker remittances remain a critical source of foreign exchange in South Asia — equivalent to 20 per cent of GDP — as of 2010 — in Nepal, 9.6 per cent in Bangladesh, seven per cent in Sri Lanka and five per cent in Pakistan." If the global conditions were to deteriorate sharply, remittances growth could stall, resulting in weaker incomes, weaker foreign currency earnings and slower domestic demand growth within the region," the World Bank warned.
Financial sector impacts through heightened global risk aversion — reversal of capital inflows, higher international borrowing costs and slowing FDI — are also projected to be felt strongest in India, which is the most integrated with global financial markets, along with the Maldives and Sri Lanka, where 2012 external financing needs — current account financing and external debt repayments — are estimated to reach 9.8 per cent, 18 per cent and seven per cent of GDP, respectively.
"Countries heavily reliant on foreign assistance, like Afghanistan, Nepal and Pakistan, could be hit hard, if fiscal consolidation in high income countries were to result in cuts to overseas development assistance," it added.
Similarly, lack of fiscal space in South Asia, inflationary pressures and consequent limited room for monetary policy easing, fiscal consolidation through greater revenue mobilisation — particularly in Pakistan, Sri Lanka, Bangladesh, and Nepal — and expenditure rationalisation — especially in India — could play a key role in helping to protect critical social programmes.
But it concludes that South Asian countries have the opportunity to re-think and pursue new sources of growth in both domestic and external markets.
However, developing countries should prepare for further downside risks, as Euro Area debt problems and weakening growth in several big emerging economies are dimming global growth prospects, it cautioned, lowering its growth forecast for 2012 to 5.4 per cent for developing countries and 1.4 per cent for high-income countries (-0.3 per cent for the Euro Area), down from its June estimates of 6.2 per cent and 2.7 per cent (1.8 per cent for the Euro Area), respectively. Global growth is now projected at 2.5 per cent and 3.1 per cent for 2012 and 2013, respectively.
Meanwhile, the global economy is now expected to expand 2.5 and 3.1 per cent in 2012 and 2013 (3.4 and four per cent when calculated using purchasing power parity weights), versus the 3.6 per cent projected in June for both years. High-income country growth is now expected to come in at 1.4 per cent in 2012 (-0.3 percent for Euro Area countries, and 2.1 per cent for the remainder) and 2.0 percent in 2013, versus June forecasts of 2.7 and 2.6 per cent for 2012 and 2013 respectively.
Developing country growth has been revised down to 5.4 and six per cent versus 6.2 and 6.3 per cent in the June projections. Reflecting the growth slowdown, world trade, which expanded by an estimated 6.6 per cent in 2011, will grow only 4.7 per cent in 2012, before strengthening to 6.8 per cent in 2013.
The growth
2010-11 — 3.5 per cent
2011-12 — 3.6 per cent
2012-13 — 4.0 per cent
(Source: World Bank, Global Economic Prospect 2012)
Though, the government has projected a growth rate of five per cent for the current fiscasl year, the report has reduced the growth forecast due to slower growth in the whole South Asian region.
In the last fiscal year, the country had witnessed a growth of 3.5 per cent.
"Following a vibrant 9.1 per cent growth rate in 2010, real GDP growth in South Asia decelerated to an estimated 6.6 per cent in 2011, with a sharp fall-off evident in industrial production and trade late in the year," it said.
"Nevertheless, regional growth is estimated to have exceeded the long-term average of six per cent (1998-2007), reflecting above trend activity in Bangladesh, India and Sri Lanka. The GDP growth is projected to ease further to 5.8 per cent in 2012 before strengthening to 7.1 per cent in 2013.
Accounting for about 80 per cent of South Asia’s GDP, India has led the regional slowdown as its GDP growth weakened to an estimated 6.8 per cent — at factor cost — in the fiscal year 2011-12, ending in March 2012, from 8.5 per cent in 2010-11. But the growth is projected to hold steady at 6.8 in 2012-13 before accelerating to 8.5 per cent in 2013-14 reflecting moderation in domestic demand, given a deceleration in investment growth that has faced headwinds of rising borrowing costs, high input prices, slowing global growth and heightened uncertainty.
Worker remittances remain a critical source of foreign exchange in South Asia — equivalent to 20 per cent of GDP — as of 2010 — in Nepal, 9.6 per cent in Bangladesh, seven per cent in Sri Lanka and five per cent in Pakistan." If the global conditions were to deteriorate sharply, remittances growth could stall, resulting in weaker incomes, weaker foreign currency earnings and slower domestic demand growth within the region," the World Bank warned.
Financial sector impacts through heightened global risk aversion — reversal of capital inflows, higher international borrowing costs and slowing FDI — are also projected to be felt strongest in India, which is the most integrated with global financial markets, along with the Maldives and Sri Lanka, where 2012 external financing needs — current account financing and external debt repayments — are estimated to reach 9.8 per cent, 18 per cent and seven per cent of GDP, respectively.
"Countries heavily reliant on foreign assistance, like Afghanistan, Nepal and Pakistan, could be hit hard, if fiscal consolidation in high income countries were to result in cuts to overseas development assistance," it added.
Similarly, lack of fiscal space in South Asia, inflationary pressures and consequent limited room for monetary policy easing, fiscal consolidation through greater revenue mobilisation — particularly in Pakistan, Sri Lanka, Bangladesh, and Nepal — and expenditure rationalisation — especially in India — could play a key role in helping to protect critical social programmes.
But it concludes that South Asian countries have the opportunity to re-think and pursue new sources of growth in both domestic and external markets.
However, developing countries should prepare for further downside risks, as Euro Area debt problems and weakening growth in several big emerging economies are dimming global growth prospects, it cautioned, lowering its growth forecast for 2012 to 5.4 per cent for developing countries and 1.4 per cent for high-income countries (-0.3 per cent for the Euro Area), down from its June estimates of 6.2 per cent and 2.7 per cent (1.8 per cent for the Euro Area), respectively. Global growth is now projected at 2.5 per cent and 3.1 per cent for 2012 and 2013, respectively.
Meanwhile, the global economy is now expected to expand 2.5 and 3.1 per cent in 2012 and 2013 (3.4 and four per cent when calculated using purchasing power parity weights), versus the 3.6 per cent projected in June for both years. High-income country growth is now expected to come in at 1.4 per cent in 2012 (-0.3 percent for Euro Area countries, and 2.1 per cent for the remainder) and 2.0 percent in 2013, versus June forecasts of 2.7 and 2.6 per cent for 2012 and 2013 respectively.
Developing country growth has been revised down to 5.4 and six per cent versus 6.2 and 6.3 per cent in the June projections. Reflecting the growth slowdown, world trade, which expanded by an estimated 6.6 per cent in 2011, will grow only 4.7 per cent in 2012, before strengthening to 6.8 per cent in 2013.
The growth
2010-11 — 3.5 per cent
2011-12 — 3.6 per cent
2012-13 — 4.0 per cent
(Source: World Bank, Global Economic Prospect 2012)
Nepal to fast track Karnali, Arun projects: Jha
Nepal has assured India of quick resolution of issues pertaining to Indian investment in Nepal.
Industry minister Anil Jha in his meeting withminister of commerce industry and textiles Anand Sharma in New Delhi, today, singled out Karnali and Arun power projects for fast-track clearances. Sharma said that “the move on the part of Nepal will send a very positive signal for deepening of economic relations and boosting investor confidence.”
Indian firms are the biggest investors in Nepal accounting for about 47.5 per cent of total approved foreign direct investments (FDIs). There are about 150 operating Indian ventures in Nepal engaged in manufacturing, services — banking, insurance, dry port, education and telecom — power sector and tourism industries. Indian joint ventures in Nepal have contributed significantly to increase in Nepal’s exports to India.
They also provide direct employment to around 30,000 Nepalis and indirect employment to more than twice that number. According to the current Indian FDI policy there is no restriction for inflows of FDI from Nepal. Both the governments have also signed the text of bilateral investment protection and promotion agreement (BIPPA).
Sharma assured Jha of continued special relationship with Nepal.Jha asked the Sharma for better concessions for the jute products from Nepal. He also made a strong pitch for further concessions for Nepal imports and more investments from India.
The bilateral trade between the two countries has increased from $1,985 million in 2009-10 to around $2,700 in 2010-11 registering an increase of around 36 per cent.
Exports from Nepal to India have also grown from $452 million in 2009-10 to $476 millionin 2010-11, an increment of around 5.3 per cent. “Our growing mutual cooperation in the development of the hydropower potential of Nepal confirms the special relationship between our two countries,” Sharma said, adding that India would like to accelerate such cooperation which would usher in a new era of prosperity for Nepal.
It is estimated that sale of electricity from the 40,000 MW hydropower potential of Nepal can generate revenues of more than $10 billion per annum.
Nepal could also attract a lot of investment in manufacturing/services sector by overcoming its present power shortage.
Industry minister Anil Jha in his meeting withminister of commerce industry and textiles Anand Sharma in New Delhi, today, singled out Karnali and Arun power projects for fast-track clearances. Sharma said that “the move on the part of Nepal will send a very positive signal for deepening of economic relations and boosting investor confidence.”
Indian firms are the biggest investors in Nepal accounting for about 47.5 per cent of total approved foreign direct investments (FDIs). There are about 150 operating Indian ventures in Nepal engaged in manufacturing, services — banking, insurance, dry port, education and telecom — power sector and tourism industries. Indian joint ventures in Nepal have contributed significantly to increase in Nepal’s exports to India.
They also provide direct employment to around 30,000 Nepalis and indirect employment to more than twice that number. According to the current Indian FDI policy there is no restriction for inflows of FDI from Nepal. Both the governments have also signed the text of bilateral investment protection and promotion agreement (BIPPA).
Sharma assured Jha of continued special relationship with Nepal.Jha asked the Sharma for better concessions for the jute products from Nepal. He also made a strong pitch for further concessions for Nepal imports and more investments from India.
The bilateral trade between the two countries has increased from $1,985 million in 2009-10 to around $2,700 in 2010-11 registering an increase of around 36 per cent.
Exports from Nepal to India have also grown from $452 million in 2009-10 to $476 millionin 2010-11, an increment of around 5.3 per cent. “Our growing mutual cooperation in the development of the hydropower potential of Nepal confirms the special relationship between our two countries,” Sharma said, adding that India would like to accelerate such cooperation which would usher in a new era of prosperity for Nepal.
It is estimated that sale of electricity from the 40,000 MW hydropower potential of Nepal can generate revenues of more than $10 billion per annum.
Nepal could also attract a lot of investment in manufacturing/services sector by overcoming its present power shortage.
Petroleum products price hike makes kitchen expensive
The common people's kitchen has become expensive as the state oil monopoly has increased petroleum prices including cooking gas that will be dearer by Rs 175 per cylinder to Rs 1,500, putting extra burden on household budgets.
Nepal Oil corporation (NOC) has — in the sharpest ever one-time increase — hiked prices of petrol by Rs 10, diesel and kerosene by Rs 9 and domestic aviation fuel by Rs 5 per litre.
Petrol will now cost Rs 115 per litre, diesel and kerosene Rs 85 and domestic aviation avitation fuel Rs 105. But according to Nepal Petroleum Dealers National Association, the Valleyeits will have to pay Rs 115.70 for a litre of petrol.
The NOC had also hiked price of petrol, diesel and kerosene three months ago to Rs 105 for a litre of petrol and Rs 76 for a litre of diesel and kerosene, citing the huge loss by the corporation due to rising international oil prices.
However, the price hike in petroleum products will push transportation costs up having a cascading effect on food prices and other commodities related to everyday lives. he price hike will fuel up to 10 per cent inflation in an average. The fare of public vehicle will go up by up to eight per cent and the market will witness some five to seven per cent inflation in food stuffs and vegetables.
An increase in the price of diesel — the economy's main transportation fuel — will not only push up the cost of food items, including fruits and vegetables, and many other perishables that are moved largely by truck but also the operating cost of industries.
Minister for Commerce and Supplies Lekh Raj Bhatta, however, promised to bring special relief package to the poor. “The ministry is preparing working procedure to provide subsidy to the poor and students and it will come into effect within two months.
The price hike was a must since the NOC losses due to skyrocketing crude prices in the international market which have been hovering at around $100 to $111 a barrel, according to the ministry.
After the hike in petroleum products, the state oil monopoly will still suffer a total of Rs 860 million loss every month. The government has also planned to establish Price Stabilisation Fund to cushion the rise and fall of prices in the international market.
Nepal Oil corporation (NOC) has — in the sharpest ever one-time increase — hiked prices of petrol by Rs 10, diesel and kerosene by Rs 9 and domestic aviation fuel by Rs 5 per litre.
Petrol will now cost Rs 115 per litre, diesel and kerosene Rs 85 and domestic aviation avitation fuel Rs 105. But according to Nepal Petroleum Dealers National Association, the Valleyeits will have to pay Rs 115.70 for a litre of petrol.
The NOC had also hiked price of petrol, diesel and kerosene three months ago to Rs 105 for a litre of petrol and Rs 76 for a litre of diesel and kerosene, citing the huge loss by the corporation due to rising international oil prices.
However, the price hike in petroleum products will push transportation costs up having a cascading effect on food prices and other commodities related to everyday lives. he price hike will fuel up to 10 per cent inflation in an average. The fare of public vehicle will go up by up to eight per cent and the market will witness some five to seven per cent inflation in food stuffs and vegetables.
An increase in the price of diesel — the economy's main transportation fuel — will not only push up the cost of food items, including fruits and vegetables, and many other perishables that are moved largely by truck but also the operating cost of industries.
Minister for Commerce and Supplies Lekh Raj Bhatta, however, promised to bring special relief package to the poor. “The ministry is preparing working procedure to provide subsidy to the poor and students and it will come into effect within two months.
The price hike was a must since the NOC losses due to skyrocketing crude prices in the international market which have been hovering at around $100 to $111 a barrel, according to the ministry.
After the hike in petroleum products, the state oil monopoly will still suffer a total of Rs 860 million loss every month. The government has also planned to establish Price Stabilisation Fund to cushion the rise and fall of prices in the international market.
Nepal to open five service sectors
Nepal has selected its five service sectors to open for the SAARC member countries.
"Among the service sectors within Nepal Trade Integration Strategy (NTIS), Nepal has opened Trade, Tourism, Information Technology (IT), Health and Education for the SAARC member countries to invest in Nepal,” said joint secretary at the Ministry of Commerce and Supplies Toya Narayan Gyawali, after the Eighth meeting of Expert Group on SAARC Agreement on Trade Service that concluded in Kathmandu.
Nepal Trade Integration Strategy 2010 has identified 19 products and services having maximum export potentials.Seven agro-based products — large cardamom, ginger, honey, lentils, tea, noodles, medicinal and essential oils — five industrial products — handmade paper, silver jewellery, iron and steel, pashmina, and wool products — and seven service sectors — tourism, labour, health, education, IT and BPO, engineering and hydro-electricity have been featured in the NTIS list for the promotion of these sectors as they have export potential.
"Service sector is more complicated than the trading sector therefore we are holding direct discussions with the stakeholders to make it be easier for negotiations," Gyawali, said, adding that Nepal is going to participate in the Trading Service Expert meeting — after the two-day meeting in Kathmandu that concluded today — that is scheduled for February 13 in Pakistan.
"We will have a series of meetings on different sector and trading services which will be followed by the SAARC ministerial meeting in Pakistan,” he said.
Nepal has already agreed to open up 70 sub-sectors of services for other member countries under WTO rules and the meeting might decide on additional sub-sectors of service for foreign investors.
The South Asian regional block’s member states have already made their initial offer to open over 170 sub-sectors of service for foreign investments under the WTO norms. The 16th SAARC summit in Bhutan in 2010 had decided to introduce service sector in the SAFTA, which would incorporate only goods for regional preferential trade.
Joint secretary Gyawali and undersecretary Binod Acharya from Ministry of Commerce and Supplies participated in the eight meeting of Expert Group on SAARC Agreement on Trade Service in Kathmandu.
"Among the service sectors within Nepal Trade Integration Strategy (NTIS), Nepal has opened Trade, Tourism, Information Technology (IT), Health and Education for the SAARC member countries to invest in Nepal,” said joint secretary at the Ministry of Commerce and Supplies Toya Narayan Gyawali, after the Eighth meeting of Expert Group on SAARC Agreement on Trade Service that concluded in Kathmandu.
Nepal Trade Integration Strategy 2010 has identified 19 products and services having maximum export potentials.Seven agro-based products — large cardamom, ginger, honey, lentils, tea, noodles, medicinal and essential oils — five industrial products — handmade paper, silver jewellery, iron and steel, pashmina, and wool products — and seven service sectors — tourism, labour, health, education, IT and BPO, engineering and hydro-electricity have been featured in the NTIS list for the promotion of these sectors as they have export potential.
"Service sector is more complicated than the trading sector therefore we are holding direct discussions with the stakeholders to make it be easier for negotiations," Gyawali, said, adding that Nepal is going to participate in the Trading Service Expert meeting — after the two-day meeting in Kathmandu that concluded today — that is scheduled for February 13 in Pakistan.
"We will have a series of meetings on different sector and trading services which will be followed by the SAARC ministerial meeting in Pakistan,” he said.
Nepal has already agreed to open up 70 sub-sectors of services for other member countries under WTO rules and the meeting might decide on additional sub-sectors of service for foreign investors.
The South Asian regional block’s member states have already made their initial offer to open over 170 sub-sectors of service for foreign investments under the WTO norms. The 16th SAARC summit in Bhutan in 2010 had decided to introduce service sector in the SAFTA, which would incorporate only goods for regional preferential trade.
Joint secretary Gyawali and undersecretary Binod Acharya from Ministry of Commerce and Supplies participated in the eight meeting of Expert Group on SAARC Agreement on Trade Service in Kathmandu.
Tuesday, January 17, 2012
India agrees to simplify procedures at Kolkata Port
India agreed to redesign and simplify customs declaration form at Kolkata port and introduce internationally accepted online system (automation) that is expected to help Nepali traders clear customs procedure without much delay and ultimately reduce their time and cost for third country trade via Kolkata port.
In a joint secretary level meeting held in Kolkata between Nepali and Indian customs authorities on trade and transit procedure simplification, the Indian side agreed on a number of issues that are expected to boost Nepal’s trade with third country.
India has also agreed to operationlise Birgunj dry port as a full-fledged international port for which Nepal will have to give a proposal to Indian authorities through proper diplomatic channel, according to Nepal’s consular general to Kolkata Chandra Kumar Ghimire, who was a member in the Nepali team.Once the proposal is implemented, Nepal will not have to change shipping liners at Kolkata port, nor will it have to deal certain procedures with Kolkata port.
"Once our Birgunj dry port operates as a full-fledged international port, it will reduce number of days ultimately reducing transportation cost and increase our trade competitiveness,” Ghimire said.
Under the current procedures Nepal’s inbound and outbound shipments have to go through same set of procedures both at Birgunj dry port and at Kolkata port.
Similarly India has also agreed to set up a periodic hearing mechanism at Kolkata port where port authorities, Nepali representatives from Consulate General and stakeholders would discuss problems faced by the Nepali traders.
India has agreed to reduce security related signatures on Nepal inbound and outbound shipments, Ghimire said, adding that according to new understanding, Indian side will take up the issue of delay and demurrage issues with the concerned authorities, Kolkata Port Trust and Kolkata Customs Department.
Both sides agreed to hold a meeting of technical authorities in Kathmandu in second fortnight of February where shipping line and Kolkata port authorities will discuss relevant issues.
Nepali traders have long been complaining about the problems of administrative hassles, congestion, delay and high demurrage charges at Kolkata port through which Nepal does almost all its third country trade.
On the issue of automation both the sides agreed to integrate Nepali and Indian customs authorities including Nepal’s Consulate General in the process. Nepal wants the shipping companies to have transparent and uniform charges for all traders that import export goods from third countries via Kolkata port.Indian customs commissioner at the Central Board of Excise and Customs Sandeep Kumar led 12-member Indian team while joint secretary at the Ministry of Commerce and Supplies Naindra Upadhyay led six-member Nepali team.
Representatives from Nepal Inter-Modal Transport Development Board and Department of Customs also took part in the meeting.
Prior to the meeting Nepali team had visited Vishakhapatnam Port to observe customs clearance and automation process there before discussing issues with Indian authorities in Kolkata.
In a joint secretary level meeting held in Kolkata between Nepali and Indian customs authorities on trade and transit procedure simplification, the Indian side agreed on a number of issues that are expected to boost Nepal’s trade with third country.
India has also agreed to operationlise Birgunj dry port as a full-fledged international port for which Nepal will have to give a proposal to Indian authorities through proper diplomatic channel, according to Nepal’s consular general to Kolkata Chandra Kumar Ghimire, who was a member in the Nepali team.Once the proposal is implemented, Nepal will not have to change shipping liners at Kolkata port, nor will it have to deal certain procedures with Kolkata port.
"Once our Birgunj dry port operates as a full-fledged international port, it will reduce number of days ultimately reducing transportation cost and increase our trade competitiveness,” Ghimire said.
Under the current procedures Nepal’s inbound and outbound shipments have to go through same set of procedures both at Birgunj dry port and at Kolkata port.
Similarly India has also agreed to set up a periodic hearing mechanism at Kolkata port where port authorities, Nepali representatives from Consulate General and stakeholders would discuss problems faced by the Nepali traders.
India has agreed to reduce security related signatures on Nepal inbound and outbound shipments, Ghimire said, adding that according to new understanding, Indian side will take up the issue of delay and demurrage issues with the concerned authorities, Kolkata Port Trust and Kolkata Customs Department.
Both sides agreed to hold a meeting of technical authorities in Kathmandu in second fortnight of February where shipping line and Kolkata port authorities will discuss relevant issues.
Nepali traders have long been complaining about the problems of administrative hassles, congestion, delay and high demurrage charges at Kolkata port through which Nepal does almost all its third country trade.
On the issue of automation both the sides agreed to integrate Nepali and Indian customs authorities including Nepal’s Consulate General in the process. Nepal wants the shipping companies to have transparent and uniform charges for all traders that import export goods from third countries via Kolkata port.Indian customs commissioner at the Central Board of Excise and Customs Sandeep Kumar led 12-member Indian team while joint secretary at the Ministry of Commerce and Supplies Naindra Upadhyay led six-member Nepali team.
Representatives from Nepal Inter-Modal Transport Development Board and Department of Customs also took part in the meeting.
Prior to the meeting Nepali team had visited Vishakhapatnam Port to observe customs clearance and automation process there before discussing issues with Indian authorities in Kolkata.
Monday, January 16, 2012
BIMSTEC ministerial meeting endorses Poverty Plan of Action
The second Bay of Bengal Initiative for Multi-sectoral Technical and Economic Cooperation (BIMSTEC) ministerial meeting on poverty alleviation today endorsed the regional Poverty Plan of Action (PPA) through the Kathmandu Statement.
They also pledged to incorporate the PPA in their respective plan and programme in fighting against poverty and and achieve Millennium Development Goals (MDGs) within the stipulated time.
The PPA — that was drafted and proposed by Nepal after consulting with the representatives from the member countries — includes increased cooperation on technology transfer, capacity building, sharing of best practices, promotion of trade and tourism and improved transportation and communications among member countries.
The seven member sub regional bloc — consisting of five South Asian and two East Asian countries — also agreed on regular consultations among member countries on the issues of international trade and investment and increase human capital investment specifically targeted to the poor and the vulnerable groups.
The Poverty Plan of Action states to analyse trends of income, human development and non-income dimensions of poverty and human development, identify best practices and learn lessons for poverty reduction and suggest common areas of international cooperation to alleviate poverty in the BIMSTEC member states.
It has envisioned eight broad strategies including accelerated, pro-poor and inclusive growth, social development, implement targeted programmes for poor, increase coverage for social protection, increased preparedness to address adverse effects of climate change, disaster risk management, good governance and periodic progress review.
The meeting concluded that mutual cooperation in research and technology transfer in agriculture, easy access to markets for agricultural products, facilitating flow of plant and livestock breeding materials, testing and certification capacity building, encouraging flow of tourists through product development, promotional activities and improved connectivity, promoting trade through reduction of non-tariff barriers and shareing best practices could be areas of cooperation in the region to accelerate, pro-poor and inclusive growth.
Similarly, the meeting envisioned poverty mapping and identification of poor households, mobilising, organising and empowering poor through their own organisations, integrated package support programme through poor sensitive institutional support structure and increasing financial services to poor could help implement targeted programmes for poor.
The third BIMSTEC ministerial meeting on poverty alleviation will be held in Sri Lanka.
Earlier, in inaugural address in the morning, deputy prime minister and minister for Foreign Affairs Narayan Kaji Shrestha highlighted the role of global fraternity for poverty alleviation.
"This century may well see economic power shift to Asia with new powers continuing to grow and making the presence felt in the global arena," he said, adding that the challenges of sustainable development, safeguarding the environment, stabilising global population, bridging the gulf between the rich and the poor and ending abject poverty from the region will take the forefront thus necessitating regional cooperation more than even before.
Speaking on behalf of delegates minister for National Planning and Economic Development of Myanmar U Tin Naing Thein underlined the need for all the member states of the sub-region to work together to reduce poverty which has been drawing global attention in the recent time.
He called for regional collaboration in the areas of agriculture, climate change, food security, tourism and transportation for the upliftment of people in the region.
Similarly, National Planning Commission (NPC) vice chair Deependra Bahadur Kshetry said that the Poverty Plan of Action, endorsed by the meeting, would help reduce poverty in the sub region through mutual efforts.
Vice chair of Poverty Alleviation Fund (PAF) Janak Raj Joshi, in his vote of thanks, expressed the belief that the outcome of the meeting would pave the way for a meaningful impact on the lives of the poor and the marginalised communities of the region and reduce the ever widening gap between the rich and the poor.
The first BIMSTEC Ministerial Meeting on Poverty Alleviation held in Dhaka in 2008 had decided to endorse the PPA at the second meeting, tasking Nepal with the responsibility to present the draft of PPA by incorporating necessary inputs from other member countries.
Minister of State for Rural Development (India) Sisir Adhikari; deputy minister for Economic Development (Sri Lanka) Muthu Shiva Lingam; Minister for National Planning and Economic Development (Myanmar) U Tin Naing Thein; Minister for Finance (Bhutan) Lyompo Wangdi Norbu; Minister for Planning ( Bangladesh) A K Khandker; deputy Permanent Secretary, Ministry of Interior(Thailand) Vullop Phring Phong and Finance Minister Barsha Man Pun led their respective delegations to the meeting.
The guests also paid a courtesy call on Prime Minister Dr Babu Ram Bhattarai in Singa Durbar this afternoon.
People below poverty line in BIMSTEC countries
Bangladesh — 40 per cent
Myanmar — 32.7 per cent
Nepal — 25.16 per cent
India — 25 per cent
Bhutan — 23.2 per cent
Sri Lanka — 23 per cent
Thailand — 9.6 per cent
They also pledged to incorporate the PPA in their respective plan and programme in fighting against poverty and and achieve Millennium Development Goals (MDGs) within the stipulated time.
The PPA — that was drafted and proposed by Nepal after consulting with the representatives from the member countries — includes increased cooperation on technology transfer, capacity building, sharing of best practices, promotion of trade and tourism and improved transportation and communications among member countries.
The seven member sub regional bloc — consisting of five South Asian and two East Asian countries — also agreed on regular consultations among member countries on the issues of international trade and investment and increase human capital investment specifically targeted to the poor and the vulnerable groups.
The Poverty Plan of Action states to analyse trends of income, human development and non-income dimensions of poverty and human development, identify best practices and learn lessons for poverty reduction and suggest common areas of international cooperation to alleviate poverty in the BIMSTEC member states.
It has envisioned eight broad strategies including accelerated, pro-poor and inclusive growth, social development, implement targeted programmes for poor, increase coverage for social protection, increased preparedness to address adverse effects of climate change, disaster risk management, good governance and periodic progress review.
The meeting concluded that mutual cooperation in research and technology transfer in agriculture, easy access to markets for agricultural products, facilitating flow of plant and livestock breeding materials, testing and certification capacity building, encouraging flow of tourists through product development, promotional activities and improved connectivity, promoting trade through reduction of non-tariff barriers and shareing best practices could be areas of cooperation in the region to accelerate, pro-poor and inclusive growth.
Similarly, the meeting envisioned poverty mapping and identification of poor households, mobilising, organising and empowering poor through their own organisations, integrated package support programme through poor sensitive institutional support structure and increasing financial services to poor could help implement targeted programmes for poor.
The third BIMSTEC ministerial meeting on poverty alleviation will be held in Sri Lanka.
Earlier, in inaugural address in the morning, deputy prime minister and minister for Foreign Affairs Narayan Kaji Shrestha highlighted the role of global fraternity for poverty alleviation.
"This century may well see economic power shift to Asia with new powers continuing to grow and making the presence felt in the global arena," he said, adding that the challenges of sustainable development, safeguarding the environment, stabilising global population, bridging the gulf between the rich and the poor and ending abject poverty from the region will take the forefront thus necessitating regional cooperation more than even before.
Speaking on behalf of delegates minister for National Planning and Economic Development of Myanmar U Tin Naing Thein underlined the need for all the member states of the sub-region to work together to reduce poverty which has been drawing global attention in the recent time.
He called for regional collaboration in the areas of agriculture, climate change, food security, tourism and transportation for the upliftment of people in the region.
Similarly, National Planning Commission (NPC) vice chair Deependra Bahadur Kshetry said that the Poverty Plan of Action, endorsed by the meeting, would help reduce poverty in the sub region through mutual efforts.
Vice chair of Poverty Alleviation Fund (PAF) Janak Raj Joshi, in his vote of thanks, expressed the belief that the outcome of the meeting would pave the way for a meaningful impact on the lives of the poor and the marginalised communities of the region and reduce the ever widening gap between the rich and the poor.
The first BIMSTEC Ministerial Meeting on Poverty Alleviation held in Dhaka in 2008 had decided to endorse the PPA at the second meeting, tasking Nepal with the responsibility to present the draft of PPA by incorporating necessary inputs from other member countries.
Minister of State for Rural Development (India) Sisir Adhikari; deputy minister for Economic Development (Sri Lanka) Muthu Shiva Lingam; Minister for National Planning and Economic Development (Myanmar) U Tin Naing Thein; Minister for Finance (Bhutan) Lyompo Wangdi Norbu; Minister for Planning ( Bangladesh) A K Khandker; deputy Permanent Secretary, Ministry of Interior(Thailand) Vullop Phring Phong and Finance Minister Barsha Man Pun led their respective delegations to the meeting.
The guests also paid a courtesy call on Prime Minister Dr Babu Ram Bhattarai in Singa Durbar this afternoon.
People below poverty line in BIMSTEC countries
Bangladesh — 40 per cent
Myanmar — 32.7 per cent
Nepal — 25.16 per cent
India — 25 per cent
Bhutan — 23.2 per cent
Sri Lanka — 23 per cent
Thailand — 9.6 per cent
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