R&D_NewsBrief_26thOct

R&D Economic Research & Business

Development

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Date: October 26, 2009

Highlights

• Three separate meetings of the three major political parties — Unified CPN-Maoist, Nepali Congress and CPN-UML — today failed to forge a consensus on ending stalemate regarding parliament functioning.

• Nepal Maoists, who have announced a fresh protest against the government from next month, aim to dislodge the 22-party coalition, a top leader of the former rebels said on Sunday.

• The political parleys among the three major parties took a twist on Sunday with the Unified CPN (Maoist) staking claim over a new national government under its own leadership. This demand was a part of the package deal to end the political deadlock.

• The Nepali Congress (NC) has decided to form an 87-member Central Working Committee.

• Nepal Army (NA) has started its largest ever demining operation with a target of defusing within one year at least 19 major minefields that it had been planted during the decade-long conflict.

• Progress in 34 out of the government's 313 first priority (P1) projects was below 50 percent although it has made certain that these projects should not lack for anything. The government has classed the performance of P1 projects into three categories -- progress of more than 80 percent, between 50-79.99 percent and less than 50 percent.

• Maoists on Sunday formally demanded that each disqualified combatant be provided with one million rupees, saying that such an offer would help expedite the discharge and rehabilitation of 4,008 ineligible Maoist fighters.

• Following Indian Home Minister P Chidambaram´s recent statement that the Indian Maoists were possibly acquiring weapons from Nepal, the government is preparing to defend its position through the November 6-7 talks between the home secretaries of the two neighbors.

• United Nations Mission in Nepal (UNMIN) Chief Karen Landgren called on Unified Communist Party of Nepal (Maoist)(UCPN-M) Chairman Prachanda at the latter's residence in the capital Kathmandu on Sunday.

• India and Nepal will sign a revised trade treaty and an agreement to control unauthorised trade from a third country in Kathmandu next week, nearly two months after the two neighbours initialed the pacts during Nepali Prime Minister Madhav Kumar Nepal’s official visit to New Delhi in August.


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• Four private sector banks have established branches in Tansen in the past one year to become the first ones to do so. Himalayan Bank, Nepal Investment Bank, KIST Bank and Nepal SBI Bank have opened branch offices in the district headquarters of Palpa while Sunrise and Nepal Credit and Commerce Bank have conducted a feasibility study to expand their network here.

• In Nepal, the mobile phone (MP) users have been increasing since its introduction in 1999. At that time, it was considered a symbol of indulgence. But today, its rising popularity has taken it to approximately 5 million MP users in both the urban as well as rural areas within a very short span of time.

• The government has sped up the process of setting up integrated customs check posts linking the proposed railway lines along the four Nepali bordering towns.

• Non Resident Nepalese (NRNs) can contribute to Nepal by bringing skills and knowledge from the countries of their residence.

• Nepal and India will formalise the use of Vishakhapatnam port by Nepal for the movement of third-country transit goods at the upcoming Inter-Governmental Committee (IGC) meeting on Trade and Transit.

• The South Korean government's act of deporting a Nepali migrant worker and rights activist has evoked condemnation from human rights groups and liberal lawyers.

• The Department of Commerce (DoC) has decided to expand its market monitoring and inspection of the service sector. It took the decision on Friday after it got a large number of complaints.

• Poultry entrepreneurs´ decision to impose quota system in the supply of chicken to Kathmandu Valley has badly affected poultry industry in Chitwan, poultry farmers say.

• The Nepal Stock Exchange (NEPSE) on Sunday slipped 1.94 points. The NEPSE index settled at 599.22 points when trading closed. All the sub-indices except for the hydropower sector were down.

• Securities Board of Nepal (Sebon) has reminded merchant bankers to submit their financial details, as the deadline for the same has already elapsed.

• Soaltee Hotel has announced bonus shares and cash dividends. The 161st board of directors’ (BoD) meeting of Soaltee Hotel Ltd on Wednesday proposed 20 per cent bonus shares and 11.5 per cent cash dividend to its shareholders.

• The Ministry of Health and Population seems ill-prepared to combat potential rise in the cases of pandemic Influenza A (H1N1) in the winter.


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POLITICS:

GPK, Khanal, Prachanda, to meet

Three separate meetings of the three major political parties — Unified CPN-Maoist, Nepali Congress and CPN-UML — today failed to forge a consensus on ending stalemate regarding parliament functioning. They, however, made an understanding to hold a high-level meeting of top leaders of the Big Three — Girija Prasad Koirala, Pushpa Kamal Dahal ‘Prachanda’ and Jhala Nath Khanal — to find a way out.

The high-level meeting will probably be held tomorrow. UML leader Bharat Mohan Adhikari has been entrusted with the responsibility of arranging the meeting. Leaders of the three parties hoped that the high-level meeting would find a solution. However, the UCPN-M and NC and UML have not budged from their stances. UCPN-M and UML, NC and UML and UCPN-M and NC met separately in the morning, afternoon and evening.

NC and UML said the UCPN-M had proposed a package deal to settle all issues, including the peace process, constitution-writing and formation of consensus government. UCPN-M said it was ready to deal with the cases in isolation though it wanted a solution in package to resolve all problems.

“We want to deal with the President’s issue at first,” said UCPN-M vice chairman Narayan Kaji Shrestha after a meeting with the NC in the evening. The UCPN-M and NC teams led by Dr Baburam Bhattarai and Ram Chandra Poudel racked their brains for about two hours at a hotel in Kupandol.

“We took up all contentious issues with a view to preventing the country from confrontation and possible disaster. We have proposed to solve all problems in a package,” Shrestha said. “It is not true that we came up with a new proposal. We are ready to take up cases in isolation. The NC seems reluctant for a package deal.” NC leader Poudel said, “First the House stalemate should end and the annual budget should be passed. Then we can settle other problems in the second phase.” Earlier, a UML team led by Bharat Mohan Adhikari held talks with UCPN-M leaders at the residence of Maoist vice chairman Dr Baburam Bhattarai in Shantinagar. The UCPN-M proposed a package deal, which included formation of new consensus government. The UML leaders briefed NC leaders about the Maoists’ proposal at NC parliamentary party office.

After the NC-UML meeting, NC leader Ram Chandra Poudel and UML leader Keshav Badal said they were unable to accept the President’s step of reinstating the then army chief as a mistake or talk about dissolving the present government. NC chief whip Laxman Ghimire, who attended the meetings with UML and UCPN-M said, “Talks are heading in a positive direction. The two-hour talks between the NC and UCPN-M also focused on sharing views on constitution writing and other contentious problems.”

Source: The Himalayan Times Date: 10/25/2009


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'Maoists seek to dislodge Nepal govt'

Nepal Maoists, who have announced a fresh protest against the government from next month, aim to dislodge the 22-party coalition, a top leader of the former rebels said on Sunday.

The UCPN-Maoist have threatened to begin a stir from November 1 if the government failed to find a consensus to discuss in Parliament President Ram Baran Yadav's controversial decision in May to reinstate Army Chief General Rukmangad Katawal, who has now retired.

Our movement will not stop simply by the president's apology for his unconstitutional act of reinstating the army chief and allowing a debate on his move in the Parliament, said Mohan Vaidya 'Kiran', a top hardline Maoist leader.

Now we want the Madhav Kumar Nepal government to quit power, paving the way for formation of a Maoist-led national consensus government, Vaidya told reporters here today.

The senior Maoist leader also reiterated the party's view of alleged Indian hand in dislodging the Prachanda-led government on May 4.

We don't want any foreign involvement in our affairs as we believe that our domestic matters should be resolved by ourselves, said Vaidya, who recently returned from a visit to China along with Party supremo Prachanda.

Maoist's leader Vaidya said it is natural for us to claim the leadership of the government after being the largest party with 338 seats in the 601-member Nepal Constituent Assembly.

He said unless a Maoist-led government is formed the peace process will not be completed and the new constitution cannot be written.

Amid media reports that the Indian Maoists were getting arms from abroad, Vaidya rubbished allegation that arms from Nepal were being exported to the ultra left rebels.

He said this is totally nonsense, don't go by such false propaganda. But on the contrary, I have heard rumours that arms were being sent to Nepal by India, he said.

With regard to his talks with Chinese President Hu Jintao and other senior leaders, he said they discussed about strengthening party to party relations and ties between the two countries.

He underlined that India and China should cooperate for establishing peace and stability in this region.

He said China supported the peace process, Nepal's political stability and economic development as Beijing wished that the new constitution will be drafted on time.

Source: Press Trust Of India Date: October 25, 2009


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Maoists want to lead new govt

The political parleys among the three major parties took a twist on Sunday with the Unified CPN (Maoist) staking claim over a new national government under its own leadership. This demand was a part of the package deal to end the political deadlock. The major coalition partners of the government—Nepali Congress and CPN (UML)—rejected the demand saying it would jeopardize the achievements of the last several weeks.

The latest Maoist proposal has put the NC and UML in a dilemma, but the parties have agreed to meet again on Monday.

Earlier in the day, NC and UML leaders held a meeting to finalise the content and language of the proposed joint resolution motion and decided to sit together with the Maoists.

“The series of meetings among parties were making headway and we were close to consensus, but, all of a sudden, the Maoist proposal has complicated the situation. We did not agree to their package deal, which included forming a national government under Maoist leadership,” NC Spokesperson Arjun Narsingh K. C. told the Post.

“It’s amazing that they should demand rule of minority against the majority. We will not let them form a new government under pressure and threat,” he said.

NC declined to accept the president’s move as unconstitutional and also the package deal, so there was no agreement, Maoist Vice Chair Naryan Kaji Shrestha said. The Maoists had proposed a package including formation of a new government under its leadership, consensus among parties on drafting the constitution, passage of the motion that the president’s move was unconstitutional and taking the peace process to a logical conclusion. Maoist leaders also refused to allow any kind of discussion inside the parliament.

Source: www.ekantipur.com Date: October 26, 2009

NC CWC to have 87 members

The Nepali Congress (NC) has decided to form an 87-member Central Working Committee.

According to senior NC leader Nara Hari Acharya, a meeting of the NC leaders held on Sunday to incorporate the suggestions in Statute Amendment Proposal prepared by Krishna Prasad Sitaula-led committee made an agreement to this effect.

Acharya said while 71 members would be directly elected through the party´s general convention, 16 other members will be elected by the CWC. As per the new statute of the party, six members to be elected should be below 40 years.

Currently, the NC has 75 members, including 10 invited members in the CWC. During unification of the party with then NC (Democratic), it was agreed that 25


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additional members would be appointed in the CWC. However, the members are yet to be appointed. Two other major parties -- UCPN (Maoist) and CPN-UML-- have a 137 and 108-member CC, respectively.

The meeting also reached an agreement to appoint all five office bearers including president, vice president, general secretary, joint general secretary and treasurer through election.

The NC has a provision to elect the party president only, who is authorized to nominate 50 percent of the total office bearers on his discretion. Among others, the meeting also agreed to set 11 general convention representatives from each electoral region.

Acharya said the meeting would continue on Monday to finalize other contentious issues in the draft statute of the party.

The draft statute holds special importance as it will be presented to the upcoming Mahasamiti meeting scheduled for November 1-3 in Kathmandu for amendment in the party´s statute.

Source: www.myrepublica.com Date: 10/25/2009

Nepal starts largest demining operation

KATHMANDU, Oct. 26 (Xinhua) -- Nepal Army (NA) has started its largest ever demining operation with a target of defusing within one year at least 19 major minefields that it had been planted during the decade-long conflict, The Kathmandu Post reported on Monday.

On Sunday, three of the four NA teams began their demining operation at the minefields in Dadeldhura, Dang and Ramechhap districts. They were deployed after a long suspension of operation due to monsoon, when demining is virtually impossible.

According to the daily, the 19 landmine sites were to be demined this year.

NA said that demining of some of these sites, especially those in far-western Nepal could be delayed due to the recent floods, which have erased the mine markings.

Records show that after the Comprehensive Peace Agreement (CPA) signed in 2006, over 800 people have fallen victim to mine explosions.

Successful completion of the operation by the end of this year would mean clearance of almost 70 percent of NA-planted landmines. NA plans to inactivate all of the identified landmines by the end of 2011, said a senior officer at NA's Mine Action Team.

According to the CPA, both NA and the Unified Communist Party of Nepal (Maoist)(UCPN-M) must inactivate all of their mines within 60 days, which they say is impossible.


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So far, the Army team has cleared 17 of the total 53 landmines and 105 out of a total of 274 improvised explosive devices planted by the NA, whereas the UCPN-M have destroyed a stockpile of 46,850"dangerous items" with technical support from the United Nations Mine Action Team (UNMAT).

According to NA experts, it takes at least four to six weeks for a team of experts to clear one field with landmines.

"Demining is a very difficult, risky, costly and time-consuming job as it gets delayed due to rain and landslides, but still we are doing our best to speed up the process," said a NA expert.

NA claims that after receiving training from UNMAT and technical assistance from Britain, Norway and Canada, its demining team has attained international standard and is capable of carrying out UN-facilitated demining operations anywhere in the world.

Currently, 14 of NA's barracks have four demining teams, each comprising around 30 members.

Source: news.xinhuanet.com/English Date: October 26, 2009

POLICY:

Priority projects make lousy progress

Progress in 34 out of the government's 313 first priority (P1) projects was below 50 percent although it has made certain that these projects should not lack for anything.

The government has classed the performance of P1 projects into three categories -- progress of more than 80 percent, between 50-79.99 percent and less than 50 percent.

Of the 273 projects whose progress details were reported to the concerned ministries, 46 projects achieved 50-77.99 percent progress and 193 attained 80 percent progress.

Most of the projects whose performance was less than 50 percent are still at the initial stages, with some of them awaiting approval from the National Planning Commission (NPC) while others have started the tender process.

NPC vice chairman Yubaraj Khatiwada said that the projects showing the least performance had been hampered by delayed budget announcement, project approval and contract agreements. The budget for the fiscal year 2008/09 had been presented three months after it began. "Projects like the National Literacy Campaign and the Youth Self-Employment Programme didn't make any headway as the government had no plans or procedures in place to implement them," Khatiwada said.


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According to the NPC, there are eight projects under the Ministry of Physical Planning and Works whose progress remained below 50 percent. Likewise, five out of the 18 projects under the Ministry of Energy witnessed a similar fate. The projects under the Ministry of Irrigation also reported dismal progress. Two projects each of the Ministry of Finance, the Ministry of Environment and the Ministry of Local Development achieved pro-gress below 50 percent.

Khatiwada said that there should be a mechanism for accountability for under-performance of development projects and that there should be a probe into projects performing below 50 percent.

"We are working on a mechanism for seeking clarification on a quarterly basis for under-performance in development projects," he said.


Maoists demand Rs 1m for each disqualified; UNMIN says no

Maoists on Sunday formally demanded that each disqualified combatant be provided with one million rupees, saying that such an offer would help expedite the discharge and rehabilitation of 4,008 ineligible Maoist fighters.

Maoist politburo member Kul Prasad KC alias Sonam forwarded his party´s demand for the cash incentive for the minors and the late recruits -- disqualified combatants -- during a meeting of the Committee on the Rehabilitation, Monitoring and Coordination of the Disqualified Combatants headed by Peace Minister Rakam Chemjon, sources told myrepublica.

But the Chief of the United Mission in Nepal (UNMIN), Karen Landgren and representatives from other UN agencies based in Kathmandu, who were present in the meeting, rejected the demand outright.

"No," the source said quoting Landgren to the Maoist demand in the meeting.

When representatives from the Office of the UN Resident Coordinator, United Nations Population Fund and the United Nations Children´s Fund attending the meeting also supported Landgren, KC then pushed for another demand: gratuity to the disqualified combatants if one million rupees was not possible. But Landgren and other UN officials rejected the second demand as well.

Republica´s repeated efforts to have comment from KC failed. UNMIN Spokesperson Kosmos Biswakarma said that he was not in a position to comment what Landgren said in the meeting held the Peace Ministry Sunday afternoon.

The discharge and the rehabilitation of the disqualified combatants is one of major aspects of the peace process that began in November 2006.


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The Peace Ministry and the UN agencies are currently working on rehabilitation package. But such a package will only have education and vocational schemes, not any cash incentive.

Sources said that the rejection of the demand has made the Maoist unhappy and is likely to affect the ongoing discharge and rehabilitation process that resumed on October 11 from Dudhauli cantonments in Sindhuli after it was stalled on July 17 but was stalled following non-cooperation by the Maoists.

In the meantime, the second phase of the discharge and rehabilitation process at Dudhauli has not yet begun even as the first phase concluded on October 15. The second phase -- profiling of the disqualified -- was supposed to begin on October 20 as per the schedule of the process.

Sources said that the Maoists are not willing to begin the second phase in the cantonment, saying that the profiling of the combatants should be started once the first phase in remaining six cantonments is completed.

"The delay on part of the Maoist might be a strategy to bargain for cash incentive for the disqualified," a source involved in the process said.

Discharge beginning in six cantonments this week

In the meantime, the Chemjong-headed committee on Sunday decided to begin the discharge and rehabilitation process in remaining six cantonments later this week. The technical committee headed by Joint Secretary Bishnu Nepal will take a decision in this regard on Monday, according to Minister Chemjong.

"The committee has decided to complete the first phase within a week," Minister Chemjong told Republica.

Similarly, the meeting also decided to establish an office for the discharge and rehabilitation process very soon. Likewise, Chemjong held a meeting with government secretaries in a bid to identify possible training centers where the would-be-discharge combatants will be kept after they leave their respective cantonments.


Indo-Nepal security talks in Nov

Following Indian Home Minister P Chidambaram´s recent statement that the Indian Maoists were possibly acquiring weapons from Nepal, the government is preparing to defend its position through the November 6-7 talks between the home secretaries of the two neighbors.

The government has picked up cross border crime as its main agenda for the dialogue, which in its second edition is going to take place in Kathmandu, informed sources at the Home Ministry. The home secretary level talks between the two countries had


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been initiated in 2007 with an understanding to host it every year. The talks, however, were not held last year.

A meeting at Home Ministry on Sunday has set agendas for the talks and forwarded them to Home Minister Bhim Rawal for final agreement. According to sources, Home Secretary Govinda Kusum will draw the attention of his Indian counterpart GK Pillai on a myriad of issues, including cross border criminal activities during the meeting.

“Nepal will urge the Indian side to comb out armed groups operating from hide-outs in India,” said a senior official. “Without demolishing their shelters in the Indian territory, lasting peace in the Tarai is almost impossible. “

The official said that Nepal will highlight its Special Security Plan (SSP) as a means to bolster border security and ask for India´s support to share its benefits.

The Home Minister had a few months ago identified 109 armed criminal groups in Nepal, mostly based on Tarai. However, senior officials claim that such groups far exceed that number as many of them time and again appear with political cover.

“We will address a host of issues including arms trafficking, drug smuggling and currency forgery under the cross border agenda,” the official said. He informed that Nepal will request India to apply special measures to control kidnappings and extortion, especially of the Nepali entrepreneurs from the bordering towns, by Indian groups.

The agreement to hold the home secretary level ´security talk´ was reached during Prime Minister Madhav Kumar Nepal´s India visit. The date for the talks was later fixed during Indian home secretary GK Pillai´s Nepal visit.


UN Mission in Nepal chief meets UCPN-M chairman

KATHMANDU, Oct. 25 (Xinhua) -- United Nations Mission in Nepal (UNMIN) Chief Karen Landgren called on Unified Communist Party of Nepal (Maoist)(UCPN-M) Chairman Prachanda at the latter's residence in the capital Kathmandu on Sunday.

Landgren told reporters after the meeting, she discussed various issues related to army integration, discharge of disqualified combatants and the peace process at the meeting with Prachanda.

She urged Prachanda to cooperate in discharging and rehabilitating the disqualified combatants staying in the cantonments.

Landgren met Prachanda one day before leaving for New York to brief the United Nations Security Council on the progress of the peace process in Nepal. She had met with Prime Minister Madhav Kumar Nepal last Monday.

UNMIN's term is ending in January, 2010.


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Source: news.xinhuanet.com/English Date: October 25, 2009

New Trade treaty in the offing

India and Nepal will sign a revised trade treaty and an agreement to control unauthorised trade from a third country in Kathmandu next week, nearly two months after the two neighbours initialled the pacts during Nepali Prime Minister Madhav Kumar Nepal’s official visit to New Delhi in August.

Indian Commerce Minister Anand Sharma, who is arriving in Kathmandu tomorrow on a two-day visit to attend the meeting of the eight-member regional bloc South Asian Association for Regional Co-operation (Saarc), will sign the treaties along with his Nepali counterpart Rajendra Mahato.

Sharma will attend the Saarc meet to discuss the South Asian Free Trade Area agreement signed by the member countries in Islamabad in 2004. The trade treaty will be the upgradation of the earlier one signed in 1991, giving it a tenure of seven years from the earlier five, while the new unauthorised trade control treaty will replace the 1996 draft.

India remains land-locked Nepal’s largest trading partner and during the prime minister’s visit, both sides agreed that enhancing bilateral trade would be given priority by both.

The inter-governmental committee (IGC) at the level of commerce secretaries has been asked to look into the relevant issues to promote trade, investments and industrialisation in Nepal, expanding complementarities of bilateral trade on a sustainable basis and removing barriers to trade and investment.

The IGC as well as the commerce secretaries of both countries are expected to meet in Kathmandu in November after a two-day meet between the home secretaries. As per the revised trade treaty, India will allow Nepal to use its Vishakhapatnam port for the movement of transit traffic to and from Nepal. It is also ready to consider allowing Nepal an additional sea port on its western coast.

Nepal has pledged to take necessary measures for the promotion of an investor friendly and enabling business environment to encourage Indian public and private sector investments in Nepal, and a Bilateral Investment Promotion and Protection Agreement is expected to be signed in future.

Source: Gulf Times Date: October 26, 2009


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BANKING:

Banks rush to Tansen

Four private sector banks have established branches in Tansen in the past one year to become the first ones to do so.

Himalayan Bank, Nepal Investment Bank, KIST Bank and Nepal SBI Bank have opened branch offices in the district headquarters of Palpa while Sunrise and Nepal Credit and Commerce

Bank have conducted a feasibility study to expand their network here.

Before the advent of these private sector banks, the Agricultural Development Bank, Nepal Bank Limited and Rastriya Banijya Bank were the only ones maintaining offices in Tansen.

Pashchimanchal Develop-ment Bank and Pashchiman-chal Finance Company are smaller financial institutions providing their services here. Garima Development Bank, headquartered in Syangja, opened an office in Tansen a few days ago.

It has not been more than six months when officials of the Palpa Chamber of Commerce and Industry were making trips to Kathmandu to persuade private sector banks to expand their presence in Tansen.

Chamber president Bhusan Rajlawat said that private banks had been hesitant to open offices in Palpa despite their repeated requests. "Now we can say that there are more financial institutions than required," he added.


BUSINESS & ECONOMY:

Mobile phone potential Real GDP booster

In Nepal, the mobile phone (MP) users have been increasing since its introduction in 1999. At that time, it was considered a symbol of indulgence. But today, its rising popularity has taken it to approximately 5 million MP users in both the urban as well as rural areas within a very short span of time. But the exact number of users is hard to come by, not least because of the continued rapid growth in the number of subscribers. In the case of Kathmandu city, people of every stratum (a wage earner, an industrialist, a diplomat, a driver, a porter, a housewife, a student, a civil servant, a teacher, a laborer, a vender, a politician and others) possess a MP. The use of MP is limited in the rural areas as compared to the urban due to various reasons. But, its use would be more valuable and productive in rural areas where adequate infrastructure development is yet to take place.


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Some international institutions have investigated the economic impact of the use of MP in developing countries. A study by the World Resources Institute (WRI) found that as developing-world incomes rise, household spending on MP grows faster than spending on energy, water or indeed anything else. In the same manner, a World Bank (WB) study group has found that adding an extra ten MP per 100 people in a typical developing country like Nepal boosts growth in GDP per person by 0.8 percentage points. It further states that MPs developed in a few short years, and once the toys of rich people, they have become tools of economic empowerment for the world’s poorest people.

In Uganda, entrepreneurs and development organizations are eagerly seizing the opportunity from the fast growing MP. Farmers in rural area frequently find answers to questions about farming practices and health issues using Google text messaging and an operator service. Throughout Africa, millions of people use their MPs to transfer money, turn on water wells, learn soccer games scores and buy and sell goods.

An ICRIER study on the impact of MP on farmers across several Indian districts highlights the key role played by mobiles in lowering transaction costs and raising the income-levels of farmers by efficiently addressing their immediate agricultural-information requirements. This study found that MPs have huge potential to enable the small farmer to diversify from self-sustenance farming to higher income generating ventures like horticulture crops, animal husbandry and fish farming in paddy fields. Another study conducted by a consulting firm McKinsey & Co. found that raising wireless penetration by 10 percentage points can lead to an increase in gross domestic product of about 0.5% in the emerging economies such as China and India.

These findings are very much relevant to the Nepalese context because 90% of Nepalese villages lack roads, reliable postal services, and parlous landlines. It highlights the importance of MP as it provides telecommunications facilities in the absence of the development of physical infrastructure, except power. In the remote villages, the MP can substitute for travel, allow quicker and easier access to information on prices, and enable traders to reach wider markets, boost entrepreneurship and generally make it easier to do business. The economic condition of people may have gone up due to information on various economic activities. People may have developed their ability of entrepreneurship to produce goods and services by knowing the technological know-how, market condition as they can exchange information, ideas and views through MP from any corner of Nepal in a short span of time at the minimum cost.

Access to communication is a fundamental right of the people that makes them aware, knowledgeable and innovative. MP facilitates to provide the right of communication of the people even in the remote places. With a view to provide communication facility, Nepal has been expanding MP network throughout the country. In recent years, MP users are increasing. It is expected that MPs will make people more efficient and innovative in performing their economic activities as evidenced from the findings of the studies undertook in the international level. Putting these evidences in


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place, there is an urgent need to undertake a study to examine the economic impact of the use of MP which is not yet investigated in Nepal as MPs have the potential to play a key role in efficient logistics management and reduce costs for both private and the government sector. MP saves travel time of the people and provides them innovative ideas. Services such as mobile-phone-based agricultural advice, health care and money transfer could provide enormous economic and developmental benefits. Witnessing the widespread use of MP in the country, its contribution in overall economic performance in general and education, health, agriculture, markets, technological know-how, travel time and its use in economic activities, people’s knowledge, perception and attitude etc in particular should be evaluated to examine the economic impact of MP.

Source: The Himalayan Times Date: 2009-10-25

Railway checkpoints to be developed at four points

The government has sped up the process of setting up integrated customs check posts linking the proposed railway lines along the four Nepali bordering towns.

Integrated customs check posts are being developed as a part of the Customs Facilitation Program that Nepal and India jointly mooted for trade facilitation in 2007. The two sides had signed an agreement to this effect in 2007, under which India has promised to develop the check posts.

However, the process of setting up the cross-border check posts has not gained pace yet due to delay in identification and acquisition of land for the development and also due to additional time taken for the design of the posts.

Going by the agreement, integrated checkpoints with similar outlook and facilities would be constructed on both the sides of Nepal-India border in Biratnagar-Jogbani, Birgunj-Raxaul, Bhairahawa-Nautanuwa and Nepalgunj-Rupediya.

Total cost for the construction of the four check points has been estimated at Rs 16 billion.

Tulsi Prasad Sitaula, joint secretary at the Ministry of Physical Planning and Works (MoPPW), said that the ministry had recently finalized the design of the proposed check posts at Birgunj. It has also completed acquisition of necessary land for Bhairahawa check post. The check post in Birgunj is proposed to occupy the area of around three hectares. Posts in other towns too are estimated to stretch along the similar area.

Rites Limited (India) would undertake the construction of all checkpoints through which railway lines will be laid down to some two to five kilometers inside the Nepali side of the border.“


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"Construction of checkpoints at Birgunj will hopefully be initiated within this year as Rites has already completed the design works of the poin”s," Sitaula told myrepublica.

Under the initial understanding with India, Nepal Government has to make available necessary land, construct roads to proposed sites besides arranging facilities like electricity and water supply. Likewise, Rites would undertake the designing and contracting process for the construction of the posts.

Sitaula said necessary set up and facilities with similar design will be applied at both sides of the check posts to ensure rules and modality in executing effective quarantines and customs procedures while delivering goods through the posts.

He also said the check posts will also serve as the catalysts in checking illegal trade and unauthorized transportation of goods through the major customs, thereby pushing up customs duty mobilization


NRNs to work as gratis economic ambassadors

Non Resident Nepalese (NRNs) can contribute to Nepal by bringing skills and knowledge from the countries of their residence. “We can also hand over the technologies,” said Non Resident Nepalese Association (NRNA)president Devman Hirachan at a felicitation programme organised by Nepal Chambers of Commerce (NCC) here today. NRNs have formed their own organisations in 55 countries to work for the promotion of Nepal and Nepali labour and tourism market abroad. During the programme, Hirachan stated that NRNs are ready to work as representatives for promoting business free of cost.

NCC president Surendra Bir Malakar expressed his happiness at the formation of NRNA, which according to him was conceptualised by the chamber in the beginning. “We hope and expect that NRNs would be more active in the days ahead and contribute to the social transformation of the country by promoting industrial as well as social sectors of Nepal,” he said adding that the government should provide the facilities demanded by NRNs as it would encourage them to invest in the industrial and financial sectors of the country. “It would also help strengthen the public-private partnership (PPP),” Malakar added.

NCC vice-president Suresh Kumar Basnet, treasurer Rajendra Malla and secretary Kamlesh Agrawal said in the present context the private sector cannot be underestimated.



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Vishakhapatnam port use to be formalised

Nepal and India will formalise the use of Vishakhapatnam port by Nepal for the movement of third-country transit goods at the upcoming Inter-Governmental Committee (IGC) meeting on Trade and Transit.

Commerce Secretary Purushottam Ojha said, "The operating modality on the use of Vishakhapatnam port for Nepal's foreign trade will be discussed in the upcoming meeting."

During Prime Minister Madhav Kumar Nepal's India visit, India had agreed to the utilization of Vishakhapatnam port for movement of transit traffic to and from Nepal. Joint secretaries of the commerce ministries of the two countries are scheduled to meet on Nov. 9 and 10, to be followed by a secretary level meeting on Nov. 11.

Nepal has been seeking an additional transit port for the movement of third-country transit goods due to heavy congestion at Kolkata/Haldia port. A study by the Ministry of Commerce and Supplies had identified Vishakhapatnam as a suitable port for Nepal. Earlier, Nepal had been eyeing Jawaharlal Nehru Port in Mumbai.

Nepal and India have to amend the existing Rail Service Agreement between the two countries before Vishakhapatnam can be used. The agreement signed in 2004 permits freight train services between Kolkata/Haldia ports in India and Birgunj in Nepal via Raxaul for transit traffic. The two countries are also doing a comprehensive review meeting on the rail service agreement during the last week of November.

"We’ve already drafted the operating modality for the rail service regarding Vishakhapatnam port," said Sarad B. Rana, executive director of the Nepal Intermodal Transport Development Board.

According to Commerce Ministry officials, movement of transit goods through this port will be cost-effective despite being at a distance of 1394 km from the dry port at Birgunj.

Rana said, "This port can become a good alternative for Nepal given the congestion at Haldia port." At present, Haldia handles almost all of Nepal's seaborne trade. Haldia port handles about 40,000 TEUs of Nepal's container cargo a year.

One of the advantages of Vishakhapatnam port is that it can handle large vessels, whereas Haldia serves only feeder vessels. As of now, goods are taken by feeder vessels from Haldia port and transhipped in mother vessels either in Singapore or Colombo port.

"We don't have to face this hassle at Vishakhapatnam port," said Rana. "It will also reduce the ocean freight charge which is high at Haldia due to transhipment." According to Rana, Nepal's trade with south India will get a boost if Nepal starts to use this port.



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SKorea deports Nepali worker

The South Korean government's act of deporting a Nepali migrant worker and rights activist has evoked condemnation from human rights groups and liberal lawyers.

Korea Times reported on Sunday that the Ministry of Justice deported Minu, whose real name is Binod Moktan, to Nepal on Friday following arrest and detention at the Hwaseong Immigration Processing Center on Oct. 8. According to the newspaper, Minu had stayed here as an illegal alien for 17 years and seven months. The ministry pointed that Minu had attended political events on issues such as the free trade agreement, US beef imports and the crackdown on illegal alien protests.

While human rights groups and liberal lawyers denounced the deportation as “an act against humanitarian principles”, the ministry said the move was “to set an example of principle: abide by the rules.”

The Lawyers for Democratic Society claimed that Minu was deported after lawyers filed an appeal against his arrest. “The authorities didn't send a notice to his lawyers, which is clearly against the constitution,” the group said. The lawyers had demanded that the activist be released for his contribution to promoting migrant workers' rights and the value of multicultural society.

Norma Kang Muico, researcher of East Asia at the Amnesty International, said at a press conference last Wednesday, “It is true that Minu's residency was not legal, but he is not a criminal.” “What is important is that he had become a member of the Korean society. I hope the Korean government could have given a little credit for that.” The Migrant Trade Union also criticised the government for targeting Minu out of 'political interest'.

After arriving in South Korea on a tourist visa, Minu worked in restaurants. A video journalist and founding member of the Migrant Workers' Television (MWTV), Minu had disclosed social prejudice and discrimination against foreign workers. He had lectured at numerous universities and corporations to raise awareness for expats, especially those who are here under the employment permit system or without any legal visa.


DoC to step up market monitoring intensity

The Department of Commerce (DoC) has decided to expand its market monitoring and inspection of the service sector. It took the decision on Friday after it got a large number of complaints.

“DoC has decided to expand its market monitoring and inspection of the service sector,” said inspection officer Kamal Bahadur Thapa. There are dozens of complaints about the service sector, he added. Previously, DoC was monitoring the commodities sector also.


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“We will enter into all sectors that are associated with consumers,” he said. “DoC will enter the medicine sector as well soon,” he said, “We got complainta about date expired and substandard medicines being sold in the market.” DoC along with the Department of Medicine will start intensive monitoring and inspection campaign from next week, he added.

“Protection of consumers’ rights is DoC’s prime concern,” he said, “We will destroy date expired and substandard goods on the spot.” Moreover, DoC is planning to enter the industrial sector. It is doing homework for that with other agencies, he said.

DoC has continued market monitoring and inspection after Dashain and Tihar. It has destroyed large amounts of consumer goods from three shops — Sulabh Store, Palpali Store and Gautam General Store — in Buddhanagar last week. “We have also issued orders to register the shops within a week as many were found operating without registration,” he said.

The department also directed the shops to display price-list as per the Consumer protection Act. The act has listed 26 commodities as basic consumer goods.


Quota system hits Chitwan's poultry business

Poultry entrepreneurs´ decision to impose quota system in the supply of chicken to Kathmandu Valley has badly affected poultry industry in Chitwan, poultry farmers say.

In an attempt to exercise monopoly in supply of chicken to the Valley, entrepreneurs of Kathmandu and Dhading have been imposing quota system for the last couple of weeks.

Following the quota imposed by the entrepreneurs, supply of broiler chicken to the capital from the poultry hub has dropped to around 50 quintals from 150 quintals a day.

Entrepreneurs in Chitwan that meet almost 50 percent of total poultry demand of the Valley said they were also facing hassles in delivering poultry products to Pokhara and Butwal, which are key markets to the district´s poultry industry.

According to Janak Man Shrestha of Nepal Poultry Market Management Association, Chitwan supplies more than 50 percent of its total poultry production to other districts, including the capital. “Major poultry farms here are highly depended on the capital´s market to sell their products. The restriction in supplies has hardly hit Chitwan´s poultry sector,” said Shrestha.

Entrepreneurs in Kathmandu and Dhading districts have been keeping vigil at different parts of Prithvi Highway to ensure that only five tons of chicken enter the capital from Chitwan.


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"Our business will be severely affected if the imposition of quota system in the supply of chicken to valley, which is the largest market for our poultry products, continues," Bidhya Bhusan Dangol, proprietor of DG Poultry, one of the largest suppliers of chicken to the capital, said.


MARKET:

NEPSE slides 1.94pts

The Nepal Stock Exchange (NEPSE) on Sunday slipped 1.94 points. The NEPSE index settled at 599.22 points when trading closed.

All the sub-indices except for the hydropower sector were down. The hydropower sector gained 12.5 points.

The share market witnessed a total turnover of Rs. 60.38 million with 101,254 shares being traded.

Among the 17 commercial banks present on the trading floor, Standard Chartered Bank Ltd. posted the biggest growth with its stock rising by 15 points. Similarly, among the 13 development banks Gorkha Development Bank witnessed the highest increase of 18 points.

Among the 20 finance companies on NEPSE, Merchant Finance Company Limited was the highest gainer with an increase of 32 points in their share prices.

The top five winners on NEPSE were Merchant Finance Company with a 9.76 percent rise in its stock price followed by Kuber Merchant Finance, Chilime Hydropower Company, Patan Finance and NMB Bank.


Bankers fail to meet deadline

Securities Board of Nepal (Sebon) has reminded merchant bankers to submit their financial details, as the deadline for the same has already elapsed. According to the new Merchant Banker Regulation 2008, a merchant bank has to submit its financial details within three months of the end of the fiscal year. “We have received only one merchant banker’s financial details till date,” said Dhrub Timilsina, deputy director at the Sebon — the regulatory authority of the capital


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market. Till October 17 only Elite Capital had submitted its annual financial details. The rest have failed to meet the deadline.

There are 18 merchant bankers in the capital market. They act as issue and sales managers, share registrar, securities underwriter and portfolio manager. According to the earlier regulation, they were supposed to submit the annual reports within five months of the end of the fiscal year. “They may mixed up the deadlines,” Timilsina added. “If the reports could not be submitted within the period, the board may, on application of the merchant banker stating valid reason, thereof grant extension of three months,” states the new regulation. The board may impose fine for failure to submit annual report even during the extended period.

The board has made the disclosure mandatory as the capital market is expanding. The merchant bankers must also submit semi-annual report of their merchant banking business to the board within 60 days of the expiry of the semi-annual period. The board has also asked broker No 4 Arun Securities Services for an explanation as it failed to submit the annual financial details for the last fiscal year. According to Securities Act 2007, the brokers must also submit their annual financial details within three months of the end of the fiscal year. Only six submitted their accounts before deadline. Fifteen brokers submitted unaudited reports while four brokers did not submit the report.

“Three brokers have asked for extension,” Timilsina said, adding that the board could extend the deadline by three months if they give valid ground. Failure to submit the report even after that would incur a fine of Rs 5,000 to Rs 25,000, according to the Act.


Soaltee Hotel declares dividends

Soaltee Hotel has announced bonus shares and cash dividends. The 161st board of directors’ (BoD) meeting of Soaltee Hotel Ltd on Wednesday proposed 20 per cent bonus shares and 11.5 per cent cash dividend to its shareholders. The proposal is subject to approval from its annual general meeting (AGM), said the hotel that has decided to hold its 35th AGM on December 17.

There are only four hotels listed under the hotels sub-group in Nepal Stock Exchange (Nepse).

Hotel Yak & Yeti, Soaltee Hotel, Taragoan Regency (Hyatt) Hotel and Oriental Hotel (Radisson) have listed a total of 24,225,898-unit shares in the secondary market. But Soaltee Hotel has a paid-up value of Rs 10 per unit share whereas the remaining three have Rs 100 paid-up value per unit share. However, the secondary market has witnessed a regular trading of only two hotels — Soaltee Hotel and Oriental Hotel (Radisson). The shares of Taragoan Regency (Hyatt) Hotel also is being traded though, irregularly.


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Oriental Hotel (Radisson) has held its 12th annual general meeting on September 16. Both the shares of Oriental Hotel and Soaltee Hotel have been trading for around Rs 200 per unit.

Hotel Yak & Yeti that has listed 2,209,208-unit of shares with a face value of Rs 100 per unit, wants to be delisted from Nepse.Hotel Yak & Yeti could be delisted soon, according to Nepse. According to the rule, if a company does not pay annual renewal fee for three consecutive years, it can be delisted. The hotel has not paid its renewal fee for three consecutive years.

The Nepse board has also discussed the hotel’s request to be delisted but has not taken any decision.

Meanwhile, Kist Bank’s board of directors’ meeting has also proposed 1:1.5 rights shares and 3.5 per cent cash dividends from the profits of the fiscal yaer 2008-09. The youngest commercial bank —- that has upgraded from the Class-C finance company to Class A commercial bank — has planned its annual general meeting on November 14. The AGM will approve the BoD’s decision.

It will have its books closure for the AGM from October 30 to Novermber 14. The bank has planned to increase its paid-up capital to Rs 5 billion — the largest amount among commercial banks in the country. According to Nepal Rastra Bank (NRB), a commercial bank needs to have Rs 2 billion paid-up capital.

Meanwhile, Nepse again dropped below the 600-point mark to close trading on the first day of the week at 599.22 points. Nepse lost 1.94 points from the morning’s opening of 601.16 points.


GENERAL:

Govt tackling H1N1 doubtful

The Ministry of Health and Population seems ill-prepared to combat potential rise in the cases of pandemic Influenza A (H1N1) in the winter.

Dr Nirmal Kandel, national programme officer of World Health Organisation said WHO Headquarters had already written to MoHP asking for the amount of vaccines the country would require in emergency. “We have started doing the needful on our own in this regard. The government is yet to respond to the letter,” he told The Himalayan Times. However, Dr Yashobardan Pradhan, spokesperson for MoHP, expressed his ignorance about the letter.

“WHO will get 200 million doses of swine flu vaccine by January from manufacturing companies with the assistance of developed countries,” added Kandel. He said the headquarters will distribute the vaccines on priority basis, considering poverty, vulnerability of the cases and Human Development Index. He added that the


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US government had promised to provide 10 per cent of vaccine it produced to WHO. He said WHO would provide MoHP with Tamiflu whenever such a request was made.

“Nepal has a slim chance of getting swine flu vaccine right now,” said Pradhan, adding that the number of vaccine being manufactured was far below the demand. “After cases of swine flu were confirmed in Nepal, we intensified preventive measures to curb the spread of the disease,” said Dr Pradhan.

Dr Jeetendra Man Shrestha, deputy coordinator of Avian Influenza Control Project, said they hoped to get swine flu vaccine by November-end. The vaccine has been available in the developed countries since the beginning of October. He said they AICP would mobilise around 45,000 female community health and Red Cross Society volunteers to spread awareness about the disease. AICP has been collecting the samples of suspected swine flu patients from Chitwan, Kathmandu, Jhapa, Biratnagar and other areas.

“We are looking forward to getting the required set of equipment that WHO promised us earlier to treat severe cases of swine flu,” Shrestha said.


R&D_NewsBrief_26thOct

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