Issuu on Google+

R&D Economic Research & Business Development

Date: September 1, 2009

Highlights

Paramananda Jha's position as Nepal Vice President has become defunct from Monday with Jha's refusal to take oath in Nepali within the deadline given by the Supreme Court.

The government is in a ´wait and see´ mode over whether to continue or withdraw state facilities provided to Parmananda Jha, whose vice presidency is in controversy, until the Supreme Court decides on the review petition filed by him.

CPN-UML chairman Jhalanath Khanal on Monday said Paramananda Jha can no longer be the Vice President since he defamed the court.

The main opposition UCPN (Maoist) has concluded that ground is ripening for a mass movement as the ruling political parties have isolated the Maoists from the whole peace process.

An 18-member Chinese delegation led by Zhang Gaoli, a senior politburo member of the Chinese Communist Party, arrived in Kathmandu Monday. Senior UML leader and former Foreign Minister K.P Sharma Oli welcomed the delegation at the Tribhuvan International Airport.

Amidst much controversy, the Commission for the Investigation of Abuse of Authority (CIAA) has interrogated Inspector General of Nepal Police Ramesh Chand Thakuri over his alleged involvement in financial embezzlement while purchasing some 57,000 parka jackets for police.

Minister for Finance Surendra Pandey said the new budget has stressed women empowerment and gender equality.

“On September 1, third party insurance will become mandatory and so will compensation. Major supply routes will be spared of disturbances,” said Finance Minister Surendra Pandey.

A significant amount of bad loans have been recovered from willful defaulters in the last four months. The Willful Defaulter Action Monitoring Committee of the government has recovered bad loans worth Rs. 500 million during this period.

The government has selected 36,000 applicants to the youth self-employment programme as being eligible to receive bank loans.

The government has fixed new criteria to get funding from financial institutions under the youth self-employment programme. The criteria set by the Self-Employment Fund's board on Aug. 28 states that loans will be given on collective guarantee basis.

1


R&D Economic Research & Business Development

After seeing a huge potential for investment in Nepalgunj, regional development banks have starting opening offices in this area. Since these banks are popular with the urban population, they are seen competing with larger banks as well.

As Nepal´s service sector enjoyed a robust growth amid growing consumption, big manufacturers withered away under the heat of labor stir and bandas, failing badly to hold their position among the top taxpayers of the country in 2008/09 fiscal year.

A meeting of dairy stakeholders held at the Ministry of Agriculture and Cooperatives (MoAC) on Monday decided to increase the price of fresh milk by Rs 2.80, responding to mounting pressure from agitating farmers.

The scene inside the exhibition hall at Bhrikuti Mandap resembles to that of a dance party. As soon as you enter the hall, you find yourself drawn towards loud music and dance steps performed by beautiful damsels and stylish hunks. But do not think that you have mistakenly entered the wrong venue. You are indeed at the NADA AutoShow 2009, a five-day automobile show, which kicked off here on Friday.

Television viewers, who have been at the receiving end, can now heave a sigh of relief. For the government is finally preparing to allow DTH (direct-tohome) service in Nepal.

The downfall of Nepal Stock Exchange (Nepse) continued for three successive days on Monday, as confusion over possible arrival of promoters shares in secondary share market further prolongs.

Nepal Trans Himalaya Border Commerce Association (NTHBCA) and Sindhupalchowk Chambers of Commerce and Industry (SCCI) have accused the political parties of collecting various taxes on the import and export of goods from/to China via Tatopani point and thence on the way to Kathmandu.

Union for National Industry Trade and Entrepreneurs Nepal (UNITE) has urged the government to adopt a green revolution campaign for the next five years. In a press meet here today, UNITE demanded integrated development policy for agriculture and industries.

Squatters who had been staying in the huts constructed by cadres of the Unified CPN-Maoist in Simara have begun leaving the huts, citing security fears. They had been living in the dwellings constructed on the land belonging to Shanti Singh, sister of former king Gyanendra Shah, in Simara of Bara district for a year after UCPN-M cadres had seized the land and distributed it among them.

Three more persons arriving in Nepal from foreign countries have been diagnosed with Pandemic Influenza H1N1, swine flu, a health ministry official said. A 29-year-old male returning from Qatar and two males, 23 and 29-yearolds, returning from Saudi Arabia were found contracted with swine flu. 2


R&D Economic Research & Business Development

POLITICS: Nepal Vice President's position defunct from today From ANI Kathmandu, Aug 31: Paramananda Jha's position as Nepal Vice President has become defunct from Monday with Jha's refusal to take oath in Nepali within the deadline given by the Supreme Court. Rejecting the Supreme Court ruling that ordered him to take fresh oath in Nepali, Vice President Jha has declared that he will decide whether to retake the oath only if the Constitution is amended. "The situation is that the mother language of Nepalis people so far has not been respected by the previous decisions of the Supreme Court and the government level. Thus, I can think about the issue of oath-taking only after the government and the Constituent Assembly (CA) honours the mother languages," Nepalnews quoted him as, saying. He also criticized the Supreme Court's order to him to re-take oath in Nepali or else vacate his post. He called the Supreme Court's verdict 'prejudiced' and against the tenet and spirit of the interim Constitution and said it serves no purpose other than to start a "language war" as it is against the basic right of the people "to take oath in his own mother tongue". He also complained that some political parties supported the "anti-constitution" decision by staying quiet. Supreme Court had issued a verdict on August 25 ordering him to take oath in Nepali within a week and that failure to do so would render his position defunct. According to the court verdict, Jha cannot perform any duty of the Vice President and that he is not entitled to special security and privileges given to him as the Vice President. Source: www.dailyindia.com

Govt on wait-and-see mode over Jha; 3 Madhesi parties demand House resumption The government is in a ´wait and see´ mode over whether to continue or withdraw state facilities provided to Parmananda Jha, whose vice presidency is in controversy, until the Supreme Court decides on the review petition filed by him. Jha last week filed a review petition at the apex court seeking review of an earlier decision ordering him to take a fresh oath of office and secrecy in Nepali within seven days if he wants to retain his position as vice president. 3


R&D Economic Research & Business Development

Jha´s refusal to take the oath within the SC´s Sunday deadline has created widespread speculation on how the government will treat him now. From Sunday onwards Jha has reverted to being “vice president-elect.” Jha did not attend the oath-taking ceremony organized at the President´s office Sunday. President Dr Ram Baran Yadav, Prime Minister Madhav Kumar Nepal, ministers and others present on the occasion returned after Jha failed to appear. “The government has begun informal consultations at various levels about the possible steps to be taken, and especially whether or not to withdraw the facilities enjoyed by Jha,” a source at the Office of the Prime Minister and Council of Ministers (OPMCM) said, adding, “We will not take a decision until the court says something about Jha´s review petition.” The source hinted that the government is mulling replacement of the Nepal Army personnel deployed for his security with Armed Police Force personnel. Jha´s security was arranged by the army after he became vice president. “We cannot immediately withdraw all the security arrangements provided to Jha as incidents of bomb blast are taking place around his residence in recent days and there have been threats,” an OPMCM source told myrepublica.com. “The government is yet to decide what to do over Jha´s case but is engaged seriously to resolve the issue soon,” said Bishnu Rijal, press advisor of the prime minister. The source also informed that the government will not withdraw Jha´s salary and allowances. “Though the Madhesi parties have issued warnings, we see the possibility of freezing those facilities if the SC´s decision on the review petition does not come soon,” the source added. But officials at OPMCM informed that Jha cannot travel in a vehicle with the national flag following the expiry of Sunday´s deadline. Asked about the government´s possible move in Jha´s case, Attorney General Bharat Bahadur Karki said, “We will plead before the court rather than comment on the matter through the media as the case is sub judice.” Jha stays home A day after his refusal to take oath in Nepali as ordered by the apex court, Jha refrained from going to his office at Bahadur Bhawan, Kantipath Monday. “Yes, I stayed at home. What else do you need,” Jha told myrepublica.com, “Who are you to ask me whether I returned the vehicle and other facilities to the government?” Jha said he is waiting for the government´s formal letter before making his next move on whether to continue using state facilities or not. “I cannot decide myself to use or not use states facilities,” he said. Three Madhesi parties demand House resumption Three Madhes-based ruling parties have urged the main opposition Unified CPN (Maoist) to suspend its House obstruction to allow passage of a constitutional 4


R&D Economic Research & Business Development

amendment. Parliament has failed to deliberate on the proposal as the Maoists continue House obstructions demanding ´civilian supremacy´. The government registered the constitutional amendment proposal at parliament to address the Madhes-based parties´ demand for a provision allowing the President and Vice President to take their oath of office and secrecy in languages of their choice. As per the interim constitution, the head of state and the vice president should take their oath in Nepali. A meeting of the Madhesi People´s Rights Forum Nepal (Democratic), Tarai-Madhes Democratic Party and Sadbhavana Party on Monday decided to urge the Maoist party to help resume House business. “Urging the main opposition Unified CPN (Maoist) party to end the ongoing House obstruction, we request all the political parties and lawmakers in the Constituent Assembly (CA) to help pass the bill presented in parliament,” said a statement issued by the heads of the three parties-Bijay Gachchhadar, Mahantha Thakur and Rajendra Mahato. The three leaders also made a last ditch effort to persuade Jha Sunday morning. Stating that the country was heading toward a complicated conflict following the Supreme Court´s decision, the three parties have said that the need of the day is to immediately address voices raised by several linguistic communities demanding their linguistic rights. Source: www.myrepublica.com Date: 09/01/2009

Jha can’t remain VP: Khanal BIRATNAGAR: CPN-UML chairman Jhalanath Khanal on Monday said Paramananda Jha can no longer be the Vice President since he defamed the court. Talking to mediapersons at Biratnagar airport, Khanal said, “The Vice President has mocked the law and all Nepalis. It would have been better had if such a high profile personality had respected the court. The court’s verdict cannot be revised. I urge Jha to take fresh oath in Nepali language. If that happens, we can try to find a way out through consensus.” When asked id it would have any impact on the government if Jha did not take fresh oath in Nepali, Khanal said, the issue would not affect in the present structure of the government. “The government will serve its full term and Jha will not get any facility from the government in capacity of VP,” he said. — HNS

5


R&D Economic Research & Business Development

Prestigious posts meant nothing to them • Ganesh Man Singh, veteran democracy leader had declined the post of Prime Minister after restoration of democracy in 1990. • Former Chief Justice Bishwonath Upadhayaya declined to become a Constituent Assembly member even after the Council of Ministers appointed him. The then prime minister Girija Prasad Koirala had appointed him with an aim to make him lead the Constitutional Committee of the CA. He was not convinced of working independently at a time when the Maoists were imposing their authoritarian style of thinking. • Prime Minister Madhav Kumar Nepal had declined to be a member of the Commission that investigated the royal massacre in June 2001, fearing controversy. • In 2005, Bipulendra Chakraworti had declined the post of Supreme Court Justice. The Judicial Council again selected him for the same post six months ago but he declined to take the oath of office and secrecy. Source: The Himalayan Times Date: 09/01/2009 Ground ripening for mass movement: Maoists The main opposition UCPN (Maoist) has concluded that ground is ripening for a mass movement as the ruling political parties have isolated the Maoists from the whole peace process. A standing committee meeting of the UCPN (Maoist) Monday had deliberated on the latest political development including the loss suffered by the UCPN (Maoist) in the election of the Constitutional Committee of the Constituent Assembly. “The largest political party has been isolated from the whole process,” said a member of the standing committee. The party has reached the conclusion that it should intensify protest in the wake of the latest political development. The party has also concluded that the issue of Parmananda Jha, who is at the center of controversy after Supreme Court nullified his oath-taking in Hindi and he refused to retake oath in defiance of a court order, has put the government in trouble. “We hold the view that he should resign,” said Maoist Spokesperson Dinanath Sharma. The party has also reached the conclusion that Nepali politics is getting complex by the day and that the party should step up protest in the streets and in the parliament to overcome it. On Sunday, the Maoists announced a parallel government with party Vice President Dr Baburam Bhattarai as its coordinator and decided to intensify protest from the grassroots. The party had also decided to form local bodies to deliver justice and carry out development works at local levels. The standing committee meeting will continue for a couple of days and deliberate on the organizational and financial aspects of the party. The meeting will also hold discussions to find ways to implement the party´s code of conduct and carry out investigations based on the recommendations of the party´s disciplinary committee.

6


R&D Economic Research & Business Development

Source: www.myrepublica.com Date: 09/01/2009

POLICY: Chinese delegation arrives in Kathmandu An 18-member Chinese delegation led by Zhang Gaoli, a senior politburo member of the Chinese Communist Party, arrived in Kathmandu Monday. Senior UML leader and former Foreign Minister K.P Sharma Oli welcomed the delegation at the Tribhuvan International Airport. During its stay in Kathmandu, the Chinese delegation will hold series of high-profile meetings including with President Dr Ram Baran Yadav, Prime Minister Madhav Kumar Nepal, Nepali Congress president Girija Prasad Koirala, Maoist chairman Pushpa Kamal Dahal, UML chairman Jhala Nath Khanal and Foreign Minister Sujata Koirala. Chinese ambassador to Nepal Qiu Guohong had met Prime Minister Mahdav Kumar Nepal on Sunday to inform him about the visit schedule of the delegation. PM Nepal, who visited India August 18-22, is said to be planning a visit to Beijing "at the earliest". During his Delhi trip, Prime Minister Nepal had faced questions of "growing Chinese activities" in Nepal. On the other hand, China has repeatedly sought Nepal's commitment to prevent the movement of Tibetan exiles in Nepal. Sources say Gaoli will raise the Tibetan's issue with Nepali leaders while the Indian perspective over Nepal-China relations will also figure during the discussions. Source: www.nepalnews.com Date: 31 August 2009

IGP grilled over parka deal Amidst much controversy, the Commission for the Investigation of Abuse of Authority (CIAA) has interrogated Inspector General of Nepal Police Ramesh Chand Thakuri over his alleged involvement in financial embezzlement while purchasing some 57,000 parka jackets for police.

7


R&D Economic Research & Business Development

According to a highly-placed source at the CIAA, IGP Thakuri was interrogated last Friday. "He was asked in detail about the tender awarding and selection process for the purchase of the jackets," the source told myrepublica.com. The source said that IGP Thakuri defended himself saying every decision was taken with good intentions and as per the existing law. He claimed no embezzlement took place while awarding tender. "Our main purpose was to acquire quality jackets from a reliable firm and we concentrated on that. We did not intend to indulge in corruption," the source quoted IGP as saying. The source informed that Thakuri was grilled for about two and a half hours. He was asked about two dozen questions. "He appeared before the commission in national dress." "Investigation officials might have summoned him for regular investigations. I cannot make comment on the investigation," said Lalit Bahadur Limbu, the CIAA acting chief. CIAA had raided Nepal Police headquarters and seized important documents related to the purchase a month ago after complaints of irregularities worth Rs 50 million in the purchase of 56,059 parka. The procurement division at Nepal Police headquarters had awarded a tender worth Rs 100 million to Ananda Trade Concern (ATC) some two months ago, while denying the contract to the lowest bidder. Source: www.myrepublica.com Date: 09/01/2009

‘Budget for women empowerment’ Minister for Finance Surendra Pandey said the new budget has stressed women empowerment and gender equality. Inaugurating a seminar organized by the Centre for Economic Development and Administrative Research (CEDA) on Women for Inclusion, Good Governance and Nation Building, Minister Pandey said the state was working hard for women's development. He said the Constituent Assembly was a good example of inclusiveness. On the occasion, Minister Pandey said the budget has various provisions of inclusion of women like 17 percent on gender equality, 17 percent on education, 33 percent on the Tarai belt, Rs. 200 per month for two children from each Dalit family for five years, provision of scholarship worth Rs. 5,000 for Muslim and backward community women to study Community Medicine Auxiliary and Auxiliary Nurse Midwife for their development.

8


R&D Economic Research & Business Development

Minister Pandey stressed the need of special provisions in the new constitution for women's and marginalized class's access to the state mechanism. CEDA chairman Bharat Pokhrel presided over the function and adviser Mohandas Manandhar and coordinator Menuka Raj Bhandari presented papers on the condition of inclusiveness and steps to be taken in this regard for women's access to the state mechanism. Source: The Kathmandu Post Date: 09/01/2009

Third party insurance now mandatory Hopefully, highway blockades in the wake of accidents and resulting deaths will be a thing of past. “On September 1, third party insurance will become mandatory and so will compensation. Major supply routes will be spared of disturbances,” said Finance Minister Surendra Pandey. Vehicle owners can now get third party insurance for a little more than the usual rate they pay for their vehicle insurance. “Third Party Insurance is a liability cover purchased by an insured — the first party — from an insurer — the second party — for protection against the claims of another — the third party,” said Prof Phatta Bahadur KC, chairman of Beema Samiti. “Vehicle Insurance Rate Regulation-2009 will also benefit employees in transportation sector, passengers and common people,” KC said, adding that TPI will not be expensive but the deceased’s family or the relatives of the injured can claim a substantial amount. “The insurance company must pay within 21 days in case of death caused by accident and within two months in case of injury,” said Sharad Chandra Poudel, director general of Department of Transport Management. “On the demand of transport entrepreneurs CDOs will ensure settlement of any dispute, as in the past such incidents had caused law and order problems,” he said, adding that unlike in the past police will not impound the vehicle in case of an accident, if the owner shows the vehicle’s TPI papers Source: The Himalayan Times Date: 09/01/2009

9


R&D Economic Research & Business Development

BANKING:

Bad loans on road to recovery Banks recover Rs 500m from willful defaulters A significant amount of bad loans have been recovered from willful defaulters in the last four months. The Willful Defaulter Action Monitoring Committee of the government has recovered bad loans worth Rs. 500 million during this period. "Bad loans worth Rs. 500 million have been recovered after the committee started its work," said Hari Roka, coordinator of the committee. "The defaulters have shown commitment to pay back additional Rs. 1.5 billion." The then Maoist-led government had formed the committee in the second week of February and appointed lawmaker Hari Roka as its coordinator. The committee was formed in order to monitor and expedite legal action against wilful defaulters. Other members in the committee are deputy governor of Nepal Rastra Bank (NRB), joint secretary of the Finance Ministry, chairman of the Bankers Association and NRB´s chief of the Department of Supervision. The then government had decided to impose a ban on transactions of wilful defaulters' properties, restrict them from operating businesses and seize their passports. It had initiated action against at least 238 wilful defaulters who owe more than Rs. 10 million each. In the last four months, nine defaulters have started paying back their loans to their banks. Among them are Chandi Raj Dhakal, former president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), Jamim Shah, owner of Space Time Network, Prakash Chandra Shrestha of Dimpu Pinku Group and Bhaskar Sharma of Asian Fashion. Also in the list are Piyush Bahadur Amatya of the Fulbari Resort and Birendra Kanaudiya of Mahalaxmi Sugar Mills. Dhakal has paid Rs. 15 million to Rastriya Banijya Bank (RBB) and Rs. 30 million to Nepal Bangladesh Bank (NBB). He has made commitment to pay Rs. 15 million to RBB within the second week of October and has even submitted two post-dated cheques. Likewise, Jamim Shah has paid Rs. 19.2 million to RBB and NBB. Till date, Amatya of the Fulbari Resort has paid Rs. 112.6 million to Nepal Bank Limited (NBL) and Himalayan Bank. Kanaudiya, a former lawmaker, has paid Rs. 107.2 million to RBB. Owner of Mahlalaxmi Sugar Mill, Kanaudiya has been removed from the blacklist after he started repaying his bank loans to RBB. Along with Kanaudiya, eight defaulters have been delisted from the blacklist. Among them are owners of Bhairahawa-based Mahendra Sugar Mill and minor promoter of Luna Fertilizer Factory, Dibas Bikram Shah.

10


R&D Economic Research & Business Development

Mohan Bahadur Shahi, Gopal Bahadur Shahi and Prakash Bahadur Shahi of Himalayan Brewery have also been delisted after they paid back their loans including both principal and interest amounting to Rs. 110 million to RBB. Of late, the wilful defaulters have started contacting their banks after the government started tightening the screw against them. The other reason behind the defaulters showing an interest in restructuring their loans is the rising price of land. "The defaulters are now showing an interest to pay back their loans as the price of land has increased," said Roka. According to the Roka committee, 17 defaulters have submitted applications to the committee to restructure their loans. Likewise, eight defaulters have contacted RBB. Source: The Kathmandu Post Date: 09/01/2009

36,000 applicants to get loans The government has selected 36,000 applicants to the youth self-employment programme as being eligible to receive bank loans. More than half a million people had applied for financing which can be obtained without collateral under the programme. The scheme was introduced by the previous government led by the Maoists and it has been continued by the present administration. Officials said the 36,000 candidates had been selected from among 73,000 applicants who had been provided skill training as part of the programme. Those without training are not eligible to receive loans as per the new rules. "The government, however, also aims to provide loans to 5,000 rickshaw pullers this year to allow them to purchase new rickshaws under the programme," said Rana Bahadur Shrestha, joint secretary of the Finance Ministry who oversees the scheme. On Aug. 28, the board of the Youth and Small Entrepreneurs Self-Employment Fund formed under the chairmanship of the finance minister had decided to include rickshaw pullers as prospective receivers of loans under the programme. As per the decision of the board, the fund will seek applications from rickshaw pullers from mid-December for a month. The successful candidates will be provided loans and orientation from March 14 next year. The government has allocated Rs. 355 million for the programme this year. "The budget allocation is enough for only 42,000 applicants this year," Shrestha said. The loans to be given by financial institutions to bankable projects will be covered by insurance which will reduce the risk of non-recovery of such loans. Officials said the unsuccessful applicants were rejected because they lacked training.

11


R&D Economic Research & Business Development

"They can be considered for loans in the next fiscal year if they receive training," Shrestha said. "They should file a fresh application." President of the Nepal Bankers Association Sashin Joshi said that they were ready to provide loans to bankable projects on the basis of a tripartite agreement between borrowers, bankers and the government. He, however, said that most of the project proposals they had received during the last few months were not bankable. Source: The Kathmandu Post Date: 09/01/2009

New criteria for loans fixed The government has fixed new criteria to get funding from financial institutions under the youth self-employment programme. The criteria set by the Self-Employment Fund's board on Aug. 28 states that loans will be given on collective guarantee basis. Likewise, loans will be provided to those projects which have a confirmed market, a buy back guarantee or a provision of sub-contract. The latest decision has given financial institutions the freedom not to provide loans to all sectors. "They can make investments in particular sectors," said Rana Bahadur Shrestha, joint secretary of the Finance Ministry who oversees the programme. They will have to inform the Self-Employment Fund and the local chambers of commerce and industries about such sectors, the statement said. Likewise, priority should also be given to particular products in particular areas. Source: The Kathmandu Post Date: 09/01/2009

Dev banks increasing in rural Nepal After seeing a huge potential for investment in Nepalgunj, regional development banks have starting opening offices in this area. Since these banks are popular with the urban population, they are seen competing with larger banks as well. Bageshwori Development Bank has expanded its reach by inaugurating two branches in one day in Nepalgunj. Speaking at the inauguration, regional manager of Nepal Rastra Bank Narayan Dhamala said that regional banks should provide banking services to the rural 12


R&D Economic Research & Business Development

population in order maintain a healthy economy. He added that if these banks could attract the lower classes, then they could achieve their goal very soon. Among the other development banks that have launched here are Karnali Development Bank, Bhargav Development Bank, Rara Development Bank and Kakrebihar Development Bank. Malika Development Bank is one of the most popular banks that has been launched here in Nepalgunj. This bank has about 10 branches and counters in various parts of the country. Bankers said that even if it is hard to compete with commercial banks, they have targeted the lower and middle classes which has helped them to turn a profit. Khagendra Bahadur Saud, manager of Malika Development Bank, said, "Our bank has been making a profit for the last four years." He added, "After the end of the conflict, the people have started putting their trust in these kinds of financial institutions." Rajendra Poudel, managing director of Bageshwori Development Bank, said that people from rickshaw drivers to entrepreneurs have started depositing money in the bank. People here take loans mostly for agriculture, study and other purposes, he added. Source: The Kathmandu Post Date: 09/01/2009

BUSINESS & ECONOMY:

Telecom, banking players enjoy impressive jump; manufacturers lose out As Nepal´s service sector enjoyed a robust growth amid growing consumption, big manufacturers withered away under the heat of labor stir and bandas, failing badly to hold their position among the top taxpayers of the country in 2008/09 fiscal year. Large client base and rapid expansion drive enabled the state-owned telecom giant Nepal Telecom (NT) to consolidate its position as the largest taxpayer of the country during the year. The telecom giant contributed Rs 7.42 billion to the state coffer during the year, which was a 16 percent growth over what it paid in the previous year, shows a Ministry of Finance record. Spice Nepal, the private operator of Mero Mobile brand, marched into the second position from the third position in the preceding fiscal year, pushing down Surya Nepal, the regular second largest taxpayer, in 2008/09. Spice Nepal paid Rs 1.92 billion in taxes to the government during the year, up from Rs 627.10 million of the previous year.

13


R&D Economic Research & Business Development

Gorkha Brewery, the manufacturer of leading beer brands such as Tuborg, Carlsberg and San Miguel, also climbed up the ladder to the third spot from the fourth place, thanks to increased consumption. The subsidiary of the Khetan Group paid Rs 1.90 billion in tax in 2008/09, which was a rise of more than two-fold over what it paid a year earlier. Surya Nepal, the cigarette and apparel manufacturing giant, found itself in the fourth spot during the year, even though it paid Rs 1.26 billion in tax to the government -- a figure that was two-fold higher than the amount it paid a year ago. Interestingly, the positions from the 5th to 10th largest taxpayers of the country were occupied by the commercial banks. By contributing Rs 447.60 million in the state treasury, the country´s first private commercial bank, Nabil Bank, jumped up a position to the fifth spot, displacing Standard Chartered Bank, which paid Rs 438.90 million in tax in 2008/09, to the sixth spot. Nepal Investment Bank, with the contribution of Rs 381.20 million in state coffer, became the seventh largest taxpayer, whereas Himalayan Bank, state-owned Agricultural Development Bank and Everest Bank Limited secured the 8th, 9th and 10th spots. They had paid taxes of Rs 318.10 million, Rs 304.20 million and Rs 267.20 million respectively. Among the manufacturing players, Unilever Nepal was ranked third leading taxpayers. However, in the overall list, it was ranked as the 14th largest taxpayer of the country. Unilever Nepal had paid tax of Rs 222 million in 2008/09. “It is not surprising that the positions of taxpayers switched as per the way economy performed,” said a government source, referring to the negative growth of manufacturing sector and rosy growth of the service sector. Top players Nepal Telecom - Rs 7.42b Spice Nepal - Rs 1.92b Gorkha Brewery - Rs 1.90b Surya Nepal - Rs 1.26b Nabil Bank - Rs 447.60m Standard Chartered - Rs 438.90m Nepal Investment Bank - Rs 381.20m Himalayan Bank - Rs 318.10m Agricultural Dev Bank - Rs 304.20m Everest Bank - Rs 267.20m Source: www.myrepublica.com Date: 09/01/2009

14


R&D Economic Research & Business Development

Milk price up by Rs 2.80 per liter No further change in market price A meeting of dairy stakeholders held at the Ministry of Agriculture and Cooperatives (MoAC) on Monday decided to increase the price of fresh milk by Rs 2.80, responding to mounting pressure from agitating farmers. Following the decision, the farmers announced the withdrawal of their protest programs from Tuesday. However, the hike in the price of fresh milk will not affect market price of fresh milk. The meeting attended by representatives of farmers, MoAC officials, state-owned Dairy Development Corporation (DDC) and dairy regulator Dairy Development Board (DDB) took the decision to this effect. Farmers had been demanding price rise by Rs 4 per liter, in which they would get Rs 2.76 per liter. Talking to myrepublica.com after the meeting, Ajab Lal Yadav, chairman and general manager of the DDC, said the state-owned dairy producer would have to suffer a loss of 80 paisa per liter of milk. "Though we will make loss by implementing the decision, we are committed to implementing it," Yadav said. Dhaka Ram Aryal, chairman of Central Dairy Co-operatives, informed that farmers have withdrawn their protest programs after their demands were addressed. However, private dairy firms said the decision would severely affect the private players in the dairy industry as they would not be able to sustain themselves by purchasing fresh milk at the revised price. "We have to bear additional cost of Rs 4.30 per liter and we can collect only Rs 2 per liter. We will suffer a loss of at least Rs 2.30 per liter," said Ram Kumar Khadka, president of Private Dairy Association. The meeting also formed a committee, comprising dairy farmers and the representatives of the DDC and the DDB, to asses the problems of dairy farmers and make appropriate recommendation to the government on the price of milk. Dairy farmers across the country had been halting supplies and blocking highways to press the authorities concerned to address their 11-point demands, including the rise in the milk price of Rs 4 per liter, for the last few days. The farmers´ protest prompted the dairy firms to increase the quantity of powdered milk amid dipping supplies of fresh milk. A high-level committee, constituted by the MoAC, had recently recommended the government to increase the milk price by Rs 4 per liter, after concluding that the cost of milk production had increased by 33.83 percent over two years. Acting on the recommendation, the MoAC had directed the DDC and DDB to implement the recommendation. The DDC and private dairies had increased the price of milk by Rs 2 per liter on August 21 with Rs 1.26 per liter going to farmers´ pocket. Source: www.myrepublica.com Date: 09/01/2009

15


R&D Economic Research & Business Development

Wide options for buyers The scene inside the exhibition hall at Bhrikuti Mandap resembles to that of a dance party. As soon as you enter the hall, you find yourself drawn towards loud music and dance steps performed by beautiful damsels and stylish hunks. But do not think that you have mistakenly entered the wrong venue. You are indeed at the NADA AutoShow 2009, a five-day automobile show, which kicked off here on Friday. Some auto companies have been taking NADA Auto Show as an opportunity to unfold their best promotional campaigns. Sangita Thapa, a sale executive at the Yamaha stall, said the company had hired models and dancers for the show to draw visitors and involve them in various games. “This answers why we have been able to draw most of the visitors to our stalls,” Sangita added. She also said the Yamaha Fazer that costs around Rs 2 lakh has become the showstopper at the event. Yamaha´s stall features other bikes like Enticer, Gladiator, Alba and Fazer among others. Besides Yamaha, Honda and Hero Honda two-wheelers are also stealing the show. Lata Manandhar, an attendant at Honda stall, said Hero Honda CBZ X-treme with 150 cc displacement and 223 cc Hero Honda Karizma are doing wonders in the event. Hero Honda CB600F HORNET, a bike with sporty look and costing Rs 14 lakh, is another attraction, she added. Rajan Puri, manager Syakar Company, said both CBZ and CB600F bikes were drawing huge crowds. “We have already received four bookings for CB600F. This bike is specially brought from Italy for the show and we are planning to launch it in the market shortly.” The competition among motorbike dealers in offering best deals has put the customers in a tough situation. They are having hard time choosing best two-wheelers for them. Ramesh Nepal, who visited the show to buy a two-wheeler, was having difficulty in deciding whether to go for Honda or Suzuki bikes. “I like Stunner and Unicorn by Honda but B-King by Suzuki is also attractive. I am planning to bring my friends Monday to help me choose one,” he added. Suzuki has come up with three attractions -- B-King, GS 150R and Hayabusa. “We have on display both the best and the fastest bikes in the world”, said Raju Bhetwal Chhetri, chief general manager, The Ganesh Enterprises. B-King -- one of the best bikes in the world -- costs Rs 2.35 million and Hayabusa costs Rs 2.2 million. The show is not just only about bikes. Companies are offering best deals on fourwheelers too. Hyundai´s i20 and i10 and Skoda MAW´s Fabia and Octavia are some of the attractions in the show. Visitors are thronging to the stall as the companies are offering the vehicles at prices lower than their regular prices. Sonam Choden Lama, a businesswoman who was busy filing a requisition form for Santro GLS, said, “I am going for the vehicle as it is being offered at Rs 1,355,000, less than the regular price.”

16


R&D Economic Research & Business Development

Shyam KC, a businessman, was looking for offers to exchange his Maruti Swift ZXI. “I want to buy a modified vehicle. So, I have been visiting stalls that offer exchange deals,� KC added. Source: www.myrepublica.com Date: 09/01/2009 Government to allow DTH service Television viewers, who have been at the receiving end, can now heave a sigh of relief. For the government is finally preparing to allow DTH (direct-to-home) service in Nepal. “We have submitted a proposal for the fourth amendment to the National Broadcasting Regulations at the Ministry of Law and Justice last Friday. The amendment includes provision to permit Nepali service providers to operate the DTH service," said Under Secretary at the Ministry of Information and Communications Shailaja Regmi. The Ministry will permit Nepali service providers to set up their own port and provide DTH services in Nepal. "Some organizations including the Chaudhary Group have already evinced interest in providing DTH service in Nepal," Regmi, who looks after the Audio Visual Broadcasting Section at the Ministry, revealed. Executive Director of the Chaudhary Group Nirvana Chaudhary (CG) said his company was conducting a feasibility study for DTH service and would start the process in earnest once it gets the go ahead from the government. Regmi conceded that many homes were currently using Indian DTH services but promised that the government will not allow Indian DTH services in Nepal once the new law comes into effect. "The Indian DTH services have made their way into Nepal due to incompetence of the customs," said Regmi, adding, if Indian service providers were allowed, Nepali providers would face difficulties in competing with them," she added. Regmi also said that the Ministry is planning to regulate the foreign channels being aired in Nepal through the amendment in the regulations. "Currently, any channel can be aired in Nepal. After this amendment any foreign channel that wants its programs to be aired in Nepal has to get downlink permission from the government and pay certain annual fee," she said. Regmi, however, said that the fee would be reasonable and would not affect the subscribers. "We are not focusing on revenue generation. Instead, we want to control foreign channels from airing programs that would have an adverse impact on viewers," she stated. Advantages of DTH service

17


R&D Economic Research & Business Development

The majority of channels currently provided by the cable operators are useless to an average viewer. A subscriber of DTH service can select channels that he wishes to watch from a basket and has to pay only for the channels that he views. The picture quality and resolution of DTH is better than that currently provided by the cable operators. Signals are directly received by the dish at home from the satellites and are not distorted by any means. Furthermore, the cable services generally are dysfunctional during power cuts and a subscriber cannot watch the channels even if he has alternative power arrangement at home. With DTH, a subscriber can watch channels if he has alternative arrangement and don´t have to be dictated by load shedding schedule. Source: www.myrepublica.com Date: 09/01/2009

MARKET: Nepse's downfall continues The downfall of Nepal Stock Exchange (Nepse) continued for three successive days on Monday, as confusion over possible arrival of promoters shares in secondary share market further prolongs. The benchmark Nepse shed 10.12 points to close at 661.03 points at the end of Monday´s trading. Nepse, which is also considered as the indicator of investors´ confidence on share market, has lost 21 points in three days, as investors fear the arrival of promoters shares would flood the stock market, leading to further decline in share prices. During Monday´s trading, Banking and Hydropower groups saw their sub-indices drop by 13.26 and 18.12 points to settle at 679.4 points and 854.62 points respectively. Decline in the share prices of major banks such as Himalyan Bank, Nabil Bank, SBI bank and Standard Chartered Bank dragged down the sub-index of Banking group, the dominant player in the secondary share market. Similarly, Development Bank and Finance groups also saw their sub-indices dip by 4.42 points and 4.68 points to close at 694.89 points and 658.2 points respectively. Insurance and Others groups also suffered losses with their sub-indices going down by 0.19 points and 8.23 points to close at 640.91 points and 646.19 points respectively. Total market capitalization, total value of shares in the market, declined to Rs 459.87 billion from Rs 466.92 billion on Sunday. Source: www.myrepublica.com Date: 09/01/2009

18


R&D Economic Research & Business Development

GENERAL: Extortion slur on political parties Nepal Trans Himalaya Border Commerce Association (NTHBCA) and Sindhupalchowk Chambers of Commerce and Industry (SCCI) have accused the political parties of collecting various taxes on the import and export of goods from/to China via Tatopani point and thence on the way to Kathmandu. Countering the accusation, CA member from Sindhupalchowk Keshav Nepal said that these associations are to blame for such activities as they themselves are permitting the establishment of parallel associations and collecting money from entrepreneurs at the Tatopani border in turn. He also alleged that these organizations are not doing anything for the development of Sindhupalchowk district and that they do not include small entrepreneurs in their associations. NTHBCA president Durga Bahadur Shrestha reacted saying that his association has been inclusive in this matter and that it is the political party members who should be more responsible. He also said that till date some 5000 members are in the association which has been providing employment opportunities to many people. He added that due to the chungi (border point) tax, the total import has decreased from 75 per cent to 25 per cent at present state. “Apart from it, the syndicate system has not been removed from Tatopani customs point. That has added to the difficulties of the enterpreneurs,” said Shrestha. He said that the association is preparing various plans to develop Sindhupalchowk as a ‘special economic zone’ and that it has been doing business through TT Draft and Credit for small entrepreneurs. CA member Nepal said that the association should introduce a system of public auditing and bring transparency to its dealings. He pointed out that it was a matter of great concern as it involves the public more than it does the business entrepreneurs. He, however, admitted that many organizations, including police and many members of political parties are embroiled in this. Source: The Himalayan Times Date: 09/01/2009 UNITE calls for five-year green campaign Union for National Industry Trade and Entrepreneurs Nepal (UNITE) has urged the government to adopt a green revolution campaign for the next five years. In a press meet here today, UNITE demanded integrated development policy for agriculture and industries. “The government must focus on green revolution for the next five years,” said UNITE president Kamal Kharel. “The revolution must target surplus food production along with establishment of agro-based and herb-based industries,” he said. Without industrializing and commercializing the agriculture sector the country’s development cannot be sustained, he added. 19


R&D Economic Research & Business Development

Around 66 per cent of Nepalis are dependent on agriculture and the sector contributes 32 per cent to Nepal’s gross domestic production (GDP). Though agriculture sector reforms is a priority programme of the government it has allocated only a minimum budget for it — Rs 8.6 billion. “This is not enough, the agriculture sector must have at least 20 per cent of the budget,” Kharel said. The government has allocated Rs 100 million for the promotion of cash crops — tea, coffee, ginger, honey and fruits — in the budget 2009-10. “How can we promote these sectors with a meagre budget?” asked Kharel. “If the government wants development which would be tangible, it should target two sectors — green revolution and hydropower,” he said. According to UNITE, the government must adopt five and ten year plans for bringing a green revolution and energising the hydropower sector. Without electricity, the establishment of industries is impossible so the concentration must be in energy sector, said UNITE. Over 50 per cent of the development budget should be set aside for agriculture and hydropower sectors to build the foundations of industrialization, it urged. Source: The Himalayan Times Date: 09/01/2009 Squatters fleeing Maoist-built huts Squatters who had been staying in the huts constructed by cadres of the Unified CPNMaoist in Simara have begun leaving the huts, citing security fears. They had been living in the dwellings constructed on the land belonging to Shanti Singh, sister of former king Gyanendra Shah, in Simara of Bara district for a year after UCPN-M cadres had seized the land and distributed it among them. Squatters begun fleeing after the UCPN-M quit the government. “We had hoped that the Maoist-led government will provide the land to us. However, many squatters are leaving the huts fearing that they will be forced to flee due to the change in government,” said Dhan Bahadur Pariyar, a squatter. “Over 200 families of the squatters fled after the UCPN-M quit the government,” Pariyar said, adding, “Those who were living with the hope of getting the land are also planning to leave.” “The Maoists had assured us of providing land ownership certificates when they were leading the government. But nobody cares for us these days,” the squatters regretted. Some 400 families of squatters had been living on seven bighas of land. Their number has been dwindling, as the settlement is being attacked every night, claims Jagat Bahadur Magar, a squatter. No authority has heeded to their call for security, say the fleeing squatters. Two huts were gutted and three squatters were injured four months ago when an unidentified gang attacked the settlement. Protesting the incident, they had staged a sit-in erecting tents on Pathlaiya-Birgunj road demanding security. However, three squatters were killed when a truck ran over them. Devi Phuyal, 45, Seti Maya Pariyar, 11 and Sugam Moktan, 10, were killed in the incident. 20


R&D Economic Research & Business Development

Source: The Himalayan Times Date: 09/01/2009 Three more contract swine flu Three more persons arriving in Nepal from foreign countries have been diagnosed with Pandemic Influenza H1N1, swine flu, a health ministry official said. A 29-year-old male returning from Qatar and two males, 23 and 29-year-olds returning from Saudi Arabia were found contracted with swine flu. With this, the tally of swine flu cases in Nepal has reached 31. The remaining 28 persons have already recovered fully. There is no reason to panic yet, as the flu has not been found in the community, secretary at the health ministry Dr Prawin Mishra said. Source: www.nepalnews.com Date: September 1, 2009

21


R&D_NewsBrief_01Sept