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R&D Economic Research & Business Development

Date: December 11, 2009

Highlights

The President of the Republic, Dr. Ram Baran Yadav, who had refused the Chinese Invitation to participate in the Beijing Olympics, August 2008, too is flying to the preferred destination of Nepal’s political actors, India, February 15, 2009 The three-party taskforce formed to offer suggestions on ending the current impasse failed to yield any results on Thursday with the contending parties sticking to their respective stances. A standing committee meeting of the CPN-UML on Thursday decided to stand by the Prime Minister Madhav Kumar Nepal-led government and extend the party’s full support to it. Nepal Sadbhawana Party (Anandidevi) has sought clarification from the President´s Office over the public statement of president´s advisor Dr Surya Dhungel on the CA´s tenure. In various news reports and articles, Dr Dhungel had argued that the CA will automatically be dissolved should it fail to draft new constitution by May 28, 2010. He indirectly suggested that all powers will be vested on the President´s Office once the CA´s term expires. The meeting of the CPN (UML) politburo that resumed Thursday at the party headquarters in Balkhu after the gap of a week passed party chairman Jhala Nath Khanal's political document. The UN rights watchdog and top envoys in Nepal, including the US, the UK and European Union (EU), have flayed the government for failing to probe "forced disappearances" in the country during the decade-long Maoists'-led civil war, which ended in November 2006. Amid fears that increasing differences between the major political parties of Nepal could lead to the failure of the entire peace process, the Unified Maoists’ Party Chairman Pushpa Kamal Dahal has assured that his party will not let any force on earth jeopardize the peace process. UCPN-Maoist today objected to the Cabinet observation that the Maoists had violated the Comprehensive Peace Agreement. The party is also irked by the government’s failure to address the Kailali incident, as agreed with its leadership The Parliamentary Hearing Special Committee (PHSC) on Thursday unanimously approved seniormost Justice Anup Raj Sharma as the new Chief Justice (CJ). Nepal's inflation moderated to 9.3 percent in the first three months of the current fiscal year. The latest statistics of Nepal Rastra Bank (NRB) shows

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that year-to-year inflation has declined to 9.3 percent from 14.1 percent in the same period last year. Nepal Rastra Bank (NRB) on Wednesday communicated to the Finance Ministry that it could regulate the Employees Provident Fund (EPF) and the Citizens Investment Trust (CIT) in response to the ministry's request for its opinion. Failure of key commodities like woolen carpet, readymade garment and zinc sheets to withstand global competition and the ban imposed on export of pulses have caused country´s exports to decline by 17 percent over the first quarter of 2009/10. Indian Oil Corporation (IOC) has reacted strongly to Nepal Oil Corporation´s (NOC) recent talks with Essar Oil and has sought clarification on its expression of interest to import petroleum products from the new supplier. Minister for Labour and Transport Management Mohammad Aftab Alam has issued directives to the concerned outsourcers to send industrial trainees (ITs) to Japan. As per the directives, outsourcing agencies are responsible for all processes ranging from marketing for Nepali trainees to sending ITs to bringing them back to Nepal - under the Japan International Training Cooperation Organization (JITCO) system. The first quarter of the current fiscal year saw poor export business with a fall by 16.8 per cent against an increase of 25.9 per cent in the same period last year, according to the current macroeconomic situation, based on first three month’s data of the current fiscal. Deputy Prime Minister and Foreign Minister Sujata Koirala cancelled her Copenhagen trip at the last moment, as the number of Nepali participants in the ongoing Copenhagen Climate Change Conference has surged to almost 600. Prime Minister Madhav Kumar Nepal on Thursday called on rights defenders and members of civil society to help the government nab ‘powerful’ criminals. Outgoing Chief Justice (CJ) Min Bahadur Rayamajhee on Wednesday expressed serious concerns over the security of judges and judicial staff with Prime Minister Madhav Kumar Nepal. UN High Commissioner for Human Rights Navi Pillay has cautioned world leaders that women, indigenous communities and other minority groups in all regions of the world continue to face discrimination, and are excluded from decision-making process. The Department of Food Technology and Quality Control has stated that instances of adulteration in processed water, milk, oil and instant noodles have increased significantly. The Kalanki area has been facing a severe water shortage since the last five months, with water supply being ensured only once a week for an hour. 2


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Despite the traffic situation in several parts of the Capital improving due to the placement of concrete traffic dividers, their mismanagement has created an equal number of problems.

POLITICS: Refusing Chinese invitation Nepal President set for India visit The President of the Republic, Dr. Ram Baran Yadav, who had refused the Chinese Invitation to participate in the Beijing Olympics, August 2008, too is flying to the preferred destination of Nepal’s political actors, India, February 15, 2009. It was reported in the media after the Chinese invitation was forwarded to the president, that the Indian ambassador to Nepal, Rakesh Sood immediately sneaked into the Presidential Secretariat and somehow or the other pressed the President to reject the Chinese invitation. The Rejection of the President to visit the northern neighbor, with whom Nepal shares equally close familial, cultural and historical ties, was taken as India’s diplomatic victory over China in Nepal by the media. Be that as it may, the three day visit of the Ceremonial Head of the State to India will be the first after Nepal’s 240 Years Old Hindu Monarchy abolished by Nepal’s political parties with the support of the former rebel party the Maoists which was planned with the tacit support of the Indian establishment. It is in this light, say Nepal’s India experts, it was necessary for the Indian mandarins to invite the President of Nepal at least to provide name-sake legitimacy to the gifted Republican order. Equally true is the fact that with Nepal’s haughty yet pro-India monarchy sidelined, thereafter the emergence of a completely unexpected scenario wherein India had been the sole loser in Nepal, was it necessary for India to legitimize the non-functioning Republican Order? Dr. Yadav during his stay in India will meet the Indian ceremonial President Mrs. Prathiba Patil, Vice President Hamid Ansari, Prime Minister Dr. Man Mohan Singh and Indian National Congress Party Chair Woman Mrs. Sonia Gandhi. Dr. Yadav immediately after his election as the president of Nepal was declared as Nepal’s first President of the Indian origin by Indian media. Dr. Yadav will also visit Haridwar, the famous Hindu pilgrimage site in India. Yadav will return home to participate in the Democracy Day celebrations, February 19, 2009.

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However, with the Maoists’ Party, the largest in the people’s elected Constituent Assembly at war with the President for his unconstitutional decision, May 3, 2009, and at a time when the President position is itself in a limbo, his visit to India will have no meaning. Source: www.telegraphnepal.com Date: 2009-12-11

Three-party taskforce meet turns into fiasco The three-party taskforce formed to offer suggestions on ending the current impasse failed to yield any results on Thursday with the contending parties sticking to their respective stances. “We are continuously working on the wording of the joint resolution motion and you can guess how complex the task is,” said taskforce member from the CPN-UML Bharat Mohan Adhikari after the meeting on Thursday. The taskforce, comprising two members each from the UCPN (Maoists), the UML and the Nepali Congress (NC), deliberated on the wording of the joint resolution motion, but failed to reach consensus. Top leaders of the three major parties on Monday had formed the taskforce to offer suggestions on resolving the political deadlock and the issues surrounding the Dudejhari firing within two days. The deadline set earlier for the taskforce to make suggestions expired on Wednesday. On Thursday, the taskforce members also discussed if the president should be urged to address the nation. “As the country is in trouble, we can appeal to the president, who is the center of people´s faith, to address the nation. But we cannot dictate the content of his speech,” said Adhikari. However, taking such a decision would not fall into the jurisdiction of the taskforce, he added. According to the leaders, the taskforce member will discuss the issue with their party leaderships and sit again on Friday try to reach consensus. “But we are absolutely against dictating the content of the president´s speech,” said Arjun Narsingh KC, taskforce member from the NC. As per the agreement reached earlier, the top leaders will sit together to deliberate on the recommendations made by the taskforce. Source: www.myrepublica.com Date: 2009-12-11

UML stands by govt

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A standing committee meeting of the CPN-UML on Thursday decided to stand by the Prime Minister Madhav Kumar Nepal-led government and extend the party’s full support to it. The party also endorsed the amendment proposal of the political document presented by party Chairman Jahalanath Khanal. “There is no alternative to the incumbent government led by Prime Minister Nepal,” Chairman Khanal told the politburo meeting during the question-answer session on his political dossier on Thursday. Source: www.ekantipur.com Date: 2009-12-11 President's aide stirs controversy Nepal Sadbhawana Party (Anandidevi) has sought clarification from the President´s Office over the public statement of president´s advisor Dr Surya Dhungel on the CA´s tenure. In various news reports and articles, Dr Dhungel had argued that the CA will automatically be dissolved should it fail to draft new constitution by May 28, 2010. He indirectly suggested that all powers will be vested on the President´s Office once the CA´s term expires. Issuing a press statement, NSP (A) Chairperson Sarita Giri said Dhungel´s statement about the Constituent Assembly was ´condemnable´ and ´punishable´. She also sought resignation of Dr Dungel, arguing that a person enjoying salary and allowance from the state can not misinterpret constitutional provision. Giri argued that the preamble of the Interim Constitution 2063 BS clearly spells that the present constitution remains valid till the new constitution is drafted and that the CA is authorized, if it deemed necessary, to extend its term for drafting the new constitution. The NSP (A) claimed none other than the CA itself has the constitutional right to dissolve the CA. The party also said it has already registered an amendment bill in the CA demanding extension of the CA term by another six months. Source: www.myrepublica.com Date: 2009-12-11 UML politburo endorses Khanal's political dossier The meeting of the CPN (UML) politburo that resumed Thursday at the party headquarters in Balkhu after the gap of a week passed party chairman Jhala Nath Khanal's political document.

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The politburo passed the document after the party chairman answered the questions raised by the politburo members during the debate. He had presented his political dossier at the start of the meeting nearly three weeks ago. Speaking at the meeting, Khanal pledged to include the suggestions made by the politburo members in the document later on, leaders said. He also reiterated that said the UML should stand in favour of a national government, but didn't reiterate his earlier call that the party should be ready to give up the government leadership if such a move paves the way for such a government. He further said the party should maintain balanced approach towards the Maoists by opposing their extremist activities and accepting the positive moves. Meanwhile, the politburo meeting is to take up the 'correction paper' presented by party's influential leader KP Sharma Oli and a note of dissent tabled by vice chairman Bam Dev Gautam. Earlier, some politburo members had suggested Khanal to withdraw his 'imbalanced' political report which tends to side with the Maoists. Khanal refused to do so, but hinted that amendments could be made in it. Politburo members close to Oli had sharply criticised Khanal's report for saying that the party should be prepared to leave the government if that paves the way for a consensus government. This is one of the longest running meetings of any body of the party in recent times. Source: www.nepalnews.com Date: 2009-12-11

No force can derail Nepal Peace Process: Maoist leader Prachanda Amid fears that increasing differences between the major political parties of Nepal could lead to the failure of the entire peace process, the Unified Maoists’ Party Chairman Pushpa Kamal Dahal has assured that his party will not let any force on earth jeopardize the peace process. Mr. Dahal made these remarks addressing a Far-West Regional Fair in Dhangadi of Kailali District, December 10, 2009. “The Maoists want institutionalize peace in the country,” Dahal also said. Nevertheless, Dahal also alleged that the reactionaries and status quoists were conspiring to dissolve the Constituent Assembly. He continued saying, the “Constituent Assembly that is there due to the sacrifices made by the people will not be allowed by the Maoists’ party to go in vain”.

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He accepted that the country stood in a cross road of uncertainty and opportunity at the moment. “There is also the possibility that the country may have to face a grave accident. Whether the constitution drafting process will accomplish its task on time? There are several confusions at the moment”, Dahal said. Interestingly, Mr. Dahal at the inauguration ceremony was welcomed by a Garland weighing 20 Kilograms. The organizers revealing the secret behind ‘20 KGs’ said that they had forwarded 21 Demands to the erstwhile government led by Mr. Dahal himself…however, since then just one demand has been addressed from the list of 21 and thus we wanted to remind him that 20 demands are yet to be addressed by the government. Source: www.telegraphnepal.com Date: 2009-12-11 Govt decision irks Maoists UCPN-Maoist today objected to the Cabinet observation that the Maoists had violated the Comprehensive Peace Agreement. The party is also irked by the government’s failure to address the Kailali incident, as agreed with its leadership. The meeting of the central office bearers of the party, held at chairman Pushpa Kamal Dahal’s residence in Naya Bazaar, today refuted the cabinet decision. Vice-chairman Narayan Kaji Shrestha said the meeting had decided to oppose the cabinet decision and discuss the issue with Prime Minister Madhav Kumar Nepal. “The decision has violated the agreement made by PM Nepal with chairman Prachanda, regarding the Kailali incident,” he said. UCPN-M has also decided to resolve the conflict over the boundaries of various autonomous states. Despite protests from various quarters, Shrestha said the meeting decided to go ahead with the plan of declaring autonomous states. Source: www.thehimalayantimes.com Date: 2009-12-11

POLICY: Sharma unanimously approved for CJ

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The Parliamentary Hearing Special Committee (PHSC) unanimously approved Anup Raj Sharma’s recommendation for the post of Chief Justice on Thursday. The PHSC queried Sharma about his future strategies especially regarding transparency, corruption and delay in justice process for over an hour before approving him. The Constitutional Council has recommended Sharma as the successor of incumbent Chief Justice Min Bahadur Rayamajhi, who is retiring on December 12. Sharma is the senior most justice at the Supreme Court. The lawyer-turned judge has the reputation of passing bold verdicts, especially during the King´s direct rule, and holds a clean image. He will be the first Nepali lawyer to assume the top judicial post. Though former Chief Justice Hari Prasad Pradhan was also a lawyer, he was an Indian national. Sharma joined the Supreme Court on January 5, 2004 as a permanent judge. Source: www.myrepublica.com Date: 2009-12-11

BANKING: Inflation drops to 9.3pc in Q1 Nepal's inflation moderated to 9.3 percent in the first three months of the current fiscal year. The latest statistics of Nepal Rastra Bank (NRB) shows that year-to-year inflation has declined to 9.3 percent from 14.1 percent in the same period last year. However, this won't give any relief to consumers as prices of food and beverages have increased by 15.6 percent which was higher than the rate at which they increased last year. The decline in inflation is due to an easing of the price of non-food items and services. Of the items under the food and beverages group, the price index of sugar and sugarrelated products increased a whopping 42 percent as compared to a 39.5 percent increase in the same period last year. Likewise, vegetable and fruit prices rose by 37.5 percent against last year's decline of 10.1 percent. Similarly, the price indices of pulses as well as meat, fish and eggs increased 25.1 percent and 22.7 percent respectively. The central bank data reveals that NRB purchased Indian currency worth Rs. 30.31 billion by selling US$ 630 million in the review period. An expanded trade deficit with India led to a growth in the purchase of Indian rupees during the review period. The expansion of domestic credit in the first three months of the current fiscal year was lower than that of last year. Domestic credit expanded by 5.4 percent compared to

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a growth of 6.8 percent in the previous year. The slower growth in domestic credit is mainly due to a slower growth in commercial banks' claim on the private sector. The growth in commercial banks' credit to the production sector is lower than in the corresponding period last year. In the review period, such credit increased by 3.3 percent compared to 8.3 percent in the previous year. Total loans and advances by commercial banks increased by 6.5 percent (Rs. 33.86 billion) in the review period. Due to the higher growth in loans and advances, the liquid fund of commercial banks has declined by 19 percent. The NRB data shows a gloomy picture of foreign trade. In the first three months, exports fell by 16.8 percent in contrast to an upsurge of 25.9 percent last year. Source: www.ekantipur.com Date: 2009-12-11

NRB ready to regulate EPF, CIT Nepal Rastra Bank (NRB) on Wednesday communicated to the Finance Ministry that it could regulate the Employees Provident Fund (EPF) and the Citizens Investment Trust (CIT) in response to the ministry's request for its opinion. An NRB source said that the Finance Ministry had asked it about three months ago to regulate the two institutions which have remained unregulated despite huge resource mobilisation. According to Ramesh Bhattarai, administrator of EPF, it has mobilised about Rs. 80 billion. Similarly, the CIT has mobilised Rs. 16 billion. Both have remained selfregulated so far. According to the EPF, about 50 percent of its money has gone to contributors, 35 percent is in fixed deposits, 8 percent in government bonds and 5 percent in project loans. The CIT holds deposits of the general public and government employees. It provides certain benefits to the public by investing the money in corporate shares, debentures and government securities. An official at the ministry however said that there had been informal talks about regulating these institutions by the NRB The NRB official said that regulating the two institutions was simple given their simple form of transactions. "We can regulate them with separate directives, and we should not invest much effort for regulating them," he said. He, however, added that that the government should make the EPF and CIT boards decide to be regulated by the central bank to avoid any legal complications in the future. However, the EPF is not happy about having NRB as regulator. Bhattarai said that NRB was not the appropriate institution to regulate a social security institution like the EPF as the nature of financial institutions and EPF was completely different.

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"Financial institutions invest for a short period, but we invest in long-term projects," he said. "NRB has prevented cross-holding for financial institutions, and preventing us from cross-holding may be problematic for us." He, however, added that the EPF would welcome the formation of a separate body to regulate the social security institution while admitting that they needed prudent regulation despite being self-regulated well. He also said that without a change in the NRB Act or EPF Act, the central bank could not regulate the EPF as both acts lack a provision regarding the central bank's regulating them. "The EPF's board decision is not sufficient for NRB to regulate us," he added. However, CIT manager Sushil Aryal was supportive of the idea of the central bank regulating the CIT, but NRB should give different treatment to financial institutions and the CIT as their nature of work differed. Although the Citizen Investment Trust Act 1990 has provisioned that the CIT would have to comply NRB directions, there are no detailed provisions regarding how NRB should regulate it. The government had made a provision in the budget two years ago about letting the central bank regulate these two institutions, but it did not materialize. The ministry official said that the proposal went to the cabinet where it was cancelled. Source: www.ekantipur.com Date: 2009-12-11

BUSINESS & ECONOMY:

Exports drop 17 pc as key commodities fail Failure of key commodities like woolen carpet, readymade garment and zinc sheets to withstand global competition and the ban imposed on export of pulses have caused country´s exports to decline by 17 percent over the first quarter of 2009/10. As a result, Nepal´s exports for the period landed to about Rs 16 billion, says the latest Nepal Ratsra Bank (NRB) report. Nepal´s exports in the same period last year was well over Rs 19 billion. Of the total exports, export to India alone declined by 11.4 percent to Rs 9.22 billion during the period. Concerned business attributed the drop to imposition of countervailing duty by India, which affected exports of readymade garments, and also standards related and non-tariff barriers. Exports to other countries too plummeted by more than 23 percent to Rs 6.7 billion, as export of pulses, the largest exports recorded for the period, dropped and woolen

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carpets, readymade garments and tanned skin failed to retain markets amid eroding competitiveness. Country´s imports, however, soared by more than 30 percent and touched Rs 89.71 billion during the period. Nepal mainly recorded a sharp rise in imports of MS wire rod, sanitary wares and insecticides from India and gold, electrical goods, crude soybean oil and medicines, which shot up import of goods from India by over 25 percent and from third countries by 37 percent. As a result of sharp rise in imports compared to exports, country´s trade deficit widened by more than 48 percent to touch Rs 73.33 billion. The central bank has attributed the rising trade deficit to increased consumption on the back of soaring remittances inflow and also poor performances of key industries in India and US markets. According to the central bank, the country received over Rs 51 billion as remittances from Nepalis working abroad, up 11 percent over what was received in the same period last year. The report further notes that inflation moderated 9.3 percent in midOctober as against 14.1 percent in the same period last year. Still the prices of food and beverages rose by 15.6 percent during the period. Of the food items, prices of sugar and sugar-related products soared by a whopping 42 percent, prices of vegetables and fruits increased by 37.5 percent and the prices of pulses increased by over 25 percent. Source: www.myrepublica.com Date: 2009-12-11

IOC quizzes NOC on Essar talks Indian Oil Corporation (IOC) has reacted strongly to Nepal Oil Corporation´s (NOC) recent talks with Essar Oil and has sought clarification on its expression of interest to import petroleum products from the new supplier. NOC received the heat from the sole exporter of fuel to Nepal when a visiting highlevel IOC team met with its top officials on Wednesday. Essar had approached the government and NOC last month to import fuel from it as well. If NOC said yes, it will break decades-long monopoly of IOC in the Nepali petroleum market. IOC presently exports fuel worth about Rs 50 billion a year to Nepal. The IOC team, including Deputy General Manager (Commercials) from Mumbai and General Manager (Accounts) and accounting officer from IOC Kolkata, is in Nepal Nepal to reconcile the financial statements of the two business partners.

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NOC Chief Digambar Jha, talking to Republica, said he had had meeting with the team, but refused to disclose its details. However, sources close to NOC said that IOC DGM Rahul Bhardwaj, during the meeting, asked for reasons behind NOC showing interest to induct new supplier. He also sought clarification on NOC´s intent to divert the business away from IOC. IOC has remained the sole exporter of fuel to Nepal for more than three decades. However, Nepal has not received adequate supplies from it of late due to various technical reasons. Moreover for fuel security and introducing reforms in the sector, experts have long been pushing the government to open the sector and induct new suppliers. In this context, when top officials from Essar Group that operates the second largest petroleum refinery in India approached it, NOC had responded positively to their business proposal. The NOC management had suggested them to forward specific business, technical and financial proposals, including prices, mode of delivery and technical specification of the products, so that NOC could discuss the matter with the higher authority. During the meeting with Essar, NOC Chief Jha had even stated that they could instantly pledge it an order of much as 50 percent of its total diesel imports, if its price and product is competitive and if it is ready to supply fuel from bordering areas, among other conditions. Since diesel makes 60 percent of NOC´s total business, Essar would instantly take away 30 percent of IOC business in Nepal, if NOC started business with Essar. Source: www.myrepublia.com Date: 2009-12-11

MoLTM instructs outsourcers to send ITs to Japan Minister for Labour and Transport Management Mohammad Aftab Alam has issued directives to the concerned outsourcers to send industrial trainees (ITs) to Japan. As per the directives, outsourcing agencies are responsible for all processes ranging from marketing for Nepali trainees to sending ITs to bringing them back to Nepal under the Japan International Training Cooperation Organization (JITCO) system. The directives also entitle outsourcing agencies to take a maximum of Rs 50,000 for their service fees including language course and medical examination. JITCO is a priority programme of MoLTM for the fiscal year 2009-10. The ministry had selected 172 outsourcing agencies including Federation of Nepalese Chambers of Commerce (FNCCI) for sending IT’s to Japan in May.

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JITCO has opened 64 occupation and 120 courses for industrial trainees, which includes agriculture, fisheries, electronics, textile, construction, tailoring and others. Under the process, industrial workers having two years experience can be eligible for industrial trainees for one year which will later turn to industrial internship for two years. Under JITCO, trainees can earn monthly allowance of Rs 50,000 while interns earn more than Rs 100,000 a month. Source: www.nepalnews.com Date: 2009-12-11

MARKET:

Forex reserve, exports drop; situation grim The first quarter of the current fiscal year saw poor export business with a fall by 16.8 per cent against an increase of 25.9 per cent in the same period last year, according to the current macroeconomic situation, based on first three month’s data of the current fiscal. Export to India declined by 11.4 per cent against a rise of 3.2 per cent in the same period last fiscal year. Exports to other countries also plummeted by 23.2 per cent as against a rise of 70.6 per cent in the same period the preceding year. The report attributes the decline in exports to India to the drop in exports of readymade garments, zinc sheet, footwear, thread and marble slab. “Exports to other countries fell due to decline in export of pulses, woollen carpets, readymade garments, tanned skin and readymade leather goods,” Nepal Rastra Bank (NRB) said. However, imports increased by 30.4 per cent compared with a growth of 32.8 per cent in the corresponding period of the last year. While imports from India rose by 25.2 per cent compared to a growth of 20.9 per cent, imports from other countries rose by 37 per cent compared to a growth of 51.8 per cent in the same period last fiscal. . Overall balance of Payment (BoP) registered a deficit of Rs 19.45 billion in contrast to a surplus of Rs 7.70 billion in the same period last fiscal. “The current account also posted a deficit of Rs 11.38 billion in the first quarter of this fiscal year against a surplus of Rs 4.31 billion in the same period of the last year,” the central bank saidt. The current account deficit is attributed to expansion in trade deficit by about 48 per cent and the decline in net income by 15.6 per cent.

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Under transfers, while grants fell by 21 per cent, workers’ remittances increased by just 11.1 per cent in comparison to a whopping rise of 67.3 per cent in the same period of last year. Gross foreign exchange reserves stood at Rs 249.10 billion in mid-October 2009, a drop by 11 per cent compared to the level as at mid-July 2009. Such reserves rose by 8.5 per cent in the corresponding period last year. “In US dollar terms, gross foreign exchange reserves declined by 5.7 per cent to $3.38 billion in mid-October 2009. In the same period last year, such reserves had gone down by 3.9 per cent. The current level of reserves is sufficient for financing merchandise imports of 8.5 months and merchandise and service imports of 7.2 months only,” the report said. However, the budget deficit stood at Rs 90.5 million compared with a deficit of Rs 2.9 billion in the same period last year due to a high growth of revenue collection. The total government spending increased by a whopping 35.5 per cent to Rs 39.7 billion against a decrease of 2.4 per cent in the same period last year. “Recurrent expenditure increased by 54 per cent to Rs 28.5 billion against a decrease of 13.2 per cent in the same quarter last year. Meanwhile, capital expenditure increased by 73.3 per cent to Rs 1.93 billion in contrast to a decline of 60.8 per cent in the same period last year. Source: www.thehimalayantimes.com Date: 2009-12-11

GENERAL:

Sujata to miss climate meet Deputy Prime Minister and Foreign Minister Sujata Koirala cancelled her Copenhagen trip at the last moment, as the number of Nepali participants in the ongoing Copenhagen Climate Change Conference has surged to almost 600. Currently, Koirala is attending the 12th Bay of Bengal Initiative for MultiSectoral Technical and Economic Cooperation (BIMSTEC) ministerial meeting in Myanmar. In addition, Nepal still faces a dilemma whether or not to support the Political Document in Copenhagen that will emerge as the declaration and will be a legally binding agreement. Foreign secretary Madan Kumar Bhattarai will also not be attending the meeting. Earlier, the Cabinet decided that Koirala would accompany Prime Minister Madhav Kumar Nepal with six other ministers — Finance, Culture and Constituent Assembly, Environment, Science and Technology, Forest, and Tourism.

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According to the ministry, till Thursday, the list of participants accompanying the prime minister had crossed 75. Citing the huge number of participants from a poor country like Nepal, Koirala decided to cancel the trip, said her personal aide Bharat Sapkota. We are still receiving the names of participants, said a protocol officer at the ministry “Nepal’s participation has turned into a Gai Jatra. The Danish Embassy in Kathmandu also cautioned the ministry that such a huge participation could create accommodation problems.” With the global jamboree kicking off on Monday, participants from across the world are gathering in Copenhagen and the Danish government has urged people to provide accommodation to the participants since all rooms in hotels across the city are already booked. Ministry officials however said the government was bearing the cost of only a few participants and donor agencies and other INGOs would be covering the cost for the remaining participants. “The donors and INGOs will however slash the funding they provide to the government of Nepal,” an official said. “If the summit expresses concern over the melting glaciers of the Himalayas and is ready to come up with the ways address the issue, Nepal will accept the declaration,” a senior official said. Source: www.ekantipur.com Date: 2009-12-11

PM: Help nab powerful criminals Prime Minister Madhav Kumar Nepal on Thursday called on rights defenders and members of civil society to help the government nab ‘powerful’ criminals. Addressing a programme organised by National Human Rights Commission (NHRC), Nepal said the government was committed to bring perpetrators involved in serious human rights violation, including murderers of journalist and the general public to book. “But the government alone will not be to bring them to justice as they are very powerful,” said Nepal. But he did not disclose who those powerful criminals were. However, Nepal clearly hinted that UCPN (Maoist), which has been accused of protecting some of the members involved in murder, torture and disappearance. Nepal also said the government was committed to implementing the recommendations of NHRC and it has allocated necessary funds in this regard. He informed that establishment of Commission on Disappearance and Peace and Reconciliation Commission had been given top priority. Source: www.ekantipur.com Date: 2009-12-11 15


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CJ seeks security for court staff Outgoing Chief Justice (CJ) Min Bahadur Rayamajhee on Wednesday expressed serious concerns over the security of judges and judicial staff with Prime Minister Madhav Kumar Nepal. The CJ´s concerns over court safety come at a time when the Supreme Court (SC)´s demands with the Ministry of Home Affairs have largely gone unheeded. “Though it was a farewell meet with the PM, we happened to talk about issues related to security of the judges and staff and judicial independence, CJ Rayamajhee said, adding, “The security issues for courts and its staffs is all the more relevant at this critical juncture.” Some nine months back, the SC had set up a committee under the chairmanship of Justice Balram KC to study the security situation of courts, judges and court staffs across the country. The committee had submitted its report to the Ministry of Home Affairs. “There is always the possibility of attack on judges and court staff by those who lose a case on the court premises,” said Justice KC, adding that the government should leave no stone unturned to ensure court safety. The SC, following the recommendation of KC-led committee, had asked the Home Ministry to provide personal security officer for all judges and ensure security at courts across the country. The SC had demanded 41 security personnel under the command of District Superintendent of Police (DSP) to be deployed on its premise, 12 police personnel under the command of Sub Inspector to be deployed at 16 Appellate Courts and at least five security personnel for each District Court. The SC had also asked Home Ministry to provide one personal security officer for appellate and district court justices and two such officers for each justice serving in the Supreme Court. “Our demands are yet to be addressed by the Home Ministry,” Hemanta Rawal, Assistant Spokesperson at the SC told myrepublica.com. CJ Rayamajhee is retiring on December 12. Source: www.myrepublica.com Date: 2009-12-11

Fight discrimination: Pillay UN High Commissioner for Human Rights Navi Pillay has cautioned world leaders that women, indigenous communities and other minority groups in all regions of the world continue to face discrimination, and are excluded from decision-making process.

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Pillay, issuing a statement on the occasion of Human Rights Day, said discrimination was still rampant despite a whole range of rights-based international treaties. “Embrace Diversity, End Discrimination” is the theme of this year’s human rights day. “Discrimination lies at the root of many of the world’s most pressing human rights problems,” said the UN official. “No country is immune from this scourge. Eliminating discrimination is a duty of the highest order.” Women, she said, work two-third of the world’s working hours and produce half of the world’s food, yet earn only 10 percent of the world’s income and own less than one percent of the world’s property. Source: www.ekantipur.com Date: 2009-12-11 Food adulteration from bad to worse The Department of Food Technology and Quality Control has stated that instances of adulteration in processed water, milk, oil and instant noodles have increased significantly. Incidences of adulteration had decreased to 23.7 percent during the last fiscal year 2008/09 from 25 percent in the previous year. The department has projected that the trend during the current fiscal year will increase following the old trend which had started to increase heavily since 2006/07. "During the first four months of the current fiscal year, we have experienced that the adulteration rate is increasing significantly," said Pramod Koirala, spokesperson and senior food research officer at the department. "If it continues in the same ratio, the rate will surpass last year's record." Speaking at an interaction organised by the Forum for Protection of Consumer Rights on challenges of standards regulation, general secretary of the forum Jyoti Bania urged the government to address the acute need of a workforce at the governmental monitoring organisations for efficient work. According to Koirala, the government bodies working for quality control and maintaining standards had been working somehow with the limited resources amid a shortage of budget, workforce, infrastructure and testing labs. "Our Butwal office has been without any official for the last five months, how can we work in such a situation?" said Sita Ram Joshi, director general of the Bureau of Standards and Metrology. At the programme, Kenneth Biswell, a representative of Consumer International, was also present. He is on a study visit to Nepal under a special project of EC-Nepal WTO. Source: www.ekantipur.com Date: 2009-12-11

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Kalanki reels under acute water shortage The Kalanki area has been facing a severe water shortage since the last five months, with water supply being ensured only once a week for an hour. Ramesh Shrestha, a tea seller at Kalanki Bus Park, said he is forced to wait a whole week for a few buckets of water, enough for two days only according to him. “It has made our life miserable,” he said. “The timing of the water supply is also not fixed.” Shrestha said he has been forced to depend on private water tankers for his water supply. According to Kathmandu Upatyaka Khanepani Ltd (KUKL), the Valley’s water utility, the erratic supply is a result of the muddy water which is pumped up from the boring wells. “It seems the groundwater in the area has been reduced. That’s why the water from the wells is muddy and sometimes, sandy,” said Kishor Shrestha, chief of Tripureshwor division at KUKL. “We have demanded a new well in the area and are waiting for the response.” At least 8,000 users in Kalanki are facing this problem, according to him. Meanwhile, Rameshwar Lal Shrestha, spokesman of KUKL, said that a study regarding the establishment of a new well in the area is going on. “We are looking for the place and are studying the exact needs of the people,” he said. “It will take at least three months more for the water supply to become regular if KUKL decides to bore a new well.” Rameshwar Lal said the three month gap is necessary because KUKL has to go through a tender process followed by other bureaucratic processes. “We can provide water tankers if there are any collective demands from the area,” he said. Source: www.ekantipur.com Date: 2009-12-11 Dividers: more problems than solutions Despite the traffic situation in several parts of the Capital improving due to the placement of concrete traffic dividers, their mismanagement has created an equal number of problems. The Department of Roads placed heavy concrete blocks marked in yellow and black in different parts of Kathmandu to separate the lanes. But several blocks have broken down and traverse the road, while in some areas, the glow stickers placed on them have faded. On the Baneshwor-Maitighar stretch, dividers infringe the lanes themselves, leading to further problems, especially at night. “Once I was about to hit a divider while turning at Harihar Bhawan at night. Thankfully I wasn’t riding the motorcycle at a high speed at the time,” said Kshitiz Chhetri, a motorcycle rider.

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R&D Economic Research & Business Development

The problem is not only limited to stretches inside the Valley. Even on the Ring Road, the absence of street lights means dividers are very difficult to ascertain as the glow stickers have faded. Chang Pradhan, a taxi driver, faced a similar problem. “In the night, I really can’t see the divider and it creates problems while turning.” According to Deputy Inspector General Police Binod Singh, Metropolitan Traffic Police Division (MTPD), the cat’s eye system was brought in to maintain lane discipline and assist in night-time driving. But the system was of no use. Then, plastic cones were used as dividers. But vehicles started turning through gaps between the cones. “The cones also became the best tool for protesters to set on fire to demonstrate their anger,” Singh said. After the failed cones experiment, walls were built to divide lanes, such as in the stretch between the Himalaya Hotel and Jawalakhel. However, such walls became a problem in narrow streets where they consumed a lot of space. “At last, the cement blocks were brought in to divide the lanes. But protesters are now using the blocks to demonstrate and burn tires. The glow stickers pasted on the blocks are taken out by the protestors as well. The ropes between two blocks are also split by vehicles while turning from restricted areas,” Singh said. Singh also added that the traffic police are responsible to monitor the traffic and take action against violators, managing the blocks and the glow stickers isn’t their responsibility. “We don’t have the budget to add colours, paste glow stickers and rope each block. It’s the responsibility of the road department,” Singh further said, adding that he had repeatedly requested the department to repair the dividers. However, the roads department blames the traffic police. “We don’t have sufficient budget as well. It’s the traffic police’s duty to manage all these things. We only take care of roads and traffic lights,” said Balram Mishra, chief of Kathmandu Road Division Office. Mishra said that he is now committed to manage those lane dividers in near future. According to Singh, a divider is not usually needed for safe riders. But to prevent accidents that usually take place due to illegal turns and overtaking, dividers play an important role. MTPD has no specific data of accidents caused due to dividers. But according to them, 119 out of the 310 accidents since Oct. 18 have taken place at night. Source: www.ekantipur.com Date: 2009-12-11

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