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Date: July 31, 2009 Highlights •
As part of the Special Security Plan phase II, the Home Ministry has initiated groundwork for purchasing a pair of helicopters for the police force to counter highly mobile criminals in the southern plains and eastern and mid-western hill districts.
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Worried that Nepal's "prolonged" period of transition to democracy would hamper its growth and cause suffering to the people, dethroned king Gyanendra has said "even a small amount" of cooperation from India and China would be sufficient to build the country's future.
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Prime Minister Madhav Kumar Nepal has said the deepening cold relations among the political parties in the country has affected in government’s effort to build consensus on several national issues.
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The National Interest Preservation sub-committee of the International Relations and Human Rights Committee of the Constituent Assembly has urged the government to look for a suitable solution to the ongoing border dispute with India, with the support of the Government of United Kingdom.
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The Chairman of the Madhesi Janaadhikar Forum, Mr. Upendra Yadav was greeted with black flag by the cadres of Madhesi Janaadhikar Forum-Nepal (Gachhedar-Loktantrik) in Lahan, Siraha District, and July 30, 2009.
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The Unified Communist Party-Maoist has expressed its grave reservation over the government’s plan to appoint General Rukmangad Katawal as the country’s Ambassador to France.
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The Central Committee meeting of the Unified Communist Party-Maoists’ has passed the Party Chairman Pushpa Kamal Dahal’s political proposal with certain amendments.
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Prime Minister Madhav Kumar Nepal said on Thursday that his government was in crisis due to the Maoists’ failure to act like a creative and active opposition.
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The recently announced Monetary Policy for the fiscal year 2009-10 has projected the price hike at 7.5 per cent - almost half the present rate. However, the government has been since last year failing to control price rise. Factors leading to the price hike Price Weightage (%) Contributing factors Indian market 40 Bandhs/road blockades/syndicates 10 Stockists/wholesellers 20 Hoarders/blackmarketeers 30
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Finance Minister Surendra Pandey has expressed commitment to continue market intervention and monitoring process recently initiated by to government control skyrocketing price of essential commodities in the market.
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Home Minister Bhim Rawal proposed about four billion rupees for the special security programme approved by the cabinet on Wednesday. The programme, ‘Special Programme for Effectiveness of Peace and Security, End of Impunity and Defending Human Rights 2066' presented special strategies for improving the present status of the country.
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Noting that impunity for right violators is hindering the peace process in Nepal, a top UN human rights official in the country stressed the need for both sides of the conflict to cooperate with independent investigations into abuses.
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With the growing interest of people to invest in gold, an increasing number of banks are starting to deal in the yellow metal as an additional banking product to offer to their customers. Nabil Bank and Sunrise Bank are preparing to import gold soon while a number of other banks like NIC Bank and Ace Development Bank are already doing so.
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The Advertising Association of Nepal (AAN) on Thursday condemned the decision of Nepal Cable Television Organization and Nepal Cable Television Association to suspend the signal of Avenues Television.
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The parliamentary Public Accounts Committee today ordered the Ministry of Energy not to enter into any other agreement with the West Seti Hydroelectric project, an undertaking of the Australia-based Snowy Mountain Engineering Corporation Ltd, until the parliamentary body gives a go-ahead. WSH aims to generate 750 MW of electricity to export to India, of which Nepal will get 10 per cent free.
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Traders from Nepal and China have signed a pact to enhance cooperation, expand business relations and explore investment opportunities in various fields. A Memorandum of Understanding (MoU) was signed in China during a meeting of the Nepal-China Non-Governmental Cooperation Forum, established in 1996 through an agreement between the governments of both nations to promote trade, investment, culture and other bilateral relations.
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Insurers have announced that commercial vehicle operators will face some three-fold rise in third party insurance cost, if the companies are to pay Rs 500,000 to families of road accident victims, as provisioned by the government.
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Bangladesh wants a corridor through West Bengal to revive bilateral trade with Nepal and Bhutan, Tripura Chamber of Commerce and Industries (TCCI) president M L Debnath said on Thursday.
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The government is soon opening a new air route to fly to New Delhi and some of the international sectors, which is expected to shorten flight time and slightly reduce air fares.
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HP, the world's largest technology company, has unveiled its ProBook series notebook PCs in the Nepali market.
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For the first time, two African nations -- Algeria and Mauritius -- have offered more than 1,300 jobs for Nepali jobseekers in their construction sector.
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The government is preparing to allow Nepali manpower agencies to send Nepali labourers to new job destinations like Cyprus, Poland, Ukraine and Mauritius.
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The Nepal Stock Exchange (NEPSE) Thursday continued its downturn after it fell by 5.48 points. Majority of the sub indices at NEPSE witnessed a downturn. Finance sector was the only one to gain on the floor by rising 0.81 points.
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Revenue collection has soared at the Makawanpur Land Revenue Office as Hetauda has emerged as a popular place to settle in for displaced people from the Tarai which has been plagued by killing, terror and kidnapping for the last three years.
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Garbage dumped in the streets of the capital for eight days now will be collected and disposed at Sisdole Landfill Site in Nuwakot district from Friday following an agreement reached between the government and agitating locals Thursday.
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Yahoo Inc. invested billions of dollars in its Internet search engine during the past six years before realizing it made more sense to entrust the job to an outsider hearkening back to a conclusion the company's co-founders reached shortly after they started their Web directory in the mid-1990s.
POLITICS:
Home Ministry eyes choppers to tackle crime KOSH RAJ KOIRALA •
Development: Police seek choppers for quick response against highly mobile criminals in southern plains.
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Background: Home Ministry planned to buy a pair of choppers for Nepal Police in 2002 when Maoist insurgency was at its peak. But, the plan failed
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due to fierce resistance mainly from Nepal Army. •
Implication: The present practice of hiring expensive privately-owned choppers for quick action will end and better-equipped choppers will add to police air-patrolling capability.
As part of the Special Security Plan phase II, the Home Ministry has initiated groundwork for purchasing a pair of helicopters for the police force to counter highly mobile criminals in the southern plains and eastern and mid-western hill districts. Highly-placed sources at the ministry told Republica that they are looking into the feasibility of buying two helicopters, probably one Russian made MI 17 and a smaller one, maybe a six-seater. "We have started looking into available options to buy two helicopters, but it will be for the second phase, which is likely to come into implementation after six months" said the sources, declining to elaborate. However, they hinted that the MI-17 might be one of the choices, given its affordability, past performance and suitability for Nepal´s difficult terrain. Explaining the urgent need for helicopters for quelling escalating crime, particularly in the Tarai and remote hill districts, sources said helicopters are urgently needed not just for security patrolling in troubled parts of the country but also for handling rescue operations in times of calamity like floods, landslides and epidemics. Though the demand for at least one helicopter for the police is a long-running one, this time they are really pushing hard for the resources to procure the choppers, said the sources. When asked about the financial constraint on purchasing two helicopters, the sources said the Finance Ministry might be ready to provide the resources to procure one helicopter this year. "We are trying our level best to procure at least one helicopter, if two are not possible at one time." As per the initial plan, the helicopters will be managed by the Nepal Police and will be mobilized as per the needs of all three security agencies -Nepal Police, Armed Police Force and National Intelligence Department. Determined to take on the menace of criminal groups operating in various parts of the country, the government recently introduced a Special Security Plan in the troubled Tarai districts and the eastern and mid-western hills. Security officials say helicopters will help increase the mobility of police in far flung areas, especially in hill districts not easy of access on foot. Asked about the Ministry´s plans, Home Secretary Dr Gobinda Kusum said there is a need for helicopters for rapid police response but declined to comment further. Apart from private operators, the Nepal Army currently has four MI-17 choppers, but two are grounded due to lack of timely maintenance.
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Source: www.myrepublica.com Date: July 31, 2009 'Help from India, China could help build Nepal' Worried that Nepal's "prolonged" period of transition to democracy would hamper its growth and cause suffering to the people, dethroned king Gyanendra has said "even a small amount" of cooperation from India and China would be sufficient to build the country's future. Gyanendra, who was overthrown last year by a Maoist-led democratic government, said capable leaders in the country seemed to be "inactive" and hoped that the period of transition would end soon. "People will suffer if the transitional period becomes long... It is better if this transition becomes shorter," the former King told a tabloid in an interview. He said: "There are capable leaders in this country but they are not active and they have not been able to make their views clear to the people. But those who are active are not in a position to fulfill the aspirations of the people". Source: http://ptinews.com/news
Deepening differences among parties reflecting badly on govt’s works: PM Prime Minister Madhav Kumar Nepal has said the deepening cold relations among the political parties in the country has affected in government’s effort to build consensus on several national issues. Speaking at the parliamentary committee on foreign relations Thursday morning, PM Nepal, however, reiterated his commitments to make additional efforts on end such a situation at the earliest. He cited the latest instance of rumour on arms deal with India as an indication of bitter relations among the parties and urged all to act responsively towards maintaining friendly relations with neighbouring countries. In response to the questions raised by lawmakers, he said diplomatic efforts are underway to settle the border disputes with India, as reported in media recently and confirmed by the visit of parliamentary committee. He underlined to need for national consensus on finding solution of such important issue. He also allegations that government had not shown its seriousness towards controlling the spread of diarrhea and cholera in mid and far-western districts and informed the committee members about the initiatives taken so far to control the epidemic. Source: www.nepalnews.com Date: July 30, 2009
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Border dispute with India: Nepal’s CA body seeks UK facilitation The National Interest Preservation sub-committee of the International Relations and Human Rights Committee of the Constituent Assembly has urged the government to look for a suitable solution to the ongoing border dispute with India, with the support of the Government of United Kingdom. A report forwarded by the sub-committee categorically states that the border dispute with India need to be solved as per the agreement of 1816, 1860 and 1875 with the then East India Company. “The official representatives of Her Majesty’s Government of Britain as facilitators could permanently resolve the border dispute with the former British Colony, India”, the report says. India, to recall, remained as the colony of the then East India Company for decades and decades. The report was forwarded after the subcommittee returned from the bordering areas of the district of Dang where India has illegally occupied thousands of hectares of Nepali land illegally. Nepal’s border experts claim that India has illegally occupied Nepali lands at 54 different locations along the 1808 Km long open strip. To add, Prime Minister of Nepal Mr. Madhav Kumar Nepal who was summoned by the committee on Thursday July 30, 2009, claimed that the border demarcation map of 1816 and 1860 have less contention however, locally there are several problems along the border. This is the first time that Nepal PM accepts that there is the problem of the border with India. No less surprising it is. “We have sent instructions to the local district officers to collect information at the local level over the land encroachment by India and at the central level also have ordered the Foreign and the Home Ministries to hold a thorough study over the issue”, the PM divulged. Question is thus how Nepal government convinces the British government for such facilitation? Even if the Nepal government approached the British government, will the latter come to extend its support to Nepal as demanded by the Nepal's CA body? As a matter of fact, wisdom would demand that the United Kingdom come to the rescue of one of its oldest allies in this part of the region. www.telegraphnepal.com
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Nepal MJF prez. Upendra Yadav favors National Government The Chairman of the Madhesi Janaadhikar Forum, Mr. Upendra Yadav was greeted with black flag by the cadres of Madhesi Janaadhikar Forum-Nepal (GachhedarLoktantrik) in Lahan, Siraha District, and July 30, 2009. Mr. Yadav who had arrived in Lahan to attend a three day party campaign was addressing a local cadre meeting program wherein MJF-Loktantrik cadres hoisted black flags and chanted anti-Yadav slogans. “Down with the Forum”, they, the Gachhedar cadres, chanted. In a minor scuffle, cadres from both the sides were injured, local reports reveal. A pretty distressed looking Upendra Yadav, after the incident, said that the MJF was preparing for yet another Madhesi uprising. He demanded immediate implementation of 22-Points and 8-Points agreements signed by the previous government with the Untied Madhesi Front and the MJF. “If the agreements are not implemented, the MJF will heat up Madhesh once again”, he declared. “The country is currently in one of the most dangerous turn in the entire history” he said adding, “At this critical juncture without the formation of a National government, the constitution drafting will not be possible”. Commenting on the government action against the Madhesi armed outfits creating unrest in Madhesh said Yadav, “the Government was involved in great human rights violations in Tarai…in the name of wiping out terrorist outfits, the government was instead terrifying the Madhesi population.” To recall, Indian Ambassador May 15, 2009, had point blank told Upendra Yadav that if he (Yadav) did not extend his party’s unconditional support to the new UML-NC coalition, he, the Ambassador, would even get the MJF support by bringing about a vertical split of the party led by Yadav. The Ambassadorial threat came right inside the official residence of Mr. Yadav in Pulchowk. Mr. Yadav by that time was the foreign minister of Nepal. The Ambassador did it as promised. Sood, it is said, is expert in dismantling things. Gachhedar-Tharu is presumed to have been enjoying the clandestine “blessing” of the Kathmandu based Indian embassy. This should perhaps explain as to why Upendra looks pretty disturbed these days www.telegraphnepal.com
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No says Maoists' to Army Chief Katawal as Nepal’s envoy to France The Unified Communist Party-Maoist has expressed its grave reservation over the government’s plan to appoint General Rukmangad Katawal as the country’s Ambassador to France. C.P. Gajurel, a senior Maoists’ leader speaking in Kathmandu on Thursday, July 30, 2009, said that the decision to appoint controversial Nepal Army Chief Katawal as the Ambassador to France after his retirement reveals the government’s inner designs that basically ridicule the politics of consensus. “This decision is highly objectionable”, said Mr. Gajurel. “The erstwhile government’s nominee Ram Karki’s agrimo has already arrived at the Foreign Ministry, the government cannot hold him and appoint Katawal”, said Gajurel. Katwal retires August 10, 2009, next month. www.telegraphnepal.com
Nepal Maoist chief proposal accepted, Veto power for Prachanda The Central Committee meeting of the Unified Communist Party-Maoists’ has passed the Party Chairman Pushpa Kamal Dahal’s political proposal with certain amendments. The meeting held in the Party central office located in Paris Danda of Koteshwor, July 30, 2009, had passed the proposal. With the ratification of the Dahal proposal by the Central Committee, the party has adopted the strategy to take on the route to draft Peoples’ Republican Constitution. “Drafting the Peoples’ Republican constitution, logical conclusion of the peace process and declaring the country a peoples’ republic” are the prime objectives of the party, reports quote Maoist’s sources as saying. Chairman Dahal’s proposal also outlines the need to form a National Consensus Government that accords top priority to the Peoples’ Supremacy. The party has planned to adopt Fresh Revolt as an alternative. “Any conspiracy to derail the peace process, block our way for the declaration of Peoples’ Republic and drafting of a Peoples’ Republican Constitution will instantly trigger the Third Uprising which will open the gates for a Fresh Revolt”, reports quote Maoists’ sources as saying. “The party will not immediately declare the revolt but we have clearly traced the way for the Revolt”, the report further adds quoting the source.
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The amended Maoists party statute also allows the chairman to use veto power if need be. The New Maoists’ party statute also accepts the idea of a collective leadership. However, to stop the party from split-if and when as a result of the collective leadership fails as experienced in the UML and the NC in the past, the party chairman has been provided with this veto power. The party also decided to hold General Assembly after tentatively January-February, 2010, early next year. www.telegraphnepal.com
PM: Govt in crisis KATHAMNDU, July 30 - Prime Minister Madhav Kumar Nepal said on Thursday that his government was in crisis due to the Maoists’ failure to act like a creative and active opposition. “I have requested them time and time again to help reconstitute the special committee on supervision, integration and rehabilitation of the Maoist Army, to no avail,” said Nepal addressing CPN-UML Bagmati district cadres’ meet. Coordinator’s position at the special committee has been lying vacant since May 23. Nepal said the Maoists have been unable to forget the pain of quitting the government, though three months have passed since they stepped down. Source: www.kantipuronline.com
POLICY: Market watch Price hike control KATHMANDU: The recently announced Monetary Policy for the fiscal year 200910 has projected the price hike at 7.5 per cent - almost half the present rate. However, the government has been since last year failing to control price rise. Nepal Rastra Bank (NRB) and the Finance Minister - in the budget - project growth and price hike ritually every year. They failed last year to contain the price hike and this year too, people are feeling the heat of the price hike. The people have not got any relief from the price spiral as neither the budget nor Monetary Policy has tried to tackle the key factors that have led to the current surge in inflation. “It requires better management of financial, monetary and political causes as the price hike is co-related to all of them,” said National Planning Commission (NPC) vice
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chairman Dr Yubaraj Khatiwada. The key reason behind the price hike is insufficient supply, he opined adding that the bandhs/road blockades/ syndicates have contributed 10 per cent to the total price rise. The other major reason for price hike is more money chasing less goods. There is a shortage of goods due to hoarding, curtailing and supply constraints. The Commerce Department last week raided some of the godowns in the valley on the charge of hoarding. However, the traders protested and the government seems to have backed down as not a single trader has been booked. Rise in salary and remittance inflow has also contributed to the price hike. The remittance inflow has increased by 55.5 per cent and crossed the Rs 169 billion mark. But remittance has been spent on unproductive areas like land and houses, fuelling consumerism. World Bank Economic Advisor for the South Asia Region, Ejaz Ghani said Nepal is benefitting from higher inflows of remittances and healthy availability of foreign aid. “With the decline in global commodity prices, the balance of payments (BoP) and fiscal situation are comfortable and there is no evidence of a liquidity constraint on domestic demand,” he said adding that on the contrary large foreign exchange inflows are creating some demand pressure. The private sector could not become an engine of growth as the manufacturing industries have not seen any growth while consumption is increasing. Labour disputes and frequent power outage has hit production, leading to more unemployment. The government also could not spend on development activities that would have generated employment, It instead spent more on unproductive areas. In the first 10 months of 2008-09, recurrent expenditure increased by 26.5 per cent to Rs 81.9 billion. In the corresponding period of the year before that, this expenditure had increased by 21.9 per cent, according to NRB. It was that upward revision of salaries of government employees as well as an increase in non-budgetary expenditure that led to such acceleration in recurrent expenditure in the review period. All this led to a price spiral, despite the government’s tall claims of containing the price rise. The year-on-year (y-o-y) consumer price index rose by 12.9 per cent in mid-May compared to that of 9.2 per cent in the same period the last fiscal year, according to NRB. The food and beverages group pushed the price hike up as the inflation, in the review period, was driven mainly by the 16.5 per cent price rise in food and beverages group. The price index of non-food and service group increased by 8.8 per cent. The price increase in food and beverages group was 13 per cent and that in non-food and services group was 5.3 per cent in the same period the last fiscal year. The price of items in food and beverages group like sugar and sugar-related products increased by a whopping 66.9 per cent in sharp contrast to last year’s decline of 0.5 per cent, said the central bank. Similarly, the price indices of vegetables and fruits as well as meat, fish and eggs subgroups increased by 33.5 per cent and 27.5 per cent respectively in the review period
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compared to an increase of 1.8 per cent and 10.2 per cent respectively in the same period last year. The indices of pulses also rose by more than double to 26.3 per cent compared to an increase of 12.1 per cent in the same period last year. The subgroup of grains and cereal products also witnessed a price rise of 6.3 per cent compared to an increase of 21.0 per cent in the corresponding period of the previous year. In the review period, the y-o-y core inflation rose to 12.7 per cent from 7.5 per cent a year ago. Recognising the high inflationary pressure, NRB has announced a cautious and tight Monetary Policy envisioning to containing inflation at 7.5 per cent. However, there has been no change in the political situation and the prevailing political instability will lead to hoarding further fueling price rise, with little or no hope for the public. Policy measure taken by the Budget The government is trying to get consensus on banning strikes and bandhs. Declaring the highways a strike-free zone and implementing third-party insurance, the budget has tried to protect highways from unwanted bandhs, accidents and disputes leading to bandhs for compensation. It has promised to keep the supply route — the highways — free of disturbances. — HNS Policy measure taken by NRB The Monetory Policy has reintroduced Statutory Liquidity Ratio (SLR) to contain inflation and fuel growth as it is commonly used to contain inflation and fuel growth by increasing or decreasing it, respectively. This counteracts by decreasing or increasing the money supply in the system. — HNS Factors leading to the price hike Contributing factors Price Weightage (%) Indian market 40 Bandhs/road blockades/syndicates 10 Stockists/wholesellers 20 Hoarders/blackmarketeers 30 Source: www.thehimalayantimes.com Date: 2009-07-30 Market intervention to be continued: FM Finance Minister Surendra Pandey has expressed commitment to continue market intervention and monitoring process recently initiated by to government control skyrocketing price of essential commodities in the market. “We are committed to controlling skyrocketing prices of daily commodities. This action will continue in coming days too,” Pandey said at an interaction on price hike, organized here on Thursday by South Asian Free Media Association (SAFMA).
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He also said the government would continue market intervention for some selected commodities. However, he did not divulge details of commodities “We have yet to decide on these things. We will finalize the process of reining in the market prices once a panel, formed to study on it, submits its report,” said Pandey. He also said around 15 to 20 businessmen were controlling the supply of essential commodities in the market. “Market intervention is a must to break the cartel of those traders,” added Pandey. In a bid to bring down the mounting prices of commodities in the market, the government had recently raided four major warehouses of essential commodities. Jyoti Baniya, general secretary of Consumers´ Interest Protection Forum, suggested the government to sell essential commodities in the market by procuring them from the private producers. Dr Yubaraj Khatiwada, vice-chairman of National Planning Commission, said restriction on the export of some food commodities by Indian government was one of the reasons behind the rise in market prices. “We have to request the Indian government to lift the ban during the Prime Minister´s upcoming India visit,” he said. Dr Khatiwada heads the panel formed by the government to recommend measures to tame market prices. Source: www.myrepublica.com Date: July 30, 2009 Rs. 4 billion for security plan KATHMANDU: Home Minister Bhim Rawal proposed about four billion rupees for the special security programme approved by the cabinet on Wednesday. The programme, ‘Special Programme for Effectiveness of Peace and Security, End of Impunity and Defending Human Rights 2066' presented special strategies for improving the present status of the country. The programme plans to conduct ‘cordon and search’ in suspect areas after identification of areas with a high level of criminal activities. Similarly, 101 armed groups have been identified, who are divided into Political, Criminal, Separatist and Religious. It aims to increase the police positioned in different parts of the country and arrange Nepal Police, Armed Police Force and National Investigation Department under a unified command. A special security plan has been extended focusing on Kathmandu valley which includes International Airport Security, Control of Criminal Activities and Establishment of Rule of Law among others. Some innovative programmes like installing CCTV in sensitive areas, emergency frisking, searches, mobilising armed security personnel on motorbikes, adopting security alarm systems and providing 12
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quasi-judicial authority to metropolitan police are also introduced under the plan. The plan will work to rule out the closing of public offices and educational institutions. It will deploy well-equipped security personnel with adequate arms and coordinate with security staff deployed in various areas of the border. Rawal stressed that the plan will come into effect from Thursday which will control anarchy, promote human rights and end impunity in the country. Source: www.thehimalayantimes.com Date: 2009-07-30 Tackling impunity key to Nepal peace: UN New York: Noting that impunity for right violators is hindering the peace process in Nepal, a top UN human rights official in the country stressed the need for both sides of the conflict to cooperate with independent investigations into abuses. At a press briefing, Richard Bennett, the Representative of the Office of the High Commissioner for Human Rights in Nepal (OHCHR-Nepal), has called for perpetrators of violations to be brought to justice. "The victims of these violations and their families deserve no less," he said adding, "They have the right to know the truth and to a remedy, and they should be at the heart of everyone's concerns." Parties to the peace process agreed that addressing the past is essential for a durable peace, "but, regrettably, too little progress has been made," the official noted. Impunity reigns, he added, for political crimes as well, including cases of torture and arbitrary detention at the Maharajgunj barracks in the capital, Kathmandu, in 2003 and 2004, as well as several instances where the Unified Communist Party of NepalMaoist (UCPN-M) is responsible. He reiterated High Commissioner Navi Pillay's comments in the Nepalese capital earlier this year that until demands "for justice are fulfilled and accountability for past, and in particular on-going, violations are ensured, a truly new Nepal will not emerge, and indeed, the peace process could be jeopardized." www.zeenews.com
BANKING: Nabil, Sunrise prepare to import gold KATHMANDU, July 30 - With the growing interest of people to invest in gold, an increasing number of banks are starting to deal in the yellow metal as an additional banking product to offer to their customers. Nabil Bank and Sunrise Bank are preparing to import gold soon while a number of other banks like NIC Bank and Ace Development Bank are already doing so. 13
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Nabil's chief executive officer Anil Shah said that his bank was preparing to import gold within the first quarter of the current fiscal year. "The bank's board has already decided to go for gold trading, and we are now seeking partners in the Middle and Far East for the purpose," he said. The bank will bring gold from Dubai as it is the most accessible country for Nepal, said Anupama Khunjeli who oversees the gold trading department at Nabil. "The bank will also give loans against gold," she added. "There is an increasing trend of investing in gold in Nepal," Shah said. "We want to tap this market." Sunrise's CEO Kishor Maharjan said his bank was going to import gold within a month. "We are planning to import from 1.5 to 2 tons initially in a year," he said. He added that there were good prospects for earnings with volume sales although the profit margin was low. Soaring gold imports during the last two years also show how the gold market in Nepal is expanding. According to Nepal Rastra Bank statistics, the import of gold soared to Rs. 11.71 billion during the first 10 months of the last fiscal year 2008/09 against Rs. 3.24 billion during the same period in 2007/08. Gold imports in 2006/07 were worth just Rs. 842.4 million After the government removed gold from its list of prohibited imports on Feb. 16, 2006, financial institutions and other legally registered firms became free to import gold. The growing tendency of people to purchase gold as a safe investment is mainly responsible for the rise in import, said bankers. Bijaya Satyal, chief executive officer of Commodities and Metal Exchange Nepal (COMEN) said that there were about 2,000 committed gold investors in COMEN. "The number is expected to grow by 20 percent every year," he said. COMEN is a paper gold market where trading is done with no yellow metal being physically transferred between the traders. According to Satyal, more than 100 kg of paper gold is traded daily at COMEN. According to gold dealers, about 25 percent of the imported gold is used for investment purposes while the rest is used to make jewelry. Ace Development Bank CEO Siddhant Raj Pandey said that his bank had been importing gold for a year for trading on the paper gold market. He added that about 300 kg of gold had been traded during the year from Ace. Tej Ratna Shakya, president of the Nepal Gold and Silver Dealers Association, said that growing competition in importing the yellow metal would make the market competitive which would benefit all including retailers like him.
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Source: www.kantipuronline.com
BUSINESS & ECONOMY: AAN flays cable operators’ move KATHMANDU, The Advertising Association of Nepal (AAN) on Thursday condemned the decision of Nepal Cable Television Organization and Nepal Cable Television Association to suspend the signal of Avenues Television. AAN, in a press statement, said that the cable operators’ move was an attack on independent Nepali media. "It has violated people's right to information," AAN said and urged the cable television operators to let Avenues TV resume its broadcasting service. Source: www.kantipuronline.com
PAC to look into WSH project KATHMANDU: The parliamentary Public Accounts Committee today ordered the Ministry of Energy not to enter into any other agreement with the West Seti Hydroelectric project, an undertaking of the Australia-based Snowy Mountain Engineering Corporation Ltd, until the parliamentary body gives a go-ahead. WSH aims to generate 750 MW of electricity to export to India, of which Nepal will get 10 per cent free. “The PAC orders the Ministry of Energy not to reach any further agreement with the WSH as the committee has been studying overall aspects of the project,” a letter to the ministry stated. The letter to this effect was forwarded to the ministry following a discussion at PAC meeting. The parliamentary committee has also asked the ministry to give it access to all missives exchanged between the WSH and the ministry, besides the details of the previous agreements, by Sunday. Dr Prakash Chandra Lohani, one of the PAC members, said there were some key issues that needed to be clarified before the government reached a final agreement on the generation of power from the reservoir project. He said the draft of the amended and restated project agreement sent by the Snowy Mountain Engineering Corporation Ltd had mentioned nothing about the flood control benefits of the reservoir project. “It may set a precedent if benefits from the regulated water and flood control benefits are not well-calculated and negotiated with India,” Dr Lohani said. He urged the government to inform the parliament regarding agreement with the WSH project.
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He said WSH had proposed to sell its energy to India’s power purchasing party at Rs 3.30 per unit, whereas Nepal is purchasing per unit of electricity at Rs 6.60 from India.Dr Lohani found loopholes in the amended and restated project agreement draft. He said it could not be justified why to exempt customs duty and Value Added Tax for the power-exporting project on construction materials. He said he could not find any justification of the Asian Development Bank’s decision to provide US$ 45 million loan to Nepal meant for the project. Lohani said there had to be a provision in the agreement under which Nepal could purchase at least 25 per cent of the total energy, apart from the 10 per cent free energy, from the project at the same price agreed upon with the Indian side. Source: www.thehimalayantimes.com Date: 2009-07-31 Nepal, China sign pact to enhance trade relations Kathmandu: Traders from Nepal and China have signed a pact to enhance cooperation, expand business relations and explore investment opportunities in various fields. A Memorandum of Understanding (MoU) was signed in China during a meeting of the Nepal-China Non-Governmental Cooperation Forum, established in 1996 through an agreement between the governments of both nations to promote trade, investment, culture and other bilateral relations. Led by former president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Chandi Raj Dhakal, the delegation attended a meeting on 'Investment in Hydropower and Agriculture' held in Chengdu city in Sichaun Province in China on July 28, a statement issued by FNCCI said. Coordinator of FNCCI's Hydropower Forum, Gyanendra Lal Pradhan and another official Arun Shrestha, delivered presentations on 'Investment Opportunities in Hydropower Sector of Nepal' and 'Agriculture and Forest-based Products of Nepal'. Entrepreneurs from both countries held negotiations during the one-to-one session organized later, FNCCI said. Both sides also agreed to conduct multifold commercial activities between the two countries such as exchange of trade delegations and training for Nepalese entrepreneurs. Around 150 Chinese delegates from various industrial sectors took part in the meeting. www.zeenews.com
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Third-party insurance fee to rise three-fold Insurers have announced that commercial vehicle operators will face some three-fold rise in third party insurance cost, if the companies are to pay Rs 500,000 to families of road accident victims, as provisioned by the government. “For instance third-party insurance premium amount will soar to Rs 13,000 a year from existing Rs 4,500 for passenger vehicles having more than 35 seats,” said Dip Prakash Pandey, an insurer and the leader of the team formed by the Insurance Board (IB) to work out the rate. The team is yet to get the rate endorsed by transporters and Department of Labor and Transport Management. The new rates and compensation amount is scheduled to come into effect from August 17. Nepal Transportation Entrepreneurs´ Federation (NTEF) has said that the new rate is too high. It has pushed the government to reduce the compensation amount to Rs 250,000 to bring the premium down. Insurers, on the other hand, said the new rate as the least amount they could agree at. “Fixation of compensation amount at Rs 500,000 has raised our liability by 10-fold, compared to now. On top of that, commercial vehicles are among the most vulnerable in terms of accidents,” said a member of the team. Presently, maximum liability borne by the companies stands at Rs 75,000 in case the accident victim passed away and Rs 50,000 in case s/he suffered permanent disability. Maximum treatment cost covered by the companies too stands at Rs 50,000. Under the new rate, Pandey said the companies would pay Rs 500,000 to the families in case the victim succumbed to injuries or suffered a permanent disability. They will also pay a treatment cost of up to Rs 200,000. The rise in premium amount will be equally applicable to all commercial vehicles, including passenger vehicles of different capacities, tankers and trucks and also taxis. Passenger vehicles are presently paying in a range of Rs 3,000 to Rs 4,500 per annum for getting third party insurance coverage. Truck and tanker operators pay Rs 3,000 to Rs 4,000 and taxis pay Rs 1,500 to Rs 3,000 for it. The government had announced the sharp rise in third party compensation amount after it identified dispute over low compensation in roads accidents as one of the major causes behind increasing incidents of closure and obstruction of highways in recent months. The amount is applicable for public as well as private vehicles. To ensure enforcement of the new provision, the government has made it mandatory for vehicle owners to produce the evidence of third party insurance for new registration and
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renewal of vehicles. However, the team has not studied how the new provision will impact insurance premium for private vehicles. “The premium amount for them will be lower as compared to commercial vehicles though,” said Pandey. Source: www.myrepublica.com Date: July 30, 2009 Bangladesh wants corridor through West Bengal to Nepal, Bhutan Agartala: Bangladesh wants a corridor through West Bengal to revive bilateral trade with Nepal and Bhutan, Tripura Chamber of Commerce and Industries (TCCI) president M L Debnath said on Thursday. Bangladesh Prime Minister Sheikh Hasina told him on 21 July in Dhaka on the sidelines of a Federation of Indian Chamber of Commerce and Industry (Ficci) business meet, that her government wanted a corridor through Bhurimari and Banglabandh land ports in West Bengal to revive bilateral trade with Nepal and Bhutan, Debnath said. Sheikh Hasina also expressed interest to open border haats along the Indo-Bangla border to enhance bilateral trade, he said. Debnath said that the Bangladesh government has urged railway minister Mamata Banerjee to reopen abandoned rail links between India and Bangladesh. Meanwhile, a 14-member team of Bangladesh tour operators today left for Dhaka after spending three days here. During their stay, they visited some eco-tourism spots and held meetings with local businessmen. This was the first business tourism trip to Tripura that was organized by Indo-Bangla Chamber of Commerce and Industries http://www.livemint.com
Algeria, Mauritius offer 1,300 jobs For the first time, two African nations -- Algeria and Mauritius -- have offered more than 1,300 jobs for Nepali jobseekers in their construction sector. According to data compiled by Department of Foreign Employment (DoFE), 22 workers had flown to Algeria and 12 to Mauritius in the last fiscal year but not on an institutional manner. “A mega construction company operating in Algeria has demanded 1,300 Nepali workers, majority of whom are blue-collar workers, and has offered a salary of $300 to $700 per month, excluding overtime pay,” Som Bataju, proprietor of SOS 18
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manpower agency, told Republica. “If we get permission on time, we can send workers to Algeria by the end of next month.” The company has demanded workers of different skill levels, ranging from technicians to masons and carpenters. Bataju said service charge for arranging jobs would be around Rs 80,000 per person. “The employer company has fixed a working hour of 10 hours per day. But we have replied to them that the working hour should not exceed eight hours a day,” Bataju added. Along with Algeria, Mauritius has also offered employment opportunities to Nepali workers through institutional channel. As of today, Nepali workers have been managing to enter the African nation through individual channel. Neeta International Manpower, a Nepali recruiting agency, has sought permission from the DoFE to send Nepali workers to the island located off the African continent in the south west Indian ocean. A company has offered $134 per month for Nepali workers willing to work as machine operators. “Though Mauritius is a new destination and a safer place to work, the salary offer is not so lucrative. However, we have forwarded the application to the Ministry of Labor and Transport Management to issue permission for the agency to initiate the sending process,” said Mohan Krishna Sapkota, director general, DoFE. The recruiting company has offered a service charge of Rs 17,000 per person. Meanwhile, some manpower agencies have already sought permission from the MoLTM to send Nepali workers to Poland, Ukraine and Cyprus. However, the MoLTM is yet to approve their application. Likewise, the government has recently approved Nepali recruiting agencies to send Nepali workers to Libya and Romania. The government had granted permission to send workers to Libya on May last year and Romani a month ago. According to the DoFE, a total of 285 Nepali blue-collar workers have already left for Libya to work in the fast-growing construction sector. Source: www.myrepublica.com Date: July 31, 2009 Europe next stop for Nepalis KATHMANDU, July 30 - The government is preparing to allow Nepali manpower agencies to send Nepali labourers to new job destinations like Cyprus, Poland, Ukraine and Mauritius. "We are currently studying the service fee, visa fee, ticket charges and other predeparture expenses," said Purna Chandra Bhattarai, joint secretary of the Ministry of
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Labour and Transport Management (MoLTM). "The Ministry of Foreign Affairs (MoFA) is also doing the necessary official work." The MoLTM permits manpower agencies to send workers to new destinations only after studying various aspects of the labour demand such as offered wage, job security and job safety through the MoFA for the welfare of Nepali workers. According to the Association of Nepal Foreign Employment Agencies, Mita Overseas has received a request for manpower from Mauritius and Pioneer Overseas Service has received a request from Poland. Similarly, Cyprus has asked for labourers through Pioneer Overseas Service. The labour demands from these countries are in industry, service and agriculture sectors. Bhattarai said that the process of sending Nepalis to work in Romania was also at the final stage. Rajdhani International and VV International have received requests for around 275 Nepali workers from Romania. "The process of sending labourers to Romania will start after the MoAF completes its work," said Uma Shankar Joshi, director of the Department of Foreign Employment. Source: www.kantipuronline.com
Govt to open new air route to New Delhi soon The government is soon opening a new air route to fly to New Delhi and some of the international sectors, which is expected to shorten flight time and slightly reduce air fares. The new one-way air route -- dubbed L626 -- was developed around three years ago. It links Kathmandu with New Delhi and other destinations in west like, Middle East and Europe, via Mahendranagar, located in far-western Nepal. However, it hasn´t come into operation till date due to the delay by Nepali government in installing necessary communication equipment. "We now have everything in place, including remote control air-ground communication and satellite equipment," said Mahesh Basnet, deputy director, Air Traffic Management, Civil Aviation Authority of Nepal. "We are now waiting to sign the agreement with Airports Authority of India to commence the operation of the route." Nepal needs to sign an agreement with India to start traffic flow on this route, as all the flights will have to use the Indian airspace soon after crossing Mahendranagar. A source at the Ministry of Tourism and Civil Aviation told Republica that the cabinet of ministers had already given approval to initiate talks with India. Although the date for the meeting is yet to be fixed, government officials are expecting a positive outcome as India has been insisting Nepal to sign an agreement in this 20
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regard since long. One of the reasons why India wants to commence operation of this route as soon as possible is to reduce the congestion in its airspace. Currently, all the flights bound for New Delhi and other western destinations enter into the Indian sky after flying for around 20 minutes in Nepali territory. But once the new route is opened, all airplanes bound for India and other international destinations will have to fly in Nepali sky for at least 45 minutes. "This, on one hand, reduces the traffic in Indian airspace, while, on the other, allows Nepali government to earn more revenue from airline companies for using Nepali air space for a longer period," Basnet said. Opening of the new route is also expected to reduce flight time between Kathmandu and other international sectors. For instance, flight time between Kathmandu and New Delhi will come down by around four minutes. "This may seem too little, but considering the number of flights conducted between Kathmandu and New Delhi per day, a lot of fuel can be saved," Basnet said. "Reduction in usage of fossil fuel not only means reduction in operating cost of airlines and ultimately airfares, but also reduction in emission of greenhouse gases.� Basnet also said the new route would also help erase the carbon footprint generated by the aviation sector to some extent. Source: www.myrepublica.com Date: July 31, 2009 HP launches new notebooks in market KATHMANDU, July 30 - HP, the world's largest technology company, has unveiled its ProBook series notebook PCs in the Nepali market. According to HP, the local authorised dealers Neoteric Nepal, Kastha-mandap International and CAS Trading will supply the new products in the domestic market which will cost around Rs. 65,000 including VAT. The main features of the notebook are HP Sparekey, Quicklook 2 and 3D Drive Guard. The Sparekey facility allows users to retrieve forgotten passwords by answering three personal questions. HP Quicklook 2 provides read capability of emails, calendar, task and contact information within a few seconds at the touch of a button without having to boot up. The innovative layout of the keyboard allows users to clean dirt and dust as the keyboard. The ProBook series comes in 14", 15.6" and 17.3'' diagonal widescreen sizes with LED backlit display in red and black colours. Source: www.kantipuronline.com
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MARKET: NEPSE falls 5.48 points KATHMANDU, July 30 - The Nepal Stock Exchange (NEPSE) Thursday continued its downturn after it fell by 5.48 points. Majority of the sub indices at NEPSE witnessed a downturn. Finance sector was the only one to gain on the floor by rising 0.81 points. The banking sector lost the most by shedding 7.13 points followed by development bank sector which fell by 7.07 points and the hydropower sector which lost 2.14 points. The share market witnessed a total turnover of Rs. 82.575 million with 159,384 shares being traded. Shares of 62 companies changed hands on NEPSE. Among the 21 commercial banks listed on NEPSE, Machhapuchhre Bank posted the biggest growth with its stock rising by 13 points while Everest Bank lost the most on the trading floor by shedding 94 points. Similarly, Swabala-mbhan Bikas Bank witnessed the highest increase of 62 points among the development banks while Annapurna Bikas Bank dropped 28 points. Among the 23 finance companies, Annapurna Finance Company Limited gained the highest by increasing 39 points. Lumbini Finance lost 113 points. The top five winners were Swabhalambhan Bikas Bank with a 9.89 percent rise in its stock price followed by Annapurna Finance Company Limited, Prabhu Finance, Machhapuchhre Bank Limited and Malika Bikas Bank Limited. The top five losers on Thursday were Lumbini Finance Limited which fell by 20 percent followed by Annapurna Bikas Bank, Central Finance Company Limited, Everest Bank Limited and Capital Merchant Banking and Finance Limited. Source: www.kantipuronline.com
Hetauda popular amongst settlers HETAUDA, July 30 - Revenue collection has soared at the Makawanpur Land Revenue Office as Hetauda has emerged as a popular place to settle in for displaced people from the Tarai which has been plagued by killing, terror and kidnapping for the last three years. During the last fiscal year, the office took in Rs. 103.2 million as land registration charges with Rs. 87.2 million coming from Hetauda Municipality and Rs. 15.9 million from rural areas of the district. In 2007/08, the office collected Rs. 48 million. According to the District Land Revenue Office, buying and selling of land has increased in Hetauda Municipality and Hatiya and Harnamadi VDCs. Source: www.kantipuronline.com
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GENERAL: Garbage disposal at Okharpauwa to resume Garbage dumped in the streets of the capital for eight days now will be collected and disposed at Sisdole Landfill Site in Nuwakot district from Friday following an agreement reached between the government and agitating locals Thursday. Apart from cleaning out the garbage-- some 5,000 tons-- accumulated in the streets, the agreement seeks to put an end to this long-standing malady of the fast-growing capital city. To make this 53rd garbage obstruction the last one, the government has agreed to speed up construction of a Central Lanfill Site at Bancharedanda in Nuwakot. An action plan will be prepared at the earliest, the agreement reads. The existing Sisdol Site will be improvised to accomodate garbage disposal until the Bancharedanda site is ready. Under-secretary at the Ministry for Local Development Danda Raj Ghimire and local representatives of political parties had signed the agreement in the presence of the minister of state for local development. The signing took place in the presence of representatives of the Ministry for Finance and the Ministry of Education. Talks had been prolonged for three days as the agitating group led by a local Maoist leader held back time and again, insisting on their demands. In view of controversy about the affected area, an independent study will be carried out by an acclaimed institution to ascertain the extent of that area, said Dipendra Oli, legal officer of the Garbage Management and Resource Mobilization Centre (GMRMC), the government agency which brokered the talks. A high-level mechanism of CA members, to be assisted by a technical team, will be formed to draft a broad development plan for the affected area. This will purportedly ready the elected representatives to handle the issue which has always remained a point of contention between GMRMC, Kathmandu Metropolitan City and the locals. The government and the locals have agreed to form an authorized body involving local and political representatives to take charge of the landfill site. An all-party mechanism formed four years ago had become defunct as the locals obstructed garbage disposal for 72 days. Besides the policy-wise agreement, both sides have agreed on some infrastructural issues also. The much-hyped alternative Okharpauwa-Galchi highway has been given a 2016 deadline. Work is to begin with the construction of a bridge at Ratamate this year. Similarly, pending and ongoing projects at Chatredeurali and Okharpauwa will be speeded up. Source: www.myrepublica.com Date: July 30, 2009
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EXPRESSIONS Strongest pillar of National Unity: Nepali language The Nepali language, the most beautiful among the languages spoken by the human beings, though has its root in Sanskrit, the language of the Gods and Goddesses, has evolved scientifically by the virtue of the nature itself. Nepali language never needed so much debate to make it more scientific. It is by itself following scientific development. Thus, the Nepali language speakers must feel proud that the language of the Gods and Goddesses- "Sanskrit`, by choosing the natural course has evolved into the most beautiful and scientific language of the present day world. In this, whoever possess hatred against the "Nepali Bhasa (language)` is not just the ignorant to the evolution of the languages but also jealous against the natural development of the beauties of the Nepali language. Nepali language is one of the four pillars of the national unity of the Nepalese People. Other three pillars were almost undermined and paralyzed. The life we have been practicing under the enlightenment of Hindu Dharma has been attacked. The Nepalese people were tried to deny practicing the day-to-day life by breaking the ties they enjoyed which was protected by the Hindu Dharma. Nepal`s unique identity as the only Hindu Rastra in the world is attacked by none other than the reason to break the unity guarded by the Hindu Dharma. The third pillar of the unity of Nepalese that is Nepal`s Monarchy was forced to leave the crown. The fourth pillar known as Nepal Army is also weakened. It was made to lose its glory by making it failed to protect its supreme commander, "the King`. It is further weakened after it was dragged into politics and thereby provided not only national actors to interfere in its affairs but the foreigners openly played Nepal Army to protect their vested interests in Nepal. The Nepali language has turned the strongest pillar of the national unity of the Nepalese people. Though it has been attacked, too, from the very beginning of the strategy to weaken Nepal`s unity, Nepali language is withstanding the pressures. It is surviving and slowly moving towards its natural course of evolution. All Nepalese who think they have something to contribute to the nation must stand firm to protect Nepali language as well which ultimately protect our national unity and save Nepal from being disintegrated. Now, it must be very clearly understood that why the real enemies of Nepal prefer Hindi as the median language of the terai (plain land). In the past, Nepali Congress members had affection towards Hindi. The Nepali Congress party is belittled by the terai based parties on demanding the Hindi as lingua franca of their stronghold. The episode of the Vice Presidential oath taking ceremony in Hindi is still fresh. There are many more in terai based parties who openly prefer Hindi against Nepali language. It is their efforts to boost political career pleasing the big neighbors, frankly speaking, their masters across the borders. Following the reestablishment of the multiparty democracy in 1990, several incidents were recorded in support of the Hindi language but the elections to the Constituent Assembly (2008), provided more opportunities to the subservient to the masters 24
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across the borders to please them by loudly speaking in favor of the Hindi against the Nepali language. It is an irony, there is no law against those who undermine and speak against the national language of Nepal. We must have a clear policy that the lovers of Hindi language who wants to turn it as Nepal`s median language be asked to respectfully leave the country and settle elsewhere in Bihar, UP or other states and campaign for the language they love very much. The Nepal Government has to have the strict laws that bind anyone from getting citizenship who do not speak Nepali language or any language that is purely home grown like Nepal Bhasa (Newa), Tamang, Gurung, Bhojpuri, Maithili, Sherpa and so on. Since Nepali is the median language to the origin of Nepali people living inside Nepal or abroad, its planned development is needed. Every Nepali should be taught Nepali language to make it real national language. As long as Nepal remains intact, we are Nepalese and we all keep on speaking Nepali language. Whoever we are by caste groups or wherever we live, Nepali language provides us as median to exchange our feelings to each-other. In foreign lands, all Nepalese including Bhutanese exchange their feelings in Nepali language. Many Tibetans and Indians of Nepali origin also prefer to speak Nepali. The development of Nepali language in Diaspora lacks seriousness. This might have prompted out of the insufficiency of the credible leadership or credible institution that can bear the great responsibilities convincing the people of Nepali origin that Nepali language and Nepal are synonyms. One without another is a paralyzed object. There is an urgency to have an "Institution` composed of Diaspora scholars of Nepali language and the scholars who live in a land of Nepali language origin. There must be joint efforts to protect and promote Nepali language. At least, Diaspora has to make the concerned authority working towards the development of Nepali language to sincerely pay attention to the development taking place in Diaspora as far as the Nepali language is concerned. Seeking a feedback from them on timely basis should not be the issue of ego. Finally, we all Nepalese must realize that Nepali language is the only remaining means to protect the national unity of Nepal. The Nepali language, therefore, needs to be promoted and protected at any cost. Its survival is directly linked to the survival of Nepal. Keeping Nepal intact is not just the duty of the people living in Nepal. This responsibility befalls upon all people of Nepali origin. This is the message we all need to extend throughout the world where the people of Nepali origin have spread. Source: thesop.org/world.
Yahoo comes full circle with retreat from search SAN FRANCISCO: Yahoo Inc. invested billions of dollars in its Internet search engine during the past six years before realizing it made more sense to entrust the job to an outsider hearkening back to a conclusion the company's co-founders reached
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shortly after they started their Web directory in the mid-1990s. The latest shift in direction will put rival Microsoft Corp. in control of the search results and the ads that appear alongside search results on Yahoo's highly trafficked Web site, assuming the proposed partnership is approved by antitrust regulators in the United States and Europe. The 10-year deal announced Wednesday blows up a search expansion undertaken under Yahoo's former chief executive, Terry Semel, who resigned under shareholder pressure two years ago. The repudiation of Semel's strategy returns Yahoo to a philosophy embraced by co-founders Jerry Yang and David Filo in the company's early days. Within two years of starting what was originally known as "Jerry and David's Guide to the World Wide Web," Yang and Filo concluded Yahoo wouldn't be able to index all the new sites proliferating on the Internet without more automation and sophistication. Rather than spend its own money on expensive upgrades, Yahoo hired AltaVista to supplement its search engine and then later turned to Inktomi. Those decisions freed up more cash for Yahoo to spend on compelling content and developing other services that established its Web site as the biggest draw on the Internet. As indexing the Web grew even more complicated in 2000, Yahoo sought the expertise of an ambitious young startup called Google. In a move that the company later regretted, Yahoo promoted the Google brand next to its search box to show where it got its results. The exposure on one of the Web's most popular pages drove millions of people to Google's search engine, which quickly supplanted Yahoo as the go-to place to find stuff on the Web. After Google came up with a way to make big money from text ads placed alongside search results, Semel wanted a bigger piece of the action. Beginning in 2002, Yahoo spent more than $2 billion buying other search engines, including the remnants of AltaVista and Inktomi. Later, Yahoo invested heavily in search improvements that included a much-delayed advertising system called Panama. Although it helped boost Yahoo's profits early on, the search expansion never panned out the way Semel envisioned. Google widened its lead in search as Yahoo's U.S. share shriveled from about one-third of the market in 2004 to about one-fifth of the market today. To make matters worse, socializing hubs like Facebook and MySpace supplanted Yahoo as the hot spots to hang out on the Web. "They just lost their way," said technology analyst Rob Enderle. "This (Microsoft deal) will let them rediscover what they once were — a place where a lot of people liked to spend a lot of their time online." While he was Yahoo's CEO last year, Yang tried to lessen Yahoo's financial
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commitment to search by forming an advertising partnership with Google. Under that plan — which is narrower than what Yahoo now wants to do with Microsoft — Google would have served up some of the ads that ran alongside search results on Yahoo. U.S. antitrust regulators threatened to sue to block the arrangement, scaring Google off. Yang didn't seem to want any part of Microsoft. In May 2008, he and the rest of Yahoo's board rebuffed a Microsoft offer to pay Yahoo $1 billion in cash and buy $8 billion worth of stock in return for a search partnership. Now, Yahoo will get no cash upfront, and instead will get a big share of the ad revenue generated by Microsoft's search engine when it handles queries on Yahoo's site. (Microsoft will also keep running its search engine at its usual locations, such as msn.com, bing.com and on the "toolbars" it lets people download to their Web browsers.) Carol Bartz, Yahoo's chief executive for the past six months, quickly realized that the Sunnyvale, Calif.-based company needed to get back to its roots. Since her arrival, Bartz has been de-emphasizing Yahoo's need to run its own search engine. "It really hard to tell whether (Bartz) just thinks Yahoo isn't that strong in search or whether she thinks she needs to jettison search to save the company," said Danny Sullivan, editor of the online newsletter SearchEngineLand. This much is certain: Microsoft has been stalking Yahoo for years because it wants to boost its meager U.S. market share of 8 percent to narrow the gap separating it from Google, which commands a 65 percent share. Because Yahoo handles about 20 percent of search requests, the Microsoft-Yahoo combination would have about 28 percent share, assuming no big shifts in usage between now and when the project is fully running — which could take two years. "We found a partner willing and excited to put a lot of technology behind search," Bartz said in an interview Wednesday. "So our customers are still going to get the same search experience or better search experience because of the investment that Microsoft is willing to make." Microsoft is no stranger to the concept of farming out search, having done that itself earlier this decade, when it relied on Yahoo's technology. Another prominent Web site, AOL, has used Google for search results and advertising for years. Having the extra money to spend on other products and services hasn't proven that effective for AOL, which has been faring so badly for so long that its corporate parent, Time Warner Inc., is cutting the subsidiary loose this year. Since breaking away from its first partnership with Yahoo, Microsoft has been continually honing its search expertise and even hired away one of Yahoo's top engineers, Qi Lu, to further the cause. This time, Yahoo won't feature its partner's brand in the prime space located next to
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its search box. Bing's name instead will only appear at the bottom of the search results page. Source: www.thehimalayantimes.com Date: 2009-07-31
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