R&D Economic Research & Business Development
Date: July 4, 2010
Highlights
Contrary to the GDP growth projection of 5.5 per cent, the Economic Survey likely to be presented on July 8 -presents a gloomy scenario. The Survey doesn't expect GDP to expand beyond 3.5 per cent due to low agriculture yield, especially for major crops like maize and paddy. Besides, the nonagriculture sector's output too has been lower than expected. Inflation stands at 10.7 per cent against the projected seven per cent. The Survey maintains that double digit price hike and slow growth have adversely impacted consumers' purchasing power, posing a serious threat to financial management. Governor of Nepal Rastra Bank (NRB) Dr Yuba Raj Khatiwada has said, there will no shortage of currency notes this year during the festival season like last year. Addressing a symposium on financial liquidity and changing interest rates on credit in Damauli Saturday Dr Khatiwada said, NRB had printed and kept in stock enough notes for next three years. Nepal Rastra Bank (NRB) has frozen bank accounts 20 firms for evading tax, Kantipur daily reported. NRB directed concerned banks and financial institutions to freeze the accounts of the firms from Thursday on the recommendation of Inland Revenue Department (IRD). Nepal has been selected among six countries in the world to undertake pilot programme on scaling up renewable energy in low income countries (SREP) for the first time under multi-lateral development banks’ Climate Investment Funds (CIF). Through Strategic Climate Fund (SCF) under the CIF, Nepal will get funding worth US$50 million (Rs. 3.71 billion approx.) from the CIF Strategic Climate Fund (SCF) to undertake a transformational programme for renewable energy development in the country. The decision was made at a meeting of the multilateral CIF governing bodies last week in Washington D.C. The caretaker government is planning to bring a vote on accounts bill worth around Rs 110 billion, out of the which biggest chunk of around Rs 53 billion will be earmarked for recurrent expenditure. The new budget should focus on import-substitution to deal with the balance of payments deficit as export promotion would require a longer period. Terming balance of payment deficit the biggest problem, Rameshwor Khanal, Secretary, Ministry of Finance, said at an interaction programme, ―The coming budget has focused on the programmes that will increase the production capacity.
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The government will take import substitute measures to protect the domestic industry in the areas of meat, vegetables and fruits, cements and dairy. With the trade deficit as high as 52 percent and Balance of Payment deficit at Rs. 17.36 billion, the government is seeking to reduce imports. Overlay works on over 100 km major roads inside Kathmandu Valley have become uncertain due to delay in the approval of budget by the Ministry of Finance (MoF) and National Planning Commission (NPC). The Ministry of Energy has sold license of three hydro-electric projects to private sector, Nagarik daily reported. The ministry handed over the license of 5 MW Maya Khola project, 6.4 MW Singati Khola project and 15.24 MW Mathillo Solu project to private sector through competition on Friday. Nepal Tourism Infrastructure Development Council (NTIDC) is preparing tourism profile of all 75 districts of the country. According to Baikuntha Nath Pradhan, NTIDC chairman, the organization has already prepared tourism profile of Dolakha district. The profiles will be prepared in coordination with the concerned VDCs, District Development Committees and the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), Pradhan said. The government has opened a letter of credit (LC) to import 12,500 tonnes of sugar from Brazil with an eye on the festive season of Dashain and Tihar. Under this consignment, National Trading Limited (NTL) and Salt Trading Corporation (STC) will import 6,250 kg of sugar each. The Gold price fell hard alongside the dollar on Friday dropping to $ 1,207 per ounce in the international market with its domestic trading price falling to Rs 35,400 per tola on Friday. In the domestic market, gold opened on Sunday at Rs 36,200 per tola. The capital market responded positively to the resignation of Prime Minister Madhav Kumar Nepal with the Nepal Stock Exchange Index (NEPSE) witnessing a double digit growth last week. NEPSE witnessed a gain of 11.39 points. The benchmark index that had opened at 459.52 points on Monday settled at 470.91 points on Thursday. Financial experts are advising the rookies to invest in Initial Public Offering (IPO) and mutual funds before engaging in the secondary market, which is more risky and investment-intensive. ―Nepse’s current problem is that shares are in oversupply while the demand is low. This pulls the index down,‖ said Shurbir Paudyal, SEBON Chairman, at an interaction programme about women investors or lack of it in the capital market. The three major parties -- UCPN (Maoist), Nepali Congress and CPN-UML on Saturday held bilateral negotiations in a bid to form a national consensus government. But they failed to make any substantive progress as the NC and UML asked the Maoists to agree on concluding the remaining tasks of the peace process. 2
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Nepali Congress leaders have made it clear to the Maoist leadership that their party is not going to support the Maoist bid to form new government under its leadership. CPN-UML Chairman Jhala Nath Khanal on Saturday informed UML parliamentarians that the party is again in a position to lead the next government and he has already taken initiatives toward that end. Himalayan river basins in China, Bangladesh, India and Nepal will face massive water depletion in the next 20 years, leading to mass exodus and decline in food, according to a report. During the Singapore International Water Week (SIWW) 2010 held from June 28 to July 2, a report published by Strategic Foresight Group of India stated that due to natural causes like glacial melting, the four countries including Nepal would lose almost 275 billion cubic meters of annual renewable water in the next two decades, more than the total amount of available water in Nepal at present. In a ―no-stone-left-unturned‖ approach, the Ministry of Foreign Affairs (MoFA) is determined to complete the awarding of the bid concerning supply of Machine Readable Passports (MRP) contract before the new government takes charge. Nearly two years after acquiring membership of the International Atomic Energy Agency (IAEA), the government has now begun preparations to legitimize the membership.
BANKING:
ECONOMIC SUR VEY Paints bleak picture; GDP growth down Economic freedom hurt on five out of ten fronts Contrary to the GDP growth projection of 5.5 per cent, the Economic Survey -likely to be presented on July 8 -presents a gloomy scenario. The Survey doesn't expect GDP to expand beyond 3.5 per cent due to low agriculture yield, especially for major crops like maize and paddy. Besides, the non-agriculture sector's output too has been lower than expected. Inflation stands at 10.7 per cent against the projected seven per cent. The Survey maintains that double digit price hike and slow growth have adversely impacted consumers' purchasing power, posing a serious threat to financial management.
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Traditionally, the Survey is presented a day ahead of the budget for the fiscal year. However, this year, with the possibility of new government formation still distant, the Madhav Kumar Nepal-led caretaker government is preparing to present the Finance Bill on July 9, a day after the Economic Survey is presented. "We are planning to present the Economic Survey on July 8," said Keshav Acharya, senior economic advisor at the Finance Ministry. Finance minister Surendra Pandey is likely to present the Financial Bill on July 9 so as to give the government the right to spend a quarter of this fiscal year's expenditure. Delay in the budget will also not hit revenue collection as Income Tax Act 2012 BS has given the government the right to collect revenue not exceeding this fiscal year's rates. Since the last three years, successive governments have failed to present a full-fledged budget on time due to political instability that has also brought down Nepal's economic freedom ranking. According to the 2010 Index published by Heritage Foundation and Wall Street Journal, Nepal ranked 130th scoring 0.5 point lower than last year, reflecting decline in five of the 10 economic freedoms, due to political instability. It has hampered development as successive governments have not been able to spend properly on development activities. Due to ballooning trade deficit and slowdown in remittance growth rate -hovering around 10 per cent -Balance of Payment (BoP) has also registered deficit. THT July 04, 2010
There will be no shortage of currency notes this year: NRB governor Governor of Nepal Rastra Bank (NRB) Dr Yuba Raj Khatiwada has said, there will no shortage of currency notes this year during the festival season like last year. Addressing a symposium on financial liquidity and changing interest rates on credit in Damauli Saturday Dr Khatiwada said, NRB had printed and kept in stock enough notes for next three years. Last year, during the festival seasons people had faced acute shortage of currency notes as NRB could not supply enough notes to the banks. Customers were unable to withdraw enough money from the banks due to the shortage of notes. Dr Khatiwada attributed the shortage of notes last year to the delay in appointing the governor. He claimed the banks and the financial institutions this year were safe and urged people to deposit money in the banks without apprehension.
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People have been stocking notes in their homes and even in bank lockers instead of depositing in bank accounts due to the reduced credibility of banking system in the recent months. nepalnews.com 03 July 2010
NRB freezes bank accounts of 20 firms for evading tax Nepal Rastra Bank (NRB) has frozen bank accounts 20 firms for evading tax, Kantipur daily reported. NRB directed concerned banks and financial institutions to freeze the accounts of the firms from Thursday on the recommendation of Inland Revenue Department (IRD). Chief Tax Officer Krishna Bahadur Bohara said, the accounts of the firms were frozen as the firms refused to pay taxes even after several verbal and written reminders. nepalnews.com 3 July 2010
Int’l aid to tackle climate change JUL 03 - Nepal has been selected among six countries in the world to undertake pilot programme on scaling up renewable energy in low income countries (SREP) for the first time under multi-lateral development banks’ Climate Investment Funds (CIF). Through Strategic Climate Fund (SCF) under the CIF, Nepal will get funding worth US$50 million (Rs. 3.71 billion approx.) from the CIF Strategic Climate Fund (SCF) to undertake a transformational programme for renewable energy development in the country. The decision was made at a meeting of the multilateral CIF governing bodies last week in Washington D.C. A unique programme, SREP was launched at the UN Climate Change Conference in Copenhagen last December to support low-carbon and climate resilience development through scaled-up financing from the developed nations, which are responsible for global warming and climate change. As part of the Copenhagen Accord, there is a proposal to raise $30 billion for faststart finance until 2012, with $100 billion to be mobilised annually by 2020. A total of $6.1 billion has been committed by the developed nations till date under the long-term funding mechanisms. Prior to Copenhagen, pledged contributions to the SREP (equivalent in dollars in million) from the UK (82.4), Netherlands (81.8), Norway (26.5) and Switzerland (20) totalled $210.7 million where US Energy Secretary Steven Chu announced a financial support of $50 million. ―It is a big opportunity for a developing country like Nepal to be a part of funding mechanisms under the CIF that would help the country in development and poverty
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Rs 110b vote on accounts bill in offing July 3: The caretaker government is planning to bring a vote on accounts bill worth around Rs 110 billion, out of the which biggest chunk of around Rs 53 billion will be earmarked for recurrent expenditure. Briefing the parliamentary committee of the CPN-UML about the fiscal budget that the Ministry of Finance is planning to bring in the wake of confusion that has emerged after the sudden resignation of the government, Finance Minister in the caretaker government, Surendra Pandey, said that the ministry is planning to table the bill on July 9. Of the total expenditure planned for the next fiscal year, the ministry will earmark the entire fiscal year´s budget for expenditure heads that fall under chargeable items -expenditure allocations that are not discussed in parliament, said a government official. Expenditures for repayment of domestic as well as foreign loans and interest, expenses for the president, parliament and the judiciary are earmarked under the chargeable items in the budget. However, MOF is working to bring one-third of the annual expenditure for appropriate items -- expenditure heads needing parliamentary approval. As per the Article 96 (A) of the Interim Constitution, the government is authorized to bring one-third of the actual expenditure of the current fiscal year for expenditure heads falling under the appropriate items category. Government officials told myrepublica.com that the Ministry of Finance is planning to earmark Rs 20 billion for financing capital expenditure, Rs 31 billion for repaying principal and interest of internal as well as external loans.
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Finance Minister Pandey also was quoted as saying that the government is planning to allocate enough budget for major ongoing development projects. As per the Interim Constitution, the government however, will also have the authority to mobilize revenues as per the Finance Act of the current fiscal year, though the government can´t bring changes to the present tax structure or introduce new taxes. Then finance minister Dr Ram Sharan Mahat announced a similar budget in 2008/09 when the government led by late Girija Prasad Koirala was rendered a caretaker government immediately after the Constituent Assembly election. http://www.myrepublica.com/portal/index.php?action=news_details&news_id=20629
Experts brainstorm for new budget The new budget should focus on import-substitution to deal with the balance of payments deficit as export promotion would require a longer period. Terming balance of payment deficit the biggest problem, Rameshwor Khanal, Secretary, Ministry of Finance, said at an interaction programme, ―The coming budget has focused on the programmes that will increase the production capacity. We are aiming to be self-reliant in the production of vegetables, fruits and meat in two years.‖ ―if everything goes as planned, we will be self-reliant in cement production in five years,‖ he added. He also opposed government regulation in petroleum and electricity prices. ―The prices of these items should be left to be decided by the forces of demand and supply,‖ he said. He pointed out that industrial sector is faced with many problems such as power shortage, difficult labour relations, political instability and security issues. Due to more credit flowing to non-productive sectors and interest rate being high, the industrial sectors need incentives, he said. ―The forthcoming budget should deal with issues such as poor investment climate, inflation, performance of public enterprises, balance of payment deficit, climate change and so on,‖ said Badri Pokharel, Joint Secretary, National Planning Commission. ―The delaying of budget will create difficulty in expenditure, especially on development,‖ he said. ―It is unfortunate that the recurrent expenditure goes overboard but, of the entire allocated capital budget for the financial year 2009-10, only about 60 per cent has been spent so far,‖ he said. ―Being a land-locked country, the Nepali economy is cost-intensive and too much dependent on India,‖ said economist Dr Madan Kumar Dahal. It is a necessity to deviate from agriculture-based economy to an industrial economy, he said. ―Our economy is in crisis as the imports are increasing and exports are disappearing.
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At the same time, we are becoming more dependent on India, resulting in more severe shortage of Indian currency, which in turn is causing liquidity crunch in the banking sector in Nepal,‖ he said. ―On the other hand, when development expenditure is not spent, it restricts nation’s growth,‖ he said. He said that the only silver lining is that the revenue collection in the past few years has shown a growth but unfortunately these are diverted towards recurrent budget, and not to the development expenditures. He suggested, ―For an export-led growth, we need zero-tariff policy with India and China. China has been kind to allow about 200 commodities as tariff-free.‖ ―Public enterprises have been bleeding our economy. The next budget should decide the fate of these enterprises,‖ he said. ―Productivity has to be prioritised, especially for a sustained growth as it leads to the development of both infrastructure and service sectors. They should be provided with incentives and subsidies,‖ said economist Dr Dilli Raj Khanal. The expenditure structure needs a drastic improvement. ―Our growth is decelerating but at the same time inflation is rising. So, we are dangerously moving towards stagflation,‖ he said. http://www.thehimalayantimes.com/fullNews.php?headline=Experts+brainstorm+for +new+budget+&NewsID=248678
BUSINESS & ECONOMY: Import substitution a must, says govt JUL 04 - The government will take import substitute measures to protect the domestic industry in the areas of meat, vegetables and fruits, cements and dairy. With the trade deficit as high as 52 percent and Balance of Payment deficit at Rs. 17.36 billion, the government is seeking to reduce imports. Finance Secretary Rameshwor Khanal on Saturday said the measure would substitute imports worth Rs. 25-30 billion. Nepal imports 55,000 tonnes meat annually while import of other agro products is high and which has triggered BOP deficit to some extent. ―We have low competitive edge products compared to neighboring countries. In this situation, substituting import of these products will be viable as we cannot think of exporting products that reduce the ballooning trade gap immediately,‖ he said. He said that the government would also take some tough measures on petroleum products (PoL) and hike electricity tariff in the upcoming budget. ―We have to take these measures keeping in mind the increasing demand for PoL products as the
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government will not be able to subsidize the products that account for the huge BOP trade,‖ Khanal said at a pre-budget discussion organised by Society for Economic Journalists of Nepal (SEJON). The government will also be harsh on electricity tariff. If the same tariff remains, the Nepal Electricity Authority (NEA), which is reeling under a huge loss, could go bankrupt. ―This will affect people for a short time but will be beneficial and sustainable,‖ he said. The upcoming budget has also adopted measures to substitute some import based industrial and agro products by prioritising their production and encouraging them in the home country. Among the industrial products, import of cement and dairy products would be substituted by domestic production. Secretary Khanal said that by mid-January there will be an additional 12,000 tonnes cement production in the country, which will help substitute import of cement. ―If one more big dairy processing industry is established, it will help import substitution,‖ Khanal said adding that the government was committed to provide all facilities regarding roads and electricity in those industries. The government is planning to bring the advance budget by the next week. ―A fullfledged budget will be announced by the national consensus government,‖ said Khanal quoting the Prime Minister who resigned recently. Khanal said the development budget will take a slow growth path due to lack of political commitment. Delay in budget will not hamper the monetary policy and other issues related to it, but it will severely impact the development budget. http://www.ekantipur.com/2010/07/04/business/import-substitution-a-must-saysgovt/317794/
Setback for Valley roads overlay plan July 4: Overlay works on over 100 km major roads inside Kathmandu Valley have become uncertain due to delay in the approval of budget by the Ministry of Finance (MoF) and National Planning Commission (NPC). The Ministry of Physical Planning and Works (MoPPW) had forwarded concerned proposal to MoF and NPC some five months back requesting a budget of Rs 450 million to overlay 35 km in Kathmandu, 35 km in Lalitpur and 30 km of roads in Bhaktapur in view of the Nepal Tourism Year 2011. In view of the tourism campaign and in response to the request from the Ministry of Tourism and Civil Aviation (MoTCA) for improvement of Valley roads, the MoPPW was working to speed up the overlay process through Roads Division Offices in the three districts of Valley. "Our plan to renovate 100 km roads in the valley roads through overlay has passed through cloud of uncertainty due to delay in approval of the necessary budget. The 9
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whole overlay process would have been completed within the three months after the sanction of the budget," Balaram Mishra, chief of Kathmandu Roads Division Office, told myrepublica.com on Saturday. The division has already initiated the overlay process in Kathmandu´s major roads with its available budget during the current fiscal year. "From our regular budget, we have completed overlay of 25 km roads, out of the 60 km major roads in Kathmandu. However, fate of the remaining 35 km in Kathmandu district has become uncertain," said Mishra. Overlay on the Sitapaila-Chabahil section, New Baneshwar-Jorpati section, Tripureshwar-Teku, Sinamangal-Maitidevi and Kalopul-Durbarmarg sections, and Singha Durbar, Lazimpat and Balaju areas have completed. Kathmandu division had demanded about Rs 20 million for the overlay of the remaining major roads which are facing immense pressure of vehicles. "We had plan to improve pavement along major roads in the Valley had our plan for overlaying the roads completed on time before start of the Nepal Tourism Year," said Mishra. An official at the MoF said decision on the proposed budget for overlaying Valley roads couldn´t be taken due to lingering uncertainty regarding passage of budget for the coming fiscal year. "We are positive about timely overlay of Valley roads by the start of Nepal Tourism Year, but this entirely depends upon the endorsement of the demanded budget," the official added. http://www.myrepublica.com/portal/index.php?action=news_details&news_id=20626
Energy ministry sells license of three hydel projects to private sector The Ministry of Energy has sold license of three hydro-electric projects to private sector, Nagarik daily reported. The ministry handed over the license of 5 MW Maya Khola project, 6.4 MW Singati Khola project and 15.24 MW Mathillo Solu project to private sector through competition on Friday. Electricity Development Board (EDB) had conducted the feasibility study of the projects. The government sold million.nepalnews.com
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Tourism profile of all 75 districts soon July 3: Nepal Tourism Infrastructure Development Council (NTIDC) is preparing tourism profile of all 75 districts of the country. According to Baikuntha Nath Pradhan, NTIDC chairman, the organization has already prepared tourism profile of Dolakha district. The profiles will be prepared in coordination with the concerned VDCs, District Development Committees and the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), Pradhan said. The NTIDC is also working to identify the core tourist areas in the districts and the condition of related infrastructures. I hope this will be much helpful for the success of the Nepal Tourism Year 2011, he said. NTIDC has deployed teams for profiling districts since September 2009 and the work is expected to complete within two years. Nepal can promote thousands of tourist destinations to lure Indian and regional tourists, he said. After identifying attractive destinations, NTIDC aims to come up with feasible solutions for improving the infrastructure. In the city areas and district headquarters hotels with good facilities are essential but in rural areas and villages home stay system is good. The government has also promoted home stay system in view of Nepal Tourism Year 2011. Pradhan said tourism-related cooperative should be set up for investing in home stay system and other tourism activities at local level. According to him this will provide employment opportunities, help develop infrastructures and benefit the local community. Pradhan pointed at the need for producing efficient tourist guides skilled in English, Chinese, Japanese and other major foreign languages. According to him, the government should invest in trainings for producing guides. He stressed immediate training for rural people about home stay system. According to him the government budget effectiveness in tourism sector is poor as mobilization of local bodies for executing tourism plans and programs is less. He said, I/NGOs and local bodies including business communities should work together for developing tourism infrastructures. http://www.myrepublica.com/portal/index.php?action=news_details&news_id=20615 Latin sweetness to lace Nepali mouths this Dashain JUL 04 - The government has opened a letter of credit (LC) to import 12,500 tonnes of sugar from Brazil with an eye on the festive season of Dashain and Tihar. Under this consignment, National Trading Limited (NTL) and Salt Trading Corporation (STC) will import 6,250 kg of sugar each. ―We have already opened an LC for sugar and it is scheduled to arrive in Nepal within mid-August,‖ Laxman Agrawal, general manager of the NTL, told the Post on Saturday. ―The sugar will cost around Rs. 60 to 65 per kg in the local retail market.‖
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This time, the state-owned entities have also made the Brazilian supplier put up a performance bond of two percent as precaution so that they do not have to face any monetary losses even if the supplier fails to deliver sugar. Following the failure in procurement of sugar in the last six months, the government had to cancel the LC opened for import of 25,000 tonnes from Brazil and 12,500 tonnes from Thailand three months ago. However, domestic sugar producers said the government process to procure sugar from Brazil with a view to selling them at Rs. 60 to Rs. 65 a kg in the retail market was not logical at the time when they, too, were able to make sugar available within the same price range. ―We have 20,000 to 30,000 tonnes of sugar in stock,‖ said Manish Agrawal, managing director of Lumbini Sugar Mills and a member of Nepal Sugar Mills Association. ―If the government invites for tender to supply sugar, domestic producers can offer the sugar at reasonable prices.‖ NTL and STC have opened the LC at US$ 500 per tonne for 12,500 tonnes and they are planning to import at least 25,000 tonnes of sugar from Brazilian suppliers for the festive season. Currently, STC has a stock of around 3,000 tonnes of sugar and NTL has around 700 tonnes. The three state owned entities NTL, STC and Nepal Food Corporation (NFC) had procured sugar from domestic producers following the government decision to buy 5,000 tonnes of sugar to control rising prices and short supplies. ―The government did not buy the sugar as agreed and this time, too, is importing sugar without giving us priority,‖ Manish Agrawal said. ―If the government aims to buffer stock, it should bring sugar at a lower price and also provide a level playing field to domestic mills.‖ NTL had taken delivery of around 1,300 tonnes of sugar from domestic producers against the government’s directive to obtain 2,000 tonnes. Likewise, STC and NFC have already acquired 2,000 and 1,000 tonnes as told. ―We did not buy sugar as ordered because the prices had already started to go down,‖ said NTL general manager Agrawal. The government had set the sugar price at Rs. 80 per kg and with the arrival of fresh stock the price started to decline to drop to Rs. 65 from Rs.100 when there was an acute shortage of the sweetener six months back. Meanwhile, NTL said it would not import sugar under the quota offered by India citing lack of financial resources. India has offered 2,000 tonnes of sugar to Nepal, of which STC has already received approval for 5,300 tonnes. ―We are out of cash for import from India,‖ said Agrawal. He said they had obtained a loan of Rs. 700 million to import sugar from Brazil. http://www.ekantipur.com/2010/07/04/business/latin-sweetness-to-lace-nepalimouths-this-dashain/317793/
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MARKET: Euro vs dollar keeps gold prices lower The Gold price fell hard alongside the dollar on Friday dropping to $ 1,207 per ounce in the international market with its domestic trading price falling to Rs 35,400 per tola on Friday. In the domestic market, gold opened on Sunday at Rs 36,200 per tola. As US investors lost more than the Euro, the single currency jumped on the forex market effecting fall in the price of gold to $ 1,207 per ounce. According to the agencies, as a percentage of global financial assets, investible gold has gone from 17 per cent in 1982 to 4 per cent today. According to agencies, on the currency market today the Euro rose sharply, leaping to a two-week high, and pushing the gold price in Euros down through Euro-1,000 an ounce for the first time since June 17. Gold this week opened at Rs 31,035 per 10 gram ,that is Rs 36,200 per tola and remained at the same price on Monday. Later on Tuesday, trading price of gold dropped by Rs 215 and was priced at Rs 30,820 per 10 gram on Tuesday. It however picked up to Rs 30,975 on Wednesday and again gaining its trading price to Rs 31,035 per 10 gram on Thursday. Gold closed at Rs 30,350 per 10 gram that is Rs 35,400 per tola. Meanwhile, silver opened at Rs 494 per 10 gram and remained at the same price on Monday too. On Tuesday, the price fell to Rs 487 per 10 gram and was traded for the same price till Thursday, said NEGOSIDA. Silver closed at Rs 480 per 10 gram . Tej Ratna Shakya, president of Nepal Gold and Silver Dealers’ Association, said though the NRB has agreed to extend the import quota till July 14, traders wanted a higher quota of gold for import than existing 20 kg a day. http://www.thehimalayantimes.com/fullNews.php?headline=Euro+vs+dollar+keeps+g old+prices+lower&NewsID=248583
NEPSE smiles at PM ouster JUL 04 - The capital market responded positively to the resignation of Prime Minister Madhav Kumar Nepal with the Nepal Stock Exchange Index (NEPSE) witnessing a double digit growth last week. NEPSE witnessed a gain of 11.39 points. The benchmark index that had opened at 459.52 points on Monday settled at 470.91 points on Thursday. The sluggish secondary market since the last few weeks, bounced back with double digit points last week as the market gained 15.16 points a day after the prime minister’s resignation on Thursday. Although the latest surge in the market is being seen as a hope for political stability following the prime minister’s resignation, experts say economic factors remain equally responsible for the market performance.
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POLITICS: Parties make no headway in bilateral talks July 3: The three major parties -- UCPN (Maoist), Nepali Congress and CPN-UML on Saturday held bilateral negotiations in a bid to form a national consensus government. But they failed to make any substantive progress as the NC and UML asked the Maoists to agree on concluding the remaining tasks of the peace process. During a bilateral meeting with the Maoists Saturday afternoon, the NC asked the Maoists to come up with a concrete work plan with a timeframe to accomplish the remaining tasks of the peace process as agreed in the three-point deal, before forming the new government. NC leaders argued that since the prime minister has already stepped down as per the agreement reached on May 28 it is now the turn of the Maoists to come up with a concrete work plan for concluding the remaining tasks of the peace process including management of the cantoned combatants, return of seized properties and disbanding the paramilitary structure of the YCL (Young Communist League).
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According to NC Vice-president Gopal Man Shrestha, the Maoists begged for NC support to form a national consensus government under their leadership, saying that both the process of forming a new government and completing the remaining tasks of the peace process can be taken ahead side by side. The Maoists argued that they already agreed to passage of one-third of the total budget and formation of a State Restructuring Commission, following the resignation of the prime minister. ―Other remaining things can also be taken ahead simultaneously with the formation of a new government,‖ Shrestha quoted the Maoists as saying. During the meeting, the Maoists repeated that that they were not in a position to determine the number of combatants to be integrated into the security agencies as demanded by the NC. They asked NC leaders not to land them in trouble by asking them to determine the numbers without learning about the interests of individual combatants. NC leaders had asked the Maoists not to link the peace process with the formation of a new government. They said they cannot trust the Maoists as they failed to abide by past agreements. Talking to media after the meeting, NC Vice-president Ram Chandra Poudel said they forcefully raised the issue of completing the remaining tasks in the peace process including management of Maoist combatants. ―They [Maoists] said they have taken our demand seriously,‖ he said. Poudel said they have agreed to hold further negotiations to arrive at a consensus before the July 7 deadline given by President Dr Ram Baran Yadav for forming a national consensus government. ―The issue of government leadership is as it was before,‖ he said. ―We will hold a further round of negotiations.‖ Maoist Vice-chairman Narayan Kaji Shrestha told media that they held serious negotiations on the issues of forming a national consensus government and government leadership. ―We have agreed to form a national consensus government by arriving at consensus on all contentious issues,‖ he said. According to Shrestha, they told the NC that a majority government would not help conclude the peace process and promulgate a new constitution. Maoist-UML meet Senior leaders of the Maoists and the UML held a separate meeting to arrive at consensus on forming a new government, but failed to make substantive progress. UML Chairman Jhalanath Khanal and senior leader Bharat Mohan Adhikari reached the residence of Maoist Chairman Pushpa Kamal Dahal Saturday morning to hold talks on government leadership. Maoist leaders Mohan Baidya and Baburam Bhattarai were present during the meeting.
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Dr Bhattarai argued that the current trend among senior leaders to present themselves as prime ministerial candidates would complicate the political deadlock. "Reaching a political consensus would be impossible should each leader eye the post and seek to make himself the consensus candidate," said Dr Bhattarai. The Maoist vice-chairman, who is seen as a strong prime ministerial candidate, argued that his party being the largest in the legislature-parliament should naturally lead the new consensus government, and that would help the completion of the peace process and constitution-drafting. He said only a Maoist-led consensus government would be able to complete the peace process. "We should attempt till the last hour to form a consensus government," he said. After the meeting, Khanal said the parties are having problems with the formation of a national consensus government due to differences over who should lead it. "But we will sort out the issues through talks," he said. The UML chief argued that the disputes would be resolved within the deadline given by President Yadav. The deadline for formation of a consensus government expires Wednesday. Maoist-MPRF meet The Maoists also held talks with the Madhesi People´s Right Forum (MPRF) at Singha Durbar on Saturday. After the meeting MPRF Co-chair Jaya Prakash Gupta said his party would lend support to a Maoist-led consensus government, but he argued that the Maoists should also address the issues related to the peace process as demanded by other parties. On the occasion, the Maoists asked MPRF to support them in forming a new government. Maoist Vice-chairman Narayan Kaji Shrestha told media that they have asked MPRF to forge an alliance of progressive forces to not let regressive forces gain sway. http://www.myrepublica.com/portal/index.php?action=news_details&news_id=20619
NC leaders turn down Maoist call for support to form govt Nepali Congress leaders have made it clear to the Maoist leadership that their party is not going to support the Maoist bid to form new government under its leadership. During a meeting with Maoist leaders held at NC parliamentary party office in Singha Durbar Saturday, the Maoist leadership pledged to move ahead with consensus and urged the NC to support them to form new government. However, the NC leaders reiterated that the Maoists should first of all implement the May 28 agreement regarding the peace process, before claiming government leadership.
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NC vice president and parliamentary leader Ram Chandra Poude, who is projected as one of the prime ministerial candidate, said the Maoists should be ready for the management of their combatants at the earliest. "Maoists were positive on the agenda of the PLA integration," Poudel told reporters after the meeting. Maoist chairman Pushpa Kamal Dahal represented his party in the meeting along with Dr Baburam Bhattarai and Mohan Baidya, while acting president Sushil Koirala, senior leader Sher Bahadur Deuba and Poudel were present from NC.nepalnews.com 03 July 2010
GENERAL: ‘Serious water woes’ in 20 yrs JUL 03 – Himalayan river basins in China, Bangladesh, India and Nepal will face massive water depletion in the next 20 years, leading to mass exodus and decline in food, according to a report. During the Singapore International Water Week (SIWW) 2010 held from June 28 to July 2, a report published by Strategic Foresight Group of India stated that due to natural causes like glacial melting, the four countries including Nepal would lose almost 275 billion cubic meters of annual renewable water in the next two decades, more than the total amount of available water in Nepal at present. Themed ―Sustainable Cities: Clean and Affordable Water‖, the SIWW focused on the need for efficiency and cost effective solutions to address water problems in a constantly changing environment. Irrigation Minister Bal Krishna Khand was one of the 12,000 participants including policymakers, industry leaders, experts, and practitioners to address challenges, showcase technologies, discover opportunities and celebrate achievements in the water world. The report states that water scarcity and effects like desertification and soil erosion would reduce rice and wheat yields in China and India by as much as 50 percent by 2050. ―This will create havoc in the global food market due to soaring prices. Water depletion in the river basins would displace millions of people in the four countries by 2050,‖ mentioned the report. The basins of the rivers, including Yellow River and the Yangtze in China and the Ganges in India, are home to 1.3 billion people.
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There is a need of cooperation among the four nations in the management of river basins, said Khand. http://www.ekantipur.com/the-kathmandu-post/2010/07/03/nation/serious-waterwoes-in-20-yrs/210077/
MRP deal before new govt: MoFA JUL 03 – In a ―no-stone-left-unturned‖ approach, the Ministry of Foreign Affairs (MoFA) is determined to complete the awarding of the bid concerning supply of Machine Readable Passports (MRP) contract before the new government takes charge. Officials say this is because it wants to ward off ―unnecessary political pressure‖ that crippled the earlier bidding process. Four international security firms have submitted their papers to supply the MRPs to Nepal in a competitive global bidding process, a multimillion rupee project which aims to fulfill Nepal’s international obligation of adopting the smart passport. ―We want to avoid any kind of political pressure and maneuvering regarding the MRP deal which should also ensure and uphold the credit of the ministry. If we drag our feet this time, it would be an irreparable injury,‖ said an official. The four companies—De La Rue (UK), 3M (Singapore), Oberthur (France) and Perum Peruri of Indonesia—have submitted the bid at MoFA. The MoFA announced a fresh MRP bid on May 18 with a 45-day deadline, which expired on Thursday to submit the applications for interested bidders. ―A day after the deadline expires, we will immediately begin evaluating the papers and if we keep pace, within a week we will finish evaluating the documents,‖ the official said. There is no doubt that we want to skip political maneuvering to avoid an untoward situation in order to finish within this transition period, the official said. Earlier, the bid was cancelled following a dispute that erupted between Foreign Minister Sujata Koirala and Foreign Secretary Madan Kumar Bhattarai over the specification issue. The minister wanted to change it but the Secretary opposed it strongly. ―We will work within the time frame,‖ he said. MoFA officials believe that the incumbent establishment may not push any agenda or put political pressure as it is going soon and the coming government would be too green about the matter. ―Before the new Foreign Minister assumes office, we will settle the evaluation process and ask him to ratify the decision taken by the evaluation committee headed by the Chief of Protocol,‖ the official said. http://www.ekantipur.com/the-kathmandu-post/2010/07/03/top-story/mrp-dealbefore-new-govt-mofa/210070/
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Govt out to correct IAEA membership error July 4: Nearly two years after acquiring membership of the International Atomic Energy Agency (IAEA), the government has now begun preparations to legitimize the membership. Republica had reported on the illegal IAEA membership on February 7. The Ministry of Science and Technology (MoST), after realizing that there had been a blunder while acquiring the membership, has finally decided to follow through with all the relevant provisions of the Treaty Act and the Constitution. "There was an error while acquiring the membership two years ago," admitted Rajendra Thapa, Under Secretary at MoST, adding, "We have already begun the process of legitimize the membership." According to him, MoST recently submitted a draft of its decision paper at the bills committee of the cabinet for the necessary decision. "IAEA has already accepted our membership and thus the membership cannot be canceled," Thapa said adding, "We therefore sent the draft to the cabinet for necessary legal endorsement." The bills committee of the cabinet will table the draft in parliament for its endorsement. The government not only failed to obtain parliamentary consent in this regard, it also refrained from taking mandatory suggestions from the Ministry of Law and Justice before acquiring the membership on July 8, 2008. According to the Law and Justice Ministry, the government failed to follow mandatory legal procedures before acquiring the membership. The ministry has complained to the Office of the Prime Minister and Council of Ministers (OPMCM) over the matter. The Interim Constitution and the Treaty Act 1990 contain provisions relating to acquiring such membership. ―The government has to take prior consent from parliament before getting membership of any international agency,‖ reads the constitutional provision. Clause 4 of the Treaty Act 1990 also says that the government is required to take prior consent from parliament. Additionally, the government also failed to publish a notice in the Nepal Gazette after acquiring IAEA membership. ―According to the Treaty Act we must meet all the required legal provisions before acquiring membership," said Phanindra Gautam, co-spokesperson at the Ministry of Law and Justice, adding, "The initiation of steps by MoST to legitimize the membership is appreciated."
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The Law Ministry had also warned OPMCM and the Ministry of Foreign Affairs (MoFA) about the ramifications. The then Girija Prasad Koirala-led government, under a proposal of MoST, had applied for IAEA membership without following the correct procedures. IAEA has already conducted fact-finding research in Nepal and is preparing to launch atomic and cancer-related projects here. Interestingly, the government has already paid the required membership fees to IAEA. According to MoST, the government paid altogether 11,000 euros in 2008 and 2009 as membership charges. IAEA was set up in 1957 within the United Nations framework. The Agency works with member states and multiple partners worldwide to promote safe, secure and peaceful nuclear technology. Draft prepared Meanwhile, MoST has readied a draft nuclear bill with the support of the Law and Development Initiative Nepal. MoST held a discussion on the draft at a program in Kathmandu, Saturday. http://www.myrepublica.com/portal/index.php?action=news_details&news_id=20624
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