r&d_newsbrief 16th dec, 2009

R&D

Economic Research & Business Development

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Date: December 16, 2009

Highlights:

• A prescheduled meeting of the top leaders of the three major parties -Unified CPN (Maoist), Nepali Congress and CPN (UML) - could not take place

Tuesday, giving a clear hint that the parties are still unwilling to show

flexibility for the sake of political consensus.

• UCPN (Maoist) Chairman Pushpa Kamal Dahal said on Tuesday that the two major coalition partners in the government-Nepali Congress (NC) and CPN-

UML-were unwilling to end the protracted political deadlock in the country.

• The Indian Minister of Foreign Affairs, S. M. Krishna has expressed his displeasure over the frequent Nepal media outburst against India. Minister

Krishna expressed the Indian annoyance when he met some Nepali journalists

in South Block, India’s ministry of Foreign Affairs, Monday December 14,

2009.

• Dr. Babu Ram Bhattarai, the Jawaharlal Nehru University New Delhi graduate and the one who is also the vice chairman of Nepal Communist Party-Unified

Maoists’ Party in an exclusive interview with one of the Indian newspapers,

December 14, 2009, has said that the Maoists of Nepal were not at all Anti-

Indians.

• Pretty worried and suspicious Chinese establishment has sent another Military Delegation to Nepal. The Chinese delegation has come close on the heels of

Nepal’s Defense Minister Mrs. Bidya Devi Bhandari’s official request made to

India to construct Air-Strip for Nepal Army in Surkhet district, that claim

security experts, could be time permitting, used by the Indian Air Force to

target Tibet.

• Unified CPN (Maoist) vice chairman Dr Baburam Bhattarai on Tuesday reacted furiously to the statement given by CPN (UML) chairman Jhala Nath

Khanal that the Maoists were still engaging in criminal activities.

• The Unified CPN (Maoist) took the count of autonomous states to eight on Tuesday by declaring two more states. The main opposition party declared

Bheri-Karnali and Bhote-Lama autonomous states by organizing separate

functions attended by senior party leaders and party activists today.

• India, which has decided to resume military aid to Nepal, is likely to supply 50 phased-out tanks at discounted rates. India´s The Telegraph newspaper

reported the deal, quoting an unnamed senior Defense Ministry official in New

Delhi on Tuesday.

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• Nepalese Army chief Lt-Gen. Chhatra Man Singh Gurung is said to have asked his Indian counterpart General Deepak Kapoor to restart in Nepal

recruitment rallies for Nepalese Gorkhas in the Indian Army.

• The government is yet to act upon its three-month-old decision to deploy Armed Police Force (APF) on the northern border.

• The Ministry of Defense has asked the Ministry of Foreign Affairs to write an objection letter to the UN Department of Peacekeeping Operations (DPKO)

over the expulsion of Major Niranjan Basnet

• UN Secretary-General Ban Ki-Moon urged Prime Minister Madhav Kumar Nepal to conclude the issue of the Maoist combatants in next few months.

Saying that UN would not be in the position to extend the term of UN Mission

in Nepal (UNMIN) after one more extension, Ban expressed concerns over the

issue of lingering peace process during a meeting on the sidelines of the

United Nations Framework Convention on Climate Change at the Danish

capital on Tuesday.

• The chair of the 49 Least Developed Countries (LDCs) Group within United Nations System in Geneva, Switzerland, was formally transferred to Nepal on

Monday amid a ceremony organised by the United Nations Conference on

Trade and Development (UNCTAD).

• In a crucial decision to check rapid expansion of credit flow, the board meeting of Nepal Rastra Bank (NRB) Tuesday changed the long-running

credit policy that will increase borrowing rates.

• Nepal’s finance companies are now in the global radar. Spice Finance, the finance arm of the Singapore-based B.K. Modi Group, is looking to acquire

the Pokhara-based Annapurna Finance. The deal will likely run into Rs. 640-

800 million (Indian Rs. 400-500 million), according to an Indian business

daily, Business Standard.

• Nepal Oil Corporation (NOC), which promised last week to ease the supply of petroleum by Tuesday, has now said that fuel availability in Kathmandu

Valley would improve only by the weekend.

• UAE-based flydubai started its Kathmandu-Dubai flight from Tuesday with an introductory roundtrip fare of Rs. 12,000.

• The Ministry of Tourism and Civil Aviation is planning to decentralize the country's tourism by promoting potential tourist spots in the Tarai that possess

historical, religious and cultural importance but have remained unpublicized.

• Distressed by the continuous decline in industrial production due to frequent strikes and labour unrest, the private sector has decided to disobey any closure

call by any political party or group.

• The government has failed to formulate any plan to safeguard the rights of millions of Nepali workers who have been working in various India cities for

decades.

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• Nepal Satellite Telecom has selected solutions from eServGlobal, a provider of smart transaction management solutions in charging, payment and retention

services. Xalted Information Systems and eServGlobal secured the multi-

solution contract for convergent billing, value-added services and related

accessories.

• After posting gains for six straight trading sessions, Nepal Stock Exchange (Nepse) index lost by 1.07 percent or 5.93 points to settle at 548.61 points at

the end of Tuesday´s trading.

• Nepal has been elected an executive committee member of International Organisation of Migration (IOM) for two years starting 2010 by its 98th

session that concluded Tuesday.

• Security was beefed up on UP-Nepal border after hundreds of Nepalese thronged the Sashastra Seema Bal (SSB) check-post office at Sunauli border

in Gorakhpur on Tuesday morning and resorted to heavy stone-pelting. The

SSB had to cane charge the mischief-mongers to disperse them.

• Valley dwellers facing water shortages will have even more to worry about from Wednesday with the hike in tariff by Kathmandu Uptayaka Khanepani

Limited (KUKL), the Valley’s water utility.

POLITICS:

Top-level meeting put off

A prescheduled meeting of the top leaders of the three major parties -Unified CPN (Maoist), Nepali Congress and CPN (UML) - could not take place Tuesday, giving a clear hint that the parties are still unwilling to show flexibility for the sake of political consensus.

Maoist chairman Pushpa Kamal Dahal, UML chairman Jhala Nath Khanal and Nepali Congress president Girija Prasad Koirala were to meet to discuss the possible outlet to the prolonged political deadlock.

The meeting was to take place at Koirala's residence in Maharajgunj in the afternoon.

The meeting was put off as the six-member taskforce of the three parties remained undecided on how the deadlock could be resolved.

The taskforce formed to come up with a draft of consensus had met numerous times, but talks remained fruitless with the three parties sticking to their respective stances

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on the issue of 'civilian supremacy' raised by the Maoists as well as the step taken by the President in the army chief case.

Source: www.nepalnews.com


‘NC, UML reluctant for consensus’

UCPN (Maoist) Chairman Pushpa Kamal Dahal said on Tuesday that the two major coalition partners in the government-Nepali Congress (NC) and CPN-UML-were unwilling to end the protracted political deadlock in the country.

The Maoist chairman however said that his party was flexible enough to help end the current political crisis and expected other political parties will also show similar flexibility.

“The scheduled meeting of the senior leaders of the top three parties will hopefully arrive at a point from where we can begin afresh,” Dahal told reporters at Faplu airport in Solukhumbu prior to his return to the Capital.

Dahal was in Solukhumbu to declare Sherpa Autonomous State.

Source: www.ekanitpur.com


India FM asks why India is blamed in Nepal, Meets Nepali media team

The Indian Minister of Foreign Affairs, S. M. Krishna has expressed his displeasure over the frequent Nepal media outburst against India.

Minister Krishna expressed the Indian annoyance when he met some Nepali journalists in South Block, India’s ministry of Foreign Affairs, Monday December 14, 2009.

A team of senior journalists from Nepal is currently on a weeklong trip to India.

Krishna said, “India’s wish is to see Nepal develop and prosper and we think that we have contributed in this aspect….but, what I have failed to understand is that why India is unnecessarily drawn into controversy and is criticized in Nepal?”

The Nepali delegation of Senior Journalists who were invited by the government of India are Dev Prasad Tripathi-Chief editor of Ghatan Ra Bichar Vernacular Weekly, Sambhu Shrestha-Chief Editor of Dristi vernacular Weekly, Prakash Rimal of The Kathmandu Post Daily and other renowned journalists from the districts outside Kathmandu.

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“We want stability, peace and prosperity in Nepal but, we do not want to be unnecessarily blamed in Nepal”, said Krishna writes Ghatna Ra Bichar Weekly dated December 15, 2009.

Minister Krishna repeatedly asked the journalists over the possible impact if Nepal failed in drafting the Constitution on time, also writes the Weekly.

The delegation also met with the Indian Foreign Secretary Nirupama Rao and other foreign ministry officials.

It is also reported that the delegation will meet Parliamentarians, Journalists, Security experts and Industrialists.

The delegation will also visit Deheradun and Taj Mahal, it is reported.

However, it is not known if the delegation will meet the Indian Prime Minister Dr. Man Mohan Singh, main opposition leader Lal Krishna Advani, Indian National Security Advisor M. K. Narayanan and finally, Smt. Sonia Gandhi, the Italy born Chair Woman of the National Congress Party.

As a matter of practice, the Indian leaders become suddenly free as and when someone from Nepal lands in New Delhi.

High placed sources say that this media delegation is trying to meet the ex-Nepal King who is currently in Delhi.

Kathmandu analysts advise the Indian FM to find out the reasons for himself as to why this does happen in Nepal despite billions of undertable investment in Nepal?

He should be in contact with the Indian Home Ministry and collect the data as to how many nepali nationals were beaten by the Indian security forces in the recent months?

FM Krishna must be told in how many places along the porous Nepal-India border, the Indian nationals in coperation with the security forces have pushed the boder pillars deep into Nepali territories.

FM Krishna would perhaps get a fair answer to his queries if he asked this question to his own kathmandu based Ambassador.

But will the Ambassador dare to speak the truth?

Source: www.telegraphnepal.com


Indian Salt Supply to Nepal, Dr. Bhattarai remains Obliged

Dr. Babu Ram Bhattarai, the Jawaharlal Nehru University-New Delhi Graduate and the one who is also the vice chairman of Nepal Communist Party-Unified Maoists’ Party in an exclusive interview with one of the Indian newspapers, December 14, 2009, has said that the Maoists of Nepal were not at all Anti-Indians.

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And, Bhattarai, in a subservient manner also makes it clear that the party he leads has the knowledge that if India stops supplying ‘Salt’, Nepal as a nation state will Suffer.

Thanks Dr. Bhattarai mercifully claims that "if the salt did not come to Nepal from India, the nation state will only suffer but not “disappear”. At least he loves his compatriots. A great soul indeed that is Dr. Bhattarai.

This Nepali nationalism! Unbelievable but yet true.

Look what Bhattarai says further:

“The truth is India should be more confident of this relationship (with the Maoists

in Nepal). If India stops supplying us salt for one week, we will begin to suffer as a

nation, that is how dependent we are, and that is the stark truth of this

relationship”, said Dr. Bhattarai who and his ilk had taken refuge in India for more than a decade and flared violence in their own motherland and in the process were also responsible for the deaths of 13, 000 and many more.

Does this mean that Nepal-India relation was primarily based more on the supply of

salt from India and nothing more than that?

Grand revelation made by Dr. Bhattarai who is taken as a strong nationalist by the common men. Dr. Bhattarai deserves deep appreciation for having opened the “eyes” of the Nepalese nationalists.

Dr. Bhattarai while making such humiliating and disgraceful remarks against his own motherland forgets that the Salt that Nepal imports from India does not come for

free. Bhattarai who claims that he has a doctoral degree to his credit also forgets that Nepal has many more friends in the world and that Nepalese have shown in the past that our motherland can survive with no Indian support, more so the salt.

To recall, Nepal survived in the past without the Indian salt because we used to get it from the Bhot-now Tibet.

It was a barter trade in between the then Nepal and Bhot. Mules used to bring salt from Tibet as against the barter of Nepali red pepper-KHORSANI.

It is perhaps, the “pleasing India card” that Dr. Bhattarai is using to bounce back to power while humiliating his own motherland.

But he should go so low in pleasing India? Perhaps he spoke more than India deserved.

He could have refrained using such derogatory words against his own sovereign motherland. But he did not. May be some compulsions!

Dr. Bhattarai, the JNU graduate further adds, “Look at how deeply dependent we are on India as a people and as a nation. It is the rightwing vested interests in Nepal who have always used anti-India feelings in Nepal to secure themselves politically, not us. We have been courageous enough to recognize the reality that we cannot wish India

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away, we have to work with it, all we want is a few democratic corrections, a more equal relationship, and none of that to favor China.”

So these mean that for Dr. Bhattarai Susta land encroachment is not at all an issue with India. Several past unequal treaties that Nepal signed with India under coercion do not pinch him. Thrashing of Nepali national on a regular basis by the border security forces is also not an issue for Dr. Bhattarai. Dr. Bhattarai! Keep it up.

And who is this right-wing band whom Dr. Bhattarai dubs as anti-India?

Dr. Bhattarai in many more ways than one has teased his own mother Nepal by eulogizing the Indian establishment and that too for a pinch of salt?

Incredible though it may appear but it is a truth that he has made while talking to Calcutta Telegraph dated 14 December, 2009.

Rato Ra Chandra Surje…Samrajya dui Harey…Harena Shan Hamro…

Dr. Bhattarai is hereby suggested to recall the glorious past of his own land.



Chinese Army team Arrives, India asks another air strip in East Nepal

Pretty worried and suspicious Chinese establishment has sent another Military Delegation to Nepal.

The Chinese delegation has come close on the heels of Nepal’s Defense Minister Mrs. Bidya Devi Bhandari’s official request made to India to construct Air-Strip for Nepal Army in Surkhet district, that claim security experts, could be time permitting, used by the Indian Air Force to target Tibet.

Much to the dismay of the Chinese delegation that landed in Kathmandu December 14, 2009, claim sources at the Ministry of Defense in Kathmandu, India has already asked Nepal government to allow it to construct one more similar Air-Strip in the Eastern plains of Nepal presumably to target Tibet again from the Nepali soil.

How can Nepal deny?

The Chinese delegation that landed in Kathmandu on Tuesday is led by Major Jia Jioning who is the deputy director of the Foreign Relation cell at the Ministry of Defense, China.

Reports claim that the delegation will enquire about the purpose of the air-strips to be constructed by India in Nepal.

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The delegation will also meet Foreign Minister Mrs. Sujata Koirala, Defense Minister Mrs. Bidya Devi Bhandari, Defense Secretary Nabin Ghimire and Chief of the Army Staff General Chhatra Man Singh Gurung.

The team is set to visit Lumbini.

All in all, the visit of the Chinese team to Nepal will just be a luxury trip.

No space for China in Nepal. Bear it with Chinese friends.



Bhattarai hits back at UML leaders' statement on Salyan incident

Unified CPN (Maoist) vice chairman Dr Baburam Bhattarai on Tuesday reacted furiously to the statement given by CPN (UML) chairman Jhala Nath Khanal that the Maoists were still engaging in criminal activities.

Talking to media persons in Singha Durbar, Dr Bhattarai claimed that the UML had mobilised its cadres armed with knives and spears to attack Maoist party members in Salyan. He said that clash occurred when UML cadres first attacked the members of the Young Communist League (YCL) because of which the district convention of the UML in Salyan was disrupted.

he former finance minister further said the UML is taking advantage including its share in the power due to increasing differences between his party and the Nepali Congress. "UML has no role in peace process including the 12-point agreement but the party is reaping benefits," he added.

He mentioned that his party does not give much importance to UML while taking critical decision on issues of national importance.

UML on Monday announced nationwide protests against the 'Maoist attack' in Salyan incident.



Peace Minister cries foul as Maoists declare two more states

The Unified CPN (Maoist) took the count of autonomous states to eight on Tuesday by declaring two more states.

The main opposition party declared Bheri-Karnali and Bhote-Lama autonomous states by organizing separate functions attended by senior party leaders and party activists today.

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Bhote-Lama autonomous state was declared by Maoist leader Netra Bikram Chand 'Biplav' amid a programme in Simikot of Humla district.

Similarly, Bheri Karnali autonomous state was declared by the party's foreign affairs chief Krishna Bahadur Mahara in the district headquarters of Jumla.

Despite facing widespread criticism, the Maoists have continued to declared autonomous states as per its third round of protests to uphold "civilian supremacy".

Till now they have declared Limbuwan, Kochila, Seti-Mahakali, Tharuwan, Kirat and Sherpa autonomous states.

The Maoists had on Nov 25 unveiled its plan to declare 13 autonomous states based on ethnicity and region within Dec 11-18.

Meanwhile, Minister for Peace and Reconstruction Rakam Chemjong has said that the Maoists have breached the Comprehensive Peace Agreement (CPA) by declaring autonomous states.

He also accused the Maoists of undermining the Constituent Assembly (CA) through their brash move.

Addressing a national conference of Truth and Reconciliation commission in the capital Tuesday, minister Chemjong also blamed the Maoists for the delay in the formation of the truth and reconciliation commission and disappearance commission.



POLICY:

India likely to supply 50 phased out tanks to Nepal

India, which has decided to resume military aid to Nepal, is likely to supply 50 phased-out tanks at discounted rates.

India´s The Telegraph newspaper reported the deal, quoting an unnamed senior Defense Ministry official in New Delhi on Tuesday.

The report said Nepal has specifically asked whether it can acquire 50 tanks from the Indian Army at discounted rates. These are Ajeya T-72 tanks that are being replaced with the Bhishma T-90 in the armored regiments.

Besides the tanks, officer cadets from Nepal will get more seats in the Indian Military Academy and the recruitment of Nepalese Gorkhas in the Indian Army would be increased.

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The decisions followed talks, Nepal’s visiting army chief, General Chhatraman Singh Gurung, held with Indian security officials in the Indian capital.

On recruitment of more Nepali nationals to the Indian Army, the southern neighbor has proposed to raise an additional battalion that will increase the recruitment from Nepal from the current level of about 1,600 soldiers a year.

There are seven Gorkha Rifles regiments in the Indian Army, each with five or six battalions of about 900 soldiers. Gorkhas from Nepal and India are recruited not only in these battalions but also in other regiments such as the special forces (parachute battalions), the newspaper said.

Nepal Army has also enquired whether India can raise the supply of military hardware to the level prevalent nine years back. In 2005, India scaled down its military aid, following the February 1 coup by the then king Gyanendra. But the actual reduction in military assistance had begun in 2001, with the Maoist insurgency intensifying in Nepal.

General Gurung, an alumnus of the Indian Military Academy (IMA) in Dehra Dun who attended the passing-out parade of officer cadets on Saturday, also held talks with the Indian Army’s director-general of military training. He said it was his wish to set up an institution like the IMA in Nepal.

At the academy, Gurung visited the room where he had stayed as a cadet. He also spent time in its archives searching for a photograph of himself with the late Field Marshal Sam Manekshaw, whom he described as his hero.

Gurung was honored with the rank of General in the Indian Army by the President on Monday. He is slated to meet the external affairs minister, the foreign secretary and national security adviser on Wednesday.

Gurung’s visit comes close on the heels of an India-Nepal defence cooperation committee meeting in Kathmandu last week.

The Indian Army, the paper said, looks at the demand of the Maoists for “integration” of their PLA troops in the Nepal Army ranks — under the country’s peace accord — with "suspicion".

The delegations of the two armies have exchanged notes on security, with the Nepalese team of the view that the Maoists can present a military challenge yet again.

Source: www.myrepublica.com


APF yet to be deployed on Nepal-China border

The government is yet to act upon its three-month-old decision to deploy Armed Police Force (APF) on the northern border.

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The decision was taken following China´s insistence that the government deploy 10,000 APF personnel on the Nepal-Tibet border during the Lhasa meeting in September participated by high-ranking APF officers. China had also assured necessary assistance to make the new arrangements.

The decision is not even going to be discussed in its ever largest meeting about border security on Wednesday, sources said. The meeting entitled "Special Workshop on Border Security" at the APF headquarters will only table agendas related to the southern border.

Against the backdrop of frequent anti-China activities by Tibetans in Kathmandu, the Chinese government has been pushing to tighten security on the northern border.

Earlier, the government had also decided to add 7,000 personnel to the APF and approved recruitment of 2,700. Meanwhile, APF had conducted a feasibility study for deployment of APF personnel in Rasuwa and Mustang in mid October, which concluded that guarding the northern border perched on difficult terrain, would be an arduous undertaking.

The only development involving the decision, however, is that the government is going to deploy an APF troop having 237 personnel in Sindhupalchwok after two months. APF has also proposed to install Border Observation Posts (BOP) in the border areas.

"But the current modalities for the deployment of APF personnel is not compatible with the challenges of border security," a high-ranking APF official told Republica.

"Deployment on the northern border is being worked out at the government level. We are working closely with the government toward this end," said Kosh Raj Want, Additional Inspector General (AIG) of APF. He, however, said that there would be no agenda on northern border in the workshop.

Through the workshop, APF is chiefly seeking for legal authorization in many issues in connection with its mandate to ensure border security. Currently, APF is deployed in 18 districts on the southern border.

"We still lack legal back-up for carrying out our mandates," Want added. According to him, political parties, besides the government and non-government stakeholders, are also invited in the discussions to forge consensus on border security.

"Our focus will be on border regulations chiefly related to custom management and crime control," he said.



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Govt to lodge written complaint with UN

The Ministry of Defense has asked the Ministry of Foreign Affairs to write an objection letter to the UN Department of Peacekeeping Operations (DPKO) over the expulsion of Major Niranjan Basnet.

The defense ministry sent a letter to the foreign ministry on Tuesday arguing that the DPKO should have consulted the government before taking a decision to send Basnet back from a UN peacekeeping mission. According to a source, the foreign ministry will now send a letter to the UN DPKO as per the Defense Ministry´s request.

"As a major troop contributing country and a member of the UN, the DPKO should have talked to the Nepal government before repatriating Basnet from the Chad mission," a MoFA source quoted the MoD as saying in the letter.

DPKO expelled Basnet accusing him of serious human rights violations, including involvement in the murder of 15-year old Maina Sunar in February 2004.

Sources told Republica that MoD wrote the letter after the Nepal Army (NA) lodged a written concern over the decision of the DPKO.

During the meeting held at Defense Minister Bidhya Devi Bhandari´s official residence, which was also attended by the prime minister, army generals supported by Bhandari had opined that arrest of Basnet by the police would demoralize the NA ranks and file. Accordingly, military police detained Basnet upon his return from the Chad mission on Saturday.

"Basnet is still an incumbent officer. NA has its own rules and the military police detained him accordingly," Minister Bhandari told Republica on Monday.

The NA generals had argued before the prime minister that the government has forgiven serious human rights violations committed by the Maoists during the conflict time by withdrawing cases but the same was not the case with the NA. It may be recalled that the Maoist-led government had withdrawn around 350 cases against its cadres last year.

The meeting was called in a bid to convince the defense minister and the army that Basnet should be handed over to the police.

"But due to vehement protest from the defense minister and the army generals in the meeting, the prime minister did not issue any specific directive for Basnet´s arrest by the police," a source told Republica. An army source said that they fear that if Basnet is tried in a civilian court, it would set a precedent.

"If Basnet is presented before the court, other courts across the country will be flooded with cases against army personnel. If that happens, the army will be defunct," said an army official.

The NA has also argued, said another source, that action against its personnel should be taken only if the proposed Truth and Reconciliation Commission recommends so.

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Only one more extension to UNMIN's term: Ban Ki-Moon

UN Secretary-General Ban Ki-Moon urged Prime Minister Madhav Kumar Nepal to conclude the issue of the Maoist combatants in next few months.

Saying that UN would not be in the position to extend the term of UN Mission in Nepal (UNMIN) after one more extension, Ban expressed concerns over the issue of lingering peace process during a meeting on the sidelines of the United Nations Framework Convention on Climate Change at the Danish capital on Tuesday.

“He expressed concern over issue and told me that UN could not extend UNMIN’s term after the next extension,” PM Nepal told myrepublica after the meeting. “So he urged us to solve the issue of Maoist combatants within three months of next extension.” UNMIN’s term expires on January 23, 2010.

Ban also asked Nepal to take leading role in the climate change issue especially after assuming the chair of the committee of the Least Developed Countries (LDCs).

PM Nepal who reached Copenhage on Tuesday met Ban at at the Bela Center, the venue of the climate change meeting.



Nepal assumes chair of LDCs

The chair of the 49 Least Developed Countries (LDCs) Group within United Nations System in Geneva, Switzerland, was formally transferred to Nepal on Monday amid a ceremony organised by the United Nations Conference on Trade and Development (UNCTAD). Pursuant to the decision taken at the Ministerial level in New York in September, Ambassador/ Permanent Representative of Nepal to the United Nations and Other International Organisations Dinesh Bhattarai formally took charge of the chair of the group from Ambassador/ Permanent Representative of Bangladesh Abdul Hannan in Geneva, stated a press release issued by Nepal’s Permanent Mission in Geneva. Speaking on the occasion, Permanent Representative Bhattarai said as the Least Developed Countries (LDCs) are the weakest and poorest members of the international community, they need to work in close coordination and cooperation in

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collectively advocating and advancing the LDCs agenda and projecting common positions in international forums.

Source: www.eakantipur.com


BANKING:

NRB changes credit policy

In a crucial decision to check rapid expansion of credit flow, the board meeting of Nepal Rastra Bank (NRB) Tuesday changed the long-running credit policy that will increase borrowing rates.

A high-ranking NRB official also vowed to take further steps if current credit bubble doesn´t cool down even after the adoption of news measures.

As per the decision, the central bank will now follow a new methodology to calculate Standby Credit Facility (SLF) -- a loan extended to financial institutions by the central bank against the government bills owned by them.

"The NRB is convinced that there exists a credit bubble in the economy and the main purpose of the new policy change is to contain rapid credit expansion which has fueled imports thereby widening trade deficit to an alarming level," said the official.

The imports increased by 30 percent against the decline of 16.8 percent in exports during the first quarter of the current fiscal year, resulting to increase in trade deficit by 48.6 percent.

Earlier, the SLF rate used to be calculated by adding 3 percent panel rate either on latest average Treasury Bills (TBs) discount rate or repo rate -- the rate fixed at NRB called bidding for loans from central bank against collateral of government bills, whichever is high.

However, as per the new methodology, the central bank will add 3 percent panel rate either on latest average treasury discount rate or repo or bank rate -- interest fixed by central bank for loans it extends to financial institutions, whichever is high.

Recent studies have showed that the huge amount of loans that banks took under the SLF facility was the main factor responsible for the unnatural rise in consumption expenditure that resulted in the shocking rise of imports, said the official.

"When the average rate of the TBs and repo rate were around 4 percent, financial institutions took heavy loans from the central bank at the rate of 7 percent and extended the loans to borrowers at over 12 percent," the official said, adding that

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banks were found attracted towards such transactions as they used to produce handsome and easy profits.

But, as per the new policy, the SLF rate will be 9.5 percent at minimum, given the fact that the central bank has maintained bank rate at 6.5 percent for the current fiscal year.

"The central bank will see whether the new policy will be able to curb the current credit rate growth and if it doesn´t, the NRB will take further steps that might even include increasing the bank rate itself," the official said.

The SLF amount during the first three months of the current fiscal year has squeezed to just Rs 4.5 billion as the repo rate has gone up to over 9 percent due to ´short-term´ crunch of liquidity.

The SLF loan extension to financial institutions went up to Rs 107.82 billion by the end of last fiscal year and the amount was 130 percent higher than the figure recorded in fiscal year 2006/07.



Foreign player eyes Nepali finance firm

Nepal’s finance companies are now in the global radar.

Spice Finance, the finance arm of the Singapore-based B.K. Modi Group, is looking to acquire the Pokhara-based Annapurna Finance.

The deal will likely run into Rs. 640-800 million (Indian Rs. 400-500 million), according to an Indian business daily, Business Standard.

Established in March 1993, the Pokhara-based firm is the first finance company to be established outside the Kathmandu Valley. The company posted a net profit of Rs. 52.10 million in the last fiscal year.

One of the promoters of the finance company admitted to the Post that they are “in touch” with Spice Finance. The promoter said his company has been planning a joint venture and termed the current development part of that strategy. He, however, refused to divulge the details.

If this deal goes ahead, it will be the second joint venture in the Nepali finance company, the first one being International Leasing & Finance Co. Ltd (ILFC) in which South Korea’s KDB Capital Corporation Ltd has around 21 percent stake. ILFC was established in September 1995.

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Spice Investment and Finance had acquired 51 percent stake in Wall Street Finance Ltd, a money changer and transfer agent of India, in September 2009. Spice is eying the Nepali market because of Nepal’s huge and rapidly growing remittance market.

Annapurna Finance is a sub-agent of the Western Union Money Transfer, one of world’s leading money transfer companies. In the last fiscal year, remittance inflow in the country had increased by 47 percent, which was worth Rs. 209.69 billion.

Source: www.eakantipur.com


BUSINESS /ECONOMY:

No easy fuel supply until weekend

Nepal Oil Corporation (NOC), which promised last week to ease the supply of petroleum by Tuesday, has now said that fuel availability in Kathmandu Valley would improve only by the weekend.

The announcement makes it clear that consumers, reeling under the fuel crunch over the last three weeks, would need to brave the shortage for the next three days also. Corporation officials said they had to revisit their previous announcement because of the unforeseen closure of Birgunj from Friday to Sunday in the wake of the killing of a transporter there, greatly limiting import activities.

“We have started to receive a reasonable volume of supplies from Monday though,” said Mukunda Dhungel, NOC spokesperson.

He informed Republica that the corporation on Monday received over 1,900 KL of petroleum products loaded Sunday in Raxaul, the largest export outlet to Nepal for Indian Oil Corporation (IOC). NOC was also in the process of receiving an additional 180 KL of petrol and 200 KL diesel from Barauni refinery by late Tuesday.

NOC on Tuesday distributed 277 KL petrol and 387 KL diesel in the Valley from its Thankot depot. It supplied an additional 36 KL each of petrol and diesel to the Valley from Amlekhgunj as well.

The supply for the day nearly totaled the normal daily demand. “We plan to pump out fuel in this volume every day in order to end the shortage by the weekend” said Bhubaneshwor Rajbhandari, chief of NOC Thankot depot.

However, the volume of supplies would depend on the quantity the corporation manages to import over the next few days.

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The shortage hit consumers mainly after petroleum workers struck for about a week, affecting distribution of the fuel in the market. The agitation by tanker drivers, which went on for another three days after the petroleum workers withdrew their strike, further stalled fuel imports.

Amid weak imports, the corporation had announced that its petrol stock at Thankot as well as at Amlekhgunj had dropped to emergency-stock levels and cut off supply to the market. This has forced consumers to queue for hours at refilling stations over the last two weeks.

Officials said the corporation, in a bid to end the crisis, requested IOC to supply more fuel from Raxaul and also diverted more tankers operating the Biratnagar-Barauni route to Amlekhgunj-Barauni to bring in more fuel in a consistent flow.

The corporation, which also blames traffic jams along the Birgunj-Raxaul corridor for the supply woe, has requested traffic police to place dividers along the route to arrange a separate lane for the movement of tankers.

For the purpose, it is contributing about half a million rupee to the traffic police. Once this arrangement is made, officials are hopeful of getting adequate fuel in a predictable fashion.



Flydubai soars in Nepal

UAE-based flydubai started its Kathmandu-Dubai flight from Tuesday with an introductory roundtrip fare of Rs. 12,000.

"We've started this service and offer targeting Nepalis working in the middle-east and the tourists who want to visit Nepal," said Ghaith Al Ghaith, Chief Executive Officer of the flydubai at a press meet on Tuesday.

The airline will have four flights a week to Kathmandu.

The introductory fare was a huge crowd-puller on Tuesday as hundreds of potential fliers lined up in front of the Universal Tours and Travels, flydubai's local partner in Nepal.

The airline has said that prices start from US $96 for one way. "US $96 is for early booking," said Ghaith.

The flydubai model is simple, with customers paying only for the services they want to receive. The ticket price includes all taxes and one piece of hand baggage, weighing up to 10 kg, per passenger. "We provide basic facilities that you need while flying," said Ghaith. "Everything else, passengers have to pay."

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The airline offers a wide range of options to the passengers such as purchase of checked-in baggage in advance, option to select a seat and extra legroom positions through additional nominal payment. If the passengers want food on board, they have to pay for it.

The airline is the fifth company from the middle-east to start services in Nepal. Qatar Airways, Gulf Air, Etihad Air and Air Arabia are already in operation in this route. Nepal Airline Corporation is also doing Kathmandu-Doha and Kathmandu-Dubai flights. Kathmandu is the 11th destinations for flydubai. Established in March 2008 and owned by Dubai government, flydubai has 6 aircrafts.

Source: www.ekantipur.com


Govt goes for Tarai tourism

The Ministry of Tourism and Civil Aviation is planning to decentralize the country's tourism by promoting potential tourist spots in the Tarai that possess historical, religious and cultural importance but have remained unpublicized.

A recent cabinet meeting has endorsed this initiative to promote the Tarai region and preserve its historic, religious and cultural heritage sites.

The Tourism Ministry will play a major role in developing infrastructure and preserving the ethnic and cultural heritage sites before Nepal Tourism Year 2011 (NTY 2011), said under secretary Lok Bahadur Khatri of the ministry.

The government is aiming to diversify Buddhist and Hindu pilgrims whose numbers are expected to increase significantly during NTY 2011, he added.

Khatri said that Jhapa, Morang and Sunsari in the eastern region would be developed as Birat Tourism Area. The mythology of Birat is linked with Mahabharat where King Birat had taken shelter during his return from Mahabharat. King Birat's Palace, Arjun Dhara, Kichhak's Palace, Kichhakgadh and Pandav Gupha are some of the places to see here.

Similarly, Siraha and Saptari will be promoted as Salesh Sahakada Pradesh.

Likewise, Sarlahi, Mahottari and Dhanusha will be developed as Bidhya Mithila carrying a mythological message of the Ramayana. It will also be promoted as a marriage destination.

Parsa, Bara and Rautahat will be developed as Simraon Tourism Area. Nawalparasi, Rupendehi and Kapilvastu will be developed as Lumbini Tourism Area.

Banke, Bardia, Kailali, Kanchanpur and Dang will be promoted as Chisapani Tourism Area. Of these selected areas, Bardia has been selected as Tharu Gram Study Area.

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The ministry is also starting a feasibility study in these areas to develop them for home stay tourism. It has allocated Rs. 2.5 million for the home stay programme. "Some areas discovered by Tara Gaon Development Committee will be pushed forward before the NTY 2011 campaign," Khatri added.

Likewise, Sri-Antu of Ilam, Jaljala of Rolpa, Tharu Gram of Dang, Rara of Mugu, Dhimal community of Jhapa, Sirubari of Syangja and Ghalegaon of Samsung district will be developed as Model Tourism Villages. The government has allocated Rs. 4 million for this programme.



Private sector vows to defy strike calls

Distressed by the continuous decline in industrial production due to frequent strikes and labour unrest, the private sector has decided to disobey any closure call by any political party or group and keep all the factories running.

The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) is scheduled to consult with all the stakeholders very soon and take a final decision to operate the industries even during strike days.

"We will disobey any strikes and operate our industries," said FNCCI president Kush Kumar Joshi addressing a press conference on Tuesday to appeal to the UCPN (Maoist) to withdraw its three-day nationwide strike announced for next week.

Joshi urged the government to assure security and make provisions for compensation for any loss caused to industries if anything unwanted were to happen during the strike.

"If the government fails to compensate such vandalised industries, the government will be proven as ineffective," he said.

The private sector has appealed to the Maoists to call back the strike and solve political disputes through dialogue. It said that frequent protests, strikes, labour disputes, power shortages and political instability had hit the business sector hard at a time when exports and domestic and foreign investments were declining.

"The Maoists had promised to end the trend of strikes and protests in the industrial sector, but their words have not changed into action," said Surendra Bir Malakar, president of the Nepal Chamber of Commerce.

"We always talk about an industrial revolution, but there is no environment for doing business due to lack of peace and security and increasing unnecessary demands from labour."

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The private sector has also decided not to pay the workers who do not work on strike days. "If any labourer doesn't work voluntarily on such days, we will not pay under the 'no work no pay' system," said Joshi.

Speaking at the conference, Industry Minister Mahendra Prasad Yadav said that the government would soon endorse the new industrial policy which will include the provision of "no work no pay".

"We will submit the new industrial policy to the cabinet on Friday," said Yadav. He said that the new policy would help ease the problems being faced by the industrial sector.

Minister Yadav also assured the private sector of providing security and compensation as per the law if anything happens to the industries during strikes.



Govt draws flak for ignoring migrant workers in India

The government has failed to formulate any plan to safeguard the rights of millions of Nepali workers who have been working in various India cities for decades.

According to conservative estimates, over 3.5 million Nepalis are working in different sectors in the southern neighbor and are deprived of their professional rights and benefits. Raising serious concern over the issue, lawmakers have asked the government to incorporate the issues of Nepalis residing in India under the plans aimed at safeguarding the rights and welfare of migrant workers.

“India is the largest destination for Nepali workers who are from poor financial background. But surprisingly, the government is concerned only on the plights of overseas workers,” Constituent Assembly member Hari Roka said at the meeting of the Finance and Labor Relation Committee of legislature parliament on Tuesday. “Are the Nepali workers in India not our people?” Roka questioned.

The meeting was called to seek clarification from Baburam Acharya, secretary at the Ministry of Labor and Transport Management (MoLTM), on different problems seen in foreign employment and transportation sector.

Roka also expressed his dissatisfaction over the apathy shown by the Nepali embassy in India on the plights of Nepali workers who are not only exploited at workplaces but are also targeted by robbers and thugs while traveling to and from India.

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Commenting on rising traffic congestion in the Valley and other major cities, Roka suggested the government to limit registration of new vehicles and end syndicate system that is a major problem in the public transportation sector.

Dr Ram Sharan Manaht of Nepali Congress stressed the need to effectively enforce emission testing system and control increasing number of vehicles to end traffic congestion and control pollution.

Other lawmakers Nirmala Prasai, Arjun Rai and Bimal Kedia demanded the government to come up with special plans to cope with the rising unemployment, worsening labor relation and increasing insecurity of Nepali workers in overseas markets.

Responding to the lawmakers, secretary Acharya expressed dissatisfaction over the lack of cooperation from line ministries in implementing plans to effectively enforce transport management system.

“Though we had proposed the government to set up the Labor Tribunal to speed of settlement of fraudulent cases in foreign employment, it has yet to materialize,” Acharya said.

He said effective traffic management is not possible in the absence of close coordination among Ministry of Home, Ministry of Physical Planning and Works and MoLTM in effectively enforcing existing law.

He also suggested promoting public transport system to control pollution and lessen traffic congestion in the capital.

Minister for Labor and Transport Management Mohamad Aftab Alam assured the lawmakers that the ministry was taking effective measures to systemize foreign employment and transport sector so as to bring an end to problems plaguing both the sectors.



NST opts for eServGlobal

Nepal Satellite Telecom has selected solutions from eServGlobal, a provider of smart transaction management solutions in charging, payment and retention services. Xalted Information Systems and eServGlobal secured the multi-solution contract for convergent billing, value-added services and related accessories. Xalted Information Systems and eServGlobal will initially support 150,000 subscribers, with the customer base expected to grow to three million. eServGlobal will provide ChargingMax, its convergent billing system including rating and charging for pre-paid subscribers, PayMobile (electronic recharge and voucher management) and missed call alert, as well as installation and post-installation services. Nepal Satellite Telecom has also

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selected a number of eServGlobal’s network components: IVR, USSD and SMS solutions. Xalted Information Systems will provide the Convergent OSS/BSS platform, including wholesale, retail billing and customer management. The solution shall be supported by Xalted’s interconnect billing, service provisioning, mediation, retail billing and customer care products, eServGlobal said.

Source: www.thehimalayantimes.com


MARKET:

Nepse sheds 5.93 points

After posting gains for six straight trading sessions, Nepal Stock Exchange (Nepse) index lost by 1.07 percent or 5.93 points to settle at 548.61 points at the end of Tuesday´s trading.

The benchmark Nepse had begun to move into green zone after hitting a 29-month low two weeks ago. Loss in sub-indices of most of the trading groups dragged down Nepse on Tuesday´s trading.

Banking, a heavyweight trading group in the secondary market, lost 11.33 points to close at 527.67 with most of the commercial banks seeing their share prices drop. Similarly, the sub-indices of Development Bank and Hydropower groups also dropped 3.13 points and 3.31 points to settle at 598.64 and 810 points respectively. Hydropwer and Finance groups also saw their sub-indices go down by 2.53 points and 0.26 points to end at 561.69 points and 571.9 respectively. However, the Others group gained by 5.88 points to reach 593.34 points.

A total of 103,722 units of shares and 57 scrips worth Rs 63.34 million changed hands through 1,723 transaction on Tuesday´s trading.



GENERAL:

Nepal elected IOM ex-com member

Nepal has been elected an executive committee member of International Organisation of Migration (IOM) for two years starting 2010 by its 98th session that concluded Tuesday.

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Nepal was also a member of the executive committee from 2008-2009. The IOM executive committee has 32 members elected from its 127 members.

IOM is an international organisation established in 1951. It is committed to the principle that human and orderly migration benefits migrants and society. IOM has 127 members and 94 observers. IOM maintains a country office in Nepal and is currently involved in processing Bhutanese refugees for third country resettlement.



Security beefed up on Nepal border

Security was beefed up on UP-Nepal border after hundreds of Nepalese thronged the Sashastra Seema Bal (SSB) check-post office at Sunauli border in Gorakhpur on Tuesday morning and resorted to heavy stone-pelting. The SSB had to cane charge the mischief-mongers to disperse them.

Additional police and PAC was deployed at the border check-point to contain any sporadic outburst thereafter.

Reports said the trouble began after a group of men from Nepal was intercepted by the SSB jawans on Indian soil at the Sunauli checkpost earlier in the day. During checking of their luggage, security personnel recovered a number of items that could not be brought to India without paying the customs and excise as applicable. When the SSB men initiated the proceedings of confiscating the goods in the absence of a customs clearance certificate, the mob turned aggressive.

The situation turned violent when the mob began to pelt stones at the SSB unit and the jawans. Violence continued for nearly half an hour as the local authorities and officials from the customs and excise remained indecisive of how to tackle the issue when the SSB officers at the site took the reigns of the situations in their hands.

Next the SSB jawans resorted strategic cane charge forcing the mob to beat a hasty retreat. Within the next 30 minutes the situation was brought completely under control and normal traffic at the Sunauli border was restored.

Commandant SSB (incharge Sunauli border unit) Lalit Kumar later said that because of the repeated security alerts being received from the national intelligence agencies, a certain degree of strictness was being observed in allowing goods to enter India for commercial purposes. "These men, who usually transport goods as stocks and not for personal use were being screened which was not approved of by them. I see it as an attempt to mount pressure on security agencies to loosen their hold on such men. But we are determined," Commandant Lalit Kumar said.

Source: timesofindia.indiatimes.com


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Water to become dearer

Valley dwellers facing water shortages will have even more to worry about from Wednesday with the hike in tariff by Kathmandu Uptayaka Khanepani Limited (KUKL), the Valley’s water utility.

The decision was approved by the commission formed to revise the proposed drinking water tariff. “It has been five years since the price was last revised,” said Rameshwor Lal Shrestha, spokesperson of KUKL. “The prices of pipes and other necessary repairs have increased in these five years. KUKL also uses large amounts of electricity and it is becoming impossible to pay the electricity bills with the prices that we are charging at the moment.”

However, a price hike doesn’t mean a more regular water supply. “KUKL is trying its best to look for alternative sources of water,” said Shrestha. “For the past few years, the demand for water in the Valley has been around 280 million litres per day. Our supply, in the same period, has barely reached 160 million litres a day. Now that it is winter, things are only going to get worse.”

According to Shrestha, KUKL has proposed a project that will generate at least 30 million litres of water per day within two years. The project proposal, which will cost approximately Rs. 2.21 billion, has been sent to the Kathmandu Valley Drinking Water Board.

According to the new tariff will be imposed from Wednesday onwards, consumers using less than 10,000 litres of drinking water will have to pay Rs. 5 more than the old monthly tariff. Similarly, consumers using between 10,000 and 27,000 litres will have to pay Rs. 1,053, which is Rs. 243 more than what they were paying earlier. Meanwhile, those consuming up to 56,000 litres of water need to pay Rs. 2,184, as opposed to Rs. 1,680. The maximum tariff, which has increased from Rs. 54,300 to Rs. 70,590, applies to all customers using over 1.8 million litres.

KUKL will not just hike the price of tap water, but it is also coming up with new tariffs for drinking water provided by KUKL tankers. The cost of 5,000 litres of drinking water has increased from Rs. 850 to Rs. 1,110. The price for 10,000 litres is Rs. 1,895, which is Rs. 445 more than the old price.

Consumers who are not using KUKL meters have to pay Rs. 432 per month, which is Rs. 72 more than the old rate.

Amount of water Old price New price

Up to 10,000 litres Rs. 50 Rs. 55 Up to 27,000 litres Rs. 810 Rs. 1,053 Up to 56,000 litres Rs. 1,680 Rs. 2,184

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Revised rates for KUKL water tankers Amount Old Price New price

5,000 litres Rs. 850 Rs. 1,110 10,000 litres Rs. 1,450 Rs. 1,895

Source: www.kantipuronline.com


r&d_newsbrief 16th dec, 2009

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