Interview

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No Laughing Matter

The Sweet Rewards of Power

By Madan Lamsal

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			'content' => '<p>
	<strong><span style="font-size:16px;">‘The young generation &nbsp;is coming forward &nbsp;seeking opportunities in business’</span></strong></p>
<p>
	<img align="right" alt="" height="360" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/hari_bhakta_sharma.jpg" style="margin:0 0 0 10px;" width="210" /></p>
<address style="text-align: right;">
	<strong>Hari Bhakta Sharma</strong></address>
<address style="text-align: right;">
	<strong>Board Member</strong></address>
<address style="text-align: right;">
	<strong>Confederation of Nepalese Industries (CNI)</strong></address>
<p style="text-align: justify;">
	 </p>
<p style="text-align: justify;">
	Hari Bhakta Sharma is an executive board member of the Confederation of Nepalese Industries (CNI), a ‘think tank’ of Nepal’s industrial sector. He is also the executive director of Deurali-Janta Pharmaceuticals Private Limited (DJPL), a leading pharmaceutical company that has been an inspiration to Nepal’s manufacturing sector. In an interview with New Business Age, Sharma emphasizes on the brighter sides of the Nepali economy, the economic environment in the country and the need for developing the private sector, among other issues.&nbsp;</p>
<p>
	<strong>Excerpts:&nbsp;</strong></p>
<p style="text-align: justify;">
	<strong>How do you view the current economic situation of Nepal? Where is it heading?</strong></p>
<p style="text-align: justify;">
	There are two different ways to evaluate our economy. One is the evaluation of our overall economic growth. Nepal has achieved &nbsp;a growth rate of 3-5 per cent despite the ongoing political confusion. The Nepali economy is primarily driven by remittance. The disposable income of individual households increased with the increasing flow of remittance over the past 5-7 years. Remittance has raised the purchasing power of Nepalis and their consumption rate. The manufacturing sector, on the other hand, is becoming weaker every year and it is important how the increased consumption demand in Nepal is being fulfilled. The manufacturing sector’s contribution to the GDP has decreased gradually over the past decade. In 2012, for example, the manufacturing sector’s contribution to the GDP was around six per cent, a sharp decline from around 14 per cent a decade back.</p>
<p style="text-align: justify;">
	The consumption demand in Nepal is being met through imports. We import goods worth billions of rupees every year. The dependence on imports has impacted our manufacturing sector causing a decline in the production trend. And now we don’t find our stand in the international trade and do not know where we can compete and what the core advantages we have.Soaring imports have raised the government’s revenue. &nbsp;That’s why the government’s policies are facilitating import. &nbsp;If we do not redress these policies immediately, the power shortage, and other problems including the labour problem and political instability will take a heavy toll on the manufacturing sector, further deteriorating the employment situation in the country.&nbsp;</p>
<p style="text-align: justify;">
	Power shortage has become a chronic problem. Around 11-12 hours of power-cut everyday has made the production cost high. Second, there is a vacuum at the policy level. Although it is said that we are going to adopt a federal structure of governance, it is not yet clear to many what a federal system is and how many federal states will be there. Due to these reasons, there has been no significant investment during the past eight years. So, there has been no expansion of industrial investment in Nepal. Lastly, there is no clear economic policy. There is no common ground regarding the future economy of Nepal.&nbsp;</p>
<p style="text-align: justify;">
	<strong>How serious are the labour problems for manufacturing sector?&nbsp;</strong></p>
<p style="text-align: justify;">
	Labour problems are manageable; the industries can tackle these problems. But there is seemingly no solution to the power problem and the political instability. Due to the lack of clarity on the federal system to be adopted, investors are apprehensive about future tax system. For example, they don’t know how the products produced in Biratnagar and sold in Chitwan will be taxed. When these things become clear, investors will come to Nepal.&nbsp;</p>
<p style="text-align: justify;">
	<strong>We often talk about a private sector-led economy. But it is said that the private sector in Nepal lacks the vision of a broad-based economic growth and sustainable development. What are your views?</strong></p>
<p style="text-align: justify;">
	Since Nepal’s overall capacity to create enterprise is in the initial stage, it would not be fair to expect a high performance from the Nepali private sector. The private sector in Nepal is also a part of the Nepali society; it is as good or bad as the society is. Work culture and government policies directly affect enterprise.</p>
<p style="text-align: justify;">
	&nbsp;If we compare our development with that of China, India, Pakistan or south East Asian countries like Malaysia, Indonesia or Thailand, we find that we have poor governance in both private and government sectors. Also, our innovative capacity is poorer than theirs. The Nepali private sector is learning to be globally competitive. It is also learning to manage enterprises and managing companies properly.&nbsp;</p>
<p style="text-align: justify;">
	<strong>There are many organizations like FNCCI, CNI and other NGOs and INGOs working for the private sector. How do you assess their roles and activities?&nbsp;</strong></p>
<p style="text-align: justify;">
	If we talk about CNI, the purpose of establishing this organization was to make a positive impact on the climate of investment in Nepal and help make policy changes to transform Nepal into an investment friendly country. We create awareness about the industrial environment in Nepal and develop linkages among entrepreneurs. &nbsp;We are here to help create the right business environment, conduct dialogue at the policy level and help &nbsp;formulate policies that would attract investment to the country. When CNI was established, the country’s situation was volatile, politically unstable and unpredictable. This could be why the initiatives and efforts made by CNI were not pursued by the implementing agencies of the government.&nbsp;</p>
<p style="text-align: justify;">
	<img align="right" alt="" height="344" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/hari_bhakta_sharma(1).jpg" style="margin:0 0px 0 15px;" width="362" /></p>
<p>
	<strong><span style="font-size:16px;"><br />
	</span></strong></p>
<p>
	<strong><span style="font-size:16px;">"The Nepali private sector is learning to be globally competitive. It is also learning to manage enterprises and managing companies properly."</span></strong></p>
<p style="text-align: justify;">
	<strong><span style="font-size:16px;"><br />
	</span></strong></p>
<p style="text-align: justify;">
	<strong>Could you please elaborate a bit on the initiatives made by CNI for the development of Nepal’s industry sector?&nbsp;</strong></p>
<p style="text-align: justify;">
	We basically focused on three fundamental issues. First, we prepared documents on the country’s Industrial Policy after a lot of homework. We then submitted these documents to the Ministry of Industry. We wanted a number of changes in the policy. &nbsp;Second, we have been saying that the Nepali Enterprise Act needs a lot of improvement as the law formulated in 2049 BS has become obsolete. This issue needs to be addressed urgently.</p>
<p style="text-align: justify;">
	The previous industrial policy had incorporated &nbsp;many of our suggestions. However, the suggestions were not implemented because the Act was &nbsp;not amended. At the policy level, we have been trying to make the politicians aware about investment and the development of enterprises. We have been trying to create an investment-enabling environment. We have been trying to find ways to &nbsp;increase &nbsp;the income of Nepalis. We have been organizing economic summits. &nbsp;&nbsp;</p>
<p style="text-align: justify;">
	<strong>It is said that CNI was established because of the over politicization of the private sector. What do you say?</strong></p>
<p style="text-align: justify;">
	CNI was established because there was a need for an organization which could support the formulation of pro-private sector policies, help create an investment-friendly environment, and assure the investors about the long-term benefits of investing in Nepal. Such an institution was lacking in the country which led to the birth of CNI. Ever since its establishment, CNI has tried to do its bit for the industry sector as well as the entire economy. CNI has already passed through the test phase. If you compare the achievements we have made over the past one decade with that of any other similar organization, then you will know how hard we have been trying to improve things. Since we focus on the manufacturing sector, we raise issues and problems faced by this sector.&nbsp;</p>
<p style="text-align: justify;">
	<strong>It is said that the main reason behind the lack of &nbsp;re-investment in Nepal’s manufacturing sector is its inability to compete with China and India. For this reason, many believe &nbsp;that manufacturing does not have prospects in Nepal and are therefore importing instead. What do you have to say?&nbsp;</strong></p>
<p style="text-align: justify;">
	I do not agree with this. Deurali Janata Pharmaceuticals &nbsp;(DJPL) is one example that &nbsp;will prove this hypothesis wrong. Though the state provides five per cent discount on the import of medicines, DJPL has been able to produce quality medicines at competitive prices. The company has grown over the years. There are many areas in manufacturing where we can be competitive. All we need to do is identify and develop products with &nbsp;comparative advantage.&nbsp;</p>
<p style="text-align: justify;">
	<strong>So, what are the areas were you see comparative advantage?&nbsp;</strong></p>
<p style="text-align: justify;">
	Now is the time to go for hi-tech products. We should be able to identify the industries which can develop technologies and can also be competitive, for example bio-pharmaceuticals, IT sector and the health sector. Hydropower and tourism are two other sectors with lots of prospects; they are growing. If we improve the quality of service in tourism, we can get more benefits even from the current number of tourist arrivals. We are indeed sandwiched between India and China, but we have a great bio-diversity which makes us a country with high potentials in high-value crops. Likewise, there is a great scope for innovation and investment in the agriculture sector. We need to develop agricultural lands as enterprises but we have been developing them as properties. Agriculture is the base of a number of manufacturing industries.&nbsp;</p>
<p style="text-align: justify;">
	<strong>The government has listed the three sectors you mentioned above as the priority sectors. Still, we are unable to exploit them. Why?&nbsp;</strong></p>
<p style="text-align: justify;">
	The political instability in the country has kept the investors at bay. It seems the investors are in the wait and watch mood now. They are waiting for our discourse on federalism, future economic policy etc to take a concrete shape. Politicians should understand that their speeches alone won’t bring investment to Nepal. It’s a country’s political and business environment and the right rules regulations and policies that draw investment. We lack all these things. How will investors come to Nepal?&nbsp;</p>
<p style="text-align: justify;">
	<strong>What are the fundamental reforms needed to develop these sectors?&nbsp;</strong></p>
<p style="text-align: justify;">
	A common understanding among the politicians on the country’s economic agenda is a must. Parties in the government as well as in the opposition should understand that there should be a clear economic agenda which clearly depicts the dos and don’ts. No significant investment will come to Nepal unless the politicians have a common economic agenda prepared without any prejudice against anyone. We also need to depoliticize the economic issues so that industry, trade, and employment generation could grow smoothly. We have to keep in mind that we need domestic as well as foreign investors.&nbsp;</p>
<p style="text-align: justify;">
	<strong>That means there is no hope for growth in investment?</strong></p>
<p style="text-align: justify;">
	If there were no hopes, we won’t be in this business anymore. What I want to say is we lost a very good time. After the popular uprising of April 2006, &nbsp;the international community has had positive expectations from Nepal; we have many helping hands around. &nbsp;But we have so far failed to understand this and cash in on the opportunity. We couldn’t learn to depoliticize economy and development.&nbsp;</p>
<p style="text-align: justify;">
	Moreover, the politicians &nbsp;haven’t learnt from the mistakes they made in the past. They have spent 15 long years repeating the same mistakes. But still we hope that the time is not as bad as some people assume today.&nbsp;</p>
<p style="text-align: justify;">
	<strong>But other countries which have gone through conflicts, for example Sri- Lanka, have made progress. Why couldn’t Nepal?&nbsp;</strong></p>
<p style="text-align: justify;">
	I want to say that the generation I belong to is worried about the young blood. This young generation which could create enterprise is fleeing the country; here, I am not talking about those who go abroad for employment. This has made a very serious impact on our economy. This is why our GDP hasn’t grown in a massive way. However, we should appreciate that we have a positive growth both in the GDP and state revenue. The number of people wishing to invest in Nepal is also growing slowly. &nbsp;</p>
<p style="text-align: justify;">
	Other countries which have progressed despite undergoing a conflict in recent times attached high priority to their economies even during the time of conflict, not to mention after the conflict. Conflict-hit countries like Sri-Lanka and Bangladesh were able to maintain their growths as they had attached high priority to their economies. The Bangladeshi Cabinet has five ministers from the private sector. Those people who did not contest the parliamentary elections but were considered to be the best managers are appointed as ministers there. But in Nepal everybody seems to be thinking that only politicians can become ministers.&nbsp;</p>
<p style="text-align: justify;">
	In Sri- Lanka, you find an amazing system of governance. Every Sri Lankan ministry has at least one advisor from the private sector; they had two advisors during the conflict period. The government in Nepal only seeks loyalty from the businessmen. The knowledge of the entrepreneurs, their professional abilities and skills are not given due respect. They are judged based on their political inclinations or affiliations. This is why the inputs from professionals and technical experts of the private sector have not reached the higher level.&nbsp;</p>
<p style="text-align: justify;">
	<strong>Nepal has scored 50.2 on the economic freedom index 2012, becoming the 147th most-free economy in the world. How do you view this development in relation to the industrial environment in the country?</strong></p>
<p style="text-align: justify;">
	Regarding this issue, we have been focusing on a few things. One, we have been demanding that the Industrial Enterprises Act be amended according to the present needs. &nbsp;Two, &nbsp;the indicators of cost of doing business - for example corruption which is becoming socially acceptable - should be controlled. Three, as I mentioned already, the prime reason of the low ranking of our country on the economic freedom index is due to the unclear policies &nbsp;and the political instability. Things will improve once there is political stability.&nbsp;</p>
<p style="text-align: justify;">
	<strong>How do you find the current business environment in Nepal in comparison with the time you joined in?</strong></p>
<p style="text-align: justify;">
	I came into business some 22 years ago. There are some sectors which have made progress over this period, for example, the pharmaceutical sector and the banking and finance sector. Today a good project in Nepal stands a better chance of getting financed because of the development in the banking sector. Another good development is the young generation grown up over the past 20 years is coming forward seeking opportunities in businesses. These young people want to create enterprise on their own and are ready to take risks.&nbsp;</p>
<p style="text-align: justify;">
	There is some negativity, too. The level of corruption has risen. There are people who enjoy in others’ income rather than earning by themselves. The politicians have over-politicized almost every sector including the industrial sector. The result is less productivity in terms of individual capacity and high indulgence of the entrepreneurs in politics. In every sector, a person who is politically motivated and affiliated is selected regardless of their capability.</p>
<p style="text-align: justify;">
	<strong>Why are the pharmaceutical companies not seen aggressive in efforts to export their products?</strong></p>
<p style="text-align: justify;">
	Registration of pharmaceutical products internationally is a very difficult process. For pharmaceutical products, like medicines, companies need to scientifically prove their products, assure the consumers that the products are safe, GMP certified and so on. Another reason that makes us apprehensive to accept orders is the fear of not being able to deliver the products on time. Because of problems like power shortage and unpredictable labour problems and strikes, we always question ourselves whether we would be able to deliver the orders on time.&nbsp;</p>
<p style="text-align: justify;">
	We have just around 20 years of history in the development of pharmaceutical products. Based on my experience, I can say that there is a long way to go for Nepal’s pharmaceutical industry. It’s a highly regulated business. Unlike &nbsp;India, Brazil, the US and many other countries, Nepal is not considered &nbsp;as a country which can produce high-value medicinal products. India took 40 years to enter the export market while China took 35. We are just into 20 or 22 years of entering the pharmaceutical business. We hope to enter the export market faster than that. &nbsp;</p>
<p style="text-align: justify;">
	<strong>Why is the problem of substandard drugs in Nepal unresolved?&nbsp;</strong></p>
<p style="text-align: justify;">
	The private sector alone cannot resolve this problem. We can just facilitate the government in this process. &nbsp;We have been organizing awareness programmes against substandard drugs. The government has the authority and the mechanism to control substandard medicines. The medicines that are available at the pharmacies need be monitored and controlled by the government. We are ready to help the government in this matter.&nbsp;</p>
<p style="text-align: justify;">
	<strong>How is DJPL presenting itself in the global market? What are your upcoming plans?&nbsp;</strong></p>
<p style="text-align: justify;">
	Our primary objective during these 20 years was to learn, make our technologies world class, and establish our business globally. Now that our foundation is ready, our next step is to help reduce the import of medicines, at least those medicines which Nepal can manufacture itself. There are many products which Nepal needs to produce itself. But since we have been importing them from other countries for ages, we have not really thought along these lines. Now is the time &nbsp;to think about substituting &nbsp;the import by producing quality products. The most important thing we want to do now is promote healthier living. We want to produce health products other than medicines – health supplements. &nbsp;Taking medications after falling sick is normal. However, there are products for a healthier life, products that help prevent sickness. We &nbsp;too can produce such products. &nbsp;&nbsp;</p>
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<p class="Pa18">
	<span style="font-size:12px;"><strong><strong><span style="font-size:12px;"><span class="A17"><img alt="intrview december 2012" border="1" height="351" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/kenchini.jpg" vspace="10" width="203" /><br />
	<br />
	Nepal Country Director </span></span></strong></strong></span></p>
<p class="MsoNormal">
	<span style="font-size:12px;"><span class="A56">Kenichi Yokoyama </span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:12px;"><span class="A17"><span style="line-height: 115%; font-family: &quot;Calibri&quot;,&quot;sans-serif&quot;;">Asian Development Bank<br />
	<br />
	<br />
	</span></span></span></strong></p>
<p>
	 </p>
<p class="MsoNormal">
	<span style="font-size:12px;"><strong><span class="A63"><br />
	‘We have been actively involved <span style="line-height: 115%; font-family: &quot;Calibri&quot;,&quot;sans-serif&quot;;">in the energy sector’</span></span><span style="font-size:12px;"><span class="A63"><span style="line-height: 115%; font-family: &quot;Calibri&quot;,&quot;sans-serif&quot;;"> <br />
	</span></span></span></strong></span></p>
<p>
	<span style="font-size:12px;"><span class="A17"><span style="line-height: 115%; font-family: &quot;Calibri&quot;,&quot;sans-serif&quot;;">&nbsp;</span></span></span><span style="font-size:12px;"> </span></p>
<p class="MsoNormal">
	<span style="font-size:12px;"><span class="A64"><span style="line-height: 115%; font-family: &quot;Calibri&quot;,&quot;sans-serif&quot;;">Kenichi Yokoyama is Nepal Country Director for the Asian Development Bank (ADB), a Manila-based multilateral development finance institution dedicated to alleviating poverty in Asia and the Pacific. Yokoyama was serving as the principal water resources specialist at ADB´s South Asia department before he assumed current responsibilities on March 26, 2012. In an interview with New Business Age, Yokoyama sheds light on the ADB-funded projects in the water, energy, agriculture and other sectors in Nepal. Excerpts: </span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:12px;"><span class="A64"><span style="line-height: 115%; font-family: &quot;Calibri&quot;,&quot;sans-serif&quot;;">&nbsp;</span></span></span></p>
<p class="Default" style="margin-top:5.0pt;text-align:justify;line-height:10.05pt">
	<strong><span style="font-size:12px;"><span style="color: windowtext;">Melamchi, the ADB-financed water supply project, is in a new controversy now after the Chinese contractor left the work. How will the project move ahead now? </span></span></strong><br />
	<span style="font-size:12px;"><span style="color: windowtext;">&nbsp;</span></span></p>
<p>
	<span style="font-size:12px;">ADB is committed to supporting the construction of the Melamchi tunnel work, the water treatment plant and the distribution system. With a population of around three million, the Kathmandu Valley has been facing an acute water shortage. This is a huge developmental constraint. We have been facilitating the Nepal government in the completion of the tunnel and other works on time. </span><span style="font-size:12px;"> </span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span><span style="font-size:12px;">It is unfortunate that the Chinese contractor had to leave the project because of some issues related to work progress. Now, we are supporting the government to go for immediate rebidding. The government is looking for first class contractors. Such contractors from China, Korea, India, France and other European countries have shown interest in the project. We hope that the government will be able to hire a new contractor by March 2013 and complete the project by March 2016. </span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span style="font-size:12px;">But this has increased the cost of the project and delayed it further. Will the project complete within the new deadline?</span></strong></p>
<p class="Default">
	<span style="font-size:12px;">The topmost priority for the government is to identify a qualified contractor with high experience in similar tunnel works. Although there are concerns about the cost, we have to think about the seriousness of the water shortage problem in Kathmandu which calls for urgent attention. We have to ensure that the Melamchi project is completed on time.<br />
	</span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:12px;">Despite the many ups and downs seen over the almost past seven years, ADB remains associated with the project. The only reason for this association is that we feel that Melamchi is an important project. We have been holding regular discussions with the Ministry of Urban Development on the specific actions to be taken to take the project forward, including the swift selection of an internationally reputed, committed, dedicated and efficient contractor who can build a high quality infrastructure. Given the importance of the Melamchi project in addressing the water demand of the 2.6 million people living in the Kathmandu Valley, ADB remains fully committed to <span style="color: black;">providing the necessary support to the Government of Nepal to complete the project by early 2016 or earlier. </span></span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong></p>
<p class="Default">
	<strong><strong><span style="font-size:12px;">&nbsp;</span></strong></strong></p>
<p class="Default">
	<strong><span style="font-size:12px;"><span style="color: black;">ADB’s recent fund for water projects in Nepal is said to be aimed at improving irrigation and prevent water-induced disasters. How is it different from other water projects?<br />
	</span> <br />
	</span></strong></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">These projects aim to bring about higher rural livelihood. The government is seeking support for rapid agricultural transformation. In that context, we are supporting irrigation and water disaster mitigation risk management projects. We are building on the achievements made thus far. In irrigation, Nepal has comparative advantage in having irrigation systems managed by farmers. Building on this, ADB is supporting agriculture development for making it more profitable and commercial so that the farmers can increase their income.</span> <br />
	</span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:12px;"><span style="color: black;">Nowadays, effective water management is a critical challenge for many countries. Particularly in the dry season, many countries are facing a shortage of water supply. Nepal, too, needs an effective water management system. The country ought to fulfill additional industrial needs while protecting the conventional water users. An efficient and equitable distribution of irrigation water is also pretty much needed to increase the farmers’ income.</span></span></p>
<p class="Default">
	<strong><span style="font-size:12px;"><br />
	</span></strong></p>
<p class="Default">
	<strong><strong><span style="font-size:12px;">&nbsp;</span></strong></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span style="font-size:12px;"><span style="color: black;">Once again, ADB recently listed the West Seti Project among the newly proposed ones. How do you want to participate in this project?</span></span></strong></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span><span style="font-size:12px;"><span style="color: black;">It’s not the West Seti, but the Upper Seti project, located in Tanahun district, that ADB is supporting. Actually, we are submitting a proposal for this project to the ADB Board early next year. The name of the project is Tanahu Hydropower Project. It is a 140MW storage project. It could help address the power shortage of not only Kathmandu but the country as a whole.<br />
	<br />
	</span> <br />
	</span></p>
<p class="Default">
	<strong><span style="font-size:12px;"><span style="color: black;">ABD seems to have planned to involve itself quite heavily in the energy sector through new projects like Tanahu hydro and continue with other ongoing energy sector programs. What is the strategy?&nbsp;&nbsp; </span></span></strong><span style="font-size:12px;"><br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Our assistance strategy is to support the government to address the most critical development constraints including infrastructure, its management system, and delivery of effective public service to the needy people including the poorest. Addressing the critical infrastructure bottlenecks is of high priority. The country is facing acute power shortage. Electricity is available only six hours a day in the dry season. How can industries come to Nepal and operate in such a situation? ADB has been actively involved in the energy sector with previous assistance in Kali Gandaki A and Khimti Hydropower projects, which account for some 30 percent of the country’s generation capacity at the moment. The Tanahu project, which is a storage project, will add additional 140 MWand can provide a stable power supply during the dry season.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">We will support the efficient implementation of the Tanahu Hydro Project. There are two other ongoing projects in transmission and distribution, respectively. We are also supporting NEA in its institutional reforms which includes enhancing its financial position by increasing tariff, reducing distribution loss and providing electricity to private industries and local stakeholders more efficiently.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Default">
	<strong><span style="font-size:12px;"><span style="color: black;">Many ADB-supported projects – mainly those in the agriculture sector - are discontinued after the completion of the first phase. Why?&nbsp;&nbsp; </span></span></strong><br />
	<br />
	<span style="font-size:12px;"><span style="color: black;">Our programs are aimed at demonstrating how development can be pursued most effectively. For example, there was a community ground water project where a community ground water group was set up and provided with shallow tube-well systems. The beneficiaries can now do triple cropping with tube-well irrigation with proper maintenance of the tube-wells, which they are able to manage. Likewise, projects such as community irrigation and commercial agriculture are helping establish sustainable development systems. The government can replicate similar projects.<br />
	<br />
	</span> <br />
	</span></p>
<p class="Pa8" style="text-align:justify">
	<strong><span style="font-size:12px;"><span style="color: black;">It is said that $ 15.3 million that ADB had allocated for various projects such as commercial agriculture, community irrigation, skill development programs, etc, could not be used. What is the reality?&nbsp;&nbsp; </span></span></strong><br />
	<br />
	<span style="font-size:12px;"><span style="color: black;">The projects need to follow a specific timeline. There are also cases where the actual cost of implementation is lower than the initial projection. For example, in one of the strategic road projects, the bidding price was lower than the estimated price, thanks to the competition and devaluation of the Nepali Rupee, resulting in substantial savings. In the irrigation sector, too, the project cost is often lower than the estimated cost because of competitive bidding. There are some cases where the project implementing agency has limited absorptive capacity. Overall, we have identified $15 million savings this year, but we are also discussing with the government that these savings could be used for other projects in Nepal, such as additional financing requirement of the Melamchi project. </span></span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span style="font-size:12px;">&nbsp;</span><span style="font-size:12px;"><span style="color: black;">What would be your investment portfolio for the next couple of years for Nepal? Will it increase? </span></span></strong></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong><span style="font-size:12px;"><span style="color: black;">The allocation of the Asian Development Fund (ADF) is decided biannually, and the amount for the year 2013 -14 is to be finalized at the end of this year. At this moment, we expect it to be at least about $ 250 million per annum. </span></span></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span><br />
	<span style="font-size:12px;">&nbsp;</span></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span style="font-size:12px;"><span style="color: black;">Could you please highlight ADB’s present development assistance priorities for Nepal? </span></span></strong></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong><span style="font-size:12px;"><span style="color: black;">The thrust of ADB’s ongoing country partnership strategy for Nepal (2010-2013) is to help sustain the hard-won gains of the country’s peace process by promoting broad-based inclusive economic growth, inclusive social development, governance and capacity building, as well as climate change adaptation and environmental sustainability.&nbsp;&nbsp; </span><br />
	</span></p>
<p>
	<span style="font-size:12px;"><span style="color: black;">ADB’s assistance supports Nepal in different sectors such as agriculture and natural resources, education, water supply and other municipal infrastructures and services, transport, information and communication technology and finance and energy. We support these operations through the promotion of gender equality and social inclusion, regional cooperation and integration, public private partnerships, along with greater engagement of the civil society and NGOs. </span></span><span style="font-size:12px;"> </span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span><span style="font-size:12px;"><span style="color: black;">Our new country partnership strategy for Nepal is being formulated in consultation with the Nepal Government. ADB’s support will focus on addressing the country’s development constraints including energy, transport, urban and rural infrastructures and skill development. To support these priorities, ADB will also promote governance, private sector development, regional integration, gender and social inclusion and climate change adaption. </span></span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span style="font-size:12px;"><span style="color: black;">Could you please briefly describe ADB’s assistance in the agriculture sector? </span></span></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	 </p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span><span style="font-size:12px;"><span style="color: black;">ADB has been Nepal’s main development partner in agriculture. Agriculture remains the largest component of ADB’s assistance to Nepal. ADB has supported in increasing the production of crops and livestock, raising agricultural income and creating employment opportunities for rural people. ADB’s assistance to Nepal includes support for agricultural credit, small farmer development, livestock, irrigation, agricultural roads, forestry, and crop diversification. ADB is also supporting the government’s preparation for the Agriculture Development Strategy that will set out the long-term vision and strategy for the agriculture sector for the next 20 years, and priority programs for the next 10 years. </span></span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span style="font-size:12px;"><span style="color: black;">&nbsp;</span></span></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span style="font-size:12px;"><span style="color: black;">What is the recent development in ADB’s funding for the transport sector? </span></span></strong></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong><span style="font-size:12px;"><span style="color: black;">We have been supporting the construction of strategic roads network. Similarly, we are supporting the Sub-regional Transport Enhancement Project which was approved in 2010. All contracts have been signed for this project and the work progress is about 30 per cent. A new transport project of about $100 million is envisaged for 2013. We are also planning another project based on a new lending modality called the multi-tranche financing facility for 2014 for the transport sector. The idea is to provide a long-term financing framework of $200- 250 million, based on which individual sub- loans will be launched. </span></span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong></p>
<p class="Default">
	<strong><span style="font-size:12px;"><span style="color: black;">ADB is preparing to provide support for setting up a new CTEVT- like structure under the Ministry of Education. Would you please highlight the program?</span> <br />
	</span></strong></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">ADB is not providing assistance to a new CTEVT- like structure under the Ministry of Education. However, ADB will support the Government of Nepal, through the proposed Skills Development Project to develop a market responsive and social- and gender-responsive Technical Education and Vocational Training (TEVT) by assisting the implementation of policy, institutional and operational reforms, delivery of demand-oriented skills training, short-term market oriented skills training focusing on excluded groups, and effective project management and monitoring and evaluation.<br />
	<br />
	</span> <br />
	</span></p>
<p class="Default">
	<strong><span style="font-size:12px;"><span style="color: black;">For the last few years, ADB, DFID and WB had started to implement synchronized programs to avoid duplication. Why have you abandoned this practice now?&nbsp;&nbsp; </span></span></strong><br />
	<br />
	<span style="font-size:12px;"><span style="color: black;">We have been continuously working together with the World Bank, DFID and JICA, who are our co-members in the Nepal Portfolio Performance Review process. The government is taking the lead, and a meeting is held annually to discuss and resolve issues to enhance project implementation performance. Issues like public finance, management, procurement, human resource management and management of the development regions. These issues are critically influencing the implementation of the developmental projects. Implementation of the concept of e-bidding for infrastructure works is almost complete. This allows bidders to submit their bids through internet. This can substantially enhance the transparency and efficiency of the bidding process.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">For new development programs, a close coordination and collaboration among the development partners is maintained as an established practice in project preparation and appraisal, to avoid any duplication. Efforts are also being made to develop a common sector roadmap or result framework and define programs within the framework and pursuing the possibility of co-financing as much as possible.</span><br />
	<br />
	<br />
	</span></p>
<p>
	<strong><span style="font-size:12px;"><span style="color: black;">Despite great donor involvement in programs like the School Sector Reform, the achievement has been negligible, mainly converting government schools into community-run ones. What is the reason?&nbsp;&nbsp; </span></span></strong></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Default">
	<br />
	<span style="font-size:12px;"><span style="color: black;">In the school sector, we have to take into account that we have started from a very low base. Nepal has significant challenges such as difficult geography and remoteness in the mountain region. I don’t agree that the achievement has been negligible. If you look at the statistics, primary school enrollment was barely 60 percent in 1990; it is 95 percent now - a significant change brought about by education programs. However, it is also true that some significant challenges still remain, such as the quality of education and a high percentage of dropout. Prudent financial management of the education development fund, too, is an issue. Building on the progress made, I believe these constraints can also be addressed gradually. We have a donor co-ordination mechanism, which enables all the donors to work together to make the most efficient progress by avoiding duplication.</span></span></p>
<p class="Default">
	<strong><span style="font-size:12px;"><br />
	</span></strong></p>
<p class="Default">
	<strong><span style="font-size:12px;"><span style="color: black;">ADB has supported to modernize Nepal’s capital market. What are the latest developments in this regard?</span> </span></strong></p>
<p>
	<span style="font-size:12px;"><span style="color: black;">ADB is supporting Nepal’s efforts to develop the capital and bond markets to attract and promote private investment. For this, we have an ongoing Capital Markets and Infrastructure Capacity Support Project. Under the project, a team of consultants is being selected. There are two components of this project. The first is to support the capital market development, particularly the bond market. The second one aims to develop an enabling environment for public private partnership (PPP), identify investors, design and carry out feasibility studies. We hope to mobilize the consultants by early 2013. </span></span><span style="font-size:12px;"> </span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span><span style="font-size:12px;"><span style="color: black;">We are also discussing with the Government of Nepal the opportunity for ADB to issue local currency bonds that will help provide long-term financing for private infrastructure investment and also help develop the country’s bond market.&nbsp;&nbsp; </span></span></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span style="font-size:12px;"><span style="color: black;">How do you view the progress of ADB’s projects in Nepal? </span></span></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	 </p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">The country assistance program evaluation (CAPE) conducted by ADB’s Operations Evaluation Department a few years back found that overall, ADB’s lending program had a positive impact socially, environmentally and economically. These projects have helped reduce not only poverty but also gender disparity and social exclusion by benefiting the poor.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Some of ADB’s programs are directly targeted at the poor and some are indirectly targeted, but the ultimate objective is poverty reduction. Results can be seen from the assistance that ADB has been providing over the years. For instance, the transport system in the country has greatly improved — the main strategic road network as well as the rural roads connecting the remote parts of the country. This has helped improve public service delivery and livelihoods in these areas. ADB’s assistance has also contributed in improving the living standards of the rural communities through the provision of improved water supply and sanitation facilities. However, we recognize that the assistance we provide needs to be more effective in terms of reaching the poor and vulnerable and sustaining these development benefits.</span><br />
	</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span style="font-size:12px;"><span style="color: black;">How have you viewed Nepal’s inability to bring about a full-fledged budget at the beginning of the fiscal year? How has it affected your support? </span></span></strong></p>
<p>
	<span style="font-size:12px;"><span style="color: black;">Although the government could not bring a full budget, a one-third interim budget was provided. We are working with the government so that the developmental activities are least affected in the given context. As far as the ongoing projects supported by ADB and other donors are concerned, the ordinance (budget) has a special provision to allow the government to provide enough funds through budgetary reallocation. Nevertheless, we remain concerned how the necessary funds would be allocated in a smooth and timely manner for efficient project implementation under the present circumstance. </span></span><span style="font-size:12px;"> </span></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp; <br />
	</span></strong></p>
<p class="Default">
	<strong><span style="font-size:12px;"><span style="color: black;">What are the challenges facing the development projects in Nepal?&nbsp;&nbsp; </span></span></strong><span style="font-size:12px;"><br />
	</span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:12px;"><span style="color: black;">In general, projects in Nepal face the challenge of timely implementation due to the country’s difficult topography and remoteness of many districts. Poor infrastructures and limited human resource capacities are the other challenges. In some cases, implementation of the projects has been affected by local strikes as well. </span></span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">The political transition process has been slow and is still fraught with risks and challenges for development activities. In particular, the absence of elected local bodies since July 2002 has been a major impediment to governance, service delivery, and development works at the local level.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">In addition, labour unrest in the fragile political environment, coupled with acute power shortage, has constrained the revival of key sectors of the economy and private investments. Thus, improving basic infrastructure and strengthening governance and public and market institutions is very crucial for Nepal.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Despite these challenges, the performance of ADB’s project portfolio has improved. This also demonstrates the hard efforts by the government agencies that implement the ADB-financed projects. While the overall performance still remains below ADB’s wide average, I am hopeful that this progressive improvement will continue under the strong partnership with ADB.</span></span></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:12px;"><span style="color: black;">How do you view the current economic situation of Nepal?</span></span></p>
<p class="MsoNormal">
	<span style="font-size:12px;"><span style="line-height: 115%; color: black;">Despite the difficult political environment and the global economic slowdown, Nepal has been able to preserve a reasonable macroeconomic stability with a moderate and steady economic growth. We are pleased to note that the government’s and Nepal Rastra Bank’s proactive policy measures on the vulnerability of the banking sector and rising inflation have eased the problems in recent months, although the risks remain. The external position, too, has remained stable with the widening trade deficit being offset by sustained increase in remittance inflows and tourism receipts. However, exports continue to be sluggish due to the long-term structural weaknesses in the economy. Although agricultural growth could slow down in FY 2013 because of the late monsoon and shortage of chemical fertilizers, we believe that Nepal will be able to maintain a moderate growth supported by the service sector.</span></span></p>
<p class="MsoNormal">
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<p class="MsoNormal">
	<span class="A3"><span style="font-size:16.0pt"><img alt="phil" border="1" height="301" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/phil11.jpg" vspace="10" width="382" /><br />
	Phil Humphreys </span></span><span class="A25"><br />
	<span style="font-size:14.0pt">Chief Operating Officer </span></span><span class="A25"><br />
	<span myriad="" style="font-size:14.0pt;line-height:
115%;font-family:">Coca-Cola Sabco</span></span></p>
<p class="MsoNormal">
	<span class="A25"><span myriad="" style="font-size:14.0pt;line-height:
115%;font-family:">&nbsp;</span></span></p>
<p class="Default" style="mso-line-height-alt:10.05pt">
	<span class="A65"><span mso-bidi-theme-font:="" new="" style="font-size:13.0pt;mso-bidi-font-family:" times="">Phil Humphreys is the Chief Operating Officer of the Northern Division of Coca-Cola Sabco based in Dubai. He joined Coca-Cola Sabco in September 2010. He has a strong background in international FMCG sales and marketing. He has also worked with leading international brands such as Johnnie Walker, Smirnoff, Guinness, and an array of other leading brands within the Diageo and Nestle portfolios. He completed the PED/MBA equivalent programme at IMD, Lausanne, Switzerland as well as various other International Management and Executive Development Programmes. </span></span></p>
<p class="Default" style="mso-line-height-alt:10.05pt">
	<span class="A65"><span mso-bidi-theme-font:="" new="" style="font-size:13.0pt;mso-bidi-font-family:" times="">&nbsp;</span></span></p>
<p class="Default" style="mso-line-height-alt:10.05pt">
	<span class="A65"><span mso-bidi-theme-font:="" new="" style="font-size:13.0pt;mso-bidi-font-family:" times="">&nbsp;</span></span></p>
<p class="Default" style="mso-line-height-alt:10.05pt">
	<span class="A65"><span mso-bidi-theme-font:="" new="" style="font-size:13.0pt;mso-bidi-font-family:" times="">Humphrey’s leadership quality and keen business senses has helped him achieve significant positions in leading global companies. As the Chief Operating Officer at Coca-Cola Sabco (Northern Division), he is currently leading developing markets in the form of the franchises of Vietnam, Cambodia, Nepal, Sri Lanka and Ethiopia. He is also a member of the Coca-Cola Sabco Group Executive Committee. In an interview with New Business Age, Humphrey shared his plans for Coca-Cola Company in Nepal and market strategies among numerous other issues. Excerpts: </span></span></p>
<p class="Default" style="mso-line-height-alt:10.05pt">
	<span class="A65"><span mso-bidi-theme-font:="" new="" style="font-size:13.0pt;mso-bidi-font-family:" times="">&nbsp;</span></span></p>
<p class="Default" style="mso-line-height-alt:10.05pt">
	<span new="" style="font-size:
13.0pt;mso-bidi-font-family:" times="">&nbsp;<img alt="phil" border="1" height="300" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/phil22.jpg" vspace="10" width="393" /></span></p>
<p class="Default">
	<strong><span style="font-size:10.0pt;color:#211D1E">You joined Coca-Cola Sabco in September 2010. How have you made a difference in this period?</span></strong></p>
<p>
	<span style="font-size:10.0pt;color:#211D1E">Nepal is one of the five countries that I am looking after. In Nepal, I inherited an already good business. We took up the business in 2004 and we have had the business as franchise for eight years now. Every year from 2007 onward, we have delivered double digit growth both on the top and bottom lines. One of the things that we talk a lot about Nepal strategy is amazing relationships with people as one of the strengths. We spend a lot of time engaging with Nepali people both at the plant and in the field. We also spend a lot of energy in engaging with our stakeholders and believe in power of relationships. That is one of the things that have really happened in the last two years since I joined the company. As far as engagements go, every year we </span><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">measure how engaged our people are. Last year it was incredible 96 per cent, which is the highest in the whole company. Out of 11 countries, there is no other country in Sabco with higher engagement than that. </span></p>
<p class="Default">
	<strong>&nbsp;</strong></p>
<p class="Default">
	<strong>&nbsp;</strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">You have an extensive experience in the FMCG field and possess in-depth knowledge of global brand development. How do you view your current experience at Coke?</span></strong></p>
<p>
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">The key thing about the system at Coca – Cola is to work in partnership and collaboration. For example, you can do everything in Nepal from marketing and selling to distribution while Coca-Cola Company owns the brand and does all the corporate marketing. So, one of the things about the system is to collaborate really well and maintain tension in the conversation. You have got to challenge and be there with each other. I had not experienced this kind of a system before and never experienced working for a private company before. Therefore, these are new experiences for me. In Nepal, we have set up two publicly listed companies and majority of shareholding is our own while we do have a number of knowledgeable people as minority shareholders. We are heavily backed by a private company who can make decisions easily. We are part of a public company here and need to make agreement through our annual general meetings. For example, we are building a new plant in Bharatpur which is a US$ 25 million investment. That is about four times the average injection capital that we would put into the country. It is going to be fantastic and I am really excited because it not only creates a lot of new job opportunities but it is also going to give us PET plastic bottles.</span></p>
<p class="Pa10" style="text-align:justify;text-indent:14.0pt">
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">&nbsp;<br />
	<br />
	<img alt="phil" border="1" height="306" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/phil45.jpg" vspace="10" width="432" /><br />
	</span></p>
<p>
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">How far have you reached in your expansion plan for Coca-Cola in Nepal?</span></strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:"><br />
	<br />
	We are going through our plans right now and always look at three year plans. We want to be a non alcoholic energy drinks company by 2013. We want retailers, customers and consumers to able to come to us and get anything they want from our portfolio. They can get sparkling drinks right now but they can’t get juice, water and energy drinks. That is going to be part of our expansion in the coming years as we are definitely interested in these areas. We are in discussion with our partner about the possibility at the moment and also looking after the water facility in one of our existing plants. I am expecting to play a much broader role in this non alcoholic drink segment in a year’s time. We have a lot of opportunities as this country is very much an emerging market. </span></p>
<p class="Default">
	<strong>&nbsp;</strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Where will you reach in the next two years after the expansion and all these investments?</span><br />
	</strong></p>
<p>
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">We try to think a little further than just one, two or three years. In a country like this, you cannot just look forward to 2013 only. I think that the non alcoholic drinks market in this country is basically worth 25 million cases right now. It would probably grow to become a 200 million case business by 2020. This is a brilliant place to be in for doing business from a consumer perspective even though it is not the easiest place to do business from regulations perspective. But what matters at the end of the day is that Nepali consumers are demanding more from a company like ours. </span></p>
<p class="Default">
	 </p>
<p>
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Is there a chance that you will start bottling canned beverages here in Nepal?</span></strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:"><br />
	<br />
	Probably not at the moment because we have various other options that we can look at. The market for canned beverages is still very small. For the next few years, the glass bottle is going to be continuously very important part of the battle between Coke and Pepsi. We are going to make sure that it is affordable and everybody has access to Coca-Cola. Our mantra for the year is ‘within arm’s reach’. Now my dream is to have our quality products in different packaging formats which people can rely on and get those products literally within arm’s reach. That is a big responsibility and most important thing is to do it in a sustainable way. </span></p>
<p class="Default">
	 </p>
<p>
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">The overall transaction of your competitor comes more from food business than the sale of cola drinks. Have you ever thought to focus on the food business as well?</span></strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:"><br />
	<br />
	We will not be getting into the food business. Anything is possible in terms of partnerships as such but whether Bottlers Nepal Pvt Ltd will ever buy a food company is something I can’t predict about right now. Taking up secondary distribution is possibly an option but it’s definitely not a priority right now. We want to sell Coca-Cola, Sprite, Fanta and Kinley and want to and open as many new outlets as possible to give people an opportunity to retail our products. Food business is not the direction for Coca-Cola Company, it is soft drinks only.</span><br />
	&nbsp; <br />
	<br />
	<img alt="phil" border="1" height="306" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/phil45(1).jpg" vspace="10" width="432" /><br />
	 </p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Is there any negative impact for cola industry in Nepal like in India because of the propaganda against cola from certain quarters? </span></strong></p>
<p>
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Not at the moment though of course we do need to be careful. There has been some negative publicity against soft drinks but I think there is a great opportunity for us in this industry to come together as non alcoholic beverages industry and actually do some better work right now. I think we always need to be very careful about NGOs’ and public perception of soft drinks but I personally have massive confidence in our products. It is time for educating consumers that Coca-Cola is about health and wellness. The average consumption of Coca-Cola here is nine bottles per capita for an entire year so there is a lot of room. We have a lot to do about giving back to this country - getting involved in education, sustainability and renewable energy. These are the three areas we are going to significantly focus on. I think we will be doing well if we show the government and our consumers that we are a locally responsible business. </span></p>
<p class="Default">
	 </p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">You have changed the focus of your advertising campaigns from electronic and print media to hoarding boards. What is the targeted outcome that you are looking at? </span></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	 </p>
<p>
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">I am a marketer by background so I love all those stuffs. The time was right for us to do something different few months ago and we started printing Kathmandu around February this year. Everywhere you went, you saw boards with Rs 20 for 350 ml bottle of Coke. Personally, I think it is the right way to go right now for Nepal. I call it visibility but it needs to be the part of the whole 360 degree integrated campaign. You can’t just have it on TV or a single media. I would like people to see our brand wherever they go and not just when they go home and switch on their television sets. You will continue to see a lot of them in the future as well. </span></p>
<p class="Default">
	 </p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">What are the new CSR activities that Bottlers Nepal is coming out with? </span></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	 </p>
<p>
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:"><br />
	We are going to focus particularly on water usage because our water usage ratio is pretty low. The Coca-Cola Company is very happy with us and the team here has done a great job so we will continue to focus on it. That means we are going to give more water back to the ground than we basically take out. So, a good example of this is rainwater harvesting projects that we are doing at number of places in association with the NGOs. We have also organised environment cleaning campaigns. Another thing that we will be doing but have not really started yet is to facilitate solar energy run coolers. </span></p>
<p class="Default">
	 </p>
<p>
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">What are the new changes that you are making in different fields of Bottlers Nepal’s operations?</span></strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:"><br />
	<br />
	The big thing is adding a new facility that we have not done for years. We are also going to expand the portfolio of non alcoholic drinks. We will also be putting a lot more people into frontline sales to execute our operations more efficiently. </span></p>
<p class="Default">
	 </p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Coke conducted a study recently on shoppers’ loyalty and retail dynamics. What were the findings about the behaviour of Nepali consumers? </span></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	 </p>
<p>
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">We understood a little more about how shoppers shop than we already knew. One of the things we learned a lot about was that Coke clearly stands out when you put Coca-Cola, Sprite or Fanta, particularly Coca-Cola, next to another product which is associated with an occasion. Another aspect about Nepali consumers was that they like simplicity, they don’t like complications. That was a great message, as many times, big company like us tend to over engineer the world. The fact that simplicity of packaging and product never ever changes the taste of the product, was a great finding for us. </span></p>
<p class="Default">
	 </p>
<p>
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">How is Coke changing its business strategy in Nepal in regard to these findings? What is the targeted increase in your market share? </span> </strong></p>
<p class="MsoNormal">
	<strong>&nbsp;</strong> <span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">I think consumer and meal occasions are changing. My demand is that every eating and drinking outlet I go to should have a poster with Momo or another Nepali dish plus Coke and their combined price. That is really the big change that is currently being done. People always drink Coca-Cola at a little grocery out there but now there is going to be a big shift in the mindset of the consumers. As for market share increase, the general rule for us is we are very happy if we can get one per cent market share rise per year.</span></p>
<p class="MsoNormal">
	<span style="font-size:10.0pt;line-height:115%;color:#211D1E">&nbsp;</span></p>
<p class="MsoNormal">
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			'description' => 'Phil Humphreys is the Chief Operating Officer of the Northern Division of Coca-Cola Sabco based in Dubai. He joined Coca-Cola Sabco in September 2010. He has a strong background in international FMCG sales and marketing. He has also worked with leading international brands such as Johnnie Walker, Smirnoff, Guinness, and an array of other leading brands within the Diageo and Nestle portfolios. He completed the PED/MBA equivalent programme at IMD, Lausanne, Switzerland as well as various other International Management and Executive Development Programmes.',
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			'content' => '<p class="MsoNormal">
	<span style="font-size:20px;"><strong><span class="A31"><span style="line-height: 115%;">‘Social Research has a Huge Scope in this Part of the World’</span></span></strong></span></p>
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	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A31"><span style="line-height: 115%; font-family: "><span style="font-size:20px;"><strong>&nbsp;</strong></span><img alt="Justin Sargent " border="1" height="403" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/interview_11.jpg" vspace="10" width="277" /><br />
	</span></span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Justin Sargent </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span class="A16">Managing Director-India </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A16"><span style="line-height: 115%; font-family: ">Nielsen</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A16"><span style="line-height: 115%; font-family: ">&nbsp;</span></span></span></p>
<p class="Pa24" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span class="A58">Justin Sargent is the Managing Director for Nielsen India's Consumer Business. He is leading Nielsen's consumer businesses (Retail Measurement Services, Consumer Research, BASES, Advance Analytical Consulting) including Client Leadership, Client Service and Product Leadership initiatives. He graduated from Warwick University, England with a BSc in Mathematics, Operational Research, Statistics and Economics. Langer has held a number of senior positions at Nielsen across the globe, including the position of RMS Executive Director - Australia, and most recently Managing Director - UK &amp; Ireland. </span></span></p>
<p class="Pa24" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span class="A58">&nbsp;</span></span></p>
<p class="Pa24" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span class="A58">He is currently based in Mumbai, India and focuses on the strategy of listening to the consumers to get more consumers' insight. The Nielsen Company is a global information and media company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence, mobile measurement, trade shows and business publications. It is planning to continue growing its business by applying its strategies of driving more consumers' insights and generating a more complete understanding of consumers. In an interview with New Business Age, Langer talked about importance of Nielsen numbers and major plans for its Nepal operations among a host of other issues. Excerpts:<br style="mso-special-character:line-break" />
	<br />
	<br />
	<img alt="Justin Sargent " border="1" height="419" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/interview_12.jpg" vspace="10" width="287" /><br style="mso-special-character:line-break" />
	</span></span></p>
<p class="Pa24" style="margin-top:5.0pt">
	<span style="font-size:14px;"><strong><span class="A58"><br />
	</span><span style="color: rgb(34, 30, 31);">Please give us an overview of Nielsen’s business in this region that includes Nepal and India. <br style="mso-special-character:line-break" />
	<br style="mso-special-character:line-break" />
	</span></strong></span></p>
<p class="Default">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The Nielsen’s South Asia operation covers countries like India, Bangladesh, Sri Lanka and Nepal. It’s quite a sizeable region for Nielsen in this developing part of the world. Like multinationals, we view countries like India, Nepal and other parts of South Asia as areas of priority where our clients are investing to find out their consumers’ size. Nielsen has been in India since 1960s and in Nepal since early 1990s. We are increasingly focusing on these two countries as our clients are seeking growth here.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Nielsen in Nepal has a full range of services. It is mainly known for measurement services. Most of our clients are particularly from the fast moving consumer goods (FMCG) sector and hence they demand to understand how they are performing, in comparison to their competitors. We also do a lot of work with NGOs and help them understand factors that can help them promote and influence the country’s growth. We work for AED, PSI and some other USAID-funded projects in Nepal in addition to a host of multinational companies like Coca- Cola, Colgate-Palmolive and Procter &amp; Gamble to name a few.&nbsp; </span><br />
	</span></p>
<p class="Default">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">A huge part of our business is dedicated to these two services. Our business is growing well in Nepal and the clients seem increasingly interested in this market. It seems to be the right time for us to consider how to elevate to the next level and how to potentially bring in further expansion. Maybe, we could bring some new analogical products that have worked well elsewhere, in other developing markets.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Social research has a huge scope in this part of the world. In India, we also work in sectors including government organizations and the NGOs, for example, UNICEF. We also work with projects on big, important sectors like health and education. FMCG is an area that Nielsen tends to put in a lot of time and energy into. Nielsen is a global company so we are constantly looking for the climax in different countries, and Nepal is now in its climax. It has many centers of attraction and the GDP growth of the country is four per cent which is still pretty attractive compared to a lot of western economies.</span><br />
	</span></p>
<p class="Pa8">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">We developed the social research practice that works right across South Asia. We have experts that tend to work across the different countries. For example, we utilize the microfinance expertise from Bangladesh in other countries. We have a team on the ground here in Nepal that lives by the company’s principles. However, we are bringing in more expertise to the Nepali marketplace to see what we can do in the social research sphere as a whole. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;<img alt="Justin Sargent " border="1" height="491" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/interviw_13.jpg" vspace="10" width="306" /></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Default">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal"><span style="color: rgb(34, 30, 31);">Could you please provide us some insight on the topline retail and consumer trends from the perspective of the Indian market?</span></b> <br />
	</span></p>
<p class="Pa8" style="text-indent:14.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">India has a huge population and big traditional trade. We have seen a lot of growth in that country, especially in the rural areas. Though modern trade is still small – only six per cent – compared to traditional trade, we have started observing changes in trends. It’s growing fast and more consumers are looking for convenience and choice. We have started to notice a lot of trading for more branded products. We notice a lot of use of technology including social media and smart phones. Consumers have grown a lot savvier and their expectations are increasing. This might be helpful in changing people’s perspectives, packaging perspectives and value perspectives. One thing which is very consistent in India is the value. We do service right around the world and India always comes top in terms of value consciousness. A lot of consumers increasingly shop around for promotion to make sure they can remain value conscious and still satisfy their increasing aspirations. <br style="mso-special-character:line-break" />
	</span></span></p>
<p class="Default">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Our clients’ business and even the Nielsen’s business both saw this high trend basically three to four years ago. GDP growth is a little lower this year, which is forecasted now at six percent. However, global manufactures and local Indian multinational companies alike, are pretty positive about the future.</span><br />
	<br />
	</span></p>
<p class="Default">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal"><span style="color: rgb(34, 30, 31);">Yours is a privately held company active in approximately 100 countries, with its headquarters in New York, USA. How big an advantage is this when you deal with global clients?</span></b> <br />
	</span></p>
<p class="Pa8" style="text-indent:14.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">When a global client is working with us, they may know Nielsen already. We assure the country manager of a global client locally that we will share our best practices with them and suggest that the service is worth exploiting. Our local teams are mostly in the field, visiting local clients to relate to them and understand their perspectives. Nielsen’s methodologies are globally consistent; however, we do tend to tailor them in order to meet specific needs of the marketplace. For example, when we spoke to our clients in Nepal, they expressed that they wanted us to represent certain regions and towns in more detail than we might have for others. We don’t have this service in other countries but developed it to match their demand of covering some of the towns in greater detail. We believe that the best global practice methodologies should be open for local customization. </span></span></p>
<p class="Pa8">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Listening to a client’s need is a critical process and an important element of our strategy because clients know best where they are going and with what strategy. They can naturally express their needs. Therefore, listening is a critical part of our job while delighting clients is our aspiration. However, different clients have different needs so we need to balance between occasions and between realities. We have to bring the realities from a commercial firm with the right product to the market. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Default">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal">&nbsp;</b></span></p>
<p class="Default">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal"><span style="color: rgb(34, 30, 31);">How do you explain the importance of Nielsen numbers?</span> <br />
	</b></span></p>
<p class="Pa8">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Nielsen numbers tell our clients what their market share is, how fast the market is growing, and where they are in the competition. We are proud of being an independent company. We focus on using the Nielsen’s number to guide the expertise’s planning. We invest a lot of time in quality management, ensuring that we have got the right field management practices and the right amulets to interpret those numbers because we know how much our clients rely on the Nielsen’s number. Before I joined Nielsen, I used to work at Procter &amp; Gamble as a category marketing analyst many years ago in the UK. Every week a Nielsen’s number used to come around and that is when I first realized how much weight these numbers carry. </span></span></p>
<p class="Pa24" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The way in which people used the number were for making investment decisions, judging their performances in the market or looking after factors like distribution, product prices and level of competition. We tend to advise companies a lot in terms of what the distribution strategies should be and the likely pricing strategy they should adopt. Nielsen’s number is the bed rock for a lot of the decisions being made in the marketplace. </span></span></p>
<p class="Pa24" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="Default">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal"><span style="color: rgb(34, 30, 31);">What are the major plans for Nielsen Nepal?</span></b> <br />
	</span></p>
<p class="Pa8" style="text-indent:14.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The main purpose of my visit to Nepal is spending time with the management team and deciding on the next steps to be taken for the development of business in this country. Nepali clients’ expectations are increasing, so we are looking into the areas where potential improvements can be made. One area that we are considering is whether or not to expand coverage of measurement products into rural areas. We have not decided whether it is the right measure to take. We are also looking at a particular social research base to elaborate more expertise and bring in some more technical capabilities into Nepal in order to improve the level of understanding. We are also looking forward to introduce other services that we also have in other countries, for example, analytics. This could be an advantage for Nepal because they know how to go to the next level, to expand the distribution and to improve their competitive businesses. We have a number of analytics with capabilities in consideration. We are looking forward to listening to our clients’ view point. We would certainly like to build more presence in Nepal because our clients are demanding it. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;<img alt="Justin Sargent " border="1" height="430" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/intreview_2012.jpg" vspace="10" width="231" /></span></p>
<p class="Default">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal"><span style="color: rgb(34, 30, 31);">You joined Nielsen way back in 1993 and have held senior positions across the globe since. How do you assess this association over the period of almost two decades now?</span></b> <br />
	</span></p>
<p class="Default">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">From a personal perspective, Nielsen has provided me with lots of opportunities. When I joined Nielsen, I didn’t think that I would still be here 20 years later. Fortunately for me, I was given increasingly challenging assignments throughout which has allowed me to travel across different continents like Europe, Australia and Asia. Currently, I am working in India. Working in different countries engaging with different people, thinking about and understanding the clients’ needs and facing business challenges, has been very stimulating indeed. Nielsen has come across a lot of transformation in 20 years’ time including its ownership.</span> <br />
	</span></p>
<p class="Pa8" style="text-indent:14.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Nielsen focuses on shifting developments and as I mentioned before, moving people around is a big part of our strategy. Moving people to the developing market is good for learning about what works for a developing market. We can then reverse, innovate and take the best of practices to the developing market. But it also means you can look elsewhere, may be in the US or Europe, that could be a relevant market like India or Nepal. Nielsen’s strategies on talent developments and moving people around the world are incredibly one of the great things that it wants to share with other companies. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Default">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal"><span style="color: rgb(34, 30, 31);">Could you please elaborate on why is transferring talents so important?</span></b> <br />
	</span></p>
<p class="Default">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The general principal of moving people around is either for different jobs within a country or across different countries. It provides people with different experiences, perspectives and learning opportunities that eventually lead to career building. It is equally important from a company’s perspective as transferring people is also about transferring ideas, embracing innovations and sharing the best skills within and beyond boundaries. A big part of Nielsen’s strategy is to be a company exporting talent around the globe. We are fortunately one of the beneficiaries of that as we get to carry out a number of different assignments in different countries.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Default">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal"><span style="color: rgb(34, 30, 31);">Could you highlight the integral components of a transparent communications culture?</span></b> <br />
	</span></p>
<p class="Pa8">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">This is something that I have always strongly believed in. You have to be very candid, honest and open to both your peers and clients. When you communicate very frankly, you recognize people better. It is a fundamental philosophy of mine to lead a very honest communication because it is the only way to build trust and loyalty in general. It’s about celebrating and recognizing people. The transparent communication culture is not limited among the colleagues, rather it also extends to our clients by being very open with them. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Default">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal"><span style="color: rgb(34, 30, 31);">What are your recommendations to organizations for building a ‘client first’ mindset?</span></b> <br />
	</span></p>
<p class="Default">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">‘Client First’ mindset is all about thoughtfulness. Instead of offering Nielsen’s products immediately, I first inquire about what my clients need and how we can satisfy them better. Once you build a ‘client first’ mindset it will eventually benefit your business strategies because then you are developing your products and services according to the clients’ needs. It improves your client’s service because your clients can relate to and make use of them. Besides, at the end of the day, it ensures that our services are up to the mark. ’Client First’ mindset is something that I have passionately believed in during my entire career. Even if we talk beyond Nielsen, the same philosophy rules the most successful companies. From a marketing stand point, it is necessary to listen to the customers. Since there are new technologies emerging, we should utilize them to listen to the customers’ voice. For example, the social network and blogs could be powerful tools. Even the CEOs of many companies have started going out on the streets to understand customers’ needs.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">Things are rapidly changing in countries like India and Nepal. If you are constantly in touch with people, you could know more about them particularly the way in which people adopt technology. You have to constantly engage with customers to understand what is important for your brand and how could you keep it desirable for them. Understanding technology and customers to flourish your brand is something that can certainly be achieved by building a ‘client first’ mindset.<br />
	<br style="mso-special-character:line-break" />
	<br style="mso-special-character:line-break" />
	</span></span></p>',
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<p class="MsoNormal">
	<span style="font-size:24px;"><span class="A66"><span myriad="" style="line-height: 115%;">‘Tunnel Project Is A Litmus Test For The Private Sector’<br />
	<br />
	</span></span></span></p>
<p class="MsoNormal">
	<span class="A66"><span myriad="" style="font-size:43.5pt;line-height:
115%;font-family:">&nbsp;<img alt="kushkmarjoshi" border="1" height="251" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/interview(8).jpg" vspace="10" width="303" /></span></span></p>
<p class="MsoNormal">
	<span mso-bidi-font-family:="" myriad="" style="font-size:14.0pt;mso-bidi-font-size:11.0pt;
line-height:115%;font-family:">Kush Kumar Joshi <br />
	Chairman <br />
	Nepal Purbadhar Bikash Company Ltd</span></p>
<p class="MsoNormal">
	<span mso-bidi-font-family:="" myriad="" style="font-size:14.0pt;mso-bidi-font-size:11.0pt;
line-height:115%;font-family:">&nbsp;</span></p>
<p class="Pa19">
	<span class="A67"><span style="font-size:13.0pt">Kush Kumar Joshi is the Chairman of Nepal Purbadhar Bikash Company Limited (NPBCL) that is to develop the Kathmandu-Kulekhani- Hetauda Tunnel (KKHT) Highway that would substantially reduce the Kathmandu-Hetauda driving distance. <br />
	<br />
	NPBCL will be constructing the 50-kilometre long four-lane highway that will have approximately two 5.5 kilometre long tunnels for oncoming and going traffic between Kathmandu and Hetauda. The company will construct and operate the tunnel road in public-private-people partnership (4P) modality under the Private Financing in Build and Operation of Infrastructure 2006 act. A leading industrialist of Nepal, Joshi is also the Immediate Past President of Federation of Nepalese Chambers of Commerce and Industry (FNCCI), and the Chairman of Liberty Energy, Himalayan Bamboo Pvt Ltd and Managing Director of Nepal Ekarat Engineering Co Pvt Ltd. <br />
	<br style="mso-special-character:line-break" />
	<br style="mso-special-character:line-break" />
	</span></span></p>
<p class="MsoNormal">
	<span class="A67"><span myriad="" style="font-size:13.0pt;line-height:
115%;font-family:">In an interview with Gaurav Aryal of New Business Age, Joshi talked about the tunnel project as well as the country</span></span><span class="A67"><span style="font-size:13.0pt;line-height:115%;font-family:">’</span></span><span class="A67"><span mso-bidi-font-family:="" myriad="" style="font-size:13.0pt;line-height:115%;font-family:">s overall investment environment. Excerpts:</span></span></p>
<p class="Pa10" style="text-indent:14.0pt">
	<span class="A67"><span myriad="" style="font-size:13.0pt;line-height:
115%;font-family:">&nbsp;</span></span><strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:"><br />
	<img alt="kush kumar joshi" border="1" height="251" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/interview_333.jpg" vspace="10" width="250" /><br />
	<br />
	For the first time in Nepal, the private sector is developing a major road project. As the leader of this project, how do you plan to execute it? <br />
	<br style="mso-special-character:line-break" />
	</span></strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">It is indeed the first time the government has entrusted a private company with such a big responsibility. It is an honour to share the weight of the government in enriching the lives of Nepali people. The concept of making shortest road from Hetauda to Kathmandu was conceptualised more than 50 years ago. Everyone knows this will be the shortest distance to link these two cities but due to socio-political reasons, the mechanism to construct the road was not finalised earlier. This time around, a new approach of 4P model - public, private and people participation - is taken to revive this initiative. People’s participation in a massive scale is the main strength of this approach. The local people presently have to take a longer route to travel to Kathmandu despite a possible shorter alternative there. This project would be a matter of dignity for every Nepali when it will be completed solely with Nepali resources, technology and management. That is a motivating factor for all of us. <br />
	<br />
	<br style="mso-special-character:line-break" />
	</span><strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">What is the progress towards the financial closure of the project? <br />
	<br />
	</span></strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">The government has granted us this project for 30 years as per the People, Private and Public Partnership (4P) Modality under Private Financing in Build and Operation of Infrastructures 2006 act. The cost of the project is estimated around US$ 350 million and that money is going to be raised from amongst ourselves. Once we complete the feasibility study by November 2012, we will have the concession agreement with the government on technical and financial issues as well as the toll fee. <br />
	<br />
	<br style="mso-special-character:line-break" />
	</span><strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">You have set a timeline of three-and-a-half-years for the completion of the project. As many projects are failing to meet their deadlines, what is the basis of your optimism to meet your deadline? <br />
	</span></strong><br />
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">The main possible hurdles in a project are fund collection, local disturbances and not getting a license. In our case, the government has already granted a license to us not only for DPR but also for execution of the project. The main strengths of this initiative are the local people. The local landowners are ready to contribute to this project by providing their land after a proper valuation. We are not buying the land; instead the value of the land will be treated as their equity investment in the project. Thus the main likely cause of local disturbance is not there. <br style="mso-special-character:line-break" />
	</span></p>
<p class="Pa10" style="text-indent:14.0pt">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">The other main issue is fund collection. So far, we have received a warm response to our initiative and people are more than willing to invest in such a project that not only has high rate of return but also contributes in developing the infrastructure of the country. This will be the first time Nepali people will be involved in such kind of project. Our people have always been depending on financial support from donor countries, banks or the government. But, this project will make massive mobilisation of people – business community, local people, NRN community and the Nepali workers abroad - for generating funds. Another key component is the Nepali construction companies who will not only be the contractors but also major investors in this mega project. There is plenty of liquidity in the capital and money market but there are not enough good projects for investment. So, this good project will have no problem of funds. And we are hopeful to complete the project within the set deadline. <br style="mso-special-character:line-break" />
	<br style="mso-special-character:line-break" />
	</span></p>
<p class="Pa10" style="text-indent:14.0pt">
	<strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">Disputes on land acquisition and paying compensation have proven major issues while developing such projects. What is the basis for your optimism that your arrangement will work this time? <br style="mso-special-character:line-break" />
	</span></strong><br />
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">The modality we have come up with for this project is very unique. As I said earlier, we are not trying to buy land – it is more or less like a barter system and a participatory approach. Before deciding the alignment and making the survey, we had a lot of interactions with the locals and received a commitment from them regarding the project. The most important aspect is that they positively want to see this road built. The local community is ready to invest 75 per cent of the actual valuation of their land to the project and hold 25 per cent with themselves. This is a great step towards making a change. The locals have not just said that they want the road built but they have actually played a significant role in making this initiative a success. And if an existing house is needed to demolish for the road, we are committed to build another house for the owner. This, I think, is beauty or the strength of this entire project.</span><strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:"><br />
	<br />
	<br />
	<img alt="kush kumar" border="1" height="264" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/inteview_11.jpg" vspace="10" width="317" /><br />
	<br />
	<br />
	The KKHT highway is considered a project of national pride and a model to invite foreign investment in infrastructure development. How will this project be able to live up to this expectation? <br />
	<br style="mso-special-character:line-break" />
	</span></strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">We have huge potentials in infrastructure. One can see the level of service we are providing to the people in energy, road, drinking water, medical facilities, the basic needs for the people where we need investment whether from domestic or the international investors. The deficit in infrastructure is such huge, domestic investment is simply not enough. But we need to build up the confidence level of investors by providing a guarantee through the policy, political commitment and, most importantly, from the domestic investment. If our project will thrive, it would be a benchmark for other investors to emulate. A successful project such as this will have foreign investors to get interested to work on other projects. This should be a milestone for all Nepalis. I hope that this will surely lure foreign investors to collaborate with local investors and develop the infrastructures in the country. <br />
	<br />
	<br style="mso-special-character:line-break" />
	</span><strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">You have said that the project will return the investment to its investors in six to eight years from the date of operation. Wouldn’t this proposition make the highway a costly road to travel for the general public? <br />
	<br style="mso-special-character:line-break" />
	</span></strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">It is going to be a win-win situation for passengers as well as vehicle owners as they will be saving both fuel and time. If a truck or a passenger bus is today making a single round trip a day between Hetauda and Kathmandu, the completion of this road will enable them to make several round trips a day. Instead of four hours, the distance from Kathmandu to Hetauda will be covered in 45 minutes once this road comes into operation. Quite naturally, the frequency of travel will be more and transport entrepreneurs can earn more money besides, of course, saving on fuel. The toll fee will be very low and I am sure the users of this road will find it economical and not just save time but also money. <br />
	<br />
	<br style="mso-special-character:line-break" />
	</span><strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">Do you think that investing in infrastructure will give enough yield to the private sector? What will be the model of investment in your company’s future projects? <br />
	<br style="mso-special-character:line-break" />
	</span></strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">First of all, the license granted to us is a historical one. We always talk about the government not giving priority to the private sector and not giving investment opportunity or packages for infrastructure development. This is the first time the government has given a priority project to the private sector. Now, it is our turn to prove that we can do it. If we can do it ourselves, the trust on the private sector will be heightened. This is a litmus test for the private sector to prove that we can do it. For future projects, we may use foreign investment as well as equity based or debt and equity based modality. We will be trying to bring in equity participation for future projects as much as possible. Once this project is completed, NPBCL will become the largest company in Nepal valued at US$ 315 million. A sustainable mechanism and a proven track record will then be part of the company’s resume. We will be hoping for huge projects coming our way and perhaps we could look at large scale storage hydropower projects too. This is going to be the biggest company in Nepal enjoying massive public participation. The ownership will be divided among many people and benefits shared by all. <br />
	<br style="mso-special-character:line-break" />
	<strong><br style="mso-special-character:line-break" />
	</strong></span></p>
<p class="Pa10">
	<strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">What are the other similar projects in the pipeline for NPBCL? <br />
	<br style="mso-special-character:line-break" />
	</span></strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">The other similar projects coming up include road extension plans from Hetauda to Narayanghat and Hetauda to Birgunj but that will be taken only after the current project completes a whole lap. The traffic from Kathmandu to Eastern and Western Nepal is huge. This project is now envisaged for westbound traffic and people from Far West will travel via this road. Once the proposed new road from Hetauda to Narayanghat is opened, the drive from Narayanghat to Kathmandu will take only one-and-a-half hours. All the traffic coming to Kathmandu via Mugling will be diverted to the newly built road.<br style="mso-special-character:line-break" />
	<strong><br style="mso-special-character:line-break" />
	</strong></span></p>
<p class="Default" style="margin-top:5.0pt;line-height:10.05pt">
	<strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">This project is to utilise Nepali resources only for its development. Is there a possibility of similar big projects with Nepali investment only?</span></strong><span mso-bidi-theme-font:="" new="" style="font-size:10.0pt;mso-bidi-font-family:" times=""> <br />
	</span></p>
<p class="Default" style="margin-top:5.0pt;line-height:10.05pt">
	<span mso-bidi-theme-font:="" new="" style="font-size:10.0pt;mso-bidi-font-family:" times="">Many other people are trying to emulate this particular project. For example, the NRN Association has a 100 million dollar fund and they are trying to develop 100 MW hydropower project on their own. Some other companies too are trying to build hydropower projects with Nepali investment only. There are two important bases for the development of a country, one is roads and the other is electricity. Therefore, our next project will focus on energy because there is a lack of storage-based project in hydropower currently. After the success of this project, we will work towards mega storage projects. <br />
	<br />
	<br />
	<img alt="kush kumar joshi" border="1" height="387" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/kushkumar.jpg" vspace="10" width="208" /><br />
	<br />
	</span></p>
<p class="Default" style="margin-top:5.0pt;line-height:10.05pt">
	<strong><span mso-bidi-theme-font:="" new="" style="font-size:10.0pt;mso-bidi-font-family:" times="">What is your opinion on allowing investment abroad from Nepal? </span></strong></p>
<p class="Default" style="margin-top:5.0pt;line-height:10.05pt">
	 </p>
<p class="Default">
	<strong><span mso-bidi-theme-font:="" new="" style="font-size:10.0pt;mso-bidi-font-family:" times="">&nbsp;</span></strong><span style="font-size:10.0pt;
color:#211D1E">We are observing Nepal Investment Year and trying to invite foreign investment to Nepal. Given this situation, what kind of message will the Nepali and foreign investors get if Nepali investment in other countries is made an option indeed? Having said so, even if we have an opportunity to invest in foreign countries, it must come with certain conditions. The criterion should be – one must be an expert in one’s own field, have good brand recognition at home and willing to expand. Expansion requires investment and in such case, one needs to have a chance to expand and to promote the products and technology in some other country. Ultimately, the benefit should come to one’s own country.</span></p>
<p class="Default">
	<span style="font-size:10.0pt;
color:#211D1E">For example, an airline must have its branch in other countries for marketing and promotions. In such a case, one has to invest in foreign countries. Similarly, if you have a good and well-known brand in Nepal and want to export but the cost of competition in other countries may make it not feasible to produce in Nepal and export. Then you should be allowed to produce your own brand in other countries. This will be similar to what multinational companies do. If you have your own brand image for product that is made in Nepal, it will benefit if you establish your factory abroad and promote your own product. But let’s focus on investing within Nepal first.</span></p>
<p class="Default">
	 </p>
<p class="Pa23" style="margin-top:5.0pt">
	<strong><span style="font-size:10.0pt;
color:#211D1E">How do you judge the efficiency of the current FNCCI leadership? </span></strong></p>
<p class="Pa23" style="margin-top:5.0pt">
	 </p>
<p class="Pa10" style="text-indent:14.0pt">
	&nbsp;<span style="font-size:10.0pt;
color:#211D1E">There are a lot of issues, which have scope to be tackled more efficiently by the FNCCI. It looks like they are focusing on the investment year but they must handle local issues first. Given the situation where the fate of the government hangs in the balance one needs to know how the policies are being driven and focus on pressing to bring the full annual budget of the government at the earliest. Similarly, the policies meant to attract foreign investment for the Nepal Investment Year must be established. Priorities on issues like areas of investment and backing up the investment are more important than to celebrate the investment year itself. The investment board has the law and bylaws to backup the investment package and the same will be applied for other investments also. There are a lot of things that FNCCI can do as an apex body of the business community. </span></p>
<p class="Default">
	 </p>
<p class="Pa23" style="margin-top:5.0pt">
	<strong><span style="font-size:10.0pt;
color:#211D1E">Are business prospects for Nepal improving? What are the bottlenecks?<br />
	</span></strong></p>
<p class="Default">
	<span style="font-size:10.0pt;color:#211D1E">Everybody knows about the prospects Nepal has. We talk about tourism, hydropower, infrastructure and others but the business community has to push the government to create a proper environment and identify the priority projects for investment. The ongoing political turmoil is not giving a good sign to the investors to come to Nepal and invest.</span></p>
<p class="Pa10">
	<span style="font-size:10.0pt;color:#211D1E">There are three issues – energy crisis, labour issues and unstable government policies. Energy is the prerequisite because without energy, nobody will come to invest here. Labour issues have also discouraged investors. These two things must be prioritised and cleared by the government and the investment board to encourage investment. We also need to have consistent policies. Changes in policies every time there is change in the government will not attract any investments in Nepal. We have been asking the government and the political parties to come up with a common minimum economic agenda. Establishing a common minimum economic agenda will give a positive signal to the investors. </span></p>
<p class="Default">
	 </p>
<p class="Pa23" style="margin-top:5.0pt">
	<strong><span style="font-size:10.0pt;
color:#211D1E">You have been demanding reforms in the public procurement system. Would you please explain it? </span></strong></p>
<p class="Pa23" style="margin-top:5.0pt">
	 </p>
<p class="Default">
	&nbsp;<span style="font-size:10.0pt;color:#211D1E">The government has to prioritise domestic product. Any company’s first area of business is the local market. Once they have a good position in the local market, they can improve their quality, productivity and be assured about their growth. Having delivered their basic service, they can then think about exporting.</span></p>
<p class="MsoNormal">
	<span style="font-size:10.0pt;line-height:115%;color:#211D1E">The government has to provide a level playing field for the domestic producers by buying their products, but at the same time it should be monitoring the price and quality as well. At this point of time the government has not been able to accomplish these objectives. The government always seeks cheap foreign products and does not care for the quality. Our argument is, local products do not need incentives instead they need to be promoted so that they can be competitive, qualitative and eventually become export oriented. The government has to give confidence to investors by prioritising the purchase of local products. That is why we are saying that the procurement act has to be revised by making it mandatory to buy local products.<br />
	<br />
	<br />
	<br />
	</span></p>',
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			'created' => '2012-10-11',
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			'keywords' => '',
			'description' => 'Kush Kumar Joshi is the Chairman of Nepal Purbadhar Bikash Company Limited (NPBCL) that is to develop the Kathmandu-Kulekhani- Hetauda Tunnel (KKHT) Highway that would substantially reduce the Kathmandu-Hetauda driving distance.',
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			'id' => '676',
			'article_category_id' => '46',
			'title' => 'Chandra Prasad Dhakal',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<span style="font-size: 14px;"><strong><br />
	</strong></span></p>
<p>
	<span style="font-size:14px;"><strong>The Three-way Merger Has Consolidated The Global IME Bank’</strong></span></p>
<p>
	<span style="font-size:14px;"><strong><br />
	<br />
	</strong></span></p>
<p>
	<strong><img alt="interview" border="1" height="371" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/interview(7).jpg" vspace="5" width="300" /><br />
	<br />
	Chandra Prasad Dhakal <br />
	Chairman <br />
	Global IME Bank <br />
	</strong><br />
	<br />
	Chandra Prasad Dhakal is the Chairman of Global IME Bank. He is also the President of International Money Express (IME). Born in a middle class family of Baglung district of Nepal, he has by now established himself as a leading entrepreneur of the country in a relatively short span of time. Dhakal is a member of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Executive Committee and the Co-ordinator at Investment Development Forum of FNCCI. He is also a member of the Nepal Investment Board constituted by the Government, besides being an honorary consul for Indonesia. He is currently looking forward to explore business expansion in association with Nepali as well as foreign companies. In an interview with New Business Age, Dhakal talked about recent three-way merger among Global Bank, IME Finance and Lord Buddha Finance creating the Global IME Bank and prescribed measures of bringing remittances through formal banking channels, among a host of other issues. Excerpts: <br />
	<br />
	<strong><br />
	While mergers in Nepali BFIs are usually between two companies, yours is a three-way merger. How did that become possible? <br />
	</strong><br />
	First, we were convinced with the fact that a merger between banks and financial institutions (BFIs) can certainly add value into the eventual entity as we have seen from the latest merger trend. A merger between two companies is normal but for the first time in the history of Nepali BFIs, Global Bank signed a merger agreement with two other financial institutions. At the beginning of the process, we had Global Bank and IME Financial Institution had signed a memorandum of understanding and later, the promoters of Lord Buddha Financial Institution submitted their merger proposal in a meeting with the Global Bank management. Thus, the successful completion of the process of all three companies led to the formation of Global IME Bank. The amalgamation of the three companies has made Global IME Bank stronger in terms of the capital assets, networking, product diversity and quality of customer services. As the promoters of all three institutions are from different sectors, it has created a synergy for us to explore new business sectors with possible expansion plans. The Global IME Group is strongly committed to provide its banking and other financial services to areas that are thus far deprived of formal financial services. <br />
	<br />
	<br />
	<strong>Where would the Global IME Bank like to focus after becoming such a stronger new entity after the merger? <br />
	</strong><br />
	The Global Bank already had a strong presence in the industry and that has been further fortified in terms of networking following the merger. Now Global IME Bank is the only private sector commercial bank with the most extensive network of 62 branch offices in 13 zones. We are resolute enough to extend financial services through our innovative products in both urban and rural areas. We would be utilizing our potential to explore new areas of investment covering almost every possible productive sectors of Nepal. Along with it, in the medium or long term, we aspire to establish at least one branch office in each district of Nepal. Retail banking is one of the top agendas in our priority list. <br />
	<br />
	<br />
	<strong>The bank has issued debentures worth Rs 400 million as part of a strategy to expand the capital base. Do you have any specific investment plan for that fund? <br />
	</strong><br />
	The paid up capital of Global IME Bank has augmented to Rs 2.18 billion after the merger of the three companies. And with the debentures issued worth Rs 400 million, our overall capital size has reached Rs 2.58 billion. The increased capital base will definitely support our business expansion plans in the future in national as well as international levels. We are planning to aggressively expand our businesses in the areas that other commercial banks in Nepal have not explored so far. <br />
	<br />
	For example, agriculture is a very important sector of our economy. However, the private sector investment in this sector including those of BFIs is very negligible so far. Unlike other commercial banks, we are taking a different approach to increase investment in the agriculture sector. Currently, most commercial banks are focusing on businesses of more organized sector and corporate clients as their main transaction base. Departing from this trend, Global IME Bank has plans to finance agriculture and related productive sectors for their development to the fullest potential. <br />
	<br />
	It is evident by now that the financial services to the agro sector from the state owned banks alone is not enough for developing the agriculture sector so long as it can contribute more to the national economy. By financing for the commercialization of the agriculture, Global IME Bank would also be supporting the government plans and policies to increase the contribution of the agricultural sector to country’s GDP. Besides this, we will soon start to work towards minimizing operational risk of the Bank by focusing more on retail banking. This means our main transaction base for both deposit and lending will be the common people, although we will not shy away from corporate and institutional banking.</p>
<p>
	<br />
	<strong>Benefits of the merger apart, grievances and disputes too come up in the process among promoters of different institutions as well as at the top-level management and employees. How did you handle the situation? <br />
	<br />
	</strong>After the merger, the number of staffs under the Global IME Group has increased for sure. Managing all the employees of the three companies that were in existence before the merger has been indeed a very challenging task for us. However, we have received support from all levels of employees including the Chief Executive Officers of all the three companies, the board of directors and other stakeholders of all three entities. Employees as well as our promoters are aware that after the introduction of comprehensive merger bylaws by the central bank, a class ‘A’ bank has successfully merged with two other class ‘C’ financial institutions for the first time in Nepal’s financial history. This, in fact, is a historical achievement for the entire system. Everyone involved in this process has put his/her priority second to the very goal of merger among these institutions. I am confident that there will be no grievances amongst our promoters and the employees in the future as well. <br />
	<br />
	<br />
	<strong>You also have a very strong presence in Nepal’s inbound remittance business. How is the remittance industry doing at present? <br />
	</strong><br />
	The current fiscal year has witnessed a 36 per cent growth in the inflow of remittances. It is comparatively higher than the growth rate of the previous years. The flow of remittance has grown substantially in recent years due to the increased number of Nepalis going abroad for employment. Likewise, the recent appreciation in the value of dollar is also responsible for growing figures on remittance income. It is sad but true that the existing political instability and constitutional vacuum will continue to create unemployment in the days to come. Hence, the trend of people going to foreign countries seeking employment opportunities is not likely to slow down in the immediate future. This will undoubtedly increase the amount of inbound remittance in the future as well. <br />
	<br />
	<br />
	<strong>It is often alleged that a large amount of workers’ remittances enter the country thorough illegal channels. What is your prescription to control it? <br />
	</strong><br />
	We can control the flow of remittance through informal channels only when we find the reasons behind it. We need to pinpoint the reasons which take people to choose nonbanking channels over the available legal ones. The obvious answer to it is the inability of Nepali financial institutions in providing banking channels to all the people willing to transfer their hard earned money to Nepal. In this regard, IME was the first Nepali financial institution to start its services to bring in remittances through a banking channel, 12 years ago. Prior to it, there was banking or legal channel available to send remittances from abroad and people entirely relied on the ‘hundi’ transactions. The trend of remittance coming in through informal channels has been reduced to a large extent after the establishment of IME. The objective of the Global IME Group is to create an easy mechanism for Nepalis living abroad to transfer their funds conveniently through the banking channels. <br />
	<br />
	But, I must mention here that we also have a fully functional system and products in place that address all the needs of fund transfer. For example, our foreign employment agencies need to pay a certain amount in foreign exchange to the companies in the Gulf countries or Malaysia that place orders to Nepali companies. But that is not possible legally and they are compelled to use ‘hundi’ for this purpose. If we can legally channel the agency commission, the illegal transfer will automatically reduce. Wherever a functional channel exists, there is possibility of both way movements of funds. <br />
	<br />
	The flow of remittance from India is also very nominal. About four million Nepalis are believed to be working in India and a very high majority of them use non-banking channels to transfer funds as they find it hasslesome and uneasy to remit through the banking channels. After the commencement of the Indo- Nepal remittance policy three months ago, the remittance flow from India is gradually increasing. Currently, IME has been networking with United Bank of India (UBI) which has around 1,600 branch offices across India. We do hope to reverse the trend of remitting through informal channels once we are able to make this networking with UBI branches throughout India fully functional. <br />
	<br />
	International Money Express (IME) has its reach in over 25 countries for bringing remittance to Nepal. It has strategic alliances with various exchange companies and commercial banks in Malaysia, the Middle East, Australia, UK and USA. IME Remit has also formed an alliance with companies like Money Gram International, Xpress Money, EZRemit and Instant Cash, for global access. I strongly believe that we can certainly combat the flow of remittance through informal channels in the long run if we can introduce appropriate bylaws and products to meet the needs of all stakeholders of the remittance business. <br />
	<br />
	<br />
	<strong>Both domestic and foreign investors are reluctant to invest in Nepal citing political instability. When do you think the situation will improve? <br />
	</strong><br />
	The political instability has definitely led towards a wait-andwatch situation for everybody, mainly the potential large investors. In spite of it, we should all move ahead with a positive attitude as business is also about taking risks and succeeding in it. Therefore, I think that companies investing during the crisis period can gain in the long term and make profits at a later stage. We are losing enormous opportunities due to the difficult circumstances that we currently face at home. I am sure there will be no looking back once the political issues are sorted out. I hope that it happens sooner than later and Nepal becomes one of the best destinations for investment. <br />
	<br />
	<br />
	<strong>The central bank has recently announced new Monetary Policy for FY 2012/13. Has it addressed issues raised by the banking community? <br />
	</strong><br />
	This Monetary Policy does not seem to have addressed remittance much. However, it has encouraged opening of bank branches and contact offices in countries like India and South Korea which are major remittance originating destinations. It is a positive step towards directing inflow of remittance through legal channels. Another important development is that the Nepalis can now exchange 2,500 dollars every time they go abroad. Earlier, when an individual or an organization submitted the required documents to banks and financial institutions, they could exchange up to 6,000 dollars maximum. This amount has now been increased up to 10,000 dollars. Similarly, the traders could earlier make a maximum payment of 25,000 dollars through Draft/TT while importing goods from countries apart from India. That has now been increased to 30,000 dollars. All these measures are the positive aspects of this policy. <br />
	<br />
	<br />
	<strong>How are different companies in the IME Group fold doing? What are your diversification plans? <br />
	</strong><br />
	From the perspective of a consolidated corporate group, we are involved in Automotives, Energy, Pharmaceuticals, Technology, Trading and Travel &amp; Tours besides Banking &amp; Finance and Remittance. IME Group has its presence in energy sector through Himalayan Power Partner Pvt Ltd, Mountain Energy Nepal Pvt Ltd and IME Oxygen Pvt Ltd. It is also one of the established players in the trading sector of Nepal. IME Group’s trading subsidiary – C M Trading – has been successful in penetrating major European markets with the exports of its Pashmina products for the last oneand- a-half decade now. <br />
	<br />
	The group has also been overseeing real estate and property lending through its trading subsidiary. IME Group has a presence in the tourism sector too, since 1995. It has Across Travels &amp; Tours Pvt Ltd, one of the leading travel agents accredited by IATA that has successfully carved a niche in the tourism industry. As far as the group’s financial services are concerned, there has been a massive transformation in the size of the Global IME Bank after the merger. Its paid-up capital has jumped to Rs 2.18 billion. <br />
	<br />
	It has debentures portfolio of Rs 400 million and lending is at the range of Rs 20 billion against the deposits of Rs 26 billion. The financial structure of the company has thus grown and opened new avenues for investment. In terms of networking, we are the largest amongst the private sector commercial banks. We have a total of 56 ATM counters, 70,000 shareholders, 650 employees, and 255,000 depositors. Currently, we are concentrating to expand our banking facilities in each district of the country and also set our focus on branchless banking. <br />
	<br />
	<br />
	<strong>You are planning to tie up with a foreign joint venture in several other sectors beyond banking and remittance services. Can you please share the developments? <br />
	</strong><br />
	To begin with, we first need to have a strong networking in order to tie up with foreign joint ventures. Our merger has reinforced the networking mechanism we had and it will certainly help us expand our business with the foreign companies in the days ahead. With the increased financial structures and widened networking, we look forward to collaborate with foreign companies in the near future. The process of Global IME Bank’s tie up with a possible foreign joint venture is in the pipeline right now. <br />
	<br />
	<br />
	<strong>You are also involved in the automobile business. How has been your auto venture doing? <br />
	</strong><br />
	We made a foray into this evergrowing sector in 2009 representing some of the renowned international automotive manufacturers as an authorized 3S distributor. Currently, our products from Asian Motor Works (AMW) – an Indian automobile company which produces trucks and trippers – is doing quite good. We have been associated with the company as it manufactures quality automobile products. Initially, the business did not go as well as we had anticipated because the crusher industries were on the verge of shutting down. Therefore, the trucks and trippers were difficult to be sold. However, in view of the improved situation, the products of AMW are gradually finding feet in the Nepali market. <br />
	<br />
	<br />
	<strong>You were planning to develop a fun park. What has been the progress so far? <br />
	</strong><br />
	We have reached almost to the final phase of planning to develop the said fun park which will be set up in the Chandragiri hills in the south west of Kathmandu. As part of our plan, we are working towards setting up a cable car route from Thankot in Kathmandu to the Chandragiri summit. We are consulting with various developers as well as considering different theme parks to make our fun park a complete recreation destination. Given the busy city life of Kathmandu, there is no place for the inhabitants of the capital to spend some quality time with their family and friends. Although, we are working on a new concept, we want to explore new areas of business as part of our expansion plans. We intend to start our project at the soonest possible and develop an affordable fun park for all. <br />
	<br />
	<br />
	 </p>',
			'published' => true,
			'created' => '2012-08-16',
			'modified' => '2012-10-10',
			'keywords' => '',
			'description' => 'Chandra Prasad Dhakal is the Chairman of Global IME Bank. He is also the President of International Money Express (IME). Born in a middle class family of Baglung district of Nepal, he has by now established himself as a leading entrepreneur of the country in a relatively short span of time. Dhakal is a member of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Executive Committee and the Co-ordinator at Investment Development Forum of FNCCI',
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			'article_category_id' => '46',
			'title' => 'Salman Lafit Rawn',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<span style="font-size: 14px;"><strong><br />
	</strong></span></p>
<p>
	<span style="font-size:14px;"><strong>We Have To Work According To Consumer Psychology’</strong></span></p>
<p>
	<span style="font-size:14px;"><strong><br />
	<br />
	<br />
	</strong></span></p>
<p>
	<img alt="rawn" border="1" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/rawn-interview(1).jpg" style="width: 230px; height: 350px;" vspace="5" /><br />
	<br />
	<strong>Salman Latif Rawn <br />
	Country Manager, Nepal <br />
	Coca-Cola Sabco <br />
	</strong><br />
	<br />
	<br />
	Salman Lafit Rawn is the country manager of Coca-Cola franchise in Nepal since January 2012. Prior to joining Coca - Cola, he had worked in the capacity of the General Manager at Pepsi Cola franchise Iran. He has also worked as the Country Manager at Alokozay Group of Companies in Dubai – UAE . From 2005 to 2007 he was with coca-cola company managing its franchise in Afganistan in the capacity of Country General Manager. An MBA Graduate from the institute of Business Administration in Lahore, Rawn has more than 25 years of extensive and successful experience in the Fast Moving Consumer Goods (FMCG) industry. In an Interview with New Business Age Rawn shared the expansion and investment plans of his company for Nepal and also shed light on the existing challenges. Excerpts: <br />
	<br />
	<strong><br />
	We have heard about the massive expansion plan of Coca-Cola in Nepal. Would you like to shed light on it? <br />
	<br />
	</strong><br />
	The Coca-Cola Group has been working on the expansion of the available categories of its beverage. Right now, we are only doing the Returnable Glass (RGB) and PET business categories. We are investing 23 million USD in a new plant in Terai this year which will be the group’s largest single-time investment in Nepal so far. Internationally, we have many areas where we work in, for example, juice, water and energy drinks. Taking into account the uniqueness and demand of this market, we are planning to introduce some of those products here in the coming years. <br />
	<br />
	<br />
	It’s tough bringing investment in Nepal or convincing people for funding, especially when the political and business environment is not very constructive. However, we have managed to bring investment this time and we are hopeful that if we could use it well, we could bring in more money for this country. <br />
	<br />
	<strong><br />
	What can be the positive outlook for this investment? <br />
	</strong><br />
	<br />
	If we are making profit from this country, we also have to return something to it. There will be new expansions in terms of investing in the plant and machines and it will create new employment opportunities for people. Besides, we will be contributing more to the government exchequer. Nepal is a landlocked country where we need to import most of the raw materials which means that more money will go to the government coffer in the form of Customs Duty or Value Added Tax (VAT) <br />
	<br />
	<strong><br />
	I believe that Coca-Cola has not introduced a wide range of products that are available in many other countries. What are you doing in this regard? <br />
	</strong><br />
	<br />
	Coca-Cola has a wide range of products. Unfortunately, the size of the market is too small to produce all of those products in Nepal. Putting up a manufacturing facility for everything produced by the group will be highly capital intensive. However, we are trying to bring machines which can produce multiple products. Another constraint for this is the per capita income of the Nepali people which is very low. An ordinary Nepali citizen would not spend much on beverages. We are more dependent on tourists and their consumption trend. But this does not mean that we will not introduce any new products in Nepal; we will first import a new product range in Nepal from our plants in the neighbouring country. If we see demand for those products in the market, we will then accordingly set up the manufacturing plant here. We can introduce juice, water and energy drinks and add more flavours to the existing products in the future. <br />
	<br />
	<br />
	<strong>Though the per capita income of the Nepalis is still low, the distribution system for products like beverages has expanded in Nepal in recent years due massive expansion in road network. Has not this development in infrastructure helped in increasing the business prospects? <br />
	</strong><br />
	<br />
	These aspects are not enough because we have to work according to consumer psychology. It has been discovered through our consumer researches and direct discussion with the consumers that people living in European countries and Western territories don’t limit their beverage consumption only to events or family gatherings. It is part of their regular life as well whereas in Nepal, there is still a trend to consume beverage during particular events and festivals or in the presence of guests. The per capita soft drink consumption of the Nepalis is less than eight bottles a year in comparison to other South Asian countries where it is anywhere from 24 to 48 bottles a year. It will certainly be safe for us to introduce new range of products as and when Coca-Cola becomes a part of the Nepali people’s everyday lives. <br />
	<br />
	<br />
	<strong>Coca Cola enjoyed 70-80 percent of market share in Nepal till a few years ago. That figure is now reduced to 66 per cent due to aggressive marketing from the competitor. What are you doing to regain the lost market share? <br />
	</strong><br />
	<br />
	I have worked in markets where we had as much as 92 per cent market share. But these percentages are not attainable when there are two competitive companies operating in the same market. The reality is that when two companies are working competitively, market shares settle down somewhere between 60 and 40. I have worked both with Pepsi and Coke and I know where the market share of Coke is higher than Pepsi or vice-versa and what are the reasons behind it. Our objective behind expansion and investment is to have greater market share and product availability during the peak season. If my production capacity does not allow me to reach everyone during the peak season when they want to consume my product, people will not consume my products in the future. It’s because that opportunity will be grabbed by someone else. So we are trying to regain that lost opportunity which someone else has grabbed. And the moment we have that, the lost market share will automatically come back to us. <br />
	<br />
	<br />
	<strong>What are Coca-Cola’s marketing strategies in Nepal that has helped the brand to maintain its market leader position? <br />
	<br />
	</strong><br />
	Multinational companies implement different marketing strategies at different locations. Despite having a vast range of products in their portfolio, they do consider various aspects for example, which market to go, when to go, what amount of market maturity to seek etc before launching their products. You might find some products in Nepal that are imported in the quantity of thousands or hundreds. However, when it comes to manufacture those products here, it is imperative to justify the required investment. It is the same with us so we are waiting for the right time to introduce additional products. <br />
	<br />
	<br />
	<strong>Bottlers Nepal – the Nepali bottler of Coke – had won the Country of the Year Award in 2010. When next can we expect a similar feat from Coca- Cola’s Nepal operation? <br />
	</strong><br />
	<br />
	We bagged the ‘Country of the Year Award’ continuously for two years in 2009 and 2010. There are nine countries in the group now and all of them compete for this award. Surely, there are countries that have advanced technologies such as South Africa. There is Sri Lanka, Uganda, Ethiopia and we are competing with all of them. But even this year, we won two awards— Employee Engagement Award and Best Water Usage Award. We are competing again and hope to get the Country of the Year Award in the coming years. <br />
	<br />
	<br />
	<strong>How has the ongoing financial crisis affected the soft drinks market in Nepal? <br />
	<br />
	</strong><br />
	We, or for that matter, any other FMCG companies have been seriously affected on two counts. First, with all those days of closures, the production has been disturbed. Second, the distribution of the product has become very difficult. Continuous bandhs have affected our transportation system adversely and a weak transportation mechanism impacts our production system as well. We produce less when there isn’t enough transportation facility available. When we produce less, the cost per case goes high and it affects us as producers as well as the consumers. <br />
	<br />
	<br />
	<strong>What kind of challenges do you see in your job in the Nepali market? <br />
	<br />
	</strong><br />
	Electricity is a very big challenge because we are in a business where products are best served when they are chilled. We have distributed refrigerators to the outlets in the market but they cannot sell chilled drinks due to power outage. Another challenge is gasoline or diesel prices which increase every couple of months or so. At the same time, we can’t increase the price of our products to adjust accordingly. The frequent hike in petroleum prices also makes it difficult for us to decide on our annual budget. The third biggest challenge is the dollar rate fluctuation which has been impacting us heavily as we have to import 90 per cent of the raw material that we use. <br />
	<br />
	<br />
	<strong>Is that the reason for you to reduce your advertising budget? <br />
	<br />
	</strong><br />
	We have not reduced our advertising budget as such. We have rather changed the focus of our advertising campaigns. For example, if there is lesser electricity, the people will be watching television for a lesser duration of time. So we thought of diverting our investment from electronic mediums to advertising through hoarding boards that are more visible and do not get impacted by power outage. You can see increased number of such hoarding boards in the Kathmandu Valley when you move around. There is hardly any main road where Coca-Cola is not present so it’s just a shift of focus. <br />
	<br />
	<br />
	<strong>How do you view the present competition in Nepal’s soft drink market? <br />
	</strong><br />
	<br />
	There are two major categories in the Carbonated Soft Drink (CSD) industry —water and flavoured drinks. There is no ‘A’ Class player in water so far in Nepal which is dominated by a few local brands available in the market. However, there is a competition between two players in the flavoured drinks category. Our competitor is trying to build a market for itself and so are we. But the good thing is that our share of the market pie becomes bigger with the growth in the market size. I could see that as an industry, we are less dependent on trying to eat each other’s pie. Instead, we are trying to increase the total size of the market. The fight between the two companies was stringent in the past but it is not the same anymore because a person working for Coca-Cola today can work for Pepsi tomorrow and vice-versa. At present, the fight is more indirect for example; it is for the space in the outlets. The general size of our grocery shops is small so it’s not just the soft drinks producers but the entire FMCG industry that is jostling for space in the outlets. <br />
	<br />
	<br />
	<strong>It is said that one of the major problems in the Nepali market is that of arrears in collection of dues from the distributors. How is your experience? <br />
	<br />
	</strong><br />
	We don’t have such issues. I have also talked with other FMCG companies and even they are not operating on credits. However, I don’t say that we don’t have any arrears at all. There are credits in the market but these are secure credits. Our distributors are working with us for a reasonable period of time so there is a certain level of credibility in our relations. If we realise that a distributor or distributing channel might land us in troubled waters, we prefer not to extend any unsecured business with them. <br />
	<br />
	<br />
	<strong>Bottlers Nepal has increased its spending on CSR activities in recent years. Can you tell us about the new CSR activities that are being planned? <br />
	<br />
	</strong><br />
	I could see a huge chunk of activities this year coming under our CSR initiatives apart from our regular activities. We have been working on water utilisation, plantation and education and we have also been sponsoring certain orphanages. Our new project is to extend support to women entrepreneurs so we have adopted a vision “5 BY 20” which is a commitment to empower 5 million women to turn successful entrepreneurs by the 2020. Nepal has also been selected for the project from the South-West Asia Region. A senior person representing the Director level of the India Division of the Coca- Cola Company will be visiting Nepal next week to explore the details of the campaign. The Senior Vice President of the division will accompany him and together they will be setting different criteria. The criteria will entail aspects like who can qualify, what can be the measures to qualify and what will be an appropriate form of support for women entrepreneurs etc. Another project which we are going to introduce is ‘Support My School’. It is about kids who run away from schools, are not interested in study and do not have access to studies. This big campaign will be looking at ways to help them through uniforms, books, building libraries and classrooms etc. <br />
	<br />
	<br />
	<strong>As a global operator, what are the challenges you face in a country like Nepal? <br />
	<br />
	</strong><br />
	Nepal is among the very few countries in the world which are landlocked. It does not have much of its own revenue generation. To analyse how much people can buy from us and what things they will be interested in, we will have to watch their source of revenue. Like I said earlier, the smaller base of the country, lack of electricity and diesel, and dollar rate fluctuation are the major challenges in bringing big investment to this country. Another problem is that of finding the right people to work because the Nepali industry is small. Had there been multiple industries, there would have been a bigger pool of human resource to choose from. <br />
	<br />
	<br />
	<strong>What kind of government support are you looking for? <br />
	</strong><br />
	<br />
	The government should see the quantum of direct or indirect taxes and exchequers that we are paying. If it increases the excise duty or other duties at a very abnormal rate to industries like us, bringing investment to this country and creating opportunities for employment will be difficult. We are trying to expand our business so we need facilitation in technology and computerisation from the government. We will not be able to bring investment to this country if we have to wait years-on-end for approval on bringing software and technology. At present, we are trying to bring in a software called SAP and it’s already been a year since we applied to the Inland Revenue Department for the approval. Our application is simply gathering dust there. SAP will enable our headquarters to evaluate our work and access our records through our central server. It is easier to operate when this system is installed and therefore, we have been requesting the government to approve our application. We are not the first company in Nepal to use this software as there are some other companies that are already using the same technology. We have explained this to the government authorities but they told us to wait for the permission. We have met the concerned officials and satisfied all their queries but there is no progress so far. How can we bring more technology and investment in this country if the government does not facilitate manufacturing industry with the required technologies? It is our sincere request to the government to do the needful and approve our application on the SAP software. <br />
	<br />
	<br />
	 </p>',
			'published' => true,
			'created' => '2012-08-10',
			'modified' => '2012-09-16',
			'keywords' => '',
			'description' => 'Salman Lafit Rawn is the country manager of Coca-Cola franchise in Nepal since January 2012. Prior to joining Coca - Cola, he had worked in the capacity of the General Manager at Pepsi Cola franchise Iran. He has also worked as the Country Manager at Alokozay Group of Companies in Dubai – UAE',
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	(int) 7 => array(
		'Article' => array(
			'id' => '586',
			'article_category_id' => '46',
			'title' => 'Anant SIyer',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<strong><br />
	</strong></p>
<p>
	<span style="font-size:14px;"><strong>We Will Continue Providing Brand Delight To Nepali Consumers<br />
	</strong></span></p>
<p>
	 </p>
<p>
	Anant SIyer is the Chief Operating Officer, RPC – East &amp; Nepal at United Spirits Limited (USL), the world’s third largest spirits maker by volume. He has over 27 years of experience in the industry and has earlier handled several key positions since joining the UB group in June 1992. In his current position, he will be responsible for USL’s operations in Eastern India and Nepal. He says, “We would like to participate in the growth that the government envisions for this country and be a part of the evolving Nepal<br />
	growth story.”</p>
<p>
	 </p>
<p>
	<strong><img align="right" alt="interview" border="5" height="193" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/interview2.jpg" vspace="5" width="150" />You, along with your seniors, had created USL's strategy for Nepal close to a decade-and-a-half ago. What is the purpose of your visit to Nepal this time around?</strong></p>
<p>
	It is to get myself reintroduced to our trade partners in the city as well as throughout the country as I have just taken over as the Chief Operating Officer for Nepal apart from my responsibilities in the eastern part of India. The second reason of my being here is that Gautam Mullick, our Country Manager here, is retiring after 14 long years of being in Nepal. You can call his being here as a circle of life because my seniors and I had made the original strategy for Nepal on behalf of UB Group and Nepal Liquors close to 15 years ago. At that point of time, we had selected him to be posted here.</p>
<p>
	From very small beginnings, we have now reached a position of strength. In earlier days, the market was small and so was the industry and globalisation was just coming into the subcontinent. With the kind of boom that has happened over the years, drinking of good spirits has also gone up. The Nepali consumer has been exposed to good blend and excellent tamper proof packaging like guala caps etc over a period of time. We have done very well and haven't looked back over the last oneand- a-half decade.</p>
<p>
	<strong>Do you think, USL with its 15 years presence in Nepal, have accomplished the objectives it had set out to achieve?</strong></p>
<p>
	Objectives in an organisation are set on an annual basis. It all dovetails into the vision we have for the organisation in Nepal. A vision is a long term goal that determines strategy which in turn sets objectives. Our objectives are ever evolving and ever growing so we cannot say that our objectives have been met. Our vision is to continue to grow in Nepal with the industry growth, remain market leaders and continue to provide full product and brand delight to the Nepali consumers.</p>
<p>
	The consumers experience for our brands has to be superlative and truly international so that the Nepali consumer knows he is getting the same kind of quality and product experience which he will receive anywhere else when he travels. It is an integral part of our organisational DNA that we keep on growing therefore, our objectives are not static and they change in accordance with the changing environment. The annual objectives always become better and more challenging but they all telescope into our overall vision for Nepal. We want to continue as the leading spirits marketer in the country and ensure that we give quality and delightful consumer experience. <strong><br />
	</strong></p>
<p>
	<strong>How do you assess USL's performance in India and other emerging markets?</strong></p>
<p>
	If you look at how we have performed in India, you will find that we are very clear about growing. We have close to two-thirds of the market share in India. We are now going to look at emerging markets and do have a huge strategy for markets in South Asia, Africa etc. We intend to grow by providing the consumers with good quality brands which provide delight to the consumers. We do a lot in terms of distribution and schemes to ensure reach and make our products available for every single pocket.</p>
<p>
	<strong>What is your reading of the Nepali market at this point of time?</strong></p>
<p>
	There is a growing middle class coming up in Nepal for so many years now which is very encouraging. When the economy grows, it helps people feel good and they want to enjoy themselves. We believe that socially responsible alcohol consumption is good in its own way, however, people should be aware. They must follow the laws of the land and thatâ€™s what we endeavour. We have a wonderful team of distributors located all over Nepal and they have been with us for many years. We continue to seek their help in ensuring that our products reach our consumers in the pack sizes of their preference which fits their pockets. We are the first company in Nepal to come up with 90 ml, 60 ml, guala caps etc which speaks volume of the fact that we keep on evolving.<strong><br />
	</strong></p>
<p>
	<strong>UB Group's most visible brand Kingfi sher Beer is not available in Nepal</strong>.<strong>What could be the possible reasons behind this glaring exclusion?</strong></p>
<p>
	Kingfisher Beer is actually managed by our sister organisation United Breweries and as far as I know, they had a presence in Nepal at a point of time. However, I am not aware of the latest developments in terms of its strategy for Nepal. Kingfisher is a wonderful and truly international brand and one of the real successes of this subcontinent. You will find it in many countries such as the US, Canada, England, France, Italy, Singapore, Hong Kong, Thailand etc. Kingfisher Beer is available either in restaurants that is on-trade or as off-trade. On my part, I can certainly communicate with my colleagues in the Breweries Division about the huge latent demand for the brand here. I am sure that they would want to look at this possibility again.</p>
<p>
	<strong>How have you fared on your liquor brands in this country?</strong></p>
<p>
	Luckily for us, most of our brands have succeeded pretty vigorously. Our success has been in premium whisky segment like Antiquity and Signature both being brand leaders. McDowellâ's No 1 and McDowell's Platinum have also done well while Blue Ribbon Gin is the sole leader in its category. We have received a setback in the Vodka segment but it's only a matter of time before we bounce back. Even though we are a small player in the Rum category, we have done well for ourselves and we will intend growing as there is definitely a market for Rum here.</p>
<p>
	<strong>Tell us a little about the competition you face from some other renowned brands available in Nepal.</strong></p>
<p>
	Competition has come and some of the competitor brands have been doing well but that's how business is. We don't fear the competition because as an organisation, we evolve with the consumers and step ahead. If you remember, when we launched Signature Whisky, it was Nepalâ€™s best whisky produced at that time. Today, we are right there with our successful brands Antiquity Red and Antiquity Blue. Our Antiquity Blue is as good as any value scotch available in the market and can take them head on. I believe that competition is always healthy, it keeps us on our toes and we respect our competition.</p>
<p>
	The reason for the success of our group is that we are a very humble and straight shooting organisation. We don't allow our domination of any category or market to ever get into our head and don't browbeat or pressurise. Instead, we believe in growing with the market and ensure that our partners in progress the trade partners, retailers etc are conducting their businesses successfully. We keep all our stakeholders internal as well as external happy. In a market scenario, ups and downs always happen and market positions keep changing. Competition has grown over the years just as we did but if you look at the size, we have close to two-thirds of the market share in Nepal. Our objective is that we not only reach two-thirds in terms of volume but also in terms of earnings. In this endeavour, we have ensured that in the premium segment, we have a huge share of the market.</p>
<p>
	As for the prestige segment, it's only a matter of time that we regain the market share which we have lost over the last five years or so. I welcome competition as it does not allow complacency to set in. We would all like to be one step ahead of competition by ensuring product improvement and everything else that we do in the market.</p>
<p>
	<strong>You just mentioned that you would like to reach two-thirds in terms of earnings too. How do you go about achieving that?</strong></p>
<p>
	That is certainly our endeavour but it is not to fufill through the two-thirds market share that we enjoy. We improve our bottom line by ensuring that the products we sell are more premium category which we have succeeded in and will continue to succeed at. We do efficiencies in manufacturing and selling so there are ways and means to ensure that our bottom line gets affected. I am not even suggesting remotely by any means that one side should curb it so that the other side should get it. The intent is that if the consumer gets a product at the right price, the market grows and so does the revenue.</p>
<p>
	<strong>Now that you will be looking after Nepal operations for some time to come, what would be your expectations from the government here?</strong></p>
<p>
	We only hope that the government helps the industries such that it can help the revenue. As you know, the government also gets its last share of revenue from excise and taxes but year-on-year, rising taxes substantially will eventually lead to killing the golden goose. Every government around the world is cash strapped and we understand that Nepal is no exception but our prayer to the government is not to tax indiscriminately. Because the higher you tax, it gives the unscrupulous elements the opportunity to make spurious products. Given the arbitrage of the substantial tax amount, these elements enter into the market. They may not sell their products in the cities where there is better policing and supervision but they definitely sell them in the rural areas where people are neither very literate nor do they have the choice. Normally, these products are sold very cheap but they have unnecessary side effects. It also allows illegal activities to happen and as a result, there is an increase in corruption.</p>
<p>
	A spurious manufacturer takes advantage of this arbitrage and makes a lot of money. In the bargain, everybody loses right from the consumer to the government and us too as an industry. We understand that by all means, there is a proportion which needs to go to the government but it should be reasonable. At the end of the day, the government is also here to work for the welfare of its citizens so it needs money. But as businesses, we cannot keep on hiking prices because it will go over a certain tide. If the inflation is 10 per cent and the prices go up by 20 per cent, people are still not going to stop drinking. But one has to take a very long term view on this rather than a short term fix.</p>
<p>
	As I said a short while ago, the revenue grows when the market grows otherwise the revenue regresses. As prices increase, consumers tend to drink lower category drinks instead of premium ones. Since the excise duty is less in lower categories, the government tends to earn lower per case or bottle than in the higher categories. Hence, the government's revenue regresses eventually. I would also like to add that in this country, VAT is a pure form VAT which is good.</p>
<p>
	When you charge tax on small items of daily use such as biscuits, soaps, toothpastes etc, the tax is small so people don't mind paying. But when the tax amount is higher, people don't like paying which is human tendency anywhere in the world. Our suggestion is: please charge your tax but don't charge multiple times. The sales tax people can collect taxes from say, 100 distributors, instead of collecting them from 47,000 retailers that we have spread across Nepal. It will enable the government collect taxes easier and cleaner and ultimately, it's the same amount.</p>
<p>
	<strong>Being an Indian conglomerate, could you single out the most challenging aspect of doing business in Nepal?</strong></p>
<p>
	First and foremost, we are very multinational in our nature now as we are present in many countries. I would say that our roots are sub continental instead of only being Indian. When this group was born many years ago through acquisitions followed by start up ventures, we had our presence in many markets. For example, we had a small business in Nepal going on that we reactivated 15 years ago. The fruits of that success and strategy are now here after dealing in Nepal over a period of time. There have been lots of challenges but we have weathered them. We have learnt to cope up and adapt to the market and that's a great asset of being from the sub continent. I don't think we are very different from each other in the way we look at life, for example, our beliefs in god, family and value system etc. We follow a similar culture even though we may speak different languages we have so many languages in India too. It is easier to adapt much faster being from the sub continent. We have always maintained healthy relationships with all our stakeholders in Nepal the authorities, trade partners, key opinion leading consumers, associations etc.<strong><br />
	</strong></p>
<p>
	<strong>Do you see yourself making greater inroads into this market? How do you plan to treat this country as a market in the future?</strong></p>
<p>
	We are planning to launch many more brands in the premium range in Nepal since it is a very critical market for us. You must be aware that we also have our own distillery in Biratnagar and we are investing in it on a continued basis. It is important for us to ensure that we continue to remain leaders and grow with the market. We will continue to treat the market in Nepal with respect as we have always done. The market has tremendous potential as always and lot of growth opportunities are available. We will continue to ensure that we invest in brands in this country and that our consumers are happy and satisfied with our brands. In this way, all stakeholders consumers, trade, authorities and the company will remain aligned and satisfied which is very critical for us. We would like to participate in the growth that the government envisions for this country and be a part of the evolving Nepal growth story.&nbsp; <br />
	<br />
	 </p>',
			'published' => true,
			'created' => '2012-02-22',
			'modified' => '2012-11-01',
			'keywords' => '',
			'description' => 'It is to get myself reintroduced to our trade partners in the city as well as throughout the country as I have just taken over as the Chief Operating Officer for Nepal apart from my responsibilities in the eastern part of India',
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			'id' => '525',
			'article_category_id' => '46',
			'title' => 'Sunil Kaushal',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<span style="font-size: 14px;"><strong><br />
	</strong></span></p>
<p>
	<span style="font-size:14px;"><strong>We Are Focused On The Basics Of Banking<br />
	</strong></span></p>
<p>
	 </p>
<p>
	<strong><br />
	</strong></p>
<p>
	<strong><img alt="" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/interview(5).jpg" /><br />
	</strong></p>
<p>
	<strong><br />
	</strong></p>
<p>
	<strong>Sunil Kaushal</strong> is the newly appointed Chairman of Standard Chartered Bank Nepal Limited. Kaushal is likely to assume a senior role in the South Asia region, the announcement of which is likely to happen soon. He is currently the President and CEO of Standard Chartered Bank (Taiwan) Limited. He has over 23 years of banking experience and held several senior roles with the bank across different markets including Global Head SME Banking and New Ventures in Singapore. Prior to joining Standard Chartered Bank, he had also worked for Bank of America and HDFC Bank. In an interview with Pinaki Roy of New Business Age, Kaushal shared his views on the global banking scenario and Standard Chartered Bank's presence in the key world markets. Excerpts: <br />
	<br />
	<br />
	<strong>You have been appointed the new Chairman of Standard Chartered Bank in Nepal. What kind of vision do you have in mind for Standard Chartered Bank's operations here in Nepal? <br />
	</strong><br />
	<br />
	First of all, I think you would appreciate that we have created a very solid platform in the last 25 years in Nepal. At our AGM held recently, we declared a solid set of results given the tough market environment that prevails. The vision is to build on a strong platform that we have got here. We are very well positioned for a balance across wholesale as well as consumer banking, in the years to come. <br />
	<br />
	<br />
	<strong>You have been at the helm of affairs in Taiwan for quite some time now. Could you highlight some interesting events during your tenure while heading Taiwan operations? </strong><br />
	<br />
	<br />
	I have been fortunate enough to have worked at many locations outside my home country and Taiwan has been one of the overseas postings for me. Taiwan was particularly interesting for the bank because we had three acquisitions there. What was also quite interesting was the acquisition of a bank Hsinchu International Bank that was much larger than ours. The other two were Asia Trust Bank (for licensing) and American Express Bank (global acquisition). It was about assimilating the culture putting the three acquisitions together, integrating them and then building on the platform. The results of Taiwan have been pretty strong. <br />
	<br />
	<br />
	<strong>How has Standard Chartered differentiated itself as a bank when compared to some other global banking giants in terms of performance and branding? </strong><br />
	<br />
	<br />
	In terms of performance, we have delivered time and again as well as enjoyed great ratings upgrade for as long as one can remember. If you look at our share prices, we are one of the few banks which trade at premium to book value. We are present in the right markets Africa, <br />
	<br />
	Asia and the Middle East which stayed relatively better even during the financial crisis. And when the recovery happened on an absolute basis, these markets did fantastically well. We have a long history in these markets around 150 years presence in most of them so we have the depth and breadth of relationships in these markets. <br />
	<br />
	<br />
	Our strategy has been very clear in terms of focusing on these markets and relying on the basics of banking to deliver our performance. We have been there for our customers by being open for business and that is a very big thing. It is as big today at a time when big institutions globally are undergoing stress, talking about cutting headcount and reducing presence. On the contrary, we are still very much in a growth mode so we stand in a unique and differentiated position. We were the only international bank which consistently delivered record profits even during the financial crisis whereas most banks were struggling to break even. <br />
	<br />
	<br />
	Standard Chartered brand has been created over a period of time and we owe it to the management teams in different markets for taking the right decisions with the depth of the local knowledge that they have. The trust that the bank has created over time is especially evident during financial crises when we always see a flight to quality in terms of the customer deposits coming to us. We have proven that people feel secure while trusting their money with us. The best part is that we don't rest on our laurels and continuously try to keep ahead of the market. These are challenging times globally but we are very well positioned and quite differentiated from the competition. <br />
	<br />
	<strong><br />
	Despite the global economic crisis, Standard Chartered Bank figures among the largest profit earning international banks. How do you view this success? </strong><br />
	<br />
	<br />
	It is about being distinctive in our strategy which has resulted in our differentiated financial performance. In fact, we have delivered eight straight years of record profits, and are the only international bank to have received a ratings upgrade by all the three global rating agencies since the start of the financial crisis. Our performance, as you mentioned, has been very strong in the closing statement that we came out with recently which reiterates our differentiated position further. <br />
	<br />
	<br />
	Among the reasons for this is that we are focused on the basics of banking having a strong capital base, focusing on our clients and customers, having a strong balance sheet in terms of liquidity and being open for business. Besides, we are present in the right markets Asia, Africa and Middle East which are actually experiencing good growth as compared to the west which is facing challenges that all of us are aware of. <br />
	<br />
	<strong><br />
	Of late, the financial world is again embroiled in a crisis of sorts, like the Eurozone debt crisis. How do you analyse this situation and what kind of impact will this have on the banking scenario across different markets? </strong><br />
	<br />
	<br />
	In terms of global impact, we have all been hearing about banks wanting to require potential recapitalisation. The impact is applicable across all markets as some of the European banks pulled back because they had to reduce their risk related assets. These banks had to reduce their exposure so that the capital comes up to the level of 9 per cent that EU has mandated by the middle of next year. It's very difficult for them to go out and raise capital at this price when they are not into utilizing their earnings. <br />
	<br />
	<br />
	There is clearly a stress on liquidity for certain banks because of the fear of the exposure that they have to the European markets. Fortunately, for a bank such as ours which has no exposure to the distressed markets in Europe, it creates opportunities for us given the funding, strong balance sheets and capital position that we have. We are looking at these opportunities in different markets and monitoring them quite closely. <br />
	<strong><br />
	<br />
	Standard Chartered, as I understand, has always propagated organic growth. Do you think there will ever be a shift in this line of thought and probably the bank could look at the issue of mergers and acquisitions more favourably in the foreseeable future? <br />
	</strong><br />
	<br />
	If you look at the last decade or so, our focus is absolutely on organic growth but we have local opportunities which are inorganic as they presented themselves. Therefore, more than being a matter of choice, it is about having the right blend. Though we are focused on organic growth as a bank, we will surely consider if a right opportunity comes up. <br />
	<br />
	<br />
	<strong>Tell us about Standard Chartered Bank's India and South Asia operations which you are tipped to take over in due course? </strong><br />
	<br />
	<br />
	India is huge for us and South Asia is big for us as a region and I am excited about the opportunity. <br />
	<br />
	<br />
	In terms of market situation, it will be obviously different from my posting at Taiwan which was already a developed market. But I also have been through different roles globally which provided me with an opportunity to look at diverse markets from Korea in the east to Nigeria in the west. Therefore, I do have the understanding of managing different markets and challenges are something that I always look forward to. <br />
	<br />
	<strong><br />
	You have also been the Global Head for SMEs and New Ventures in Singapore. What are your plans to this effect for your operations in the South Asia region? </strong><br />
	<br />
	<br />
	The SME sector is already quite large for us in the markets in South Asia. It's about building on the strong track record that we have in the sector. SMEs are the core to any economy typically when they constitute 90-95 per cent of the enterprises and contribute 65-70 per cent of the employment. Even during the financial crisis, we have been out there supporting the SMEs and again that is something which differentiates us. SMEs augur well for South Asia as there is potential growth in the economies because of the sheer confidence of SMEs to the economies in the region. <br />
	<br />
	<br />
	<strong>Talking about India, there are recent reports that suggest the Indian economy may not be growing at the same breakneck speed that it so promised until about a couple of years ago, for a variety of reasons. How big an impact will it have on the fortunes of the banking conglomerates in the country? </strong><br />
	<br />
	<br />
	One has to look at the situation in terms of the overall context. India has had very strong growth in the past many years.There are some signs of moderation but I think it is only a short term phenomenon there is no denying the fundamental strength of the economy and we as an organisation are very bullish about the long term potential of the market. The big story about India remains unchanged in terms of its medium and long term prospects; we should not read too much into a slowdown in the last few quarters. <br />
	<br />
	<br />
	<strong>Standard Chartered Bank's profits in India have come under pressure after five years of accelerated growth. How, do you think, a difference can be made in this context? </strong><br />
	<br />
	<br />
	Standard Chartered in India has had a fantastic growth over the last decade or so and the team there has done an incredible job, with profits growing fivefold in the last five years. As I said, it's a short term blip and clearly, there are immense opportunities in the Indian market. We are well positioned as an institution having been in that market for 150 years, to really capitalise on the growth opportunities the economy presents. <br />
	<br />
	<br />
	<strong>China is the fastest growing economy in the world. How well placed is Standard Chartered Bank in the country given its immense potential? </strong><br />
	<br />
	<br />
	We do have a sizeable presence in China with a fully-owned banking subsidiary which operates over 70 outlets. We will very soon be looking at crossing the 90 mark in terms of the outlets that we have in the country. We have been present in China for around 150 years and it's one of the fastest growing markets for our bank in terms of revenue momentum and growth. <br />
	<br />
	<br />
	So, the Chinese market has immense opportunities for us and a bank such as ourselves, is very well positioned given our long history in that particular market. We can certainly be more aggressive in China but we also have to balance the opportunity with the investment. And I don't think we have held back on any investment in China as it's a market where we see great potential and growth.</p>
<p>
	 </p>',
			'published' => true,
			'created' => '2012-01-21',
			'modified' => '2012-09-16',
			'keywords' => '',
			'description' => 'Sunil Kaushal is the newly appointed Chairman of Standard Chartered Bank Nepal Limited. Kaushal is likely to assume a senior role in the South Asia region, the announcement of which is likely to happen soon. He is currently the President and CEO of Standard Chartered Bank (Taiwan) Limited.',
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	(int) 9 => array(
		'Article' => array(
			'id' => '477',
			'article_category_id' => '46',
			'title' => 'Pasi Koistinen',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<span style="font-size: 14px;"><strong><br />
	</strong></span></p>
<p>
	<span style="font-size:14px;"><strong>We Want To Make Mobile Telephony More Affordable</strong></span></p>
<p>
	 </p>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Pasi Koistinen </strong>is the President and CEO of Ncell Private Limited, which became the largest telecomoperator in Nepal some months back overtaking the state-owned Nepal Telecom. The company reached the figure of six million customers recently. Ncell, the first private telecom operator of Nepal was rebranded to its current name in 2010. Nordic telecom giant TeliaSonera has a large stake in the company. Koistinen joined TeliaSonera as a Director in 1998 and took up the position of Ncell CEO in May 2009. He has also served in top managerial level in diverse fields like hospitality business, advertising agencies and telecom service in countries like Finland, Singapore and China. In an interview with Gaurav Aryal of New Business Age, Koistinen shares his views on Ncell's growth, Nepal's telecommunication market and a whole lot of other issues. Excerpts: <img align="right" alt="Ncell" border="2" height="279" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/interview_pic2.jpg" style="margin:10px; padding:10px;" vspace="10" width="180" /></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Ncell's customer base has crossed six million. How sustainable is this rapid growth in the number of customers? </strong><br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">We have reached six million customers but the penetration is still low in Nepal. We are talking probably somewhere in the region of 50 per cent, meaning that only half of the population have mobile phone connectivity. So, there is still a huge potential. We are expecting the same kind of growth in the future as well because we believe that people need mobile phones. We have experienced rapid growth in the last two years and increased the customer base by three million within a year. So, mathematically speaking, we should have nine million customers after a year if everything goes as expected. The growth is sustainable because every customer we get into the system is generating revenue. The most important aspect is that our customers are happy with us. Therefore, we plan to continue investing in our operations. <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>At the time of rebranding, Ncell had only about 2.2 million customers. It has taken a giant leap since, in terms of customer base, coverage and brand name. What is the secret of this huge success? </strong> <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">Rebranding was like a new promise not only for our customers but also for our company and the employees to increase the overall customer service level. So, we decided to invest heavily in the network and subsequently, the rebranding exercise. We doubled the network before the rebranding to make sure that we have something to operate that is good quality network. When we started marketing the new brand, it was an entity of this whole package of services. Service, in our case, is very intangible in the sense that people call each other and there may be 100 million transactions each day. We have to guarantee that these transactions are successful because it's only then that people will come to us. I think this was a major reason for our huge success. Of course, rebranding was another very essential component of our success.<br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>With this tremendous growth, Ncell must be making a huge profi t now. How are you doing on revenue? </strong> <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">Well, it depends what you call a profit. We are not profitable yet if you talk about cash flow which is the main issue when talking about profitability. Revenues are good and we have gained a lot of market share during the last couple of years. But we have invested a lot on infrastructure as well so a big investment takes time to recover. We are spending three to five times more in infrastructure than in other TeliaSonera countries due to difficult terrain and climate. We have to remain humble towards our customers and give them good services and hope that results will follow in due time. <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>What kind of policies do you have to attract more customers especially from rural areas? </strong><br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">As you must have seen, we have had a lot of campaigns in rural areas. We want to support the campaigns knowing well that not everybody in Nepal has the same amount of money. Therefore, we have had a lot of rural campaigns to make mobile telephony more affordable for everybody. <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Though Ncell has sold more than six million SIM cards, it is said that a large number of SIM cards issued are not in operation. What is the actual number of your active mobile phone customers? </strong> <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">Active ratio varies, of course. Out of the over six million sim cards we are talking about, we know that some of them are not currently in operation. There are people who switch on their phones at certain times only for receiving calls because it does not cost anything for the receiver. The active ratio varies between 80 per cent to anywhere close to 100 per cent. For example, it was almost 100 per cent when we had the earthquake on 18 September. <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Tell us about TeliaSonera's Nepal experience in comparison with other countries? </strong></span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">TeliaSonera has been very happy about the investment in Nepal. We are already in number three position among all nine countries in terms of number of users. So, naturally TeliaSonera is very satisfied with what we have done here. </span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>How is the response to your smart phone service like Blackberry? <br />
		</strong></span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">We launched Blackberry because we wanted to make a difference and we are the only operator selling Blackberry in Nepal. We knew from other markets as well that Blackberry will become an essential service for the people who need to be connected while on the move and people who have enough money. In this respect, we are very happy about it. This is an exlusive service targeted at an affluent segment of the market. <br />
		<br />
		We also have Ncell Pro which is a very good approach. In the longer run, we are expecting it to be a great success because we combine the handsets and talk time, sim card, data package and sms package as one set that is easy to buy. But it takes time for people to realise the benefits of it. <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>It is said that Ncell and NTC the two telecom giants have left no space for new telecom operators. Is it really that diffi cult for new comers to penetrate in the telecommunication market now? How many operators do you think this market can sustain? </strong> <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">Well, this is a free market and anybody can invest and operate here. However, we do not have many companies in Nepal who are ready to take the risk by investing first. TeliaSonera has a history of entering emerging markets early. Kazakhstan was among the emerging markets we entered soon after Soviet Union collapsed, in 1994. It takes time to build the kind of massive operations that we have so it's not an easy business. I personally believe that this market can sustain three operators. </span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><img align="left" alt="ncell" border="1" height="426" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/interview_pic1.jpg" style="width: 356px; height: 426px;margin:10px;padding:10px;" vspace="5" width="356" /></strong></span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>What is your take on the practice of squatting on the spectrum license? </strong> <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">We actually have enough spectrum allocated to us and so far we have paid for the spectrum and the license in full. We have also fulfilled all the requirements of the NTA concerning the licenses including the spectrum. On our part, we are clear and it's not for me to analyse about some other companies holding spectrum. NTA too has introduced a fee for companies not using the spectrum effectively enough. It has the provision to penalise them for the so called holding of frequencies. </span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>What are your expectations from the regulatory authority for the improvement in quality of services along with this sectors growth and expansion? </strong><br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">Many things have been clear in the sense that we want to have a level playing field. Especially, when NTC is a government corporation, they do have the advantage of being in the country earlier than us. But the biggest issue is that they are not following NTA regulations. Let me give you an example. There is a rule that the congestion between the operators can be maximum 0.1 per cent meaning that one call out of 1000 can fail. Now, the situation is that for the past two-and-a-half years, I have been here and we have been talking about NTC not being able to give us enough capacity and units so that our subscribers can freely call the NTC network. During the peak hours, the congestion can be up to 60 per cent which is unfair. <br />
		<br />
		We had a very open discussion with NTC and NTA asking them to give us the space because we want to build a good telecom infrastructure company in this country. But, we are compelled to follow what someone else is doing. We don't want to be dependent on our competitors and want them to follow the regulations that are laid out. There is also the issue of cross subsidising, meaning, if you have an NTC mobile phone, you can call the NTC landline without any interconnection charge. However, in our case, we have to pay 52 paisa for every minute when our customers make calls to their network. This means that we cannot be price competitive with NTC on that level and this, of course, is a very wrong practice. <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Some time ago, Ncell had commented that the authority was biased against the private telecom operators and especially Ncell. What was the biased treatment? </strong> <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">We are the biggest foreign investor in Nepal so we are requesting for equal treatment and equal level playing field. For examplem, for permission requirement, foreign exchange permission and license renewal fees should be equal for all operators which has not been the case so far. </span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>WiMAX and 4G spectrum are not issued by the authority yet. Why do you think they are rigid about it? </strong> <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">To tell you the truth, 4G is essential. But it is not urgent because we are totally occupied building the 2G network. We have always seen that people are very keen on using wireless broadband. Our Ncell Connect became the number one ISP in the country within a period of eight or nine months which really proves that people are willing to have wireless internet connection. I don't believe in WiMAX at all as it is a very limited kind of technology with no handsets available and promises to be an expensive proposition. I really intend to request the government to concentrate on GSM because evolution such as the 4G will continue to take place. <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Do you think 4G will be suitable for Nepal?</strong> <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">Sure, because it gives excellent speed for data surfing. Now with HSPA, we can go up to 3.6 mbps and with HSPA plus, we can go up over 7 mbps. For instance, when 4G was launched in Sweden, it brought huge improvement to data speed. <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>How long will your aggressive marketing continue?</strong> <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">I hope that we continue in the same manner forever. This is a continuous business and we have to give people value for money and time. Marketing is not only about marketing communication, but also about best customer experience. Marketing communication gives promises via billboards and advertisements. But we have to fulfill those promises with other aspects of the infrastructure - network, billing system, call centre, point of sales etc. Our aggressive marketing has reached us this far. So, we are more than happy to continue practicing it and hope that it pays us great dividends in the long run. </span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><br />
		</strong></span></span></p>
</div>',
			'published' => true,
			'created' => '2011-10-11',
			'modified' => '2012-09-16',
			'keywords' => '',
			'description' => 'Pasi Koistinen is the President and CEO of Ncell Private Limited, which became the largest telecom
operator in Nepal some months back overtaking the state-owned Nepal Telecom. The company
reached the figure of six million customers recently. Ncell, the first private telecom operator of Nepal
was rebranded to its current name in 2010.',
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	(int) 10 => array(
		'Article' => array(
			'id' => '445',
			'article_category_id' => '46',
			'title' => 'Joseph Silvanus',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<span style="font-size:14px;"><strong>Interview: September 2011 - There Is Much To Gain And Look Forward To</strong></span><br />
	<br />
	 </p>
<div style="text-align: justify;">
	<span style="font-size:12px;"><img align="left" alt="interview" border="1" height="227" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/sep-int.jpg" style="width: 319px; height: 227px;margin:10px;padding:10px;" vspace="10" width="319" />Joseph Silvanus<span style="letter-spacing: 0.05pt;"> joined Standard Chartered Bank Nepal Limited as its new Chief Executive Officer in July 2011. A student of Economics at St Stephen's College, Delhi University, followed by a management degree from Mumbai University, he had a brief stint with established FMCG names such as Voltas Ltd and Pepsi Foods Pvt Ltd before moving over to the banking sector. A banker for over 18 years, Silvanus has worked with ANZ Grindlays Bank followed by Standard Chartered Bank across various geographies. He has vast exposure to consumer banking operations having managed branches, marketing operations, business analytics, services and service quality and project management. In his most recent role as Regional Head of Development Organisations for South Asia, he played a pivotal leadership role in engaging multilateral/bilateral agencies and DFIs for directing specific programme-based support towards Asia. In an interview with </span>Pinaki Roy <span style="letter-spacing: 0.05pt;">of </span><i>New Business Age</i><span style="letter-spacing: 0.05pt;">, Silvanus shared his views on Standard Chartered Bank's phenomenal success over the years and his plans for Nepal operations. Excerpts:</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin: 5.65pt 0in 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><strong>You have just joined in. Do you have new plans in mind for Standard Chartered Bank's operations here in Nepal?<br />
	<br />
	</strong></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">Nepal continues to be very important from a South Asian perspective of Standard Chartered Bank. It is now my turf to be able to grow the relative importance of Nepal in the overall scheme of things. Having consumer banking and wholesale banking as the two basic engines of growth for us does not mean that we will have quantum changes about the way we do our business in this part of the world. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">We will continue to grow the engines albeit with some level of caution because of the underlying situation Nepal is experiencing right now. But I personally see a lot of advantages that can be derived even through this phase of Nepali economics. The changes that I will bring, perhaps, is to leverage the Group businesses, expertise and the best practices. I can be a catalyst for that and we have internally discussed as a team that we will have more of these engagements. The businesses will reap the benefits of these visits and conversations that I had with the rest of the Standard Chartered Group. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin: 5.65pt 0in 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><strong><img align="left" alt="interview" border="1" height="396" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/inter.jpg" style="width: 224px; height: 396px;margin:10px;padding:10px;" vspace="5" width="224" />This must be an encouraging year for Standard Chartered as it is one of the largest profit earning international banks despite the global economic crisis. What do you attribute this success to?<br />
	<br />
	</strong></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">After receiving the Group results just over a couple of weeks ago, it convinced ourselves that we have done exceedingly well. I am absolutely delighted to see the results. We registered ninth consecutive record first half profit and double digits growth both for the top line (11 per cent) and profits (17 per cent). Everyone is delighted including the investors and shareholders and obviously, the businesses know what they are going to do for the rest of the year. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">Looking closer home in Nepal, I think we have achieved much. It's been a tough year with issues of liquidity and governance coming through the financial network. There has also been some amount of uncertainty because of the global businesses impacting Nepal's economy. Nevertheless, I believe that both consumer banking and wholesale banking and the respective support functions have all got together to give value to local Nepali shareholders. There has been good EPS (Earnings per Share) and top line growth as well as effective cost management at a time when we really needed to look inward and reduce expenditures coming through unforeseen circumstances. We have done well as a bank in Nepal on all fronts and have continued to be strong both on capital and liquidity. Therefore, from a group as well as country's standpoint, there is much to gain and look forward to. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin: 5.65pt 0in 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><strong>One of Standard Chartered's unique features is successful lending to SMEs. Do you plan to expand or review the lending policy?<br />
	<br />
	</strong></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">SMEs have always been an engine of growth for the bank. Asia is typically a burgeoning economy for entrepreneurs and Nepal is no exception. If you look around, you can see how entrepreneurs are converting opportunities on a daily basis and the way banks are supporting them. For us, SME is a perfect space between the lower end of consumer banking and the upper end of corporate banking. The segment is very well placed. We have appropriate products that take care of all their requirements such as Working Capital and Term lending, Trade &amp; Guarantee lines and Margin based lending. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">However, we must realise that while SMEs are the global engine of growth for the group, we have to tread with caution when it comes to Nepal. We have to be able to create equitable mortgages as most of our SME lending is based on some form of fixed collateral. Therefore, we have to play as per the rules of the game.&nbsp;We are trying to bring in a few products that are used in the group in the area of margin based lending. It is an important engine of growth not only from the bank's perspective but from a social point of view as well. We are creating a lot of headroom for growth, engagement and employment opportunities. These will have plenty of forward linkages because the entrepreneurs will be able to subsist. Access to finance is a key issue for SME business the world over. We see ourselves as a force that could help meet that latent need. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin: 5.65pt 0in 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><strong>The Nepal Rastra Bank (NRB) has brought several new measures in its monetary policy. How have you viewed this policy?<br />
	<br />
	</strong></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">Policies are well meant so I have given them a balcony view. I clearly think that NRB has tried its level best to meet some of the needs of the current economic state. Reducing CRR (Cash Reserve Ratio), for example, is good as it injects liquidity but it drives up some amount of inflationary tendencies. You have to understand that every action has an equal and opposite reaction. Increasing exposure to the deprived sector is certainly a good measure, especially when we know that farmers and the micro credit side of things require some amount of stability. However, I would like to see well-run, professionally-managed and well-governed micro credit institutions that can use this extra amount of liquidity coming their way. This would help create productive assets in the hands of the farmers so that the entire ethos around farming communities can gain sustainably from micro credit. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">The bottom-line is that while the policies are well meant, they need to be managed and supervised to the end. There are other areas where it has tried to adjust such as the Basel II issues as there has to be better accounting procedures and stress management techniques. The banks have to be prepared for event based risks. Therefore, on the whole, there is a good effort on the central bank's part as far as the monetary policy is concerned. But if it could be combined with great oversight by the concerned stakeholders, you have a winning strategy for the country. I am an optimist as far as Nepal is concerned. It's but natural that when things stack up, people can feel deprived and adopt a pessimistic approach. The people of Nepal are very resilient and it's time their patience got paid back in terms of good governance. The central bank needs to have a good embedded structure on which some of these policies can be grown upon. Policy interventions are great when they get implemented in the right fashion. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
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<div style="margin: 5.65pt 0in 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><strong>Standard Chartered in Nepal has remained shy on investing in long-term projects such as hydropower and road infrastructure. What, do you think, are the possible bottlenecks?<br />
	<br />
	</strong></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">We clearly believe that Nepal has been imbued by god by several natural resources. Hydropower is one area where the country can really subsist and actually become a force for growth for the entire region. Underinvestment is due to several counts such as lack of transparency, clear policy directives and long term stability. The FDI which comes in this country is restricted to short-term investments and areas of quick generation of goods and services. However, long term investment in infrastructure, broadly speaking, has been lacking, for sure. We have to create easier barriers to entry, longer trade protocols and cut down on double taxation that exists, perhaps, within certain geographies. We also have to allow the investors vision for at least a longer period of time. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">Bank and multi-lateral finance is always there. We already have done work in the past on hydro electricity in Nepal and are looking at a good pipeline of similar products. As a bank and a brand name, we are `Here for good which means we are here for the medium and the long term. Our commitment to Nepal is unquestionable and therefore, if we have to support the growth of infrastructure, we will certainly exercise our might. The bank is strongly behind these sectors. Hydro and roads etc take time as these are huge projects which are to be governed by several other global rules. We are quite happy to consider them, provided the right investments come along.&nbsp;</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin: 5.65pt 0in 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><strong>You must have faced a lot of pressure to accept more deposits in recent times due to a large number of people withdrawing their money from small institutions. Has there been a substantive change in your deposit patterns owing to this development?<br />
	<br />
	</strong></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">This is true not just for Nepal and this has been happening right through the period of turmoil and uncertainty. Whenever there is uncertainty in any market, there is flight to quality. People like to resort to safer havens in times of uncertainty. We are open to business in Nepal and if people so believe that in the interest of risk mitigation, they wish to move their hard earned money to a safer institution, we will not stand in their way. However, we will go through the normal protocol of good governance by looking at customer details etc and then we would bank for them. It's part of our day-to-day business, we are not in this business of just going and garnering liquidity from the market. But if it comes to us at the price point that we would like to take at, we would certainly accept it. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin: 5.65pt 0in 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><strong>We understand there is serious homework being done on mergers and acquisitions of a number of banks in Nepal. How close are you on this front?<br />
	<br />
	</strong></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">Well, it's public domain knowledge that even the Nepal Bankers Association has written to the central bank asking for tax incentives etc in the event of buying distressed assets or for mergers and acquisitions if there were. Our own view in this matter is very clear. In this part of the world, the economies are growing very productive and organically and there is a load of growth potential. Therefore, banks like ours would be more interested in looking at organic growth. On the other hand, acquisitions come at a cost. It has to do with people, culture, system integration etc and sometimes, it is difficult to get the math right. From a Nepali context, we are very happy right now with our organic engine of growth. We want to believe in primarily using the engine of origination rather than buying out an asset originated institution. We believe in our origination capabilities because we understand credit best in terms of the market that we are in and given the number of years that we are on the ground. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin: 5.65pt 0in 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><strong><img align="right" alt="" border="2" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/inter1.jpg" style="width: 210px; height: 267px;" vspace="10" />How long do you think Nepal's interest rates would be as high as they are? Aren't high interest rates detrimental to the growth of industrial and manufacturing sectors?<br />
	<br />
	</strong></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">This has got to do with some amount of demand and supply economics, cost of capital etc. Nepal is an unrated economy and we have imputed some ratings to the economy given the existing economic and political risks the country is attached to. Today, if you are to benchmark your savings bond for five years at 10 per cent which is an indicative rate, we don't have too many instruments that are longer term which will give you an indication of what the cost of funds or doing business in Nepal is. While I don't have a very firm view on where the interest rates are going to be, I believe they will remain the way they are for a short to medium term. The rate today correctly implies the cost of doing business in this country, part of which is the cost of capital. It is heightened because along with the cost of capital, there is liquidity risk and so many other market and non-market operational credit risks which pour into increasing the total cost of the fund. I believe that this is here to stay for a while unless and until we have a systemic kind of revamping of risk. We have to have central bank and all its adjuncts come out and play a constructive role in rebuilding some of these elements of risk. We will then have cross-border and country risks and the overall risk of the cost of capital come down. It will then reflect in cheaper interest rates. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">No entrepreneur or industry would like a high cost of credit as it mirrors heavily on their balance sheet. It reduces their strength to leverage the balance sheet and there are other cost elements too that are unique to Nepal such as the cost of staff and security, which, is not so large in other neighbouring countries. Therefore, it is to the extent of dampening entrepreneurial streak of modern day manufacturing. I believe that it's not a good story and there must be a different form of intervention where given the inherent risk of doing business in Nepal, the leverage allowed to such institutions should be higher. For example, if there is eight per cent leverage on a non-banking financial intermediary, it can be decided to give a higher leverage to such institutions. It is because resources are at a premium for such people and as long as the business model is good and the shareholders are willing to support the model, it should be allowed by law to higher leverage such institutions. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin: 5.65pt 0in 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><strong>Being a reasonable global player, how do you think Nepal can benefit from the ever growing economies of China and India? How do you see Nepal's prospect as an off-shore financial hub being a transit economy between the two giants?<br />
	<br />
	</strong></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">Nepal is a landlocked country but it has two great neighbours who, I think, are committed to the sovereignty and growth of Nepal. To cite an old idiom, some trade is better than no trade. Nepal would have to use the depth and resources available to it through these two strong economies. These are the future economies of this world and, therefore, Nepal stands to benefit in the long run. There is a lot of work happening already: visiting delegations from both countries, plenty of solidarity and joint ventures. There is a lot of country-to-country donor aided support in some of the more required areas of infrastructure. Nepal has everything to benefit from positively engaging with both its northern and southern partners. Both these countries bring a lot of good and appropriate technology which sometimes may not require power and capital-intensive kind of investments. All in all, if the political ambitions of Nepal are evinced right, there is tremendous opportunity for growth in the economic sector. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="line-height: 115%;">Nepal has been a part of the silk route for some time now and the people of Nepal are almost like global citizens. Almost every family in Nepal has a member working overseas which brings a lot of globalisation even into the villages. People have seen various cultures and experienced much while living overseas. Therefore, trade is an inevitable benefit to Nepal. You have to look at areas where you have a positive trading account with not just India and China but even with countries like Bangladesh and Pakistan. Nepal has to use its foreign and economic policies all geared in a very integrated and systematic approach to get the right kind of foreign investments and create value added commodities which its neighbours would seek. Besides, tax and double taxation protocols will have to be readdressed so as to meet the regional needs. <br />
	<br />
	<br />
	</span></span></div>',
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			'created' => '2011-10-02',
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			'description' => 'Joseph Silvanus  joined Standard Chartered Bank Nepal Limited as its new Chief Executive Officer in July 2011. A student of Economics at St......',
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		'Article' => array(
			'id' => '416',
			'article_category_id' => '46',
			'title' => 'Joseph Massey',
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			'content' => '<p>
	<span style="font-size:14px;"><strong>Interview : August 2011 - 'Second Phase Of Growth Would Depend On Developed Capital Market'</strong></span></p>
<p>
	<span style="font-size:14px;"><strong><br />
	<br />
	<br />
	</strong></span></p>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><img align="left" alt="" border="1" height="200" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/int1.jpg" style="margin:10px; padding:10px;" vspace="5" width="120" />Joseph Massey is Chairman of South Asian Federation of Exchanges (SAFE), a forum of exchanges with 32 members from South Asian Region, UAE and Mauritius. SAFE works for the development of capital markets in the region and offers itself as a platform to these exchanges for global integration. Massey is also the Managing Director and CEO of MCX-SX, which currently offers currency derivatives trading and is the most recent entrant to India's public-trading exchanges. He has over 18 years of experience in the corporate and financial arena and worked with organisations like Life Insurance Corporation of India, the Reserve Bank of India (RBI), Stock Holding Corporation of India, Multi Commodity Exchange of India Ltd, Interconnected Stock Exchange of India and the Vadodara Stock Exchange. Massey was in Nepal during the executive committee meeting of the SAFE from July 6 to 8. In an interview with Gaurav Aryal of <i>New Business Age</i>, Massey shared his views on capital markets of South Asia and the current status of the Nepali share market. Excerpts:</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>What is the scope for growth of secondary markets in South Asian countries?<br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">I think, post-global crisis, this region is emerging as a high growth region because of the natural demand that it has got and also the governments are very keen to develop each sector so that more employment is created and global investors are willing to come and actually invest. If you look from a capital market perspective, there is demand both from primary and secondary markets. Whichever country you take in the SAARC region, it still has to make tremendously large progress in terms of domestic penetration. That market is huge. Then, we have another opportunity which is in global market. I think all economies have very large opportunity to develop in the secondary market.</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
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<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Except India, other countries in South Asia have not been able to develop much in this field. What is the problem you see?<br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">There are couple of prerequisites for the market to develop. Indian market has a history of 130/140 years. Over such a long period, we have developed the culture of investment. Despite that, we have penetrated the market relatively less. Indian market is&nbsp;more developed because we have more instruments, more investors, more companies, good infrastructure, clearing corporations, guaranteed good regulation, and infrastructure which is comparable to the best in the world. However, there are many products that we still don't have and now India is aspiring to create those products. India has progressed but it still has a lot to do. Rest of the countries, based on their position in the cycle of economic development, could have reached some level of development in the exchanges. We expect that to happen over a period of time. When global fund comes to one region or one country, visibility of the entire region gets enhanced. Today, you see a lot of funds coming to India. Soon those companies will come and set up their companies in India. Once they set up their companies and invest there, they will also gradually look for what market opportunities are there in the region. India is gradually opening up and Indian citizens can invest outside. Once we open up the market more, a lot of investment from global market will come to India and from there they will go to the other countries of the region. I think the level of development depends on the scale of economy and how much it has developed. But it need not necessarily take the same length of time for each country to reach the same stage of development. We can cut short the time by learning from other's experience. Highlight</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Foreign institutional investors and foreign direct investors are still hesitant to enter this region whereas they are going to Taiwan, Singapore etc. Why so?<br />
	<br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">These countries have been rapidly growing for a very long time. So, the global communities have already identified those destinations. As a result, in&nbsp;the last 20/30 years, their regulatory system and infrastructure have developed so much that the global investors don't see a difference between these countries and their home markets. In SAARC region, some countries have progressed well while others have not. But we all know the model that we have to implement. We just need a more concentrated effort in finding out what are the gaps; what they have and what we don't have. And, we can put regulation and infrastructure in place. The domestic demand being so large, we will see the same level of capital coming in this region eventually. Today, we are not there but we need not take another 30 years to reach there. We can reach there in next five years.</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>What is the objective of creatig a South Asian network of stock exchanges?<br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">I think we are all determined to do this. We understand each country has its regulatory mechanism and its own capital account laws. But we want to sensitise the countries that economies of scale will be realised if this region can work as one unit. Relatively, hard infrastructures like road, transport and others may take time to be developed. Financial market is soft infrastructure which can happen easily. The secondary and tertiary gains of developing an efficient financial market are very large compared to manufacturing and few primary sectors. So, instead of developing the manufacturing sector first and then going to the financial services, it would be a good idea that in this region we shift focus to financial services and the advantage of financial services trickle down to the rest of the economy. Our cost of fund will reduce and we will be able to raise more funds for developing infrastructure, for economic activity and as a result all benefits will flow such as more jobs, better education and necessary infrastructure. So, more capital gets attracted and suddenly we will get out of the vicious cycle. Today, we are in a vicious cycle of low capital, low infrastructure and therefore, low investment. All countries can't achieve the same level of infrastructure simultaneously, but when some of them achieve a level, the trickle-down benefit will happen to the entire region.</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Protection of small investors in capital markets is taken as a major challenge. How can such network protect the&nbsp;investors?<br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">At SAFE, we have identified the global best practices. Each country has adopted these global best practices which are prescribed by IOSCO (International Organisation of Securities Commissions). What SAFE does is that the good practices of one country are shared with others. We don't wait for those countries to learn these things over a period of time. We are sharing these experiences with each other so, until real business can get done, we can share a lot of knowhow and ensure that the level of knowledge of each one is the same.</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Why are South Asian governments hesitant in opening their markets for international investment?<br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">We are saying that we need to have investor protection. So, should we open the market or not? The first level of investor protection is that you have better infrastructure for trade, better laws, and more capital to protect them. All these things can come if you have a market of significant size. We want the best protection to be given to the domestic investors. But we cannot provide that as our markets are very narrow, we don't have all the products, we don't have large number of investors, our trading volume is small and the number of companies is low. You know that the total income from such market will be naturally very less. So, we need to invest more in increasing the capital, improving law and, giving the investor better safety. If you widen the investor base then obviously it will generate more resources. You will be able to draw more resources into the infrastructure, set up a clearing corporation, depository, have best tools and educate your people better. So, you need the capital market to be very efficient. Today, each country has domestic investors but they are very few. We need institutional investors who can bring in big money and take a deeper and longer view. So, once we complete this, we have to complete the market by getting good quality investors by offering all the products available today in the global markets. Once you create these two, your protection will improve; your market will become safe because your market is aligned to global market. If the investors are investing in the growth of Nepal, you get a diversified base of investors in which some are taking a view with 10 years, some with five years, and some with just one year or less. When you get the mix of all of them, your market will be stable. Some may go out but many others will stay.&nbsp;</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>How do you see the future of capital market in this region?<br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">I think there are three or four facts which indicate that the future of capital market is enormously good. All the countries in this region more or less have the same level of development. They are developing and gradually going up the scale. In the initial phases, all of them are dominated by the public sector enterprises. Public sector enterprises naturally have the challenge of resources. Since the demand of economy is very large, there is a requirement of private capital and private production in order to supply that requirement which the public sector will not be able to deliver. The public sector has reached its level and now the private sector has to come up. It has to come up in infrastructure, education, manufacturing, services and everywhere. For developing all these, the people need risk capital. The risk capital can only come from the capital market. So, I think one is dependent on other. If you have a robust capital market, more people will be able to raise capital and set up an economic enterprise which will create more jobs and more business ventures. It is a cycle. Every economy has realised that we have gone through the stage where the public sector was dominant and&nbsp;banks had a major role to play. Second phase of growth is going to be dependent on developed capital market that should have equity, bond, derivative, service management etc. so that people can raise short term money and long term money. Then, we will see private enterprises start coming in. </span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Experiences have shown that the derivative trade has distorted the natural growth of the market. Can South Asia region avoid such distortion?<br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><img align="right" alt="inteview" border="1" height="287" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/int.jpg" style="margin:5px;padding:5px;" vspace="5" width="400" />SAFE is advocating an exchange traded market where derivatives get traded on the exchanges. They are safe because the counterparty has a guarantee from a clearing corporation. They are better risk-managed, more tightly regulated, and more transparent. As a result, exchange traded market is always a safe market. In 2008 and in the earlier 1998 crisis, what went wrong was outside the exchanges. So, the lesson from the 2008 crisis is that&nbsp;we should get more and more products on the exchanges. Second lesson is we can have laws which are similar all over the world. So, G20 is now advocating that we should have such norms and regulation that are similar in all countries. The advantage SAARC region has is that we don't have to make the same errors some other countries have made. We now already have better regulation on banking system and in the securities market, we have all the institutions developed, most countries have depository, clearing corporations and most countries now trade on electronic system. Having built an infrastructure that is similar to global environment and global rules that are gradually becoming common, I think we are operating on a much safer market.</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Many prominent stock exchanges like those in Europe and Japan have either crashed or remained stagnant for a long&nbsp;time now. Is it so because those economies have reached the point of saturation?<br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">Post-2008, two things have happened. While the exchange traded markets are same, their economy is slowing down and the financial system has observed a very large amount of loss. It will take a long time for them to come out of these losses that they have suffered outside the exchanges. Secondly, those economies are diversifying to come back to high growth phase. In doing so they are investing outside the country. You can't increase the economic growth significantly if the economy is already developed. So, they will only have to look at investing and business opportunities in rest of the world. The good news is while Europe and the US are slowing down, Asia and Africa are&nbsp;growing. If you look at world growth perspective, today there is more demand than it was before. According to a recent news, Boeing is supplying US$ 30 billion worth of planes but all these planes are going outside US. The world economic structure is changing. There is more demand outside Europe and US. And the world community is happy. It does not matter whether I sell my planes in US or outside US. In this process, companies benefit, the society where they work benefits, overall the whole world benefits. So, until the global market continues to be on a growth stage, I think it is a good news and more and more of this will continue to happen. Today, we are living in the era when the world market has more or less started looking similar or at least it has aspirations to look similar. So, we are getting into more openness, more transparency, similar regulation, more international trade. The growth of one will cause growth in other. I think the world economy will continue to grow, especially these emerging economies and developing countries will continue to grow for next 30/40 years and it is good news to the rest of the world.</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Do you see the possibility of instruments and mechanism like regional mutual funds in South Asia to invest in the share market?<br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">One of the discussions that we had both with the SAARC secretariat and the central bank here was in this very line. We should try and create some kind of regional hub in which we could have institutions which are not only taking domestic view but are taking the regional view. It could be regional investors, regional mutual funds and exchanges with cross border trading. It will depend on how much time it will take for each regulator and each country to digest that. But I think in the foreseeable future, in next two to three years time some of these concepts will actually become a reality.</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Now, the commodities future trade is also booming in the region. And they seem to have posed sort of regulatory challenge. In Nepal such market is blamed to have facilitated capital flight. How is your view? <br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">Commodities markets are markets for risk management. Secondly, they are market for giving price signals of what is expected to happen in future so that policy makers can take policy measures three months or six months in advance. Third, the physical market for commodities lack transparency, they are fragmented. To give a common view to the rest of the world on what is happening in this market, whether there is crisis building up or not you need to have an efficient futures market. An efficient futures market also brings an efficient physical market. I don't agree that commodities market cause flight of capital because it is essentially a market for risk management. People will not invest very large amount of money until they invest in the physical market. Futures contract should be for one, two or three months which is not a long-term investment. Typically, flight of capital takes place because of other natural economic indicators like high inflation, low growth of economy and interest rate structure. The domestic capital has to remain here and does not have an option. But if it is global capital, it goes to the most efficient market which has high growth, low interest bearing and good opportunity for growth. Commodities markets are rational markets. These markets will look at the fundamental demand and supply. Based on the fundamental demand and supply, price recovery will take place. </span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">If someone is buying wheat, cotton or gold, that means the price of that commodity in the future can go up. But the price&nbsp;of a commodity futures contract will go up only if the physical commodity goes up. Physical gold is going up because someone is buying physical gold. They are too integrated together. Physical market demand and supply is dependent on actual consumption and actual supply. I don't think we should panic at the price fluctuation in the commodities exchanges. However, if we can have&nbsp;regulatory system, more transparent system, better safeguard on exchange, clearing corporation it will eb better because then some of these worries&nbsp;will go away. </span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Of late, the share market index as well as confidence of investors has remained low in Nepal. How can these be bolstered up ?<br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">There are no shortcuts to it. When an economy is going through a low cycle and if you only have domestic market, the entire country has one view. You donâ€™t have a contrary view from anyone else because you only have individual retail investors. Their appetite to take a long term call is very minimal. So, when your market is going through slowdown, the individual investors will be more scared so they will also take a view which is not more than a day. Now, you need someone who can take a view which is for one month, one year or five years. This can only be done by institutional investors. So, it is paramount that Nepal tries and builds up domestic institutional investor community so you can put mutual funds in place. I don't know how your pension industry is, but I can be pretty sure that some of those funds will come and they will invest in the capital market. And insurance industry too can invest in capital market. This is level one. You now have a person who is willing to take a call which is a longer term. But still they are domestic and have a view which is not very diversified. If you can adjust global investors inside, you will have a view which is very different. They are willing to take a call which is much longer, in much larger quantum of money because now the stocks are available very cheap. Their cost of borrowing will be less. They can come and do large borrowing and as a result the market will grow up. So, in a market which goes to such a long term low cycle, the only way to break out of the cycle is by ensuring that institutional money both from domestic and global markets gets attracted to the country and I think you should do that.</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	<br />
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			'title' => 'Dr Thomas Gass',
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			'content' => '<p>
	<span style="font-size: 14px;"><strong><br />
	</strong></span></p>
<p>
	<span style="font-size:14px;"><strong>The Taxpayers Of This Country Are The Major Donors To Nepal (july 2011)</strong></span></p>
<p>
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<div style="text-align: justify;">
	<span style="font-size: 12px;"><strong><img align="left" alt="taxpayers" border="1" height="195" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/interview(4).jpg" style="width: 139px; height: 195px;margin:10px;padding:10px;" vspace="5" width="139" />Dr Thomas Gass</strong> is the first residential Ambassador of Switzerland to Nepal. He was previously Switzerland's ambassador to the United Nations in New York and spent five years there prior to arriving in Nepal. He holds a PhD in biology and began his career with the Swiss Agency for Development and Cooperation (SDC) in 1988. He has held positions in the Swiss civil service and with the United Nations. Gass was the Vice-President of the executive board of the United Nations Development Programme and United Nations Population Fund. He has also lived in Guyana and worked in Africa and the former Soviet Union. In an interview with Pinaki Roy of <i>New Business Age</i>, Gass discussed a diverse range of issues from Swiss cooperation and its impact on the Nepali society to the constitution writing process in Nepal. Excerpts:<br />
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<div style="text-align: justify;">
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;"><strong>Switzerland is among the few countries that initiated financial assistance to Nepal since 1959. How do you evaluate Swiss cooperation over the last 52 years?<br />
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	</strong></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">I would say that this has been an extremely fruitful partnership that has encompassed mutual learning and has evolved over the time as any working partnership should. Initially, Switzerland implemented many projects directly and we had up to 100 experts working here at a time in the 1970s. We work differently today as we place more emphasis on the leadership and the coordination of the government and make use of national capacities for our projects here. We work through the ministries, INGOs and the local NGOs among others.<br />
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;"><br />
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 12px;">One of your primary objectives has been to build rural infrastructure, particularly, the suspension bridges. Do you systematically assess the economic impact of these bridges constructed mainly by Swiss support?<br />
	<br />
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	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">Yes, we do systematically assess the impact of our projects. But we don't assess these projects only in an economic way; we also look at them from a social and inclusion point of view. Over 1,600 trail bridges have been built and 3,500 maintained in the last 10 years. As a result, over 4.8 million people have better access to services through safer river crossings. On an average, each bridge has reduced walking distance by 2.5 hours and about 4 million person-days of employment have been generated through these bridges. These bridges are turnkey projects constructed by the villagers and the community. In the last four years alone, school attendance has risen by 22-27 per cent and visits to health centres have increased by 20 per cent on an average in places close to the newly built bridges. So, these are the kind of evaluations that we have. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 12px;">Forestry is a major area that you have been contributing to. However, the Swiss government has diverted its attention from forestry to other areas of late. What could be the possible reasons for this?<br />
	<br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">We certainly have invested a great deal of time and resources in forestry and it's true that we have been focusing on some other areas too. However, let me correct you by saying that we are still interested in forestry. We are and will continue to invest in forestry. To give you the figures, we have been supporting the previously-funded forest project since 1991 which will end this year. The project has resulted in reversed deforestation for 185,000 hectares of government-managed forests. It has also improved the condition for 135,000 hectares of community-managed forests in the three districts where SDC [Swiss Development Corporation] has been active. Additionally, increased availability of forest products has contributed to sustainable livelihood of 145,000 families and 16,000 person-days of forest based employment have been generated for the poor. Strong multi-stakeholders mechanism and participation from empowered community groups were crucial while achieving these results.<br />
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	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;"><br />
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">We are currently planning and preparing a multi-stakeholder forest programme together with DFID and Finland with the Ministry of Forest and Soil Conservation in a supporting and facilitating role. It will build on our respective experiences and extend its impact to a great number of districts spanning over 10 years. The programme will cover about 60-65 districts of the total 75 districts in Nepal. Therefore, I would say that our presence in the forestry sector is probably more than ever.<br />
	<br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;"><br />
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 12px;">You have tried to link Swiss contribution with entrepreneurship, for example, the employment fund. As a drastic departure, you have chosen to work with private companies as trainers. How successful has the idea been?<br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">We have been engaged in vocational skill training since the 1950s with cheese and carpet production. We then moved into more formal vocational training with technical schools such as the one in Balaju.&nbsp;We were also associated with the Technical School in Jiri in the 1980s and the Training Institute for Technical Instruction (TITI) in the 1990s. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;"><br />
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">This cooperation changed over the time because many more national capacities were becoming available in the formal training sector. At the same time, we realised that we were reaching only a small number of trainees through formal training who could perhaps afford on their own. We started partnering with private entities as training providers to reach the poorer segment of the society as well. It is easier to target disadvantaged and marginalised groups through our new approach. The onus is now on the training provider to find the first employment for the trainees. We feel that vocational training responds more directly to the needs of the labour market through this approach. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 12px;"><br />
	The Swiss government was supporting the promotion of good governance. Do you think it has contributed towards transformation of government practices in Nepal?<br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">The money that Switzerland invests into its development cooperation with Nepal comes from the Swiss tax payers. It is therefore absolutely essential that we give adequate attention to good governance and fiduciary management of the projects funded by us. And, we hope that it has a positive influence on the communities and the ministries we work with. Like any other country, Nepal requires good governance across the board from the villages to the central government and from the local associations to the major national parties. Our influence is obviously less at these levels. It is the Nepali people that have to hold their politicians and administration accountable for their respective actions. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">On our part, we have promoted and tried to practise public hearings and public accountability for our projects at the local and district levels. We have seen that there are concerns to begin with while we practise accountability. However, all parties are satisfied after the entire exercise is over. The local and district administrations also realise that such practices actually strengthen their credibility. At the same time, the population too gains a lot of confidence. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;"><br />
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 12px;">You have been working with the same partner, Pro Public, for over 15 years now. How do you justify this association for such a long period of time?<br />
	<br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">Yes, we have had a very long cooperation for sure. But one has to acknowledge that Pro Public has a great deal of experience. They have been in the field for a long time and have been in many places so we have to give them credit for that. The current phase of the project with Pro Public is coming to an end this year and we haven't yet decided who will be our future partner. We believe that we need support from an independent organisation that helps the public hand to build up its credibility through public hearing. It does not necessarily have to be advocacy or accusing the administration on its weak points. It is more about building the capacity and confidence to face the public by being transparent. There is a niche for these kinds of activities in every district which makes our projects and the work of the local administration so much more effective.</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;"><br />
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 12px;">Some of your projects like Jiri Multi-Purpose Development Project have been completely abandoned. What should Nepal do to make such projects and development sustainable?<br />
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	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">Well, the question is not about what should Nepal do. It's rather about what should the development partners both Nepali and Foreign do. First, the projects have to respond to a real need in order to be sustainable. They need to respond to the demand by the beneficiaries and these needs may evolve over a period of time because the beneficiaries and their aspirations evolve. Second, the projects also have to be of appropriate size and be constantly adaptive. It is because the counterparts the national entities can take over some of the responsibilities of the projects in a more convincing way. Therefore, these are the two elements that help projects become sustainable. The projects are the tools to deliver certain services that need to continue. </span></div>
<div style="margin-bottom: 0.0001pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;"><br />
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<div style="margin-bottom: 0.0001pt; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 12px;">The issue of inclusion is in the forefront of development debate lately. Is this the right approach given that it would further consolidate caste as ethnic identity just to get the&nbsp; </span></strong><strong><span style="font-size: 12px;">desired benefits?<br />
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 12px;"><img align="left" alt="thomas" border="1" height="244" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/img1(2).jpg" style="margin: 10px; padding: 10px;" vspace="5" width="400" /></span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">The benefits of social and economic development frequently do not get distributed equitably in societies that are very diverse and strongly compartmentalised. This leads to frustration and conflict. Invariably, there is an accumulation of wealth and power by those who already have it rather by the ones who don't have it. This has been experienced in many countries and it has been experienced in Nepal too.&nbsp;The other problem is that the potential of the diversity of a nation is not unleashed. Imagine a family, village or a country where all the decisions are taken only by men. For example, I can't imagine not involving my wife in decision making. She may have many skills, knowledge and competencies that I lack. The same is true for a country where a single ethnic or linguistic community is controlling all the decisions. This way, you are invariably reducing the development potential of your country to a fraction of what it could be otherwise.&nbsp;</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;"><br />
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 12px;">Given the climate change, how do you think issues like bio-diversity can be addressed?<br />
	<br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">The problem with climate change is that we don't really know the end effect especially in a country like Nepal where there are so many ecological zones. Some places might become drier and others wetter so there could be a lot of fluctuation. The diversity in nature is the insurance policy against change. That's why nature has been created the way it is, with a lot of diversity where one plant may die and another may survive. The diversity has to be maintained in order to adapt to the changes that we don't know about. And therefore, natural bio-diversity and agricultural bio-diversity have to be promoted very actively keeping the climate change in mind. Farmers in Nepal who live in very diverse environments can help maintain and cultivate agricultural bio-diversity that would help the country resist and be more resilient to climate change and its effects. But the community and the country as a whole has to recognise that service. It's not just the food production, it goes beyond that. This is a little complicated&nbsp; it means that you have to start thinking about environmental services by getting the farmers some kind of support that is more than just the minimum payment. <br />
	<br />
	<br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;"><br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 12px;">The Swiss government is the major donor towards supporting constitution writing process but it doesn't seem to have yielded any results. What do you think is the problem with constitution writing in Nepal?<br />
	<br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">The taxpayers of this country are the major donors to Nepal. They are the ones who pay the salaries of the parliamentarians and indirectly, the politicians. Therefore, the investment of the international community cannot be compared with the investment of the people of this country in terms of time and resources. Changing the direction and design of a country takes time. It requires a lot of focus and motivation and the need to make compromises. This is in the hands of the Nepali politicians who have to come together for an agreement and then be able to share their findings with the general population at large to achieve a consensus. The current generation of the politicians owe this to the country. The constitution in my country also took a long time. We can be here as friends, nudging and criticising but in a constructive and positive way. We certainly hope that the constitution writing process in Nepal will now move forward. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;"><br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 12px;">Many people think that Swiss federalism model is appropriate for Nepal. How do you view this idea?<br />
	<br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">I strongly believe that Nepal needs to find its own model. What I can say though is that Swiss federalism is not about autonomy and independence. It is about how our cantons (provinces in your case) can work together building on reciprocal strengths and diversity to work in a united way for a stronger country. That requires a lot of compromises. One can never see one's own problems only. The provinces in my country need each other and I assume that it would be the same in Nepal. The policy makers can have a positive bias towards their own provinces. Previously, anyone who had a vision and was ambitious for Nepal focused on Kathmandu. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;"><br />
	</span></div>
<div style="text-align: justify;">
	<span style="font-size: 12px;"><span style="line-height: 115%;">In the future, the people would like to be identified by their respective regions and will be looking for strengths and resource development of their own provinces. The sense of pride for belonging to a certain province will come into play which was not there earlier. It helps but you can never lose out of perspective that a province is not viable by itself and requires to be complemented by other provinces. Therefore, everyone needs to understand that Nepal, as a single entity, needs to establish credibility at the international level. <br />
	<br />
	<br />
	<br />
	</span></span></div>',
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			'description' => 'Dr Thomas Gass is the first residential Ambassador of Switzerland to Nepal. He was previously Switzerland's ambassador to the United Nations in New York and spent five years there prior to arriving in Nepal.',
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			'title' => 'Dr Supachai Panitchpakdi',
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			'summary' => null,
			'content' => '<p>
	<span style="font-size: 14px;"><strong><br />
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<p>
	<span style="font-size: 14px;"><strong>Trade Should Be Harnessed To Ensure Development</strong></span></p>
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<p>
	<span style="font-size:14px;"><strong><br />
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	<span style="font-size:12px;"><img align="left" alt="WTO" border="1" height="185" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/interview1(1).jpg" style="width: 266px; height: 185px;margin:10px;padding:10px;" vspace="5" width="266" />Dr Supachai Panitchpakdi is the Secretary-General of the UN Conference on Trade and Development (UNCTAD), a post he first took up in September 2005. Prior to this, he was the Director-General of the World Trade Organisation (WTO). A PhD in Economic Planning and Development from the Netherlands School of Economics (now Erasmus University Rotterdam), he also served as Thailand's Deputy Prime Minister, Minister of Commerce and Deputy Minister of Finance on different times.&nbsp;Dr Supachai was in Kathmandu recently to attend the Regional Workshop on Productive Capacities, Economic Growth and Poverty Reduction in Asian and the Pacific LDCs. In an interview with Gaurav Aryal of <i>New Business Age</i>, he shared his views on economic, trade and development issues of the Least Developed Countries (LDCs).&nbsp;Excerpts:</span></div>
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	<span style="font-size:12px;"><strong>UNCTAD is organising a series of regional workshops to disseminate the findings of its reports such as Least Developed Countries Report, UNCTADâ's Division for Africa, Least Developed Countries and Special Programmes (ALDC) etc. What are the general findings of these reports?<br />
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	<span style="font-size:12px;">We are trying to concentrate on the areas of structural adjustments mainly in supporting the work of the states. We are trying to create productive capacity which means jobs creation, investment in infrastructure, investment in power plants and education. Our findings say that economic growth is needed to create social welfare for people. It does not happen automatically. So, there has to be definite development governance that would direct all the gains from growth to areas that would give people the right to participate, have transparency and decision making process as well as in the areas of trade. LDCs are essentially small economies. So, we think an LDC should make efforts to mainstream trade policy into its national development policy. The domestic markets are not enough to maintain basic demand so they need external demand too. For this, they need access in the international market. Special concessions given by the advanced countries for the LDCs will be crucial. It should be the heart of what we call early harvest for Doha negotiation.</span></div>
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	<span style="font-size:12px;"><strong>What can Nepal learn from the experience of other developing countries?<br />
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	<span style="font-size:12px;">First of all, development governance is very important. If you look at countries like Malaysia and Korea, these developing countries have actually showed the way for industrialisation process where the government has been taking the lead. They support industrial zones, put up investment policy that attract foreign direct investment (FDI) in technology related areas and create trade infrastructure in terms of ports, transportation facilities and trading firms. For example, they have trading firms that help promote the products in foreign countries. Nepal can also learn from their monetary policy that is customer focal. In the area of tourism, Nepal is doing well but it can certainly do better. More investment is required to attract tourists but it is important at the same time, to keep the negative effect of tourism under control.</span></div>
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	<span style="font-size:12px;"><strong>Despite having ample resources, poor countries have extremely low economic growth. Could you highlight the key issues where LDCs like Nepal fail in formulating trade and economic policies?<br />
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	<span style="font-size:12px;">I am not clear about Nepal but many LDCs have remained too dependent on few commodities. They have also failed most of the time to pursue positive development. This is an area in which it needs investment from the government sector for extended service, irrigation projects, water management and to build roads in the rural areas.&nbsp;The government also needs to provide support and subsidies for farmers in rural areas where they do not enjoy enough income to sustain themselves. LDCs also need to sustain in the areas of gender and women. In Africa, for example, women are the most underutilised productive capacity. In Asia, we still need legal reform that would put women rights, wage level, welfare treatment, education etc at par with men.&nbsp;LDCs can also learn from countries that have performed well in domestic resource mobilisation because one has to develop the domestic financial market. The banking system must be solid and it needs prudential supervision by the government so that more savings can be mobilised. You can have more resources here in Nepal itself and you don't have to be totally dependent on foreign aid.</span></div>
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	<span style="font-size:12px;"><strong>You have been part of the Thai Government in the past. What should be the agenda of LDC governments on the level of policy making and implementation, to increase the export trade volume?<br />
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<div style="text-align: justify;">
	<span style="font-size:12px;">The LDCs will have to invest in capacity to produce, to begin with. For example, if you have some food products, you may need to process food products as well in order to add value. Similarly, if you have some minerals, then you should think of investing in the processing of minerals. In Thailand we invested in canning of tuna fish which has been doing exceedingly well. We used to produce automobile spare parts to begin with but gradually we started producing automobiles on our own. So, you have to start from somewhere and try to move up the ladder all the time. I would recommend that LDCs having niche in certain areas have to keep adding value. Importance of technology is one lesson we have learnt in Thailand. Innovation and technology depends on the quality of education. Education must be guided in a way that would promote research. In Thailand, university professors and academics are encouraged to conduct more research and innovate. Foreign companies are also being attracted to the country to learn technology from. </span></div>
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	<span style="font-size:12px;"><strong>LDCS are largely dependent on donors and face heavy foreign debt. They also lack fundamental base of stable politics and proper policy implementation. Amid such complexities, how can countries move on the right path of development and poverty reduction?<br />
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<div style="text-align: justify;">
	<span style="font-size:12px;">Well, I think these are more controversial issues than the development policies. You must have growth to be able to have social investment and welfare but, of course, a loan is not enough. In order to transfer growth into social development, you probably need a policy on socio protection and inclusive development. It means that you would have to try to spread growth throughout the country. You need growth to be well distributed and not concentrated in certain areas only. It means decentralisation. You need to decentralise the authorities of the government and the investment activities. Investment has to be made into rural network of roads and means of transportation. Both skilled and unskilled people need help as well. If you look at the informal sector particularly, there are a lot of people being underpaid. You have to be able to initiate social programmes that would help guarantee employment. The employment guarantee programme in India could be one shining example. I feel that such programmes help support rural families. I also like the Bolsa Familia programme in Brazil where government financial support is given to families on condition that children must attend school until secondary education. These are some of the obvious measures that are needed to produce the impact from economic growth for social welfare. </span></div>
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<div style="text-align: justify;">
	<span style="font-size:12px;"><strong><img align="right" alt="reduction" border="1" height="214" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/interview(1).jpg" style="width: 171px; height: 214px;margin:10px;padding:10px;" vspace="5" width="171" />What should be the role of the development partners in addressing the issues of development and poverty reduction in the LDCs?<br />
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	<span style="font-size:12px;">Development partners normally provide financial means. They have a target to meet - a contribution of 0.15 to 0.2 per cent of the GNP - which has to be given to the LDCs. However, they are giving only 0.09 per cent which is too low. I think the target should be met. The development partners should work on transfer of technology. This is not in financial terms but in terms of intellectual property rights. There should be some sort of open software system that can be accessed by the LDCs so that proprietorship could be opened up for people to search. I would say, in the trade areas as per the Doha agenda, they can give concessions to the LDCs as an early harvest. They don't need to wait until the end of the round to give concessions in the form of duty- and quota-free concessions for trade facilitation and in the areas of outsourcing of services. These are some of the areas which, I believe, could be done in terms of green economy. I also expect the green fund for the LDCs or the green development mechanism to be established. Some of these arrangements would pay special attention to the roles of the LDCs and they should be granted special assistance in these funding ranges. </span></div>
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<div style="text-align: justify;">
	<span style="font-size:12px;"><strong>How do you view the current debate on aid for trade?<br />
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	</strong></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;">Aid for trade is a good programme to mainstream trade into development. For us at UNCTAD, aid for trade means aid for trade for development. So, trade should be harnessed for serving this purpose. We have been talking about the need for more productive investment and investment in trade infrastructure, development training of skill negotiators, the need to setup the right commercial institutions and the right legal framework. You must have the legal people who understand the Trade-Related Aspects of Intellectual Property Rights (TRIPS) issues. You may also need to have the IT court. The aid for trade should also help in the areas of providing capacity to accomplish more work in environment and trade. UNCTAD believes the new areas of green economy would provide for opportunities to invest in renewable and energy products. I think â€˜aid for trade can help pave the way to support transfer of technology and training of scientists and engineers. This would also help in bringing the LDCs to new rounds of opportunities courtesy the green economy.</span></div>
<div style="text-align: justify;">
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<div style="text-align: justify;">
	<span style="font-size:12px;"><strong>In poor countries, the governments try to tread a middle path between the models of controlled economy and free economy. How do you evaluate Nepal's trade and more specifically, its economic policy?<br />
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	</strong></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;">To be fair to the government in Nepal, I am not qualified enough to emphasise on what Nepali economy should be doing. But I do see the role of the government being evolved here. I hope it will evolve in a way where there won't be too many controls. It is important for the Nepali government to be balanced in its role along with its evolving policies. The direction we would like to advise is to go into what we call development governance. This will help policies being directed at getting the development strategy right. The government should not look at market reform, competition and pricing policy only. It must have the market work so as to attract new projects that would create employment. Productive investment should be encouraged. Nepal needs a monetary policy that would mobilise more funds and keep interest rates not too high. It would mean the fiscal policy will have to be directed at needs to create the perfect infrastructure. It will also mean that the exchange rate policy needs to be flexible. And you have to have the exchange rate at a level that will be stable and will help make your products competitive.</span></div>
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<div style="text-align: justify;">
	<span style="font-size:12px;"><strong>Questions are often raised in poor countries about the value and benefit of being WTO members. Anti-WTO activists accuse that WTO policies are pro-rich and poor countries simply can't afford to abide by WTO policies. What do you have to say?<br />
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	</strong></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;">Well, being a WTO member is not enough. It won't help a country if it doesn't work on it to make itself strong in competition. So, being a WTO member is like being presented with opportunities to take advantage of the markets around the world. Taking advantage from the market depends on domestic policies. The domestic policies must drive forward to do more work in the areas of trade infrastructure, business improvement, skills training, development of science of the exported products and standard of products that would meet international standards. The technical barriers to trade and technical standards of manufactured products are also important. You also need the right laws to take benefits from the membership of the WTO. Being the member of the WTO is not a free ride, for sure.</span></div>
<div style="text-align: justify;">
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<div style="text-align: justify;">
	<span style="font-size:12px;"><strong>What's the equation between UNCTAD and WTO in terms of policies?<br />
	<br />
	</strong></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;">UNCTAD and WTO follow similar policies and support and complement each other. For instance, UNCTAD has been doing a lot of work in the area of capacity building while WTO is doing the same in the area of trade. We support the WTO in areas of trade facilitation and negotiation and trade and environment negotiation. We do the work on investment policies that WTO cannot do due to the lack of investment agreement at WTO. Being the focal point for investment policy for the UN system, we have been giving advice on investment policies to developing countries around the world. We advise them on investment agreement, investment promotion, policies etc. So, this actually complements WTO on what it cannot do. Also in the area of competition laws and consumer protection which WTO could not agree, we are providing assistance for countries to establish competition laws and consumer protection. Therefore, I think we do play a complementary role. The pace of trade liberalisation might have been a little too fast for developing countries. They may have not been able to reap benefits because they were not well prepared. The WTO also agrees now that in order to garner benefits from trade liberalisation, well preparedness and trade mainstreaming into the development process are essential. </span></div>
<div style="text-align: justify;">
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<div style="text-align: justify;">
	<span style="font-size:12px;"><strong>How would you like Nepal to take advantage from huge and growing markets on both sides of its borders?<br />
	<br />
	</strong></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;">Asia is now the growth port of the world. This is an area where growth is maintained at a very high level and quite stably. I think Nepal is situated in the right place with major countries surrounding it like India and China and South East Asia within close proximity. There should be a definite government policy to direct trade cooperation with all these countries. Such endeavours are supported by Asian Development Bank also. Cooperation is not always easy among neighbouring countries. However, you must concentrate on joint projects like transportation or regional projects taking part in joint programmes like tourism promotion etc. I think you should make use of having a deeper integration with South East Asian and North Asian countries in the region besides China and India. </span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><br />
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<div style="text-align: justify;">
	<span style="font-size:12px;"><strong>Will it be sustainable for LDCs to look for export trade only?<br />
	<br />
	</strong></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;">No. Sustainability is more than just export trade. It means you must have social equality, look after ecology and environment and invest in forestation to keep forests alive and growing. You have to invest in water management and human resources that will make for sustainable development. Therefore, it's not only export trade that would drive you. You must have a combination of inclusive policies that would shape the benefits of growth and trade equally. </span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><br />
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	</span></div>',
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			'created' => '2011-05-31',
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			'description' => 'Dr Supachai Panitchpakdi  is the Secretary-General of the UN Conference on Trade and Development (UNCTAD), a post he first took up in September 2005. Prior to this, he was the Director-General of the World Trade Organisation (WTO). A PhD in Economic Planning and.....',
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		'Article' => array(
			'id' => '249',
			'article_category_id' => '46',
			'title' => 'Mark E Hansen',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<span style="font-size: 14px;"><strong><br />
	</strong></span></p>
<p>
	<span style="font-size:14px;"><strong>What Gets Measured, Gets Done</strong></span></p>
<p class="ANSWER">
	 </p>
<p class="ANSWER">
	<br />
	<span class="MyriadPro"><span lang="EN-GB"><img align="" alt="" border="1" height="220" hspace="5" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/interview1.jpg" style="width: 224px; height: 220px;margin:10px;padding:10px;" vspace="5" width="224" /><br />
	</span></span></p>
<p class="ANSWER">
	<span class="MyriadPro"><span lang="EN-GB"><br />
	</span></span><span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">Mark E Hansen</span></span></strong><span class="MyriadPro"><span lang="EN-GB">, the Head of Asia Governance and Strategic Initiatives at Standard Chartered Bank, serves on the Bank's Asia <br />
	</span></span></span></span><br />
	<span class="MyriadPro"><span lang="EN-GB">Geographic Management Committee. He has a Masters in Economics from UC Berkeley and a BA with honours from Cornell University. He was previously a partner at strategy consulting firm Booz Allen &amp; Hamilton. In an interview with Pinaki Roy of <i>New Business Age</i> during his recent visit to Kathmandu, Hansen spoke in detail about various aspects of corporate governance. He has over 25 years of experience in strategic transformation and performance improvement programmes and has been involved in the development of Standard Chartered's executive leadership training programme. Hansen also put forth Standard Chartered's take on mergers and acquisitions, in the light of Nepali banking sector's latest merger rhetoric. Excerpts:<br />
	<br />
	<br />
	</span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">How do you look at the overall impact of corporate governance in private sector, specifically banking operations?</span></span></strong></span></span></p>
<p>
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.1pt;">I think it's becoming increasingly important from several perspectives. One is from the investor's perspective. Investors want to invest in institutions that they believe have strong corporate governance, to ensure the security of their investment. It's not just an emerging market issue; it's a developed country issue. The fate of big companies such as Enron, MCI, WorldCom and Lehman Brothers have all raised questions about the appropriateness of corporate governance. As the world continues to evolve, investors as well as customers want to do business with institutions they believe are doing the right thing. In the financial sector, we think it's a point of differentiation for Standard Chartered Bank where we have such strong corporate governance. And it's well appreciated by the regulators in the countries that we operate in. We pride ourselves on having high standards. We are well managed and governed. So, we believe we are at the front end of the trend that will put increasing emphasis on corporate governance. We pride ourselves in Nepal because we are a listed company here. And we make sure that we are on the cutting edge of best practices.&nbsp;</span><span lang="EN-GB"> <br />
	</span></span></span></span></p>
<p>
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
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<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">When did Standard Chartered Bank first envision the importance of corporate governance? How has it helped spearhead the system so far?</span></span></strong></span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.1pt;">It's been there for a long time. We have always had in our structure a form of country management with governance as well as the businesses. Sometimes it's more towards the business side and at other, towards the governance side. But it's a bit like a check and balance system that you would see in political systems where you have a legislative, an executive and a judicial branch. In ours, we have our businesses and then we have the governance. They serve as a healthy tension and a check and balance between the two. By design, we have always had our businesses focused on shorter term. It is about making the numbers for the year and the governance function having the more strategic perspective. It predates the governance crisis that happened in the west. It was impacted by certain events in the UK in the 1970s and 1980s and later in the US. But all that did was force us to be more rigorous and more introspective about how we can do this better.<br />
	<br />
	</span></span></span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">How important is the role of institutional investors in increasing the professional diligence of your bank as a corporate entity?</span></span></strong></span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.1pt;">It's quite important. We have large sovereign funds, long term institutional funds, insurance companies as well as a reasonably diversified investor base. We think that diversity is a strength because it helps us work through many different constituents. The institutional investors tend to have a longer term perspective which is important. One of the concerns that I think exists in the academic press today is that they focus too much on the short term, on quarterly profits. We only report our financials semi annually. We would like to look and take a longer term perspective like the investors do. The other point I have always raised is that the investor base is expanding, actually. For example, we are listed in India now so it's not just the western investors in London. We now have Indian investors in Mumbai, Hong Kong investors in Hong Kong and Chinese investors in Shanghai.</span><span lang="EN-GB"> <br />
	</span></span></span></span></p>
<p>
	 </p>
<p>
	 </p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">A board of directors often plays a key role in corporate governance. How do they go about ensuring accountability of the organisation to its owners and authorities?</span></span></strong></span></span></p>
<p class="ANSWER">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.1pt;">If you look at the directors roles, it's important that they understand sharing the responsibilities they take on. What has been happening in the past is that in some institutions they were very lightweight. The practice still exists in a few companies but it is starting to disappear from most of them. Today, the directors have to come prepared, contribute and interface with the regulators. Everyone Capital Markets, Regulators and the Institutions expect the directors to perform. As for our own subsidiaries, we have quite a rigorous process for selecting and then assessing directors on a regular basis. </span></span></span></span></p>
<p>
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
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<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">Who are the parties to corporate governance that have an interest, direct or indirect, in the effective performance of an organisation?</span></span></strong></span></span></p>
<p class="ANSWER">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.15pt;">It's a wide group of stakeholders. First, the investors who want to know if the money is put in a well run and governed institution. Second, the banking and capital markets regulators because they want the assurance that the propriety in compliance with regulations is embedded in the organisation that starts with the governance function. And then the customers, increasingly, because they want to know they are doing business with the right organisation. The employees too have an interest. And I say this particularly in Asia because a number of banks and local companies are family-run entities. They have a particular management and governance style. In fact, the part of the problem is that the management and governance aren't separated. So, I think the establishment of appropriate governance and a separation of governance from the management are quite important for the evolution of companies in the Asian markets.</span></span></span></span></p>
<p>
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
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<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">Could you tell us about the key elements of good corporate governance principles? </span></span></strong></span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.1pt;">The first one is compliance which focuses on bringing the global best practises. It also recognises that one has to adhere to local regulations. Therefore, it is a binding constraint issue. We try and incorporate the best practices but we also have to accept the local constraints. The second is integrity and transparency. The best way to demonstrate corporate governance is actually the transparency by which you disclose all your financial information as well as other information about the organisation. The third is process which, though boring, is quite important. The discipline around the varying board agendas, getting papers circulated beforehand, having meetings at appropriate times, correctly managing etc are part of this. It's very administrative but critical for the impact on the working style of the board of directors. This way you make sure that the board is focusing on the right thing and getting its work done efficiently. The final one is the measurement of the board's effectiveness. You need a process to self-examine yourself. It's not necessary to bring in outside experts to determine that. The clich what gets measured, gets done is true.</span><span lang="EN-GB"> <br />
	</span></span></span></span></p>
<p>
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
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<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">What are the consequences of not having good corporate governance?</span></span></strong></span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.1pt;">As I mentioned earlier in this interview, the many recent corporate scandals MCI WorldCom, Enron, Lehman Brothers to name just a few of the more well-known failures from poor corporate governance evidence some of the consequences. Investors lose money. Employees lose their jobs. Regulation may be increased to the point where it becomes very costly and burdensome. Stakeholders trust in business diminishes.&nbsp; The trust which underpins market economies becomes eroded. I think the latter is a lot of the reason why corporate governance is becoming more important to consumers, investors and the society at large. Increasingly, consumers prefer to buy products and services from, employees prefer to work at, and investors prefer to invest in companies who are well-governed and who exhibit good corporate governance.</span><span lang="EN-GB"> <br />
	</span></span></span></span></p>
<p>
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">The Enron collapse is an example of misleading financial reporting. How crucial is quality financial reporting for the corporate governance system to function effectively? </span></span></strong></span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.1pt;">It's absolutely crucial. Because if you cannot trust the numbers, there is no way you can make an economic or financial assessment. I think the financial crisis did not come as a surprise for many because irregular accounting practices existed in the system. Markets function on information and to a certain extent, on trust. If the information cannot be trusted, they don't have market values.</span><span lang="EN-GB"> <br />
	</span></span></span></span></p>
<p>
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">What are the barriers to good corporate governance and their corrective measures? </span></span></strong></span></span></p>
<p class="ANSWER">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.1pt;">Let me focus on what helps make good corporate governance. First, there must be a clear separation of governance and management responsibilities. Second, the directors should be willing to dedicate time and effort to be effective board members. Third, the independent directors must protect minority shareholders rights.&nbsp; Fourth, a strong audit committee has to be supported by a reputable and capable external auditor and an independent and strong internal audit function. Fifth, there must be clear, accurate and timely management and financial information.&nbsp; Finally, a board effectiveness review process has to be in place to measure individual contributions and the collective effectiveness of the board. This must be supported by effective company law and regulations which clearly define the corporate governance framework in an unambiguous manner. The form <i>per se</i> is less important than the substance, since there are different models of how to structure governance in a company, for example, Anglo-American models Vs continental European models.</span></span></span></span></p>
<p>
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">Can you attribute Standard Chartered Bank's stupendous success to effective functioning of corporate governance?</span></span></strong></span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.05pt;">Yes, we view corporate governance quite importantly. I am in charge of corporate governance for all of Asia. And we have a counterpart for the remainder of the bank in Africa, the Middle East and the western countries. We pride ourselves on following best practices not only with the UK board but also our subsidiary boards. Nepal is a good example because we are not just a subsidiary here. We are a listed company and we pride ourselves not only on the financial results we have. We do believe that the governance of the entity here is part of the reason why we are so successful. Again, it allows us to identify issues early on, with a good board and a good governance process in place. It makes you see the risks down the road and helps you position for them. One of the things that might be of interest to your readers is that we actually changed our process and set up two new sub-committees on our board in London. The first one is called brand and values which focuses on the soft side of the company. We think that it's absolutely important to have values in a new organisation. The next is that we have split risk and audit. The audit committee focuses more on audit results and is backward looking while the risk committee is forward looking and focuses on new things on the horizon.&nbsp;</span><span lang="EN-GB"> <br />
	</span></span></span></span></p>
<p class="questionsforinterview">
	 </p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">Nepal's banking sector is talking mergers of late. What is Standard Chartered's take on this? </span></span></strong></span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.05pt;">In general, we prefer to grow organically and not through acquisitions because it's easier and more within our control. The degree of certainty about outcome is higher. I have worked on a number of acquisitions for the bank in Indonesia, Korea and Taiwan. Acquisitions are hard. A lot of management consultants will tell you that most acquisitions fail. And it's not normally due to financial reasons. They fail because of the difficulties and efforts required to integrate two separate entities. A lot of it surrounds not necessarily the business side but the soft side the people, values etc. In effect, you are taking another institution and marrying it to your institution. The cultures, values and perspectives aren't similar. It's very challenging and runs the risk of a strife in the management in the long term. I will give you a good example. As you know, we bought Grindlays Bank some years ago. The Grindlays deal worked very well for us and it has always been one of our best acquisitions. Not only because it has provided us a wonderful footprint in South Asia but also because the culture of the two merging banks in question, was very similar. Grindlays was a bank with strong local roots and a global perspective. Some of the other acquisitions we have done recently were that of very local banks. We had to adapt the way we worked, to fit in with the Korean and Taiwanese context, for example. It can definitely work like most other things in life it's a trade off. On Nepal specifically, we do think that there is a need for some consolidation. You have too many banks given the size of the financial sector here.&nbsp; </span><span lang="EN-GB"><br />
	</span></span></span></span></p>
<p>
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">Does the Standard Chartered Bank have any specific plan in mind? Have you set your sights on any particular brand that you want to acquire?</span></span></strong></span></span></p>
<p class="MsoNormal">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.1pt;">We will look at opportunities that come our way but our bias will always be towards organic growth. We are quite happy with organic growth and will not pursue acquisition as such. Even if there was anything on the cards, our corporate governance practice does not allow me to disclose any specific information. Nepal is a market that's of interest to us. We will look at the market growth and keep different options in mind. But the organic option will always be our preferred option.&nbsp; </span></span><br />
	</span></span></p>
<p>
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
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			'title' => 'Interview January 2013',
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			'content' => '<p>
	<strong><span style="font-size:16px;">‘The young generation &nbsp;is coming forward &nbsp;seeking opportunities in business’</span></strong></p>
<p>
	<img align="right" alt="" height="360" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/hari_bhakta_sharma.jpg" style="margin:0 0 0 10px;" width="210" /></p>
<address style="text-align: right;">
	<strong>Hari Bhakta Sharma</strong></address>
<address style="text-align: right;">
	<strong>Board Member</strong></address>
<address style="text-align: right;">
	<strong>Confederation of Nepalese Industries (CNI)</strong></address>
<p style="text-align: justify;">
	 </p>
<p style="text-align: justify;">
	Hari Bhakta Sharma is an executive board member of the Confederation of Nepalese Industries (CNI), a ‘think tank’ of Nepal’s industrial sector. He is also the executive director of Deurali-Janta Pharmaceuticals Private Limited (DJPL), a leading pharmaceutical company that has been an inspiration to Nepal’s manufacturing sector. In an interview with New Business Age, Sharma emphasizes on the brighter sides of the Nepali economy, the economic environment in the country and the need for developing the private sector, among other issues.&nbsp;</p>
<p>
	<strong>Excerpts:&nbsp;</strong></p>
<p style="text-align: justify;">
	<strong>How do you view the current economic situation of Nepal? Where is it heading?</strong></p>
<p style="text-align: justify;">
	There are two different ways to evaluate our economy. One is the evaluation of our overall economic growth. Nepal has achieved &nbsp;a growth rate of 3-5 per cent despite the ongoing political confusion. The Nepali economy is primarily driven by remittance. The disposable income of individual households increased with the increasing flow of remittance over the past 5-7 years. Remittance has raised the purchasing power of Nepalis and their consumption rate. The manufacturing sector, on the other hand, is becoming weaker every year and it is important how the increased consumption demand in Nepal is being fulfilled. The manufacturing sector’s contribution to the GDP has decreased gradually over the past decade. In 2012, for example, the manufacturing sector’s contribution to the GDP was around six per cent, a sharp decline from around 14 per cent a decade back.</p>
<p style="text-align: justify;">
	The consumption demand in Nepal is being met through imports. We import goods worth billions of rupees every year. The dependence on imports has impacted our manufacturing sector causing a decline in the production trend. And now we don’t find our stand in the international trade and do not know where we can compete and what the core advantages we have.Soaring imports have raised the government’s revenue. &nbsp;That’s why the government’s policies are facilitating import. &nbsp;If we do not redress these policies immediately, the power shortage, and other problems including the labour problem and political instability will take a heavy toll on the manufacturing sector, further deteriorating the employment situation in the country.&nbsp;</p>
<p style="text-align: justify;">
	Power shortage has become a chronic problem. Around 11-12 hours of power-cut everyday has made the production cost high. Second, there is a vacuum at the policy level. Although it is said that we are going to adopt a federal structure of governance, it is not yet clear to many what a federal system is and how many federal states will be there. Due to these reasons, there has been no significant investment during the past eight years. So, there has been no expansion of industrial investment in Nepal. Lastly, there is no clear economic policy. There is no common ground regarding the future economy of Nepal.&nbsp;</p>
<p style="text-align: justify;">
	<strong>How serious are the labour problems for manufacturing sector?&nbsp;</strong></p>
<p style="text-align: justify;">
	Labour problems are manageable; the industries can tackle these problems. But there is seemingly no solution to the power problem and the political instability. Due to the lack of clarity on the federal system to be adopted, investors are apprehensive about future tax system. For example, they don’t know how the products produced in Biratnagar and sold in Chitwan will be taxed. When these things become clear, investors will come to Nepal.&nbsp;</p>
<p style="text-align: justify;">
	<strong>We often talk about a private sector-led economy. But it is said that the private sector in Nepal lacks the vision of a broad-based economic growth and sustainable development. What are your views?</strong></p>
<p style="text-align: justify;">
	Since Nepal’s overall capacity to create enterprise is in the initial stage, it would not be fair to expect a high performance from the Nepali private sector. The private sector in Nepal is also a part of the Nepali society; it is as good or bad as the society is. Work culture and government policies directly affect enterprise.</p>
<p style="text-align: justify;">
	&nbsp;If we compare our development with that of China, India, Pakistan or south East Asian countries like Malaysia, Indonesia or Thailand, we find that we have poor governance in both private and government sectors. Also, our innovative capacity is poorer than theirs. The Nepali private sector is learning to be globally competitive. It is also learning to manage enterprises and managing companies properly.&nbsp;</p>
<p style="text-align: justify;">
	<strong>There are many organizations like FNCCI, CNI and other NGOs and INGOs working for the private sector. How do you assess their roles and activities?&nbsp;</strong></p>
<p style="text-align: justify;">
	If we talk about CNI, the purpose of establishing this organization was to make a positive impact on the climate of investment in Nepal and help make policy changes to transform Nepal into an investment friendly country. We create awareness about the industrial environment in Nepal and develop linkages among entrepreneurs. &nbsp;We are here to help create the right business environment, conduct dialogue at the policy level and help &nbsp;formulate policies that would attract investment to the country. When CNI was established, the country’s situation was volatile, politically unstable and unpredictable. This could be why the initiatives and efforts made by CNI were not pursued by the implementing agencies of the government.&nbsp;</p>
<p style="text-align: justify;">
	<img align="right" alt="" height="344" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/hari_bhakta_sharma(1).jpg" style="margin:0 0px 0 15px;" width="362" /></p>
<p>
	<strong><span style="font-size:16px;"><br />
	</span></strong></p>
<p>
	<strong><span style="font-size:16px;">"The Nepali private sector is learning to be globally competitive. It is also learning to manage enterprises and managing companies properly."</span></strong></p>
<p style="text-align: justify;">
	<strong><span style="font-size:16px;"><br />
	</span></strong></p>
<p style="text-align: justify;">
	<strong>Could you please elaborate a bit on the initiatives made by CNI for the development of Nepal’s industry sector?&nbsp;</strong></p>
<p style="text-align: justify;">
	We basically focused on three fundamental issues. First, we prepared documents on the country’s Industrial Policy after a lot of homework. We then submitted these documents to the Ministry of Industry. We wanted a number of changes in the policy. &nbsp;Second, we have been saying that the Nepali Enterprise Act needs a lot of improvement as the law formulated in 2049 BS has become obsolete. This issue needs to be addressed urgently.</p>
<p style="text-align: justify;">
	The previous industrial policy had incorporated &nbsp;many of our suggestions. However, the suggestions were not implemented because the Act was &nbsp;not amended. At the policy level, we have been trying to make the politicians aware about investment and the development of enterprises. We have been trying to create an investment-enabling environment. We have been trying to find ways to &nbsp;increase &nbsp;the income of Nepalis. We have been organizing economic summits. &nbsp;&nbsp;</p>
<p style="text-align: justify;">
	<strong>It is said that CNI was established because of the over politicization of the private sector. What do you say?</strong></p>
<p style="text-align: justify;">
	CNI was established because there was a need for an organization which could support the formulation of pro-private sector policies, help create an investment-friendly environment, and assure the investors about the long-term benefits of investing in Nepal. Such an institution was lacking in the country which led to the birth of CNI. Ever since its establishment, CNI has tried to do its bit for the industry sector as well as the entire economy. CNI has already passed through the test phase. If you compare the achievements we have made over the past one decade with that of any other similar organization, then you will know how hard we have been trying to improve things. Since we focus on the manufacturing sector, we raise issues and problems faced by this sector.&nbsp;</p>
<p style="text-align: justify;">
	<strong>It is said that the main reason behind the lack of &nbsp;re-investment in Nepal’s manufacturing sector is its inability to compete with China and India. For this reason, many believe &nbsp;that manufacturing does not have prospects in Nepal and are therefore importing instead. What do you have to say?&nbsp;</strong></p>
<p style="text-align: justify;">
	I do not agree with this. Deurali Janata Pharmaceuticals &nbsp;(DJPL) is one example that &nbsp;will prove this hypothesis wrong. Though the state provides five per cent discount on the import of medicines, DJPL has been able to produce quality medicines at competitive prices. The company has grown over the years. There are many areas in manufacturing where we can be competitive. All we need to do is identify and develop products with &nbsp;comparative advantage.&nbsp;</p>
<p style="text-align: justify;">
	<strong>So, what are the areas were you see comparative advantage?&nbsp;</strong></p>
<p style="text-align: justify;">
	Now is the time to go for hi-tech products. We should be able to identify the industries which can develop technologies and can also be competitive, for example bio-pharmaceuticals, IT sector and the health sector. Hydropower and tourism are two other sectors with lots of prospects; they are growing. If we improve the quality of service in tourism, we can get more benefits even from the current number of tourist arrivals. We are indeed sandwiched between India and China, but we have a great bio-diversity which makes us a country with high potentials in high-value crops. Likewise, there is a great scope for innovation and investment in the agriculture sector. We need to develop agricultural lands as enterprises but we have been developing them as properties. Agriculture is the base of a number of manufacturing industries.&nbsp;</p>
<p style="text-align: justify;">
	<strong>The government has listed the three sectors you mentioned above as the priority sectors. Still, we are unable to exploit them. Why?&nbsp;</strong></p>
<p style="text-align: justify;">
	The political instability in the country has kept the investors at bay. It seems the investors are in the wait and watch mood now. They are waiting for our discourse on federalism, future economic policy etc to take a concrete shape. Politicians should understand that their speeches alone won’t bring investment to Nepal. It’s a country’s political and business environment and the right rules regulations and policies that draw investment. We lack all these things. How will investors come to Nepal?&nbsp;</p>
<p style="text-align: justify;">
	<strong>What are the fundamental reforms needed to develop these sectors?&nbsp;</strong></p>
<p style="text-align: justify;">
	A common understanding among the politicians on the country’s economic agenda is a must. Parties in the government as well as in the opposition should understand that there should be a clear economic agenda which clearly depicts the dos and don’ts. No significant investment will come to Nepal unless the politicians have a common economic agenda prepared without any prejudice against anyone. We also need to depoliticize the economic issues so that industry, trade, and employment generation could grow smoothly. We have to keep in mind that we need domestic as well as foreign investors.&nbsp;</p>
<p style="text-align: justify;">
	<strong>That means there is no hope for growth in investment?</strong></p>
<p style="text-align: justify;">
	If there were no hopes, we won’t be in this business anymore. What I want to say is we lost a very good time. After the popular uprising of April 2006, &nbsp;the international community has had positive expectations from Nepal; we have many helping hands around. &nbsp;But we have so far failed to understand this and cash in on the opportunity. We couldn’t learn to depoliticize economy and development.&nbsp;</p>
<p style="text-align: justify;">
	Moreover, the politicians &nbsp;haven’t learnt from the mistakes they made in the past. They have spent 15 long years repeating the same mistakes. But still we hope that the time is not as bad as some people assume today.&nbsp;</p>
<p style="text-align: justify;">
	<strong>But other countries which have gone through conflicts, for example Sri- Lanka, have made progress. Why couldn’t Nepal?&nbsp;</strong></p>
<p style="text-align: justify;">
	I want to say that the generation I belong to is worried about the young blood. This young generation which could create enterprise is fleeing the country; here, I am not talking about those who go abroad for employment. This has made a very serious impact on our economy. This is why our GDP hasn’t grown in a massive way. However, we should appreciate that we have a positive growth both in the GDP and state revenue. The number of people wishing to invest in Nepal is also growing slowly. &nbsp;</p>
<p style="text-align: justify;">
	Other countries which have progressed despite undergoing a conflict in recent times attached high priority to their economies even during the time of conflict, not to mention after the conflict. Conflict-hit countries like Sri-Lanka and Bangladesh were able to maintain their growths as they had attached high priority to their economies. The Bangladeshi Cabinet has five ministers from the private sector. Those people who did not contest the parliamentary elections but were considered to be the best managers are appointed as ministers there. But in Nepal everybody seems to be thinking that only politicians can become ministers.&nbsp;</p>
<p style="text-align: justify;">
	In Sri- Lanka, you find an amazing system of governance. Every Sri Lankan ministry has at least one advisor from the private sector; they had two advisors during the conflict period. The government in Nepal only seeks loyalty from the businessmen. The knowledge of the entrepreneurs, their professional abilities and skills are not given due respect. They are judged based on their political inclinations or affiliations. This is why the inputs from professionals and technical experts of the private sector have not reached the higher level.&nbsp;</p>
<p style="text-align: justify;">
	<strong>Nepal has scored 50.2 on the economic freedom index 2012, becoming the 147th most-free economy in the world. How do you view this development in relation to the industrial environment in the country?</strong></p>
<p style="text-align: justify;">
	Regarding this issue, we have been focusing on a few things. One, we have been demanding that the Industrial Enterprises Act be amended according to the present needs. &nbsp;Two, &nbsp;the indicators of cost of doing business - for example corruption which is becoming socially acceptable - should be controlled. Three, as I mentioned already, the prime reason of the low ranking of our country on the economic freedom index is due to the unclear policies &nbsp;and the political instability. Things will improve once there is political stability.&nbsp;</p>
<p style="text-align: justify;">
	<strong>How do you find the current business environment in Nepal in comparison with the time you joined in?</strong></p>
<p style="text-align: justify;">
	I came into business some 22 years ago. There are some sectors which have made progress over this period, for example, the pharmaceutical sector and the banking and finance sector. Today a good project in Nepal stands a better chance of getting financed because of the development in the banking sector. Another good development is the young generation grown up over the past 20 years is coming forward seeking opportunities in businesses. These young people want to create enterprise on their own and are ready to take risks.&nbsp;</p>
<p style="text-align: justify;">
	There is some negativity, too. The level of corruption has risen. There are people who enjoy in others’ income rather than earning by themselves. The politicians have over-politicized almost every sector including the industrial sector. The result is less productivity in terms of individual capacity and high indulgence of the entrepreneurs in politics. In every sector, a person who is politically motivated and affiliated is selected regardless of their capability.</p>
<p style="text-align: justify;">
	<strong>Why are the pharmaceutical companies not seen aggressive in efforts to export their products?</strong></p>
<p style="text-align: justify;">
	Registration of pharmaceutical products internationally is a very difficult process. For pharmaceutical products, like medicines, companies need to scientifically prove their products, assure the consumers that the products are safe, GMP certified and so on. Another reason that makes us apprehensive to accept orders is the fear of not being able to deliver the products on time. Because of problems like power shortage and unpredictable labour problems and strikes, we always question ourselves whether we would be able to deliver the orders on time.&nbsp;</p>
<p style="text-align: justify;">
	We have just around 20 years of history in the development of pharmaceutical products. Based on my experience, I can say that there is a long way to go for Nepal’s pharmaceutical industry. It’s a highly regulated business. Unlike &nbsp;India, Brazil, the US and many other countries, Nepal is not considered &nbsp;as a country which can produce high-value medicinal products. India took 40 years to enter the export market while China took 35. We are just into 20 or 22 years of entering the pharmaceutical business. We hope to enter the export market faster than that. &nbsp;</p>
<p style="text-align: justify;">
	<strong>Why is the problem of substandard drugs in Nepal unresolved?&nbsp;</strong></p>
<p style="text-align: justify;">
	The private sector alone cannot resolve this problem. We can just facilitate the government in this process. &nbsp;We have been organizing awareness programmes against substandard drugs. The government has the authority and the mechanism to control substandard medicines. The medicines that are available at the pharmacies need be monitored and controlled by the government. We are ready to help the government in this matter.&nbsp;</p>
<p style="text-align: justify;">
	<strong>How is DJPL presenting itself in the global market? What are your upcoming plans?&nbsp;</strong></p>
<p style="text-align: justify;">
	Our primary objective during these 20 years was to learn, make our technologies world class, and establish our business globally. Now that our foundation is ready, our next step is to help reduce the import of medicines, at least those medicines which Nepal can manufacture itself. There are many products which Nepal needs to produce itself. But since we have been importing them from other countries for ages, we have not really thought along these lines. Now is the time &nbsp;to think about substituting &nbsp;the import by producing quality products. The most important thing we want to do now is promote healthier living. We want to produce health products other than medicines – health supplements. &nbsp;Taking medications after falling sick is normal. However, there are products for a healthier life, products that help prevent sickness. We &nbsp;too can produce such products. &nbsp;&nbsp;</p>
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<p class="Pa18">
	<span style="font-size:12px;"><strong><strong><span style="font-size:12px;"><span class="A17"><img alt="intrview december 2012" border="1" height="351" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/kenchini.jpg" vspace="10" width="203" /><br />
	<br />
	Nepal Country Director </span></span></strong></strong></span></p>
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	<span style="font-size:12px;"><span class="A56">Kenichi Yokoyama </span></span></p>
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	<strong><span style="font-size:12px;"><span class="A17"><span style="line-height: 115%; font-family: &quot;Calibri&quot;,&quot;sans-serif&quot;;">Asian Development Bank<br />
	<br />
	<br />
	</span></span></span></strong></p>
<p>
	 </p>
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	<span style="font-size:12px;"><strong><span class="A63"><br />
	‘We have been actively involved <span style="line-height: 115%; font-family: &quot;Calibri&quot;,&quot;sans-serif&quot;;">in the energy sector’</span></span><span style="font-size:12px;"><span class="A63"><span style="line-height: 115%; font-family: &quot;Calibri&quot;,&quot;sans-serif&quot;;"> <br />
	</span></span></span></strong></span></p>
<p>
	<span style="font-size:12px;"><span class="A17"><span style="line-height: 115%; font-family: &quot;Calibri&quot;,&quot;sans-serif&quot;;">&nbsp;</span></span></span><span style="font-size:12px;"> </span></p>
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	<span style="font-size:12px;"><span class="A64"><span style="line-height: 115%; font-family: &quot;Calibri&quot;,&quot;sans-serif&quot;;">Kenichi Yokoyama is Nepal Country Director for the Asian Development Bank (ADB), a Manila-based multilateral development finance institution dedicated to alleviating poverty in Asia and the Pacific. Yokoyama was serving as the principal water resources specialist at ADB´s South Asia department before he assumed current responsibilities on March 26, 2012. In an interview with New Business Age, Yokoyama sheds light on the ADB-funded projects in the water, energy, agriculture and other sectors in Nepal. Excerpts: </span></span></span></p>
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	<span style="font-size:12px;"><span class="A64"><span style="line-height: 115%; font-family: &quot;Calibri&quot;,&quot;sans-serif&quot;;">&nbsp;</span></span></span></p>
<p class="Default" style="margin-top:5.0pt;text-align:justify;line-height:10.05pt">
	<strong><span style="font-size:12px;"><span style="color: windowtext;">Melamchi, the ADB-financed water supply project, is in a new controversy now after the Chinese contractor left the work. How will the project move ahead now? </span></span></strong><br />
	<span style="font-size:12px;"><span style="color: windowtext;">&nbsp;</span></span></p>
<p>
	<span style="font-size:12px;">ADB is committed to supporting the construction of the Melamchi tunnel work, the water treatment plant and the distribution system. With a population of around three million, the Kathmandu Valley has been facing an acute water shortage. This is a huge developmental constraint. We have been facilitating the Nepal government in the completion of the tunnel and other works on time. </span><span style="font-size:12px;"> </span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span><span style="font-size:12px;">It is unfortunate that the Chinese contractor had to leave the project because of some issues related to work progress. Now, we are supporting the government to go for immediate rebidding. The government is looking for first class contractors. Such contractors from China, Korea, India, France and other European countries have shown interest in the project. We hope that the government will be able to hire a new contractor by March 2013 and complete the project by March 2016. </span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span style="font-size:12px;">But this has increased the cost of the project and delayed it further. Will the project complete within the new deadline?</span></strong></p>
<p class="Default">
	<span style="font-size:12px;">The topmost priority for the government is to identify a qualified contractor with high experience in similar tunnel works. Although there are concerns about the cost, we have to think about the seriousness of the water shortage problem in Kathmandu which calls for urgent attention. We have to ensure that the Melamchi project is completed on time.<br />
	</span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:12px;">Despite the many ups and downs seen over the almost past seven years, ADB remains associated with the project. The only reason for this association is that we feel that Melamchi is an important project. We have been holding regular discussions with the Ministry of Urban Development on the specific actions to be taken to take the project forward, including the swift selection of an internationally reputed, committed, dedicated and efficient contractor who can build a high quality infrastructure. Given the importance of the Melamchi project in addressing the water demand of the 2.6 million people living in the Kathmandu Valley, ADB remains fully committed to <span style="color: black;">providing the necessary support to the Government of Nepal to complete the project by early 2016 or earlier. </span></span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong></p>
<p class="Default">
	<strong><strong><span style="font-size:12px;">&nbsp;</span></strong></strong></p>
<p class="Default">
	<strong><span style="font-size:12px;"><span style="color: black;">ADB’s recent fund for water projects in Nepal is said to be aimed at improving irrigation and prevent water-induced disasters. How is it different from other water projects?<br />
	</span> <br />
	</span></strong></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">These projects aim to bring about higher rural livelihood. The government is seeking support for rapid agricultural transformation. In that context, we are supporting irrigation and water disaster mitigation risk management projects. We are building on the achievements made thus far. In irrigation, Nepal has comparative advantage in having irrigation systems managed by farmers. Building on this, ADB is supporting agriculture development for making it more profitable and commercial so that the farmers can increase their income.</span> <br />
	</span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:12px;"><span style="color: black;">Nowadays, effective water management is a critical challenge for many countries. Particularly in the dry season, many countries are facing a shortage of water supply. Nepal, too, needs an effective water management system. The country ought to fulfill additional industrial needs while protecting the conventional water users. An efficient and equitable distribution of irrigation water is also pretty much needed to increase the farmers’ income.</span></span></p>
<p class="Default">
	<strong><span style="font-size:12px;"><br />
	</span></strong></p>
<p class="Default">
	<strong><strong><span style="font-size:12px;">&nbsp;</span></strong></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span style="font-size:12px;"><span style="color: black;">Once again, ADB recently listed the West Seti Project among the newly proposed ones. How do you want to participate in this project?</span></span></strong></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span><span style="font-size:12px;"><span style="color: black;">It’s not the West Seti, but the Upper Seti project, located in Tanahun district, that ADB is supporting. Actually, we are submitting a proposal for this project to the ADB Board early next year. The name of the project is Tanahu Hydropower Project. It is a 140MW storage project. It could help address the power shortage of not only Kathmandu but the country as a whole.<br />
	<br />
	</span> <br />
	</span></p>
<p class="Default">
	<strong><span style="font-size:12px;"><span style="color: black;">ABD seems to have planned to involve itself quite heavily in the energy sector through new projects like Tanahu hydro and continue with other ongoing energy sector programs. What is the strategy?&nbsp;&nbsp; </span></span></strong><span style="font-size:12px;"><br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Our assistance strategy is to support the government to address the most critical development constraints including infrastructure, its management system, and delivery of effective public service to the needy people including the poorest. Addressing the critical infrastructure bottlenecks is of high priority. The country is facing acute power shortage. Electricity is available only six hours a day in the dry season. How can industries come to Nepal and operate in such a situation? ADB has been actively involved in the energy sector with previous assistance in Kali Gandaki A and Khimti Hydropower projects, which account for some 30 percent of the country’s generation capacity at the moment. The Tanahu project, which is a storage project, will add additional 140 MWand can provide a stable power supply during the dry season.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">We will support the efficient implementation of the Tanahu Hydro Project. There are two other ongoing projects in transmission and distribution, respectively. We are also supporting NEA in its institutional reforms which includes enhancing its financial position by increasing tariff, reducing distribution loss and providing electricity to private industries and local stakeholders more efficiently.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Default">
	<strong><span style="font-size:12px;"><span style="color: black;">Many ADB-supported projects – mainly those in the agriculture sector - are discontinued after the completion of the first phase. Why?&nbsp;&nbsp; </span></span></strong><br />
	<br />
	<span style="font-size:12px;"><span style="color: black;">Our programs are aimed at demonstrating how development can be pursued most effectively. For example, there was a community ground water project where a community ground water group was set up and provided with shallow tube-well systems. The beneficiaries can now do triple cropping with tube-well irrigation with proper maintenance of the tube-wells, which they are able to manage. Likewise, projects such as community irrigation and commercial agriculture are helping establish sustainable development systems. The government can replicate similar projects.<br />
	<br />
	</span> <br />
	</span></p>
<p class="Pa8" style="text-align:justify">
	<strong><span style="font-size:12px;"><span style="color: black;">It is said that $ 15.3 million that ADB had allocated for various projects such as commercial agriculture, community irrigation, skill development programs, etc, could not be used. What is the reality?&nbsp;&nbsp; </span></span></strong><br />
	<br />
	<span style="font-size:12px;"><span style="color: black;">The projects need to follow a specific timeline. There are also cases where the actual cost of implementation is lower than the initial projection. For example, in one of the strategic road projects, the bidding price was lower than the estimated price, thanks to the competition and devaluation of the Nepali Rupee, resulting in substantial savings. In the irrigation sector, too, the project cost is often lower than the estimated cost because of competitive bidding. There are some cases where the project implementing agency has limited absorptive capacity. Overall, we have identified $15 million savings this year, but we are also discussing with the government that these savings could be used for other projects in Nepal, such as additional financing requirement of the Melamchi project. </span></span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span style="font-size:12px;">&nbsp;</span><span style="font-size:12px;"><span style="color: black;">What would be your investment portfolio for the next couple of years for Nepal? Will it increase? </span></span></strong></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong><span style="font-size:12px;"><span style="color: black;">The allocation of the Asian Development Fund (ADF) is decided biannually, and the amount for the year 2013 -14 is to be finalized at the end of this year. At this moment, we expect it to be at least about $ 250 million per annum. </span></span></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span><br />
	<span style="font-size:12px;">&nbsp;</span></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span style="font-size:12px;"><span style="color: black;">Could you please highlight ADB’s present development assistance priorities for Nepal? </span></span></strong></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong><span style="font-size:12px;"><span style="color: black;">The thrust of ADB’s ongoing country partnership strategy for Nepal (2010-2013) is to help sustain the hard-won gains of the country’s peace process by promoting broad-based inclusive economic growth, inclusive social development, governance and capacity building, as well as climate change adaptation and environmental sustainability.&nbsp;&nbsp; </span><br />
	</span></p>
<p>
	<span style="font-size:12px;"><span style="color: black;">ADB’s assistance supports Nepal in different sectors such as agriculture and natural resources, education, water supply and other municipal infrastructures and services, transport, information and communication technology and finance and energy. We support these operations through the promotion of gender equality and social inclusion, regional cooperation and integration, public private partnerships, along with greater engagement of the civil society and NGOs. </span></span><span style="font-size:12px;"> </span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span><span style="font-size:12px;"><span style="color: black;">Our new country partnership strategy for Nepal is being formulated in consultation with the Nepal Government. ADB’s support will focus on addressing the country’s development constraints including energy, transport, urban and rural infrastructures and skill development. To support these priorities, ADB will also promote governance, private sector development, regional integration, gender and social inclusion and climate change adaption. </span></span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span style="font-size:12px;"><span style="color: black;">Could you please briefly describe ADB’s assistance in the agriculture sector? </span></span></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	 </p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span><span style="font-size:12px;"><span style="color: black;">ADB has been Nepal’s main development partner in agriculture. Agriculture remains the largest component of ADB’s assistance to Nepal. ADB has supported in increasing the production of crops and livestock, raising agricultural income and creating employment opportunities for rural people. ADB’s assistance to Nepal includes support for agricultural credit, small farmer development, livestock, irrigation, agricultural roads, forestry, and crop diversification. ADB is also supporting the government’s preparation for the Agriculture Development Strategy that will set out the long-term vision and strategy for the agriculture sector for the next 20 years, and priority programs for the next 10 years. </span></span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span style="font-size:12px;"><span style="color: black;">&nbsp;</span></span></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span style="font-size:12px;"><span style="color: black;">What is the recent development in ADB’s funding for the transport sector? </span></span></strong></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong><span style="font-size:12px;"><span style="color: black;">We have been supporting the construction of strategic roads network. Similarly, we are supporting the Sub-regional Transport Enhancement Project which was approved in 2010. All contracts have been signed for this project and the work progress is about 30 per cent. A new transport project of about $100 million is envisaged for 2013. We are also planning another project based on a new lending modality called the multi-tranche financing facility for 2014 for the transport sector. The idea is to provide a long-term financing framework of $200- 250 million, based on which individual sub- loans will be launched. </span></span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong></p>
<p class="Default">
	<strong><span style="font-size:12px;"><span style="color: black;">ADB is preparing to provide support for setting up a new CTEVT- like structure under the Ministry of Education. Would you please highlight the program?</span> <br />
	</span></strong></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">ADB is not providing assistance to a new CTEVT- like structure under the Ministry of Education. However, ADB will support the Government of Nepal, through the proposed Skills Development Project to develop a market responsive and social- and gender-responsive Technical Education and Vocational Training (TEVT) by assisting the implementation of policy, institutional and operational reforms, delivery of demand-oriented skills training, short-term market oriented skills training focusing on excluded groups, and effective project management and monitoring and evaluation.<br />
	<br />
	</span> <br />
	</span></p>
<p class="Default">
	<strong><span style="font-size:12px;"><span style="color: black;">For the last few years, ADB, DFID and WB had started to implement synchronized programs to avoid duplication. Why have you abandoned this practice now?&nbsp;&nbsp; </span></span></strong><br />
	<br />
	<span style="font-size:12px;"><span style="color: black;">We have been continuously working together with the World Bank, DFID and JICA, who are our co-members in the Nepal Portfolio Performance Review process. The government is taking the lead, and a meeting is held annually to discuss and resolve issues to enhance project implementation performance. Issues like public finance, management, procurement, human resource management and management of the development regions. These issues are critically influencing the implementation of the developmental projects. Implementation of the concept of e-bidding for infrastructure works is almost complete. This allows bidders to submit their bids through internet. This can substantially enhance the transparency and efficiency of the bidding process.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">For new development programs, a close coordination and collaboration among the development partners is maintained as an established practice in project preparation and appraisal, to avoid any duplication. Efforts are also being made to develop a common sector roadmap or result framework and define programs within the framework and pursuing the possibility of co-financing as much as possible.</span><br />
	<br />
	<br />
	</span></p>
<p>
	<strong><span style="font-size:12px;"><span style="color: black;">Despite great donor involvement in programs like the School Sector Reform, the achievement has been negligible, mainly converting government schools into community-run ones. What is the reason?&nbsp;&nbsp; </span></span></strong></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Default">
	<br />
	<span style="font-size:12px;"><span style="color: black;">In the school sector, we have to take into account that we have started from a very low base. Nepal has significant challenges such as difficult geography and remoteness in the mountain region. I don’t agree that the achievement has been negligible. If you look at the statistics, primary school enrollment was barely 60 percent in 1990; it is 95 percent now - a significant change brought about by education programs. However, it is also true that some significant challenges still remain, such as the quality of education and a high percentage of dropout. Prudent financial management of the education development fund, too, is an issue. Building on the progress made, I believe these constraints can also be addressed gradually. We have a donor co-ordination mechanism, which enables all the donors to work together to make the most efficient progress by avoiding duplication.</span></span></p>
<p class="Default">
	<strong><span style="font-size:12px;"><br />
	</span></strong></p>
<p class="Default">
	<strong><span style="font-size:12px;"><span style="color: black;">ADB has supported to modernize Nepal’s capital market. What are the latest developments in this regard?</span> </span></strong></p>
<p>
	<span style="font-size:12px;"><span style="color: black;">ADB is supporting Nepal’s efforts to develop the capital and bond markets to attract and promote private investment. For this, we have an ongoing Capital Markets and Infrastructure Capacity Support Project. Under the project, a team of consultants is being selected. There are two components of this project. The first is to support the capital market development, particularly the bond market. The second one aims to develop an enabling environment for public private partnership (PPP), identify investors, design and carry out feasibility studies. We hope to mobilize the consultants by early 2013. </span></span><span style="font-size:12px;"> </span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span><span style="font-size:12px;"><span style="color: black;">We are also discussing with the Government of Nepal the opportunity for ADB to issue local currency bonds that will help provide long-term financing for private infrastructure investment and also help develop the country’s bond market.&nbsp;&nbsp; </span></span></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span style="font-size:12px;"><span style="color: black;">How do you view the progress of ADB’s projects in Nepal? </span></span></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	 </p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">The country assistance program evaluation (CAPE) conducted by ADB’s Operations Evaluation Department a few years back found that overall, ADB’s lending program had a positive impact socially, environmentally and economically. These projects have helped reduce not only poverty but also gender disparity and social exclusion by benefiting the poor.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Some of ADB’s programs are directly targeted at the poor and some are indirectly targeted, but the ultimate objective is poverty reduction. Results can be seen from the assistance that ADB has been providing over the years. For instance, the transport system in the country has greatly improved — the main strategic road network as well as the rural roads connecting the remote parts of the country. This has helped improve public service delivery and livelihoods in these areas. ADB’s assistance has also contributed in improving the living standards of the rural communities through the provision of improved water supply and sanitation facilities. However, we recognize that the assistance we provide needs to be more effective in terms of reaching the poor and vulnerable and sustaining these development benefits.</span><br />
	</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span style="font-size:12px;"><span style="color: black;">How have you viewed Nepal’s inability to bring about a full-fledged budget at the beginning of the fiscal year? How has it affected your support? </span></span></strong></p>
<p>
	<span style="font-size:12px;"><span style="color: black;">Although the government could not bring a full budget, a one-third interim budget was provided. We are working with the government so that the developmental activities are least affected in the given context. As far as the ongoing projects supported by ADB and other donors are concerned, the ordinance (budget) has a special provision to allow the government to provide enough funds through budgetary reallocation. Nevertheless, we remain concerned how the necessary funds would be allocated in a smooth and timely manner for efficient project implementation under the present circumstance. </span></span><span style="font-size:12px;"> </span></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp; <br />
	</span></strong></p>
<p class="Default">
	<strong><span style="font-size:12px;"><span style="color: black;">What are the challenges facing the development projects in Nepal?&nbsp;&nbsp; </span></span></strong><span style="font-size:12px;"><br />
	</span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:12px;"><span style="color: black;">In general, projects in Nepal face the challenge of timely implementation due to the country’s difficult topography and remoteness of many districts. Poor infrastructures and limited human resource capacities are the other challenges. In some cases, implementation of the projects has been affected by local strikes as well. </span></span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">The political transition process has been slow and is still fraught with risks and challenges for development activities. In particular, the absence of elected local bodies since July 2002 has been a major impediment to governance, service delivery, and development works at the local level.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">In addition, labour unrest in the fragile political environment, coupled with acute power shortage, has constrained the revival of key sectors of the economy and private investments. Thus, improving basic infrastructure and strengthening governance and public and market institutions is very crucial for Nepal.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Despite these challenges, the performance of ADB’s project portfolio has improved. This also demonstrates the hard efforts by the government agencies that implement the ADB-financed projects. While the overall performance still remains below ADB’s wide average, I am hopeful that this progressive improvement will continue under the strong partnership with ADB.</span></span></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:12px;"><span style="color: black;">How do you view the current economic situation of Nepal?</span></span></p>
<p class="MsoNormal">
	<span style="font-size:12px;"><span style="line-height: 115%; color: black;">Despite the difficult political environment and the global economic slowdown, Nepal has been able to preserve a reasonable macroeconomic stability with a moderate and steady economic growth. We are pleased to note that the government’s and Nepal Rastra Bank’s proactive policy measures on the vulnerability of the banking sector and rising inflation have eased the problems in recent months, although the risks remain. The external position, too, has remained stable with the widening trade deficit being offset by sustained increase in remittance inflows and tourism receipts. However, exports continue to be sluggish due to the long-term structural weaknesses in the economy. Although agricultural growth could slow down in FY 2013 because of the late monsoon and shortage of chemical fertilizers, we believe that Nepal will be able to maintain a moderate growth supported by the service sector.</span></span></p>
<p class="MsoNormal">
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			'description' => 'Kenichi Yokoyama is Nepal Country Director for the Asian Development Bank (ADB), a Manila-based multilateral development finance institution dedicated to alleviating poverty in Asia and the Pacific. Yokoyama was serving as the principal water resources specialist at ADB´s South Asia department before he assumed current responsibilities on March 26, 2012. In an interview with New Business Age, Yokoyama sheds light on the ADB-funded projects in the water, energy, agriculture and other sectors in Nepal. Excerpts:',
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<p class="MsoNormal">
	<span class="A3"><span style="font-size:16.0pt"><img alt="phil" border="1" height="301" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/phil11.jpg" vspace="10" width="382" /><br />
	Phil Humphreys </span></span><span class="A25"><br />
	<span style="font-size:14.0pt">Chief Operating Officer </span></span><span class="A25"><br />
	<span myriad="" style="font-size:14.0pt;line-height:
115%;font-family:">Coca-Cola Sabco</span></span></p>
<p class="MsoNormal">
	<span class="A25"><span myriad="" style="font-size:14.0pt;line-height:
115%;font-family:">&nbsp;</span></span></p>
<p class="Default" style="mso-line-height-alt:10.05pt">
	<span class="A65"><span mso-bidi-theme-font:="" new="" style="font-size:13.0pt;mso-bidi-font-family:" times="">Phil Humphreys is the Chief Operating Officer of the Northern Division of Coca-Cola Sabco based in Dubai. He joined Coca-Cola Sabco in September 2010. He has a strong background in international FMCG sales and marketing. He has also worked with leading international brands such as Johnnie Walker, Smirnoff, Guinness, and an array of other leading brands within the Diageo and Nestle portfolios. He completed the PED/MBA equivalent programme at IMD, Lausanne, Switzerland as well as various other International Management and Executive Development Programmes. </span></span></p>
<p class="Default" style="mso-line-height-alt:10.05pt">
	<span class="A65"><span mso-bidi-theme-font:="" new="" style="font-size:13.0pt;mso-bidi-font-family:" times="">&nbsp;</span></span></p>
<p class="Default" style="mso-line-height-alt:10.05pt">
	<span class="A65"><span mso-bidi-theme-font:="" new="" style="font-size:13.0pt;mso-bidi-font-family:" times="">&nbsp;</span></span></p>
<p class="Default" style="mso-line-height-alt:10.05pt">
	<span class="A65"><span mso-bidi-theme-font:="" new="" style="font-size:13.0pt;mso-bidi-font-family:" times="">Humphrey’s leadership quality and keen business senses has helped him achieve significant positions in leading global companies. As the Chief Operating Officer at Coca-Cola Sabco (Northern Division), he is currently leading developing markets in the form of the franchises of Vietnam, Cambodia, Nepal, Sri Lanka and Ethiopia. He is also a member of the Coca-Cola Sabco Group Executive Committee. In an interview with New Business Age, Humphrey shared his plans for Coca-Cola Company in Nepal and market strategies among numerous other issues. Excerpts: </span></span></p>
<p class="Default" style="mso-line-height-alt:10.05pt">
	<span class="A65"><span mso-bidi-theme-font:="" new="" style="font-size:13.0pt;mso-bidi-font-family:" times="">&nbsp;</span></span></p>
<p class="Default" style="mso-line-height-alt:10.05pt">
	<span new="" style="font-size:
13.0pt;mso-bidi-font-family:" times="">&nbsp;<img alt="phil" border="1" height="300" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/phil22.jpg" vspace="10" width="393" /></span></p>
<p class="Default">
	<strong><span style="font-size:10.0pt;color:#211D1E">You joined Coca-Cola Sabco in September 2010. How have you made a difference in this period?</span></strong></p>
<p>
	<span style="font-size:10.0pt;color:#211D1E">Nepal is one of the five countries that I am looking after. In Nepal, I inherited an already good business. We took up the business in 2004 and we have had the business as franchise for eight years now. Every year from 2007 onward, we have delivered double digit growth both on the top and bottom lines. One of the things that we talk a lot about Nepal strategy is amazing relationships with people as one of the strengths. We spend a lot of time engaging with Nepali people both at the plant and in the field. We also spend a lot of energy in engaging with our stakeholders and believe in power of relationships. That is one of the things that have really happened in the last two years since I joined the company. As far as engagements go, every year we </span><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">measure how engaged our people are. Last year it was incredible 96 per cent, which is the highest in the whole company. Out of 11 countries, there is no other country in Sabco with higher engagement than that. </span></p>
<p class="Default">
	<strong>&nbsp;</strong></p>
<p class="Default">
	<strong>&nbsp;</strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">You have an extensive experience in the FMCG field and possess in-depth knowledge of global brand development. How do you view your current experience at Coke?</span></strong></p>
<p>
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">The key thing about the system at Coca – Cola is to work in partnership and collaboration. For example, you can do everything in Nepal from marketing and selling to distribution while Coca-Cola Company owns the brand and does all the corporate marketing. So, one of the things about the system is to collaborate really well and maintain tension in the conversation. You have got to challenge and be there with each other. I had not experienced this kind of a system before and never experienced working for a private company before. Therefore, these are new experiences for me. In Nepal, we have set up two publicly listed companies and majority of shareholding is our own while we do have a number of knowledgeable people as minority shareholders. We are heavily backed by a private company who can make decisions easily. We are part of a public company here and need to make agreement through our annual general meetings. For example, we are building a new plant in Bharatpur which is a US$ 25 million investment. That is about four times the average injection capital that we would put into the country. It is going to be fantastic and I am really excited because it not only creates a lot of new job opportunities but it is also going to give us PET plastic bottles.</span></p>
<p class="Pa10" style="text-align:justify;text-indent:14.0pt">
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">&nbsp;<br />
	<br />
	<img alt="phil" border="1" height="306" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/phil45.jpg" vspace="10" width="432" /><br />
	</span></p>
<p>
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">How far have you reached in your expansion plan for Coca-Cola in Nepal?</span></strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:"><br />
	<br />
	We are going through our plans right now and always look at three year plans. We want to be a non alcoholic energy drinks company by 2013. We want retailers, customers and consumers to able to come to us and get anything they want from our portfolio. They can get sparkling drinks right now but they can’t get juice, water and energy drinks. That is going to be part of our expansion in the coming years as we are definitely interested in these areas. We are in discussion with our partner about the possibility at the moment and also looking after the water facility in one of our existing plants. I am expecting to play a much broader role in this non alcoholic drink segment in a year’s time. We have a lot of opportunities as this country is very much an emerging market. </span></p>
<p class="Default">
	<strong>&nbsp;</strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Where will you reach in the next two years after the expansion and all these investments?</span><br />
	</strong></p>
<p>
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">We try to think a little further than just one, two or three years. In a country like this, you cannot just look forward to 2013 only. I think that the non alcoholic drinks market in this country is basically worth 25 million cases right now. It would probably grow to become a 200 million case business by 2020. This is a brilliant place to be in for doing business from a consumer perspective even though it is not the easiest place to do business from regulations perspective. But what matters at the end of the day is that Nepali consumers are demanding more from a company like ours. </span></p>
<p class="Default">
	 </p>
<p>
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Is there a chance that you will start bottling canned beverages here in Nepal?</span></strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:"><br />
	<br />
	Probably not at the moment because we have various other options that we can look at. The market for canned beverages is still very small. For the next few years, the glass bottle is going to be continuously very important part of the battle between Coke and Pepsi. We are going to make sure that it is affordable and everybody has access to Coca-Cola. Our mantra for the year is ‘within arm’s reach’. Now my dream is to have our quality products in different packaging formats which people can rely on and get those products literally within arm’s reach. That is a big responsibility and most important thing is to do it in a sustainable way. </span></p>
<p class="Default">
	 </p>
<p>
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">The overall transaction of your competitor comes more from food business than the sale of cola drinks. Have you ever thought to focus on the food business as well?</span></strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:"><br />
	<br />
	We will not be getting into the food business. Anything is possible in terms of partnerships as such but whether Bottlers Nepal Pvt Ltd will ever buy a food company is something I can’t predict about right now. Taking up secondary distribution is possibly an option but it’s definitely not a priority right now. We want to sell Coca-Cola, Sprite, Fanta and Kinley and want to and open as many new outlets as possible to give people an opportunity to retail our products. Food business is not the direction for Coca-Cola Company, it is soft drinks only.</span><br />
	&nbsp; <br />
	<br />
	<img alt="phil" border="1" height="306" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/phil45(1).jpg" vspace="10" width="432" /><br />
	 </p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Is there any negative impact for cola industry in Nepal like in India because of the propaganda against cola from certain quarters? </span></strong></p>
<p>
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Not at the moment though of course we do need to be careful. There has been some negative publicity against soft drinks but I think there is a great opportunity for us in this industry to come together as non alcoholic beverages industry and actually do some better work right now. I think we always need to be very careful about NGOs’ and public perception of soft drinks but I personally have massive confidence in our products. It is time for educating consumers that Coca-Cola is about health and wellness. The average consumption of Coca-Cola here is nine bottles per capita for an entire year so there is a lot of room. We have a lot to do about giving back to this country - getting involved in education, sustainability and renewable energy. These are the three areas we are going to significantly focus on. I think we will be doing well if we show the government and our consumers that we are a locally responsible business. </span></p>
<p class="Default">
	 </p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">You have changed the focus of your advertising campaigns from electronic and print media to hoarding boards. What is the targeted outcome that you are looking at? </span></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	 </p>
<p>
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">I am a marketer by background so I love all those stuffs. The time was right for us to do something different few months ago and we started printing Kathmandu around February this year. Everywhere you went, you saw boards with Rs 20 for 350 ml bottle of Coke. Personally, I think it is the right way to go right now for Nepal. I call it visibility but it needs to be the part of the whole 360 degree integrated campaign. You can’t just have it on TV or a single media. I would like people to see our brand wherever they go and not just when they go home and switch on their television sets. You will continue to see a lot of them in the future as well. </span></p>
<p class="Default">
	 </p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">What are the new CSR activities that Bottlers Nepal is coming out with? </span></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	 </p>
<p>
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:"><br />
	We are going to focus particularly on water usage because our water usage ratio is pretty low. The Coca-Cola Company is very happy with us and the team here has done a great job so we will continue to focus on it. That means we are going to give more water back to the ground than we basically take out. So, a good example of this is rainwater harvesting projects that we are doing at number of places in association with the NGOs. We have also organised environment cleaning campaigns. Another thing that we will be doing but have not really started yet is to facilitate solar energy run coolers. </span></p>
<p class="Default">
	 </p>
<p>
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">What are the new changes that you are making in different fields of Bottlers Nepal’s operations?</span></strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:"><br />
	<br />
	The big thing is adding a new facility that we have not done for years. We are also going to expand the portfolio of non alcoholic drinks. We will also be putting a lot more people into frontline sales to execute our operations more efficiently. </span></p>
<p class="Default">
	 </p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Coke conducted a study recently on shoppers’ loyalty and retail dynamics. What were the findings about the behaviour of Nepali consumers? </span></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	 </p>
<p>
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">We understood a little more about how shoppers shop than we already knew. One of the things we learned a lot about was that Coke clearly stands out when you put Coca-Cola, Sprite or Fanta, particularly Coca-Cola, next to another product which is associated with an occasion. Another aspect about Nepali consumers was that they like simplicity, they don’t like complications. That was a great message, as many times, big company like us tend to over engineer the world. The fact that simplicity of packaging and product never ever changes the taste of the product, was a great finding for us. </span></p>
<p class="Default">
	 </p>
<p>
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">How is Coke changing its business strategy in Nepal in regard to these findings? What is the targeted increase in your market share? </span> </strong></p>
<p class="MsoNormal">
	<strong>&nbsp;</strong> <span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">I think consumer and meal occasions are changing. My demand is that every eating and drinking outlet I go to should have a poster with Momo or another Nepali dish plus Coke and their combined price. That is really the big change that is currently being done. People always drink Coca-Cola at a little grocery out there but now there is going to be a big shift in the mindset of the consumers. As for market share increase, the general rule for us is we are very happy if we can get one per cent market share rise per year.</span></p>
<p class="MsoNormal">
	<span style="font-size:10.0pt;line-height:115%;color:#211D1E">&nbsp;</span></p>
<p class="MsoNormal">
	 </p>',
			'published' => true,
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			'description' => 'Phil Humphreys is the Chief Operating Officer of the Northern Division of Coca-Cola Sabco based in Dubai. He joined Coca-Cola Sabco in September 2010. He has a strong background in international FMCG sales and marketing. He has also worked with leading international brands such as Johnnie Walker, Smirnoff, Guinness, and an array of other leading brands within the Diageo and Nestle portfolios. He completed the PED/MBA equivalent programme at IMD, Lausanne, Switzerland as well as various other International Management and Executive Development Programmes.',
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	(int) 3 => array(
		'Article' => array(
			'id' => '721',
			'article_category_id' => '46',
			'title' => 'Justin Sargent',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p class="MsoNormal">
	<span style="font-size:20px;"><strong><span class="A31"><span style="line-height: 115%;">‘Social Research has a Huge Scope in this Part of the World’</span></span></strong></span></p>
<p class="MsoNormal">
	<span style="font-size:20px;"><br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A31"><span style="line-height: 115%; font-family: "><span style="font-size:20px;"><strong>&nbsp;</strong></span><img alt="Justin Sargent " border="1" height="403" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/interview_11.jpg" vspace="10" width="277" /><br />
	</span></span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Justin Sargent </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span class="A16">Managing Director-India </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A16"><span style="line-height: 115%; font-family: ">Nielsen</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A16"><span style="line-height: 115%; font-family: ">&nbsp;</span></span></span></p>
<p class="Pa24" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span class="A58">Justin Sargent is the Managing Director for Nielsen India's Consumer Business. He is leading Nielsen's consumer businesses (Retail Measurement Services, Consumer Research, BASES, Advance Analytical Consulting) including Client Leadership, Client Service and Product Leadership initiatives. He graduated from Warwick University, England with a BSc in Mathematics, Operational Research, Statistics and Economics. Langer has held a number of senior positions at Nielsen across the globe, including the position of RMS Executive Director - Australia, and most recently Managing Director - UK &amp; Ireland. </span></span></p>
<p class="Pa24" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span class="A58">&nbsp;</span></span></p>
<p class="Pa24" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span class="A58">He is currently based in Mumbai, India and focuses on the strategy of listening to the consumers to get more consumers' insight. The Nielsen Company is a global information and media company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence, mobile measurement, trade shows and business publications. It is planning to continue growing its business by applying its strategies of driving more consumers' insights and generating a more complete understanding of consumers. In an interview with New Business Age, Langer talked about importance of Nielsen numbers and major plans for its Nepal operations among a host of other issues. Excerpts:<br style="mso-special-character:line-break" />
	<br />
	<br />
	<img alt="Justin Sargent " border="1" height="419" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/interview_12.jpg" vspace="10" width="287" /><br style="mso-special-character:line-break" />
	</span></span></p>
<p class="Pa24" style="margin-top:5.0pt">
	<span style="font-size:14px;"><strong><span class="A58"><br />
	</span><span style="color: rgb(34, 30, 31);">Please give us an overview of Nielsen’s business in this region that includes Nepal and India. <br style="mso-special-character:line-break" />
	<br style="mso-special-character:line-break" />
	</span></strong></span></p>
<p class="Default">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The Nielsen’s South Asia operation covers countries like India, Bangladesh, Sri Lanka and Nepal. It’s quite a sizeable region for Nielsen in this developing part of the world. Like multinationals, we view countries like India, Nepal and other parts of South Asia as areas of priority where our clients are investing to find out their consumers’ size. Nielsen has been in India since 1960s and in Nepal since early 1990s. We are increasingly focusing on these two countries as our clients are seeking growth here.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Nielsen in Nepal has a full range of services. It is mainly known for measurement services. Most of our clients are particularly from the fast moving consumer goods (FMCG) sector and hence they demand to understand how they are performing, in comparison to their competitors. We also do a lot of work with NGOs and help them understand factors that can help them promote and influence the country’s growth. We work for AED, PSI and some other USAID-funded projects in Nepal in addition to a host of multinational companies like Coca- Cola, Colgate-Palmolive and Procter &amp; Gamble to name a few.&nbsp; </span><br />
	</span></p>
<p class="Default">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">A huge part of our business is dedicated to these two services. Our business is growing well in Nepal and the clients seem increasingly interested in this market. It seems to be the right time for us to consider how to elevate to the next level and how to potentially bring in further expansion. Maybe, we could bring some new analogical products that have worked well elsewhere, in other developing markets.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Social research has a huge scope in this part of the world. In India, we also work in sectors including government organizations and the NGOs, for example, UNICEF. We also work with projects on big, important sectors like health and education. FMCG is an area that Nielsen tends to put in a lot of time and energy into. Nielsen is a global company so we are constantly looking for the climax in different countries, and Nepal is now in its climax. It has many centers of attraction and the GDP growth of the country is four per cent which is still pretty attractive compared to a lot of western economies.</span><br />
	</span></p>
<p class="Pa8">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">We developed the social research practice that works right across South Asia. We have experts that tend to work across the different countries. For example, we utilize the microfinance expertise from Bangladesh in other countries. We have a team on the ground here in Nepal that lives by the company’s principles. However, we are bringing in more expertise to the Nepali marketplace to see what we can do in the social research sphere as a whole. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;<img alt="Justin Sargent " border="1" height="491" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/interviw_13.jpg" vspace="10" width="306" /></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Default">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal"><span style="color: rgb(34, 30, 31);">Could you please provide us some insight on the topline retail and consumer trends from the perspective of the Indian market?</span></b> <br />
	</span></p>
<p class="Pa8" style="text-indent:14.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">India has a huge population and big traditional trade. We have seen a lot of growth in that country, especially in the rural areas. Though modern trade is still small – only six per cent – compared to traditional trade, we have started observing changes in trends. It’s growing fast and more consumers are looking for convenience and choice. We have started to notice a lot of trading for more branded products. We notice a lot of use of technology including social media and smart phones. Consumers have grown a lot savvier and their expectations are increasing. This might be helpful in changing people’s perspectives, packaging perspectives and value perspectives. One thing which is very consistent in India is the value. We do service right around the world and India always comes top in terms of value consciousness. A lot of consumers increasingly shop around for promotion to make sure they can remain value conscious and still satisfy their increasing aspirations. <br style="mso-special-character:line-break" />
	</span></span></p>
<p class="Default">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Our clients’ business and even the Nielsen’s business both saw this high trend basically three to four years ago. GDP growth is a little lower this year, which is forecasted now at six percent. However, global manufactures and local Indian multinational companies alike, are pretty positive about the future.</span><br />
	<br />
	</span></p>
<p class="Default">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal"><span style="color: rgb(34, 30, 31);">Yours is a privately held company active in approximately 100 countries, with its headquarters in New York, USA. How big an advantage is this when you deal with global clients?</span></b> <br />
	</span></p>
<p class="Pa8" style="text-indent:14.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">When a global client is working with us, they may know Nielsen already. We assure the country manager of a global client locally that we will share our best practices with them and suggest that the service is worth exploiting. Our local teams are mostly in the field, visiting local clients to relate to them and understand their perspectives. Nielsen’s methodologies are globally consistent; however, we do tend to tailor them in order to meet specific needs of the marketplace. For example, when we spoke to our clients in Nepal, they expressed that they wanted us to represent certain regions and towns in more detail than we might have for others. We don’t have this service in other countries but developed it to match their demand of covering some of the towns in greater detail. We believe that the best global practice methodologies should be open for local customization. </span></span></p>
<p class="Pa8">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Listening to a client’s need is a critical process and an important element of our strategy because clients know best where they are going and with what strategy. They can naturally express their needs. Therefore, listening is a critical part of our job while delighting clients is our aspiration. However, different clients have different needs so we need to balance between occasions and between realities. We have to bring the realities from a commercial firm with the right product to the market. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Default">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal">&nbsp;</b></span></p>
<p class="Default">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal"><span style="color: rgb(34, 30, 31);">How do you explain the importance of Nielsen numbers?</span> <br />
	</b></span></p>
<p class="Pa8">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Nielsen numbers tell our clients what their market share is, how fast the market is growing, and where they are in the competition. We are proud of being an independent company. We focus on using the Nielsen’s number to guide the expertise’s planning. We invest a lot of time in quality management, ensuring that we have got the right field management practices and the right amulets to interpret those numbers because we know how much our clients rely on the Nielsen’s number. Before I joined Nielsen, I used to work at Procter &amp; Gamble as a category marketing analyst many years ago in the UK. Every week a Nielsen’s number used to come around and that is when I first realized how much weight these numbers carry. </span></span></p>
<p class="Pa24" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The way in which people used the number were for making investment decisions, judging their performances in the market or looking after factors like distribution, product prices and level of competition. We tend to advise companies a lot in terms of what the distribution strategies should be and the likely pricing strategy they should adopt. Nielsen’s number is the bed rock for a lot of the decisions being made in the marketplace. </span></span></p>
<p class="Pa24" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="Default">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal"><span style="color: rgb(34, 30, 31);">What are the major plans for Nielsen Nepal?</span></b> <br />
	</span></p>
<p class="Pa8" style="text-indent:14.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The main purpose of my visit to Nepal is spending time with the management team and deciding on the next steps to be taken for the development of business in this country. Nepali clients’ expectations are increasing, so we are looking into the areas where potential improvements can be made. One area that we are considering is whether or not to expand coverage of measurement products into rural areas. We have not decided whether it is the right measure to take. We are also looking at a particular social research base to elaborate more expertise and bring in some more technical capabilities into Nepal in order to improve the level of understanding. We are also looking forward to introduce other services that we also have in other countries, for example, analytics. This could be an advantage for Nepal because they know how to go to the next level, to expand the distribution and to improve their competitive businesses. We have a number of analytics with capabilities in consideration. We are looking forward to listening to our clients’ view point. We would certainly like to build more presence in Nepal because our clients are demanding it. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;<img alt="Justin Sargent " border="1" height="430" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/intreview_2012.jpg" vspace="10" width="231" /></span></p>
<p class="Default">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal"><span style="color: rgb(34, 30, 31);">You joined Nielsen way back in 1993 and have held senior positions across the globe since. How do you assess this association over the period of almost two decades now?</span></b> <br />
	</span></p>
<p class="Default">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">From a personal perspective, Nielsen has provided me with lots of opportunities. When I joined Nielsen, I didn’t think that I would still be here 20 years later. Fortunately for me, I was given increasingly challenging assignments throughout which has allowed me to travel across different continents like Europe, Australia and Asia. Currently, I am working in India. Working in different countries engaging with different people, thinking about and understanding the clients’ needs and facing business challenges, has been very stimulating indeed. Nielsen has come across a lot of transformation in 20 years’ time including its ownership.</span> <br />
	</span></p>
<p class="Pa8" style="text-indent:14.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Nielsen focuses on shifting developments and as I mentioned before, moving people around is a big part of our strategy. Moving people to the developing market is good for learning about what works for a developing market. We can then reverse, innovate and take the best of practices to the developing market. But it also means you can look elsewhere, may be in the US or Europe, that could be a relevant market like India or Nepal. Nielsen’s strategies on talent developments and moving people around the world are incredibly one of the great things that it wants to share with other companies. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Default">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal"><span style="color: rgb(34, 30, 31);">Could you please elaborate on why is transferring talents so important?</span></b> <br />
	</span></p>
<p class="Default">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The general principal of moving people around is either for different jobs within a country or across different countries. It provides people with different experiences, perspectives and learning opportunities that eventually lead to career building. It is equally important from a company’s perspective as transferring people is also about transferring ideas, embracing innovations and sharing the best skills within and beyond boundaries. A big part of Nielsen’s strategy is to be a company exporting talent around the globe. We are fortunately one of the beneficiaries of that as we get to carry out a number of different assignments in different countries.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Default">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal"><span style="color: rgb(34, 30, 31);">Could you highlight the integral components of a transparent communications culture?</span></b> <br />
	</span></p>
<p class="Pa8">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">This is something that I have always strongly believed in. You have to be very candid, honest and open to both your peers and clients. When you communicate very frankly, you recognize people better. It is a fundamental philosophy of mine to lead a very honest communication because it is the only way to build trust and loyalty in general. It’s about celebrating and recognizing people. The transparent communication culture is not limited among the colleagues, rather it also extends to our clients by being very open with them. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Default">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal"><span style="color: rgb(34, 30, 31);">What are your recommendations to organizations for building a ‘client first’ mindset?</span></b> <br />
	</span></p>
<p class="Default">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">‘Client First’ mindset is all about thoughtfulness. Instead of offering Nielsen’s products immediately, I first inquire about what my clients need and how we can satisfy them better. Once you build a ‘client first’ mindset it will eventually benefit your business strategies because then you are developing your products and services according to the clients’ needs. It improves your client’s service because your clients can relate to and make use of them. Besides, at the end of the day, it ensures that our services are up to the mark. ’Client First’ mindset is something that I have passionately believed in during my entire career. Even if we talk beyond Nielsen, the same philosophy rules the most successful companies. From a marketing stand point, it is necessary to listen to the customers. Since there are new technologies emerging, we should utilize them to listen to the customers’ voice. For example, the social network and blogs could be powerful tools. Even the CEOs of many companies have started going out on the streets to understand customers’ needs.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">Things are rapidly changing in countries like India and Nepal. If you are constantly in touch with people, you could know more about them particularly the way in which people adopt technology. You have to constantly engage with customers to understand what is important for your brand and how could you keep it desirable for them. Understanding technology and customers to flourish your brand is something that can certainly be achieved by building a ‘client first’ mindset.<br />
	<br style="mso-special-character:line-break" />
	<br style="mso-special-character:line-break" />
	</span></span></p>',
			'published' => true,
			'created' => '2012-10-30',
			'modified' => '2012-12-06',
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			'description' => 'Justin Sargent is the Managing Director for Nielsen India's Consumer Business. He is leading Nielsen's consumer businesses (Retail Measurement Services, Consumer Research, BASES, Advance Analytical Consulting) including Client Leadership, Client Service and Product Leadership initiatives. He graduated from Warwick University, England with a BSc in Mathematics, Operational Research, Statistics and Economics. Langer has held a number of senior positions at Nielsen across the globe, including the position of RMS Executive Director - Australia, and most recently Managing Director - UK & Ireland.',
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	<span style="font-size:24px;"><span class="A66"><span myriad="" style="line-height: 115%;">‘Tunnel Project Is A Litmus Test For The Private Sector’<br />
	<br />
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	<span class="A66"><span myriad="" style="font-size:43.5pt;line-height:
115%;font-family:">&nbsp;<img alt="kushkmarjoshi" border="1" height="251" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/interview(8).jpg" vspace="10" width="303" /></span></span></p>
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	<span mso-bidi-font-family:="" myriad="" style="font-size:14.0pt;mso-bidi-font-size:11.0pt;
line-height:115%;font-family:">Kush Kumar Joshi <br />
	Chairman <br />
	Nepal Purbadhar Bikash Company Ltd</span></p>
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	<span mso-bidi-font-family:="" myriad="" style="font-size:14.0pt;mso-bidi-font-size:11.0pt;
line-height:115%;font-family:">&nbsp;</span></p>
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	<span class="A67"><span style="font-size:13.0pt">Kush Kumar Joshi is the Chairman of Nepal Purbadhar Bikash Company Limited (NPBCL) that is to develop the Kathmandu-Kulekhani- Hetauda Tunnel (KKHT) Highway that would substantially reduce the Kathmandu-Hetauda driving distance. <br />
	<br />
	NPBCL will be constructing the 50-kilometre long four-lane highway that will have approximately two 5.5 kilometre long tunnels for oncoming and going traffic between Kathmandu and Hetauda. The company will construct and operate the tunnel road in public-private-people partnership (4P) modality under the Private Financing in Build and Operation of Infrastructure 2006 act. A leading industrialist of Nepal, Joshi is also the Immediate Past President of Federation of Nepalese Chambers of Commerce and Industry (FNCCI), and the Chairman of Liberty Energy, Himalayan Bamboo Pvt Ltd and Managing Director of Nepal Ekarat Engineering Co Pvt Ltd. <br />
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	<span class="A67"><span myriad="" style="font-size:13.0pt;line-height:
115%;font-family:">In an interview with Gaurav Aryal of New Business Age, Joshi talked about the tunnel project as well as the country</span></span><span class="A67"><span style="font-size:13.0pt;line-height:115%;font-family:">’</span></span><span class="A67"><span mso-bidi-font-family:="" myriad="" style="font-size:13.0pt;line-height:115%;font-family:">s overall investment environment. Excerpts:</span></span></p>
<p class="Pa10" style="text-indent:14.0pt">
	<span class="A67"><span myriad="" style="font-size:13.0pt;line-height:
115%;font-family:">&nbsp;</span></span><strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:"><br />
	<img alt="kush kumar joshi" border="1" height="251" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/interview_333.jpg" vspace="10" width="250" /><br />
	<br />
	For the first time in Nepal, the private sector is developing a major road project. As the leader of this project, how do you plan to execute it? <br />
	<br style="mso-special-character:line-break" />
	</span></strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">It is indeed the first time the government has entrusted a private company with such a big responsibility. It is an honour to share the weight of the government in enriching the lives of Nepali people. The concept of making shortest road from Hetauda to Kathmandu was conceptualised more than 50 years ago. Everyone knows this will be the shortest distance to link these two cities but due to socio-political reasons, the mechanism to construct the road was not finalised earlier. This time around, a new approach of 4P model - public, private and people participation - is taken to revive this initiative. People’s participation in a massive scale is the main strength of this approach. The local people presently have to take a longer route to travel to Kathmandu despite a possible shorter alternative there. This project would be a matter of dignity for every Nepali when it will be completed solely with Nepali resources, technology and management. That is a motivating factor for all of us. <br />
	<br />
	<br style="mso-special-character:line-break" />
	</span><strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">What is the progress towards the financial closure of the project? <br />
	<br />
	</span></strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">The government has granted us this project for 30 years as per the People, Private and Public Partnership (4P) Modality under Private Financing in Build and Operation of Infrastructures 2006 act. The cost of the project is estimated around US$ 350 million and that money is going to be raised from amongst ourselves. Once we complete the feasibility study by November 2012, we will have the concession agreement with the government on technical and financial issues as well as the toll fee. <br />
	<br />
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	</span><strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">You have set a timeline of three-and-a-half-years for the completion of the project. As many projects are failing to meet their deadlines, what is the basis of your optimism to meet your deadline? <br />
	</span></strong><br />
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">The main possible hurdles in a project are fund collection, local disturbances and not getting a license. In our case, the government has already granted a license to us not only for DPR but also for execution of the project. The main strengths of this initiative are the local people. The local landowners are ready to contribute to this project by providing their land after a proper valuation. We are not buying the land; instead the value of the land will be treated as their equity investment in the project. Thus the main likely cause of local disturbance is not there. <br style="mso-special-character:line-break" />
	</span></p>
<p class="Pa10" style="text-indent:14.0pt">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">The other main issue is fund collection. So far, we have received a warm response to our initiative and people are more than willing to invest in such a project that not only has high rate of return but also contributes in developing the infrastructure of the country. This will be the first time Nepali people will be involved in such kind of project. Our people have always been depending on financial support from donor countries, banks or the government. But, this project will make massive mobilisation of people – business community, local people, NRN community and the Nepali workers abroad - for generating funds. Another key component is the Nepali construction companies who will not only be the contractors but also major investors in this mega project. There is plenty of liquidity in the capital and money market but there are not enough good projects for investment. So, this good project will have no problem of funds. And we are hopeful to complete the project within the set deadline. <br style="mso-special-character:line-break" />
	<br style="mso-special-character:line-break" />
	</span></p>
<p class="Pa10" style="text-indent:14.0pt">
	<strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">Disputes on land acquisition and paying compensation have proven major issues while developing such projects. What is the basis for your optimism that your arrangement will work this time? <br style="mso-special-character:line-break" />
	</span></strong><br />
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">The modality we have come up with for this project is very unique. As I said earlier, we are not trying to buy land – it is more or less like a barter system and a participatory approach. Before deciding the alignment and making the survey, we had a lot of interactions with the locals and received a commitment from them regarding the project. The most important aspect is that they positively want to see this road built. The local community is ready to invest 75 per cent of the actual valuation of their land to the project and hold 25 per cent with themselves. This is a great step towards making a change. The locals have not just said that they want the road built but they have actually played a significant role in making this initiative a success. And if an existing house is needed to demolish for the road, we are committed to build another house for the owner. This, I think, is beauty or the strength of this entire project.</span><strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:"><br />
	<br />
	<br />
	<img alt="kush kumar" border="1" height="264" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/inteview_11.jpg" vspace="10" width="317" /><br />
	<br />
	<br />
	The KKHT highway is considered a project of national pride and a model to invite foreign investment in infrastructure development. How will this project be able to live up to this expectation? <br />
	<br style="mso-special-character:line-break" />
	</span></strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">We have huge potentials in infrastructure. One can see the level of service we are providing to the people in energy, road, drinking water, medical facilities, the basic needs for the people where we need investment whether from domestic or the international investors. The deficit in infrastructure is such huge, domestic investment is simply not enough. But we need to build up the confidence level of investors by providing a guarantee through the policy, political commitment and, most importantly, from the domestic investment. If our project will thrive, it would be a benchmark for other investors to emulate. A successful project such as this will have foreign investors to get interested to work on other projects. This should be a milestone for all Nepalis. I hope that this will surely lure foreign investors to collaborate with local investors and develop the infrastructures in the country. <br />
	<br />
	<br style="mso-special-character:line-break" />
	</span><strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">You have said that the project will return the investment to its investors in six to eight years from the date of operation. Wouldn’t this proposition make the highway a costly road to travel for the general public? <br />
	<br style="mso-special-character:line-break" />
	</span></strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">It is going to be a win-win situation for passengers as well as vehicle owners as they will be saving both fuel and time. If a truck or a passenger bus is today making a single round trip a day between Hetauda and Kathmandu, the completion of this road will enable them to make several round trips a day. Instead of four hours, the distance from Kathmandu to Hetauda will be covered in 45 minutes once this road comes into operation. Quite naturally, the frequency of travel will be more and transport entrepreneurs can earn more money besides, of course, saving on fuel. The toll fee will be very low and I am sure the users of this road will find it economical and not just save time but also money. <br />
	<br />
	<br style="mso-special-character:line-break" />
	</span><strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">Do you think that investing in infrastructure will give enough yield to the private sector? What will be the model of investment in your company’s future projects? <br />
	<br style="mso-special-character:line-break" />
	</span></strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">First of all, the license granted to us is a historical one. We always talk about the government not giving priority to the private sector and not giving investment opportunity or packages for infrastructure development. This is the first time the government has given a priority project to the private sector. Now, it is our turn to prove that we can do it. If we can do it ourselves, the trust on the private sector will be heightened. This is a litmus test for the private sector to prove that we can do it. For future projects, we may use foreign investment as well as equity based or debt and equity based modality. We will be trying to bring in equity participation for future projects as much as possible. Once this project is completed, NPBCL will become the largest company in Nepal valued at US$ 315 million. A sustainable mechanism and a proven track record will then be part of the company’s resume. We will be hoping for huge projects coming our way and perhaps we could look at large scale storage hydropower projects too. This is going to be the biggest company in Nepal enjoying massive public participation. The ownership will be divided among many people and benefits shared by all. <br />
	<br style="mso-special-character:line-break" />
	<strong><br style="mso-special-character:line-break" />
	</strong></span></p>
<p class="Pa10">
	<strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">What are the other similar projects in the pipeline for NPBCL? <br />
	<br style="mso-special-character:line-break" />
	</span></strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">The other similar projects coming up include road extension plans from Hetauda to Narayanghat and Hetauda to Birgunj but that will be taken only after the current project completes a whole lap. The traffic from Kathmandu to Eastern and Western Nepal is huge. This project is now envisaged for westbound traffic and people from Far West will travel via this road. Once the proposed new road from Hetauda to Narayanghat is opened, the drive from Narayanghat to Kathmandu will take only one-and-a-half hours. All the traffic coming to Kathmandu via Mugling will be diverted to the newly built road.<br style="mso-special-character:line-break" />
	<strong><br style="mso-special-character:line-break" />
	</strong></span></p>
<p class="Default" style="margin-top:5.0pt;line-height:10.05pt">
	<strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">This project is to utilise Nepali resources only for its development. Is there a possibility of similar big projects with Nepali investment only?</span></strong><span mso-bidi-theme-font:="" new="" style="font-size:10.0pt;mso-bidi-font-family:" times=""> <br />
	</span></p>
<p class="Default" style="margin-top:5.0pt;line-height:10.05pt">
	<span mso-bidi-theme-font:="" new="" style="font-size:10.0pt;mso-bidi-font-family:" times="">Many other people are trying to emulate this particular project. For example, the NRN Association has a 100 million dollar fund and they are trying to develop 100 MW hydropower project on their own. Some other companies too are trying to build hydropower projects with Nepali investment only. There are two important bases for the development of a country, one is roads and the other is electricity. Therefore, our next project will focus on energy because there is a lack of storage-based project in hydropower currently. After the success of this project, we will work towards mega storage projects. <br />
	<br />
	<br />
	<img alt="kush kumar joshi" border="1" height="387" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/kushkumar.jpg" vspace="10" width="208" /><br />
	<br />
	</span></p>
<p class="Default" style="margin-top:5.0pt;line-height:10.05pt">
	<strong><span mso-bidi-theme-font:="" new="" style="font-size:10.0pt;mso-bidi-font-family:" times="">What is your opinion on allowing investment abroad from Nepal? </span></strong></p>
<p class="Default" style="margin-top:5.0pt;line-height:10.05pt">
	 </p>
<p class="Default">
	<strong><span mso-bidi-theme-font:="" new="" style="font-size:10.0pt;mso-bidi-font-family:" times="">&nbsp;</span></strong><span style="font-size:10.0pt;
color:#211D1E">We are observing Nepal Investment Year and trying to invite foreign investment to Nepal. Given this situation, what kind of message will the Nepali and foreign investors get if Nepali investment in other countries is made an option indeed? Having said so, even if we have an opportunity to invest in foreign countries, it must come with certain conditions. The criterion should be – one must be an expert in one’s own field, have good brand recognition at home and willing to expand. Expansion requires investment and in such case, one needs to have a chance to expand and to promote the products and technology in some other country. Ultimately, the benefit should come to one’s own country.</span></p>
<p class="Default">
	<span style="font-size:10.0pt;
color:#211D1E">For example, an airline must have its branch in other countries for marketing and promotions. In such a case, one has to invest in foreign countries. Similarly, if you have a good and well-known brand in Nepal and want to export but the cost of competition in other countries may make it not feasible to produce in Nepal and export. Then you should be allowed to produce your own brand in other countries. This will be similar to what multinational companies do. If you have your own brand image for product that is made in Nepal, it will benefit if you establish your factory abroad and promote your own product. But let’s focus on investing within Nepal first.</span></p>
<p class="Default">
	 </p>
<p class="Pa23" style="margin-top:5.0pt">
	<strong><span style="font-size:10.0pt;
color:#211D1E">How do you judge the efficiency of the current FNCCI leadership? </span></strong></p>
<p class="Pa23" style="margin-top:5.0pt">
	 </p>
<p class="Pa10" style="text-indent:14.0pt">
	&nbsp;<span style="font-size:10.0pt;
color:#211D1E">There are a lot of issues, which have scope to be tackled more efficiently by the FNCCI. It looks like they are focusing on the investment year but they must handle local issues first. Given the situation where the fate of the government hangs in the balance one needs to know how the policies are being driven and focus on pressing to bring the full annual budget of the government at the earliest. Similarly, the policies meant to attract foreign investment for the Nepal Investment Year must be established. Priorities on issues like areas of investment and backing up the investment are more important than to celebrate the investment year itself. The investment board has the law and bylaws to backup the investment package and the same will be applied for other investments also. There are a lot of things that FNCCI can do as an apex body of the business community. </span></p>
<p class="Default">
	 </p>
<p class="Pa23" style="margin-top:5.0pt">
	<strong><span style="font-size:10.0pt;
color:#211D1E">Are business prospects for Nepal improving? What are the bottlenecks?<br />
	</span></strong></p>
<p class="Default">
	<span style="font-size:10.0pt;color:#211D1E">Everybody knows about the prospects Nepal has. We talk about tourism, hydropower, infrastructure and others but the business community has to push the government to create a proper environment and identify the priority projects for investment. The ongoing political turmoil is not giving a good sign to the investors to come to Nepal and invest.</span></p>
<p class="Pa10">
	<span style="font-size:10.0pt;color:#211D1E">There are three issues – energy crisis, labour issues and unstable government policies. Energy is the prerequisite because without energy, nobody will come to invest here. Labour issues have also discouraged investors. These two things must be prioritised and cleared by the government and the investment board to encourage investment. We also need to have consistent policies. Changes in policies every time there is change in the government will not attract any investments in Nepal. We have been asking the government and the political parties to come up with a common minimum economic agenda. Establishing a common minimum economic agenda will give a positive signal to the investors. </span></p>
<p class="Default">
	 </p>
<p class="Pa23" style="margin-top:5.0pt">
	<strong><span style="font-size:10.0pt;
color:#211D1E">You have been demanding reforms in the public procurement system. Would you please explain it? </span></strong></p>
<p class="Pa23" style="margin-top:5.0pt">
	 </p>
<p class="Default">
	&nbsp;<span style="font-size:10.0pt;color:#211D1E">The government has to prioritise domestic product. Any company’s first area of business is the local market. Once they have a good position in the local market, they can improve their quality, productivity and be assured about their growth. Having delivered their basic service, they can then think about exporting.</span></p>
<p class="MsoNormal">
	<span style="font-size:10.0pt;line-height:115%;color:#211D1E">The government has to provide a level playing field for the domestic producers by buying their products, but at the same time it should be monitoring the price and quality as well. At this point of time the government has not been able to accomplish these objectives. The government always seeks cheap foreign products and does not care for the quality. Our argument is, local products do not need incentives instead they need to be promoted so that they can be competitive, qualitative and eventually become export oriented. The government has to give confidence to investors by prioritising the purchase of local products. That is why we are saying that the procurement act has to be revised by making it mandatory to buy local products.<br />
	<br />
	<br />
	<br />
	</span></p>',
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			'created' => '2012-10-11',
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			'keywords' => '',
			'description' => 'Kush Kumar Joshi is the Chairman of Nepal Purbadhar Bikash Company Limited (NPBCL) that is to develop the Kathmandu-Kulekhani- Hetauda Tunnel (KKHT) Highway that would substantially reduce the Kathmandu-Hetauda driving distance.',
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		'Article' => array(
			'id' => '676',
			'article_category_id' => '46',
			'title' => 'Chandra Prasad Dhakal',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<span style="font-size: 14px;"><strong><br />
	</strong></span></p>
<p>
	<span style="font-size:14px;"><strong>The Three-way Merger Has Consolidated The Global IME Bank’</strong></span></p>
<p>
	<span style="font-size:14px;"><strong><br />
	<br />
	</strong></span></p>
<p>
	<strong><img alt="interview" border="1" height="371" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/interview(7).jpg" vspace="5" width="300" /><br />
	<br />
	Chandra Prasad Dhakal <br />
	Chairman <br />
	Global IME Bank <br />
	</strong><br />
	<br />
	Chandra Prasad Dhakal is the Chairman of Global IME Bank. He is also the President of International Money Express (IME). Born in a middle class family of Baglung district of Nepal, he has by now established himself as a leading entrepreneur of the country in a relatively short span of time. Dhakal is a member of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Executive Committee and the Co-ordinator at Investment Development Forum of FNCCI. He is also a member of the Nepal Investment Board constituted by the Government, besides being an honorary consul for Indonesia. He is currently looking forward to explore business expansion in association with Nepali as well as foreign companies. In an interview with New Business Age, Dhakal talked about recent three-way merger among Global Bank, IME Finance and Lord Buddha Finance creating the Global IME Bank and prescribed measures of bringing remittances through formal banking channels, among a host of other issues. Excerpts: <br />
	<br />
	<strong><br />
	While mergers in Nepali BFIs are usually between two companies, yours is a three-way merger. How did that become possible? <br />
	</strong><br />
	First, we were convinced with the fact that a merger between banks and financial institutions (BFIs) can certainly add value into the eventual entity as we have seen from the latest merger trend. A merger between two companies is normal but for the first time in the history of Nepali BFIs, Global Bank signed a merger agreement with two other financial institutions. At the beginning of the process, we had Global Bank and IME Financial Institution had signed a memorandum of understanding and later, the promoters of Lord Buddha Financial Institution submitted their merger proposal in a meeting with the Global Bank management. Thus, the successful completion of the process of all three companies led to the formation of Global IME Bank. The amalgamation of the three companies has made Global IME Bank stronger in terms of the capital assets, networking, product diversity and quality of customer services. As the promoters of all three institutions are from different sectors, it has created a synergy for us to explore new business sectors with possible expansion plans. The Global IME Group is strongly committed to provide its banking and other financial services to areas that are thus far deprived of formal financial services. <br />
	<br />
	<br />
	<strong>Where would the Global IME Bank like to focus after becoming such a stronger new entity after the merger? <br />
	</strong><br />
	The Global Bank already had a strong presence in the industry and that has been further fortified in terms of networking following the merger. Now Global IME Bank is the only private sector commercial bank with the most extensive network of 62 branch offices in 13 zones. We are resolute enough to extend financial services through our innovative products in both urban and rural areas. We would be utilizing our potential to explore new areas of investment covering almost every possible productive sectors of Nepal. Along with it, in the medium or long term, we aspire to establish at least one branch office in each district of Nepal. Retail banking is one of the top agendas in our priority list. <br />
	<br />
	<br />
	<strong>The bank has issued debentures worth Rs 400 million as part of a strategy to expand the capital base. Do you have any specific investment plan for that fund? <br />
	</strong><br />
	The paid up capital of Global IME Bank has augmented to Rs 2.18 billion after the merger of the three companies. And with the debentures issued worth Rs 400 million, our overall capital size has reached Rs 2.58 billion. The increased capital base will definitely support our business expansion plans in the future in national as well as international levels. We are planning to aggressively expand our businesses in the areas that other commercial banks in Nepal have not explored so far. <br />
	<br />
	For example, agriculture is a very important sector of our economy. However, the private sector investment in this sector including those of BFIs is very negligible so far. Unlike other commercial banks, we are taking a different approach to increase investment in the agriculture sector. Currently, most commercial banks are focusing on businesses of more organized sector and corporate clients as their main transaction base. Departing from this trend, Global IME Bank has plans to finance agriculture and related productive sectors for their development to the fullest potential. <br />
	<br />
	It is evident by now that the financial services to the agro sector from the state owned banks alone is not enough for developing the agriculture sector so long as it can contribute more to the national economy. By financing for the commercialization of the agriculture, Global IME Bank would also be supporting the government plans and policies to increase the contribution of the agricultural sector to country’s GDP. Besides this, we will soon start to work towards minimizing operational risk of the Bank by focusing more on retail banking. This means our main transaction base for both deposit and lending will be the common people, although we will not shy away from corporate and institutional banking.</p>
<p>
	<br />
	<strong>Benefits of the merger apart, grievances and disputes too come up in the process among promoters of different institutions as well as at the top-level management and employees. How did you handle the situation? <br />
	<br />
	</strong>After the merger, the number of staffs under the Global IME Group has increased for sure. Managing all the employees of the three companies that were in existence before the merger has been indeed a very challenging task for us. However, we have received support from all levels of employees including the Chief Executive Officers of all the three companies, the board of directors and other stakeholders of all three entities. Employees as well as our promoters are aware that after the introduction of comprehensive merger bylaws by the central bank, a class ‘A’ bank has successfully merged with two other class ‘C’ financial institutions for the first time in Nepal’s financial history. This, in fact, is a historical achievement for the entire system. Everyone involved in this process has put his/her priority second to the very goal of merger among these institutions. I am confident that there will be no grievances amongst our promoters and the employees in the future as well. <br />
	<br />
	<br />
	<strong>You also have a very strong presence in Nepal’s inbound remittance business. How is the remittance industry doing at present? <br />
	</strong><br />
	The current fiscal year has witnessed a 36 per cent growth in the inflow of remittances. It is comparatively higher than the growth rate of the previous years. The flow of remittance has grown substantially in recent years due to the increased number of Nepalis going abroad for employment. Likewise, the recent appreciation in the value of dollar is also responsible for growing figures on remittance income. It is sad but true that the existing political instability and constitutional vacuum will continue to create unemployment in the days to come. Hence, the trend of people going to foreign countries seeking employment opportunities is not likely to slow down in the immediate future. This will undoubtedly increase the amount of inbound remittance in the future as well. <br />
	<br />
	<br />
	<strong>It is often alleged that a large amount of workers’ remittances enter the country thorough illegal channels. What is your prescription to control it? <br />
	</strong><br />
	We can control the flow of remittance through informal channels only when we find the reasons behind it. We need to pinpoint the reasons which take people to choose nonbanking channels over the available legal ones. The obvious answer to it is the inability of Nepali financial institutions in providing banking channels to all the people willing to transfer their hard earned money to Nepal. In this regard, IME was the first Nepali financial institution to start its services to bring in remittances through a banking channel, 12 years ago. Prior to it, there was banking or legal channel available to send remittances from abroad and people entirely relied on the ‘hundi’ transactions. The trend of remittance coming in through informal channels has been reduced to a large extent after the establishment of IME. The objective of the Global IME Group is to create an easy mechanism for Nepalis living abroad to transfer their funds conveniently through the banking channels. <br />
	<br />
	But, I must mention here that we also have a fully functional system and products in place that address all the needs of fund transfer. For example, our foreign employment agencies need to pay a certain amount in foreign exchange to the companies in the Gulf countries or Malaysia that place orders to Nepali companies. But that is not possible legally and they are compelled to use ‘hundi’ for this purpose. If we can legally channel the agency commission, the illegal transfer will automatically reduce. Wherever a functional channel exists, there is possibility of both way movements of funds. <br />
	<br />
	The flow of remittance from India is also very nominal. About four million Nepalis are believed to be working in India and a very high majority of them use non-banking channels to transfer funds as they find it hasslesome and uneasy to remit through the banking channels. After the commencement of the Indo- Nepal remittance policy three months ago, the remittance flow from India is gradually increasing. Currently, IME has been networking with United Bank of India (UBI) which has around 1,600 branch offices across India. We do hope to reverse the trend of remitting through informal channels once we are able to make this networking with UBI branches throughout India fully functional. <br />
	<br />
	International Money Express (IME) has its reach in over 25 countries for bringing remittance to Nepal. It has strategic alliances with various exchange companies and commercial banks in Malaysia, the Middle East, Australia, UK and USA. IME Remit has also formed an alliance with companies like Money Gram International, Xpress Money, EZRemit and Instant Cash, for global access. I strongly believe that we can certainly combat the flow of remittance through informal channels in the long run if we can introduce appropriate bylaws and products to meet the needs of all stakeholders of the remittance business. <br />
	<br />
	<br />
	<strong>Both domestic and foreign investors are reluctant to invest in Nepal citing political instability. When do you think the situation will improve? <br />
	</strong><br />
	The political instability has definitely led towards a wait-andwatch situation for everybody, mainly the potential large investors. In spite of it, we should all move ahead with a positive attitude as business is also about taking risks and succeeding in it. Therefore, I think that companies investing during the crisis period can gain in the long term and make profits at a later stage. We are losing enormous opportunities due to the difficult circumstances that we currently face at home. I am sure there will be no looking back once the political issues are sorted out. I hope that it happens sooner than later and Nepal becomes one of the best destinations for investment. <br />
	<br />
	<br />
	<strong>The central bank has recently announced new Monetary Policy for FY 2012/13. Has it addressed issues raised by the banking community? <br />
	</strong><br />
	This Monetary Policy does not seem to have addressed remittance much. However, it has encouraged opening of bank branches and contact offices in countries like India and South Korea which are major remittance originating destinations. It is a positive step towards directing inflow of remittance through legal channels. Another important development is that the Nepalis can now exchange 2,500 dollars every time they go abroad. Earlier, when an individual or an organization submitted the required documents to banks and financial institutions, they could exchange up to 6,000 dollars maximum. This amount has now been increased up to 10,000 dollars. Similarly, the traders could earlier make a maximum payment of 25,000 dollars through Draft/TT while importing goods from countries apart from India. That has now been increased to 30,000 dollars. All these measures are the positive aspects of this policy. <br />
	<br />
	<br />
	<strong>How are different companies in the IME Group fold doing? What are your diversification plans? <br />
	</strong><br />
	From the perspective of a consolidated corporate group, we are involved in Automotives, Energy, Pharmaceuticals, Technology, Trading and Travel &amp; Tours besides Banking &amp; Finance and Remittance. IME Group has its presence in energy sector through Himalayan Power Partner Pvt Ltd, Mountain Energy Nepal Pvt Ltd and IME Oxygen Pvt Ltd. It is also one of the established players in the trading sector of Nepal. IME Group’s trading subsidiary – C M Trading – has been successful in penetrating major European markets with the exports of its Pashmina products for the last oneand- a-half decade now. <br />
	<br />
	The group has also been overseeing real estate and property lending through its trading subsidiary. IME Group has a presence in the tourism sector too, since 1995. It has Across Travels &amp; Tours Pvt Ltd, one of the leading travel agents accredited by IATA that has successfully carved a niche in the tourism industry. As far as the group’s financial services are concerned, there has been a massive transformation in the size of the Global IME Bank after the merger. Its paid-up capital has jumped to Rs 2.18 billion. <br />
	<br />
	It has debentures portfolio of Rs 400 million and lending is at the range of Rs 20 billion against the deposits of Rs 26 billion. The financial structure of the company has thus grown and opened new avenues for investment. In terms of networking, we are the largest amongst the private sector commercial banks. We have a total of 56 ATM counters, 70,000 shareholders, 650 employees, and 255,000 depositors. Currently, we are concentrating to expand our banking facilities in each district of the country and also set our focus on branchless banking. <br />
	<br />
	<br />
	<strong>You are planning to tie up with a foreign joint venture in several other sectors beyond banking and remittance services. Can you please share the developments? <br />
	</strong><br />
	To begin with, we first need to have a strong networking in order to tie up with foreign joint ventures. Our merger has reinforced the networking mechanism we had and it will certainly help us expand our business with the foreign companies in the days ahead. With the increased financial structures and widened networking, we look forward to collaborate with foreign companies in the near future. The process of Global IME Bank’s tie up with a possible foreign joint venture is in the pipeline right now. <br />
	<br />
	<br />
	<strong>You are also involved in the automobile business. How has been your auto venture doing? <br />
	</strong><br />
	We made a foray into this evergrowing sector in 2009 representing some of the renowned international automotive manufacturers as an authorized 3S distributor. Currently, our products from Asian Motor Works (AMW) – an Indian automobile company which produces trucks and trippers – is doing quite good. We have been associated with the company as it manufactures quality automobile products. Initially, the business did not go as well as we had anticipated because the crusher industries were on the verge of shutting down. Therefore, the trucks and trippers were difficult to be sold. However, in view of the improved situation, the products of AMW are gradually finding feet in the Nepali market. <br />
	<br />
	<br />
	<strong>You were planning to develop a fun park. What has been the progress so far? <br />
	</strong><br />
	We have reached almost to the final phase of planning to develop the said fun park which will be set up in the Chandragiri hills in the south west of Kathmandu. As part of our plan, we are working towards setting up a cable car route from Thankot in Kathmandu to the Chandragiri summit. We are consulting with various developers as well as considering different theme parks to make our fun park a complete recreation destination. Given the busy city life of Kathmandu, there is no place for the inhabitants of the capital to spend some quality time with their family and friends. Although, we are working on a new concept, we want to explore new areas of business as part of our expansion plans. We intend to start our project at the soonest possible and develop an affordable fun park for all. <br />
	<br />
	<br />
	 </p>',
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			'created' => '2012-08-16',
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			'description' => 'Chandra Prasad Dhakal is the Chairman of Global IME Bank. He is also the President of International Money Express (IME). Born in a middle class family of Baglung district of Nepal, he has by now established himself as a leading entrepreneur of the country in a relatively short span of time. Dhakal is a member of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Executive Committee and the Co-ordinator at Investment Development Forum of FNCCI',
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			'title' => 'Salman Lafit Rawn',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<span style="font-size: 14px;"><strong><br />
	</strong></span></p>
<p>
	<span style="font-size:14px;"><strong>We Have To Work According To Consumer Psychology’</strong></span></p>
<p>
	<span style="font-size:14px;"><strong><br />
	<br />
	<br />
	</strong></span></p>
<p>
	<img alt="rawn" border="1" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/rawn-interview(1).jpg" style="width: 230px; height: 350px;" vspace="5" /><br />
	<br />
	<strong>Salman Latif Rawn <br />
	Country Manager, Nepal <br />
	Coca-Cola Sabco <br />
	</strong><br />
	<br />
	<br />
	Salman Lafit Rawn is the country manager of Coca-Cola franchise in Nepal since January 2012. Prior to joining Coca - Cola, he had worked in the capacity of the General Manager at Pepsi Cola franchise Iran. He has also worked as the Country Manager at Alokozay Group of Companies in Dubai – UAE . From 2005 to 2007 he was with coca-cola company managing its franchise in Afganistan in the capacity of Country General Manager. An MBA Graduate from the institute of Business Administration in Lahore, Rawn has more than 25 years of extensive and successful experience in the Fast Moving Consumer Goods (FMCG) industry. In an Interview with New Business Age Rawn shared the expansion and investment plans of his company for Nepal and also shed light on the existing challenges. Excerpts: <br />
	<br />
	<strong><br />
	We have heard about the massive expansion plan of Coca-Cola in Nepal. Would you like to shed light on it? <br />
	<br />
	</strong><br />
	The Coca-Cola Group has been working on the expansion of the available categories of its beverage. Right now, we are only doing the Returnable Glass (RGB) and PET business categories. We are investing 23 million USD in a new plant in Terai this year which will be the group’s largest single-time investment in Nepal so far. Internationally, we have many areas where we work in, for example, juice, water and energy drinks. Taking into account the uniqueness and demand of this market, we are planning to introduce some of those products here in the coming years. <br />
	<br />
	<br />
	It’s tough bringing investment in Nepal or convincing people for funding, especially when the political and business environment is not very constructive. However, we have managed to bring investment this time and we are hopeful that if we could use it well, we could bring in more money for this country. <br />
	<br />
	<strong><br />
	What can be the positive outlook for this investment? <br />
	</strong><br />
	<br />
	If we are making profit from this country, we also have to return something to it. There will be new expansions in terms of investing in the plant and machines and it will create new employment opportunities for people. Besides, we will be contributing more to the government exchequer. Nepal is a landlocked country where we need to import most of the raw materials which means that more money will go to the government coffer in the form of Customs Duty or Value Added Tax (VAT) <br />
	<br />
	<strong><br />
	I believe that Coca-Cola has not introduced a wide range of products that are available in many other countries. What are you doing in this regard? <br />
	</strong><br />
	<br />
	Coca-Cola has a wide range of products. Unfortunately, the size of the market is too small to produce all of those products in Nepal. Putting up a manufacturing facility for everything produced by the group will be highly capital intensive. However, we are trying to bring machines which can produce multiple products. Another constraint for this is the per capita income of the Nepali people which is very low. An ordinary Nepali citizen would not spend much on beverages. We are more dependent on tourists and their consumption trend. But this does not mean that we will not introduce any new products in Nepal; we will first import a new product range in Nepal from our plants in the neighbouring country. If we see demand for those products in the market, we will then accordingly set up the manufacturing plant here. We can introduce juice, water and energy drinks and add more flavours to the existing products in the future. <br />
	<br />
	<br />
	<strong>Though the per capita income of the Nepalis is still low, the distribution system for products like beverages has expanded in Nepal in recent years due massive expansion in road network. Has not this development in infrastructure helped in increasing the business prospects? <br />
	</strong><br />
	<br />
	These aspects are not enough because we have to work according to consumer psychology. It has been discovered through our consumer researches and direct discussion with the consumers that people living in European countries and Western territories don’t limit their beverage consumption only to events or family gatherings. It is part of their regular life as well whereas in Nepal, there is still a trend to consume beverage during particular events and festivals or in the presence of guests. The per capita soft drink consumption of the Nepalis is less than eight bottles a year in comparison to other South Asian countries where it is anywhere from 24 to 48 bottles a year. It will certainly be safe for us to introduce new range of products as and when Coca-Cola becomes a part of the Nepali people’s everyday lives. <br />
	<br />
	<br />
	<strong>Coca Cola enjoyed 70-80 percent of market share in Nepal till a few years ago. That figure is now reduced to 66 per cent due to aggressive marketing from the competitor. What are you doing to regain the lost market share? <br />
	</strong><br />
	<br />
	I have worked in markets where we had as much as 92 per cent market share. But these percentages are not attainable when there are two competitive companies operating in the same market. The reality is that when two companies are working competitively, market shares settle down somewhere between 60 and 40. I have worked both with Pepsi and Coke and I know where the market share of Coke is higher than Pepsi or vice-versa and what are the reasons behind it. Our objective behind expansion and investment is to have greater market share and product availability during the peak season. If my production capacity does not allow me to reach everyone during the peak season when they want to consume my product, people will not consume my products in the future. It’s because that opportunity will be grabbed by someone else. So we are trying to regain that lost opportunity which someone else has grabbed. And the moment we have that, the lost market share will automatically come back to us. <br />
	<br />
	<br />
	<strong>What are Coca-Cola’s marketing strategies in Nepal that has helped the brand to maintain its market leader position? <br />
	<br />
	</strong><br />
	Multinational companies implement different marketing strategies at different locations. Despite having a vast range of products in their portfolio, they do consider various aspects for example, which market to go, when to go, what amount of market maturity to seek etc before launching their products. You might find some products in Nepal that are imported in the quantity of thousands or hundreds. However, when it comes to manufacture those products here, it is imperative to justify the required investment. It is the same with us so we are waiting for the right time to introduce additional products. <br />
	<br />
	<br />
	<strong>Bottlers Nepal – the Nepali bottler of Coke – had won the Country of the Year Award in 2010. When next can we expect a similar feat from Coca- Cola’s Nepal operation? <br />
	</strong><br />
	<br />
	We bagged the ‘Country of the Year Award’ continuously for two years in 2009 and 2010. There are nine countries in the group now and all of them compete for this award. Surely, there are countries that have advanced technologies such as South Africa. There is Sri Lanka, Uganda, Ethiopia and we are competing with all of them. But even this year, we won two awards— Employee Engagement Award and Best Water Usage Award. We are competing again and hope to get the Country of the Year Award in the coming years. <br />
	<br />
	<br />
	<strong>How has the ongoing financial crisis affected the soft drinks market in Nepal? <br />
	<br />
	</strong><br />
	We, or for that matter, any other FMCG companies have been seriously affected on two counts. First, with all those days of closures, the production has been disturbed. Second, the distribution of the product has become very difficult. Continuous bandhs have affected our transportation system adversely and a weak transportation mechanism impacts our production system as well. We produce less when there isn’t enough transportation facility available. When we produce less, the cost per case goes high and it affects us as producers as well as the consumers. <br />
	<br />
	<br />
	<strong>What kind of challenges do you see in your job in the Nepali market? <br />
	<br />
	</strong><br />
	Electricity is a very big challenge because we are in a business where products are best served when they are chilled. We have distributed refrigerators to the outlets in the market but they cannot sell chilled drinks due to power outage. Another challenge is gasoline or diesel prices which increase every couple of months or so. At the same time, we can’t increase the price of our products to adjust accordingly. The frequent hike in petroleum prices also makes it difficult for us to decide on our annual budget. The third biggest challenge is the dollar rate fluctuation which has been impacting us heavily as we have to import 90 per cent of the raw material that we use. <br />
	<br />
	<br />
	<strong>Is that the reason for you to reduce your advertising budget? <br />
	<br />
	</strong><br />
	We have not reduced our advertising budget as such. We have rather changed the focus of our advertising campaigns. For example, if there is lesser electricity, the people will be watching television for a lesser duration of time. So we thought of diverting our investment from electronic mediums to advertising through hoarding boards that are more visible and do not get impacted by power outage. You can see increased number of such hoarding boards in the Kathmandu Valley when you move around. There is hardly any main road where Coca-Cola is not present so it’s just a shift of focus. <br />
	<br />
	<br />
	<strong>How do you view the present competition in Nepal’s soft drink market? <br />
	</strong><br />
	<br />
	There are two major categories in the Carbonated Soft Drink (CSD) industry —water and flavoured drinks. There is no ‘A’ Class player in water so far in Nepal which is dominated by a few local brands available in the market. However, there is a competition between two players in the flavoured drinks category. Our competitor is trying to build a market for itself and so are we. But the good thing is that our share of the market pie becomes bigger with the growth in the market size. I could see that as an industry, we are less dependent on trying to eat each other’s pie. Instead, we are trying to increase the total size of the market. The fight between the two companies was stringent in the past but it is not the same anymore because a person working for Coca-Cola today can work for Pepsi tomorrow and vice-versa. At present, the fight is more indirect for example; it is for the space in the outlets. The general size of our grocery shops is small so it’s not just the soft drinks producers but the entire FMCG industry that is jostling for space in the outlets. <br />
	<br />
	<br />
	<strong>It is said that one of the major problems in the Nepali market is that of arrears in collection of dues from the distributors. How is your experience? <br />
	<br />
	</strong><br />
	We don’t have such issues. I have also talked with other FMCG companies and even they are not operating on credits. However, I don’t say that we don’t have any arrears at all. There are credits in the market but these are secure credits. Our distributors are working with us for a reasonable period of time so there is a certain level of credibility in our relations. If we realise that a distributor or distributing channel might land us in troubled waters, we prefer not to extend any unsecured business with them. <br />
	<br />
	<br />
	<strong>Bottlers Nepal has increased its spending on CSR activities in recent years. Can you tell us about the new CSR activities that are being planned? <br />
	<br />
	</strong><br />
	I could see a huge chunk of activities this year coming under our CSR initiatives apart from our regular activities. We have been working on water utilisation, plantation and education and we have also been sponsoring certain orphanages. Our new project is to extend support to women entrepreneurs so we have adopted a vision “5 BY 20” which is a commitment to empower 5 million women to turn successful entrepreneurs by the 2020. Nepal has also been selected for the project from the South-West Asia Region. A senior person representing the Director level of the India Division of the Coca- Cola Company will be visiting Nepal next week to explore the details of the campaign. The Senior Vice President of the division will accompany him and together they will be setting different criteria. The criteria will entail aspects like who can qualify, what can be the measures to qualify and what will be an appropriate form of support for women entrepreneurs etc. Another project which we are going to introduce is ‘Support My School’. It is about kids who run away from schools, are not interested in study and do not have access to studies. This big campaign will be looking at ways to help them through uniforms, books, building libraries and classrooms etc. <br />
	<br />
	<br />
	<strong>As a global operator, what are the challenges you face in a country like Nepal? <br />
	<br />
	</strong><br />
	Nepal is among the very few countries in the world which are landlocked. It does not have much of its own revenue generation. To analyse how much people can buy from us and what things they will be interested in, we will have to watch their source of revenue. Like I said earlier, the smaller base of the country, lack of electricity and diesel, and dollar rate fluctuation are the major challenges in bringing big investment to this country. Another problem is that of finding the right people to work because the Nepali industry is small. Had there been multiple industries, there would have been a bigger pool of human resource to choose from. <br />
	<br />
	<br />
	<strong>What kind of government support are you looking for? <br />
	</strong><br />
	<br />
	The government should see the quantum of direct or indirect taxes and exchequers that we are paying. If it increases the excise duty or other duties at a very abnormal rate to industries like us, bringing investment to this country and creating opportunities for employment will be difficult. We are trying to expand our business so we need facilitation in technology and computerisation from the government. We will not be able to bring investment to this country if we have to wait years-on-end for approval on bringing software and technology. At present, we are trying to bring in a software called SAP and it’s already been a year since we applied to the Inland Revenue Department for the approval. Our application is simply gathering dust there. SAP will enable our headquarters to evaluate our work and access our records through our central server. It is easier to operate when this system is installed and therefore, we have been requesting the government to approve our application. We are not the first company in Nepal to use this software as there are some other companies that are already using the same technology. We have explained this to the government authorities but they told us to wait for the permission. We have met the concerned officials and satisfied all their queries but there is no progress so far. How can we bring more technology and investment in this country if the government does not facilitate manufacturing industry with the required technologies? It is our sincere request to the government to do the needful and approve our application on the SAP software. <br />
	<br />
	<br />
	 </p>',
			'published' => true,
			'created' => '2012-08-10',
			'modified' => '2012-09-16',
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			'description' => 'Salman Lafit Rawn is the country manager of Coca-Cola franchise in Nepal since January 2012. Prior to joining Coca - Cola, he had worked in the capacity of the General Manager at Pepsi Cola franchise Iran. He has also worked as the Country Manager at Alokozay Group of Companies in Dubai – UAE',
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		'Article' => array(
			'id' => '586',
			'article_category_id' => '46',
			'title' => 'Anant SIyer',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<strong><br />
	</strong></p>
<p>
	<span style="font-size:14px;"><strong>We Will Continue Providing Brand Delight To Nepali Consumers<br />
	</strong></span></p>
<p>
	 </p>
<p>
	Anant SIyer is the Chief Operating Officer, RPC – East &amp; Nepal at United Spirits Limited (USL), the world’s third largest spirits maker by volume. He has over 27 years of experience in the industry and has earlier handled several key positions since joining the UB group in June 1992. In his current position, he will be responsible for USL’s operations in Eastern India and Nepal. He says, “We would like to participate in the growth that the government envisions for this country and be a part of the evolving Nepal<br />
	growth story.”</p>
<p>
	 </p>
<p>
	<strong><img align="right" alt="interview" border="5" height="193" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/interview2.jpg" vspace="5" width="150" />You, along with your seniors, had created USL's strategy for Nepal close to a decade-and-a-half ago. What is the purpose of your visit to Nepal this time around?</strong></p>
<p>
	It is to get myself reintroduced to our trade partners in the city as well as throughout the country as I have just taken over as the Chief Operating Officer for Nepal apart from my responsibilities in the eastern part of India. The second reason of my being here is that Gautam Mullick, our Country Manager here, is retiring after 14 long years of being in Nepal. You can call his being here as a circle of life because my seniors and I had made the original strategy for Nepal on behalf of UB Group and Nepal Liquors close to 15 years ago. At that point of time, we had selected him to be posted here.</p>
<p>
	From very small beginnings, we have now reached a position of strength. In earlier days, the market was small and so was the industry and globalisation was just coming into the subcontinent. With the kind of boom that has happened over the years, drinking of good spirits has also gone up. The Nepali consumer has been exposed to good blend and excellent tamper proof packaging like guala caps etc over a period of time. We have done very well and haven't looked back over the last oneand- a-half decade.</p>
<p>
	<strong>Do you think, USL with its 15 years presence in Nepal, have accomplished the objectives it had set out to achieve?</strong></p>
<p>
	Objectives in an organisation are set on an annual basis. It all dovetails into the vision we have for the organisation in Nepal. A vision is a long term goal that determines strategy which in turn sets objectives. Our objectives are ever evolving and ever growing so we cannot say that our objectives have been met. Our vision is to continue to grow in Nepal with the industry growth, remain market leaders and continue to provide full product and brand delight to the Nepali consumers.</p>
<p>
	The consumers experience for our brands has to be superlative and truly international so that the Nepali consumer knows he is getting the same kind of quality and product experience which he will receive anywhere else when he travels. It is an integral part of our organisational DNA that we keep on growing therefore, our objectives are not static and they change in accordance with the changing environment. The annual objectives always become better and more challenging but they all telescope into our overall vision for Nepal. We want to continue as the leading spirits marketer in the country and ensure that we give quality and delightful consumer experience. <strong><br />
	</strong></p>
<p>
	<strong>How do you assess USL's performance in India and other emerging markets?</strong></p>
<p>
	If you look at how we have performed in India, you will find that we are very clear about growing. We have close to two-thirds of the market share in India. We are now going to look at emerging markets and do have a huge strategy for markets in South Asia, Africa etc. We intend to grow by providing the consumers with good quality brands which provide delight to the consumers. We do a lot in terms of distribution and schemes to ensure reach and make our products available for every single pocket.</p>
<p>
	<strong>What is your reading of the Nepali market at this point of time?</strong></p>
<p>
	There is a growing middle class coming up in Nepal for so many years now which is very encouraging. When the economy grows, it helps people feel good and they want to enjoy themselves. We believe that socially responsible alcohol consumption is good in its own way, however, people should be aware. They must follow the laws of the land and thatâ€™s what we endeavour. We have a wonderful team of distributors located all over Nepal and they have been with us for many years. We continue to seek their help in ensuring that our products reach our consumers in the pack sizes of their preference which fits their pockets. We are the first company in Nepal to come up with 90 ml, 60 ml, guala caps etc which speaks volume of the fact that we keep on evolving.<strong><br />
	</strong></p>
<p>
	<strong>UB Group's most visible brand Kingfi sher Beer is not available in Nepal</strong>.<strong>What could be the possible reasons behind this glaring exclusion?</strong></p>
<p>
	Kingfisher Beer is actually managed by our sister organisation United Breweries and as far as I know, they had a presence in Nepal at a point of time. However, I am not aware of the latest developments in terms of its strategy for Nepal. Kingfisher is a wonderful and truly international brand and one of the real successes of this subcontinent. You will find it in many countries such as the US, Canada, England, France, Italy, Singapore, Hong Kong, Thailand etc. Kingfisher Beer is available either in restaurants that is on-trade or as off-trade. On my part, I can certainly communicate with my colleagues in the Breweries Division about the huge latent demand for the brand here. I am sure that they would want to look at this possibility again.</p>
<p>
	<strong>How have you fared on your liquor brands in this country?</strong></p>
<p>
	Luckily for us, most of our brands have succeeded pretty vigorously. Our success has been in premium whisky segment like Antiquity and Signature both being brand leaders. McDowellâ's No 1 and McDowell's Platinum have also done well while Blue Ribbon Gin is the sole leader in its category. We have received a setback in the Vodka segment but it's only a matter of time before we bounce back. Even though we are a small player in the Rum category, we have done well for ourselves and we will intend growing as there is definitely a market for Rum here.</p>
<p>
	<strong>Tell us a little about the competition you face from some other renowned brands available in Nepal.</strong></p>
<p>
	Competition has come and some of the competitor brands have been doing well but that's how business is. We don't fear the competition because as an organisation, we evolve with the consumers and step ahead. If you remember, when we launched Signature Whisky, it was Nepalâ€™s best whisky produced at that time. Today, we are right there with our successful brands Antiquity Red and Antiquity Blue. Our Antiquity Blue is as good as any value scotch available in the market and can take them head on. I believe that competition is always healthy, it keeps us on our toes and we respect our competition.</p>
<p>
	The reason for the success of our group is that we are a very humble and straight shooting organisation. We don't allow our domination of any category or market to ever get into our head and don't browbeat or pressurise. Instead, we believe in growing with the market and ensure that our partners in progress the trade partners, retailers etc are conducting their businesses successfully. We keep all our stakeholders internal as well as external happy. In a market scenario, ups and downs always happen and market positions keep changing. Competition has grown over the years just as we did but if you look at the size, we have close to two-thirds of the market share in Nepal. Our objective is that we not only reach two-thirds in terms of volume but also in terms of earnings. In this endeavour, we have ensured that in the premium segment, we have a huge share of the market.</p>
<p>
	As for the prestige segment, it's only a matter of time that we regain the market share which we have lost over the last five years or so. I welcome competition as it does not allow complacency to set in. We would all like to be one step ahead of competition by ensuring product improvement and everything else that we do in the market.</p>
<p>
	<strong>You just mentioned that you would like to reach two-thirds in terms of earnings too. How do you go about achieving that?</strong></p>
<p>
	That is certainly our endeavour but it is not to fufill through the two-thirds market share that we enjoy. We improve our bottom line by ensuring that the products we sell are more premium category which we have succeeded in and will continue to succeed at. We do efficiencies in manufacturing and selling so there are ways and means to ensure that our bottom line gets affected. I am not even suggesting remotely by any means that one side should curb it so that the other side should get it. The intent is that if the consumer gets a product at the right price, the market grows and so does the revenue.</p>
<p>
	<strong>Now that you will be looking after Nepal operations for some time to come, what would be your expectations from the government here?</strong></p>
<p>
	We only hope that the government helps the industries such that it can help the revenue. As you know, the government also gets its last share of revenue from excise and taxes but year-on-year, rising taxes substantially will eventually lead to killing the golden goose. Every government around the world is cash strapped and we understand that Nepal is no exception but our prayer to the government is not to tax indiscriminately. Because the higher you tax, it gives the unscrupulous elements the opportunity to make spurious products. Given the arbitrage of the substantial tax amount, these elements enter into the market. They may not sell their products in the cities where there is better policing and supervision but they definitely sell them in the rural areas where people are neither very literate nor do they have the choice. Normally, these products are sold very cheap but they have unnecessary side effects. It also allows illegal activities to happen and as a result, there is an increase in corruption.</p>
<p>
	A spurious manufacturer takes advantage of this arbitrage and makes a lot of money. In the bargain, everybody loses right from the consumer to the government and us too as an industry. We understand that by all means, there is a proportion which needs to go to the government but it should be reasonable. At the end of the day, the government is also here to work for the welfare of its citizens so it needs money. But as businesses, we cannot keep on hiking prices because it will go over a certain tide. If the inflation is 10 per cent and the prices go up by 20 per cent, people are still not going to stop drinking. But one has to take a very long term view on this rather than a short term fix.</p>
<p>
	As I said a short while ago, the revenue grows when the market grows otherwise the revenue regresses. As prices increase, consumers tend to drink lower category drinks instead of premium ones. Since the excise duty is less in lower categories, the government tends to earn lower per case or bottle than in the higher categories. Hence, the government's revenue regresses eventually. I would also like to add that in this country, VAT is a pure form VAT which is good.</p>
<p>
	When you charge tax on small items of daily use such as biscuits, soaps, toothpastes etc, the tax is small so people don't mind paying. But when the tax amount is higher, people don't like paying which is human tendency anywhere in the world. Our suggestion is: please charge your tax but don't charge multiple times. The sales tax people can collect taxes from say, 100 distributors, instead of collecting them from 47,000 retailers that we have spread across Nepal. It will enable the government collect taxes easier and cleaner and ultimately, it's the same amount.</p>
<p>
	<strong>Being an Indian conglomerate, could you single out the most challenging aspect of doing business in Nepal?</strong></p>
<p>
	First and foremost, we are very multinational in our nature now as we are present in many countries. I would say that our roots are sub continental instead of only being Indian. When this group was born many years ago through acquisitions followed by start up ventures, we had our presence in many markets. For example, we had a small business in Nepal going on that we reactivated 15 years ago. The fruits of that success and strategy are now here after dealing in Nepal over a period of time. There have been lots of challenges but we have weathered them. We have learnt to cope up and adapt to the market and that's a great asset of being from the sub continent. I don't think we are very different from each other in the way we look at life, for example, our beliefs in god, family and value system etc. We follow a similar culture even though we may speak different languages we have so many languages in India too. It is easier to adapt much faster being from the sub continent. We have always maintained healthy relationships with all our stakeholders in Nepal the authorities, trade partners, key opinion leading consumers, associations etc.<strong><br />
	</strong></p>
<p>
	<strong>Do you see yourself making greater inroads into this market? How do you plan to treat this country as a market in the future?</strong></p>
<p>
	We are planning to launch many more brands in the premium range in Nepal since it is a very critical market for us. You must be aware that we also have our own distillery in Biratnagar and we are investing in it on a continued basis. It is important for us to ensure that we continue to remain leaders and grow with the market. We will continue to treat the market in Nepal with respect as we have always done. The market has tremendous potential as always and lot of growth opportunities are available. We will continue to ensure that we invest in brands in this country and that our consumers are happy and satisfied with our brands. In this way, all stakeholders consumers, trade, authorities and the company will remain aligned and satisfied which is very critical for us. We would like to participate in the growth that the government envisions for this country and be a part of the evolving Nepal growth story.&nbsp; <br />
	<br />
	 </p>',
			'published' => true,
			'created' => '2012-02-22',
			'modified' => '2012-11-01',
			'keywords' => '',
			'description' => 'It is to get myself reintroduced to our trade partners in the city as well as throughout the country as I have just taken over as the Chief Operating Officer for Nepal apart from my responsibilities in the eastern part of India',
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	(int) 8 => array(
		'Article' => array(
			'id' => '525',
			'article_category_id' => '46',
			'title' => 'Sunil Kaushal',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<span style="font-size: 14px;"><strong><br />
	</strong></span></p>
<p>
	<span style="font-size:14px;"><strong>We Are Focused On The Basics Of Banking<br />
	</strong></span></p>
<p>
	 </p>
<p>
	<strong><br />
	</strong></p>
<p>
	<strong><img alt="" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/interview(5).jpg" /><br />
	</strong></p>
<p>
	<strong><br />
	</strong></p>
<p>
	<strong>Sunil Kaushal</strong> is the newly appointed Chairman of Standard Chartered Bank Nepal Limited. Kaushal is likely to assume a senior role in the South Asia region, the announcement of which is likely to happen soon. He is currently the President and CEO of Standard Chartered Bank (Taiwan) Limited. He has over 23 years of banking experience and held several senior roles with the bank across different markets including Global Head SME Banking and New Ventures in Singapore. Prior to joining Standard Chartered Bank, he had also worked for Bank of America and HDFC Bank. In an interview with Pinaki Roy of New Business Age, Kaushal shared his views on the global banking scenario and Standard Chartered Bank's presence in the key world markets. Excerpts: <br />
	<br />
	<br />
	<strong>You have been appointed the new Chairman of Standard Chartered Bank in Nepal. What kind of vision do you have in mind for Standard Chartered Bank's operations here in Nepal? <br />
	</strong><br />
	<br />
	First of all, I think you would appreciate that we have created a very solid platform in the last 25 years in Nepal. At our AGM held recently, we declared a solid set of results given the tough market environment that prevails. The vision is to build on a strong platform that we have got here. We are very well positioned for a balance across wholesale as well as consumer banking, in the years to come. <br />
	<br />
	<br />
	<strong>You have been at the helm of affairs in Taiwan for quite some time now. Could you highlight some interesting events during your tenure while heading Taiwan operations? </strong><br />
	<br />
	<br />
	I have been fortunate enough to have worked at many locations outside my home country and Taiwan has been one of the overseas postings for me. Taiwan was particularly interesting for the bank because we had three acquisitions there. What was also quite interesting was the acquisition of a bank Hsinchu International Bank that was much larger than ours. The other two were Asia Trust Bank (for licensing) and American Express Bank (global acquisition). It was about assimilating the culture putting the three acquisitions together, integrating them and then building on the platform. The results of Taiwan have been pretty strong. <br />
	<br />
	<br />
	<strong>How has Standard Chartered differentiated itself as a bank when compared to some other global banking giants in terms of performance and branding? </strong><br />
	<br />
	<br />
	In terms of performance, we have delivered time and again as well as enjoyed great ratings upgrade for as long as one can remember. If you look at our share prices, we are one of the few banks which trade at premium to book value. We are present in the right markets Africa, <br />
	<br />
	Asia and the Middle East which stayed relatively better even during the financial crisis. And when the recovery happened on an absolute basis, these markets did fantastically well. We have a long history in these markets around 150 years presence in most of them so we have the depth and breadth of relationships in these markets. <br />
	<br />
	<br />
	Our strategy has been very clear in terms of focusing on these markets and relying on the basics of banking to deliver our performance. We have been there for our customers by being open for business and that is a very big thing. It is as big today at a time when big institutions globally are undergoing stress, talking about cutting headcount and reducing presence. On the contrary, we are still very much in a growth mode so we stand in a unique and differentiated position. We were the only international bank which consistently delivered record profits even during the financial crisis whereas most banks were struggling to break even. <br />
	<br />
	<br />
	Standard Chartered brand has been created over a period of time and we owe it to the management teams in different markets for taking the right decisions with the depth of the local knowledge that they have. The trust that the bank has created over time is especially evident during financial crises when we always see a flight to quality in terms of the customer deposits coming to us. We have proven that people feel secure while trusting their money with us. The best part is that we don't rest on our laurels and continuously try to keep ahead of the market. These are challenging times globally but we are very well positioned and quite differentiated from the competition. <br />
	<br />
	<strong><br />
	Despite the global economic crisis, Standard Chartered Bank figures among the largest profit earning international banks. How do you view this success? </strong><br />
	<br />
	<br />
	It is about being distinctive in our strategy which has resulted in our differentiated financial performance. In fact, we have delivered eight straight years of record profits, and are the only international bank to have received a ratings upgrade by all the three global rating agencies since the start of the financial crisis. Our performance, as you mentioned, has been very strong in the closing statement that we came out with recently which reiterates our differentiated position further. <br />
	<br />
	<br />
	Among the reasons for this is that we are focused on the basics of banking having a strong capital base, focusing on our clients and customers, having a strong balance sheet in terms of liquidity and being open for business. Besides, we are present in the right markets Asia, Africa and Middle East which are actually experiencing good growth as compared to the west which is facing challenges that all of us are aware of. <br />
	<br />
	<strong><br />
	Of late, the financial world is again embroiled in a crisis of sorts, like the Eurozone debt crisis. How do you analyse this situation and what kind of impact will this have on the banking scenario across different markets? </strong><br />
	<br />
	<br />
	In terms of global impact, we have all been hearing about banks wanting to require potential recapitalisation. The impact is applicable across all markets as some of the European banks pulled back because they had to reduce their risk related assets. These banks had to reduce their exposure so that the capital comes up to the level of 9 per cent that EU has mandated by the middle of next year. It's very difficult for them to go out and raise capital at this price when they are not into utilizing their earnings. <br />
	<br />
	<br />
	There is clearly a stress on liquidity for certain banks because of the fear of the exposure that they have to the European markets. Fortunately, for a bank such as ours which has no exposure to the distressed markets in Europe, it creates opportunities for us given the funding, strong balance sheets and capital position that we have. We are looking at these opportunities in different markets and monitoring them quite closely. <br />
	<strong><br />
	<br />
	Standard Chartered, as I understand, has always propagated organic growth. Do you think there will ever be a shift in this line of thought and probably the bank could look at the issue of mergers and acquisitions more favourably in the foreseeable future? <br />
	</strong><br />
	<br />
	If you look at the last decade or so, our focus is absolutely on organic growth but we have local opportunities which are inorganic as they presented themselves. Therefore, more than being a matter of choice, it is about having the right blend. Though we are focused on organic growth as a bank, we will surely consider if a right opportunity comes up. <br />
	<br />
	<br />
	<strong>Tell us about Standard Chartered Bank's India and South Asia operations which you are tipped to take over in due course? </strong><br />
	<br />
	<br />
	India is huge for us and South Asia is big for us as a region and I am excited about the opportunity. <br />
	<br />
	<br />
	In terms of market situation, it will be obviously different from my posting at Taiwan which was already a developed market. But I also have been through different roles globally which provided me with an opportunity to look at diverse markets from Korea in the east to Nigeria in the west. Therefore, I do have the understanding of managing different markets and challenges are something that I always look forward to. <br />
	<br />
	<strong><br />
	You have also been the Global Head for SMEs and New Ventures in Singapore. What are your plans to this effect for your operations in the South Asia region? </strong><br />
	<br />
	<br />
	The SME sector is already quite large for us in the markets in South Asia. It's about building on the strong track record that we have in the sector. SMEs are the core to any economy typically when they constitute 90-95 per cent of the enterprises and contribute 65-70 per cent of the employment. Even during the financial crisis, we have been out there supporting the SMEs and again that is something which differentiates us. SMEs augur well for South Asia as there is potential growth in the economies because of the sheer confidence of SMEs to the economies in the region. <br />
	<br />
	<br />
	<strong>Talking about India, there are recent reports that suggest the Indian economy may not be growing at the same breakneck speed that it so promised until about a couple of years ago, for a variety of reasons. How big an impact will it have on the fortunes of the banking conglomerates in the country? </strong><br />
	<br />
	<br />
	One has to look at the situation in terms of the overall context. India has had very strong growth in the past many years.There are some signs of moderation but I think it is only a short term phenomenon there is no denying the fundamental strength of the economy and we as an organisation are very bullish about the long term potential of the market. The big story about India remains unchanged in terms of its medium and long term prospects; we should not read too much into a slowdown in the last few quarters. <br />
	<br />
	<br />
	<strong>Standard Chartered Bank's profits in India have come under pressure after five years of accelerated growth. How, do you think, a difference can be made in this context? </strong><br />
	<br />
	<br />
	Standard Chartered in India has had a fantastic growth over the last decade or so and the team there has done an incredible job, with profits growing fivefold in the last five years. As I said, it's a short term blip and clearly, there are immense opportunities in the Indian market. We are well positioned as an institution having been in that market for 150 years, to really capitalise on the growth opportunities the economy presents. <br />
	<br />
	<br />
	<strong>China is the fastest growing economy in the world. How well placed is Standard Chartered Bank in the country given its immense potential? </strong><br />
	<br />
	<br />
	We do have a sizeable presence in China with a fully-owned banking subsidiary which operates over 70 outlets. We will very soon be looking at crossing the 90 mark in terms of the outlets that we have in the country. We have been present in China for around 150 years and it's one of the fastest growing markets for our bank in terms of revenue momentum and growth. <br />
	<br />
	<br />
	So, the Chinese market has immense opportunities for us and a bank such as ourselves, is very well positioned given our long history in that particular market. We can certainly be more aggressive in China but we also have to balance the opportunity with the investment. And I don't think we have held back on any investment in China as it's a market where we see great potential and growth.</p>
<p>
	 </p>',
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			'created' => '2012-01-21',
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			'description' => 'Sunil Kaushal is the newly appointed Chairman of Standard Chartered Bank Nepal Limited. Kaushal is likely to assume a senior role in the South Asia region, the announcement of which is likely to happen soon. He is currently the President and CEO of Standard Chartered Bank (Taiwan) Limited.',
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			'id' => '477',
			'article_category_id' => '46',
			'title' => 'Pasi Koistinen',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<span style="font-size: 14px;"><strong><br />
	</strong></span></p>
<p>
	<span style="font-size:14px;"><strong>We Want To Make Mobile Telephony More Affordable</strong></span></p>
<p>
	 </p>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Pasi Koistinen </strong>is the President and CEO of Ncell Private Limited, which became the largest telecomoperator in Nepal some months back overtaking the state-owned Nepal Telecom. The company reached the figure of six million customers recently. Ncell, the first private telecom operator of Nepal was rebranded to its current name in 2010. Nordic telecom giant TeliaSonera has a large stake in the company. Koistinen joined TeliaSonera as a Director in 1998 and took up the position of Ncell CEO in May 2009. He has also served in top managerial level in diverse fields like hospitality business, advertising agencies and telecom service in countries like Finland, Singapore and China. In an interview with Gaurav Aryal of New Business Age, Koistinen shares his views on Ncell's growth, Nepal's telecommunication market and a whole lot of other issues. Excerpts: <img align="right" alt="Ncell" border="2" height="279" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/interview_pic2.jpg" style="margin:10px; padding:10px;" vspace="10" width="180" /></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Ncell's customer base has crossed six million. How sustainable is this rapid growth in the number of customers? </strong><br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">We have reached six million customers but the penetration is still low in Nepal. We are talking probably somewhere in the region of 50 per cent, meaning that only half of the population have mobile phone connectivity. So, there is still a huge potential. We are expecting the same kind of growth in the future as well because we believe that people need mobile phones. We have experienced rapid growth in the last two years and increased the customer base by three million within a year. So, mathematically speaking, we should have nine million customers after a year if everything goes as expected. The growth is sustainable because every customer we get into the system is generating revenue. The most important aspect is that our customers are happy with us. Therefore, we plan to continue investing in our operations. <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>At the time of rebranding, Ncell had only about 2.2 million customers. It has taken a giant leap since, in terms of customer base, coverage and brand name. What is the secret of this huge success? </strong> <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">Rebranding was like a new promise not only for our customers but also for our company and the employees to increase the overall customer service level. So, we decided to invest heavily in the network and subsequently, the rebranding exercise. We doubled the network before the rebranding to make sure that we have something to operate that is good quality network. When we started marketing the new brand, it was an entity of this whole package of services. Service, in our case, is very intangible in the sense that people call each other and there may be 100 million transactions each day. We have to guarantee that these transactions are successful because it's only then that people will come to us. I think this was a major reason for our huge success. Of course, rebranding was another very essential component of our success.<br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>With this tremendous growth, Ncell must be making a huge profi t now. How are you doing on revenue? </strong> <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">Well, it depends what you call a profit. We are not profitable yet if you talk about cash flow which is the main issue when talking about profitability. Revenues are good and we have gained a lot of market share during the last couple of years. But we have invested a lot on infrastructure as well so a big investment takes time to recover. We are spending three to five times more in infrastructure than in other TeliaSonera countries due to difficult terrain and climate. We have to remain humble towards our customers and give them good services and hope that results will follow in due time. <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>What kind of policies do you have to attract more customers especially from rural areas? </strong><br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">As you must have seen, we have had a lot of campaigns in rural areas. We want to support the campaigns knowing well that not everybody in Nepal has the same amount of money. Therefore, we have had a lot of rural campaigns to make mobile telephony more affordable for everybody. <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Though Ncell has sold more than six million SIM cards, it is said that a large number of SIM cards issued are not in operation. What is the actual number of your active mobile phone customers? </strong> <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">Active ratio varies, of course. Out of the over six million sim cards we are talking about, we know that some of them are not currently in operation. There are people who switch on their phones at certain times only for receiving calls because it does not cost anything for the receiver. The active ratio varies between 80 per cent to anywhere close to 100 per cent. For example, it was almost 100 per cent when we had the earthquake on 18 September. <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Tell us about TeliaSonera's Nepal experience in comparison with other countries? </strong></span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">TeliaSonera has been very happy about the investment in Nepal. We are already in number three position among all nine countries in terms of number of users. So, naturally TeliaSonera is very satisfied with what we have done here. </span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>How is the response to your smart phone service like Blackberry? <br />
		</strong></span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">We launched Blackberry because we wanted to make a difference and we are the only operator selling Blackberry in Nepal. We knew from other markets as well that Blackberry will become an essential service for the people who need to be connected while on the move and people who have enough money. In this respect, we are very happy about it. This is an exlusive service targeted at an affluent segment of the market. <br />
		<br />
		We also have Ncell Pro which is a very good approach. In the longer run, we are expecting it to be a great success because we combine the handsets and talk time, sim card, data package and sms package as one set that is easy to buy. But it takes time for people to realise the benefits of it. <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>It is said that Ncell and NTC the two telecom giants have left no space for new telecom operators. Is it really that diffi cult for new comers to penetrate in the telecommunication market now? How many operators do you think this market can sustain? </strong> <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">Well, this is a free market and anybody can invest and operate here. However, we do not have many companies in Nepal who are ready to take the risk by investing first. TeliaSonera has a history of entering emerging markets early. Kazakhstan was among the emerging markets we entered soon after Soviet Union collapsed, in 1994. It takes time to build the kind of massive operations that we have so it's not an easy business. I personally believe that this market can sustain three operators. </span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><img align="left" alt="ncell" border="1" height="426" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/interview_pic1.jpg" style="width: 356px; height: 426px;margin:10px;padding:10px;" vspace="5" width="356" /></strong></span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>What is your take on the practice of squatting on the spectrum license? </strong> <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">We actually have enough spectrum allocated to us and so far we have paid for the spectrum and the license in full. We have also fulfilled all the requirements of the NTA concerning the licenses including the spectrum. On our part, we are clear and it's not for me to analyse about some other companies holding spectrum. NTA too has introduced a fee for companies not using the spectrum effectively enough. It has the provision to penalise them for the so called holding of frequencies. </span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>What are your expectations from the regulatory authority for the improvement in quality of services along with this sectors growth and expansion? </strong><br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">Many things have been clear in the sense that we want to have a level playing field. Especially, when NTC is a government corporation, they do have the advantage of being in the country earlier than us. But the biggest issue is that they are not following NTA regulations. Let me give you an example. There is a rule that the congestion between the operators can be maximum 0.1 per cent meaning that one call out of 1000 can fail. Now, the situation is that for the past two-and-a-half years, I have been here and we have been talking about NTC not being able to give us enough capacity and units so that our subscribers can freely call the NTC network. During the peak hours, the congestion can be up to 60 per cent which is unfair. <br />
		<br />
		We had a very open discussion with NTC and NTA asking them to give us the space because we want to build a good telecom infrastructure company in this country. But, we are compelled to follow what someone else is doing. We don't want to be dependent on our competitors and want them to follow the regulations that are laid out. There is also the issue of cross subsidising, meaning, if you have an NTC mobile phone, you can call the NTC landline without any interconnection charge. However, in our case, we have to pay 52 paisa for every minute when our customers make calls to their network. This means that we cannot be price competitive with NTC on that level and this, of course, is a very wrong practice. <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Some time ago, Ncell had commented that the authority was biased against the private telecom operators and especially Ncell. What was the biased treatment? </strong> <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">We are the biggest foreign investor in Nepal so we are requesting for equal treatment and equal level playing field. For examplem, for permission requirement, foreign exchange permission and license renewal fees should be equal for all operators which has not been the case so far. </span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>WiMAX and 4G spectrum are not issued by the authority yet. Why do you think they are rigid about it? </strong> <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">To tell you the truth, 4G is essential. But it is not urgent because we are totally occupied building the 2G network. We have always seen that people are very keen on using wireless broadband. Our Ncell Connect became the number one ISP in the country within a period of eight or nine months which really proves that people are willing to have wireless internet connection. I don't believe in WiMAX at all as it is a very limited kind of technology with no handsets available and promises to be an expensive proposition. I really intend to request the government to concentrate on GSM because evolution such as the 4G will continue to take place. <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Do you think 4G will be suitable for Nepal?</strong> <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">Sure, because it gives excellent speed for data surfing. Now with HSPA, we can go up to 3.6 mbps and with HSPA plus, we can go up over 7 mbps. For instance, when 4G was launched in Sweden, it brought huge improvement to data speed. <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>How long will your aggressive marketing continue?</strong> <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">I hope that we continue in the same manner forever. This is a continuous business and we have to give people value for money and time. Marketing is not only about marketing communication, but also about best customer experience. Marketing communication gives promises via billboards and advertisements. But we have to fulfill those promises with other aspects of the infrastructure - network, billing system, call centre, point of sales etc. Our aggressive marketing has reached us this far. So, we are more than happy to continue practicing it and hope that it pays us great dividends in the long run. </span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><br />
		</strong></span></span></p>
</div>',
			'published' => true,
			'created' => '2011-10-11',
			'modified' => '2012-09-16',
			'keywords' => '',
			'description' => 'Pasi Koistinen is the President and CEO of Ncell Private Limited, which became the largest telecom
operator in Nepal some months back overtaking the state-owned Nepal Telecom. The company
reached the figure of six million customers recently. Ncell, the first private telecom operator of Nepal
was rebranded to its current name in 2010.',
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			'title' => 'Joseph Silvanus',
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			'content' => '<p>
	<span style="font-size:14px;"><strong>Interview: September 2011 - There Is Much To Gain And Look Forward To</strong></span><br />
	<br />
	 </p>
<div style="text-align: justify;">
	<span style="font-size:12px;"><img align="left" alt="interview" border="1" height="227" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/sep-int.jpg" style="width: 319px; height: 227px;margin:10px;padding:10px;" vspace="10" width="319" />Joseph Silvanus<span style="letter-spacing: 0.05pt;"> joined Standard Chartered Bank Nepal Limited as its new Chief Executive Officer in July 2011. A student of Economics at St Stephen's College, Delhi University, followed by a management degree from Mumbai University, he had a brief stint with established FMCG names such as Voltas Ltd and Pepsi Foods Pvt Ltd before moving over to the banking sector. A banker for over 18 years, Silvanus has worked with ANZ Grindlays Bank followed by Standard Chartered Bank across various geographies. He has vast exposure to consumer banking operations having managed branches, marketing operations, business analytics, services and service quality and project management. In his most recent role as Regional Head of Development Organisations for South Asia, he played a pivotal leadership role in engaging multilateral/bilateral agencies and DFIs for directing specific programme-based support towards Asia. In an interview with </span>Pinaki Roy <span style="letter-spacing: 0.05pt;">of </span><i>New Business Age</i><span style="letter-spacing: 0.05pt;">, Silvanus shared his views on Standard Chartered Bank's phenomenal success over the years and his plans for Nepal operations. Excerpts:</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin: 5.65pt 0in 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><strong>You have just joined in. Do you have new plans in mind for Standard Chartered Bank's operations here in Nepal?<br />
	<br />
	</strong></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">Nepal continues to be very important from a South Asian perspective of Standard Chartered Bank. It is now my turf to be able to grow the relative importance of Nepal in the overall scheme of things. Having consumer banking and wholesale banking as the two basic engines of growth for us does not mean that we will have quantum changes about the way we do our business in this part of the world. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">We will continue to grow the engines albeit with some level of caution because of the underlying situation Nepal is experiencing right now. But I personally see a lot of advantages that can be derived even through this phase of Nepali economics. The changes that I will bring, perhaps, is to leverage the Group businesses, expertise and the best practices. I can be a catalyst for that and we have internally discussed as a team that we will have more of these engagements. The businesses will reap the benefits of these visits and conversations that I had with the rest of the Standard Chartered Group. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin: 5.65pt 0in 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><strong><img align="left" alt="interview" border="1" height="396" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/inter.jpg" style="width: 224px; height: 396px;margin:10px;padding:10px;" vspace="5" width="224" />This must be an encouraging year for Standard Chartered as it is one of the largest profit earning international banks despite the global economic crisis. What do you attribute this success to?<br />
	<br />
	</strong></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">After receiving the Group results just over a couple of weeks ago, it convinced ourselves that we have done exceedingly well. I am absolutely delighted to see the results. We registered ninth consecutive record first half profit and double digits growth both for the top line (11 per cent) and profits (17 per cent). Everyone is delighted including the investors and shareholders and obviously, the businesses know what they are going to do for the rest of the year. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">Looking closer home in Nepal, I think we have achieved much. It's been a tough year with issues of liquidity and governance coming through the financial network. There has also been some amount of uncertainty because of the global businesses impacting Nepal's economy. Nevertheless, I believe that both consumer banking and wholesale banking and the respective support functions have all got together to give value to local Nepali shareholders. There has been good EPS (Earnings per Share) and top line growth as well as effective cost management at a time when we really needed to look inward and reduce expenditures coming through unforeseen circumstances. We have done well as a bank in Nepal on all fronts and have continued to be strong both on capital and liquidity. Therefore, from a group as well as country's standpoint, there is much to gain and look forward to. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin: 5.65pt 0in 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><strong>One of Standard Chartered's unique features is successful lending to SMEs. Do you plan to expand or review the lending policy?<br />
	<br />
	</strong></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">SMEs have always been an engine of growth for the bank. Asia is typically a burgeoning economy for entrepreneurs and Nepal is no exception. If you look around, you can see how entrepreneurs are converting opportunities on a daily basis and the way banks are supporting them. For us, SME is a perfect space between the lower end of consumer banking and the upper end of corporate banking. The segment is very well placed. We have appropriate products that take care of all their requirements such as Working Capital and Term lending, Trade &amp; Guarantee lines and Margin based lending. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">However, we must realise that while SMEs are the global engine of growth for the group, we have to tread with caution when it comes to Nepal. We have to be able to create equitable mortgages as most of our SME lending is based on some form of fixed collateral. Therefore, we have to play as per the rules of the game.&nbsp;We are trying to bring in a few products that are used in the group in the area of margin based lending. It is an important engine of growth not only from the bank's perspective but from a social point of view as well. We are creating a lot of headroom for growth, engagement and employment opportunities. These will have plenty of forward linkages because the entrepreneurs will be able to subsist. Access to finance is a key issue for SME business the world over. We see ourselves as a force that could help meet that latent need. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin: 5.65pt 0in 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><strong>The Nepal Rastra Bank (NRB) has brought several new measures in its monetary policy. How have you viewed this policy?<br />
	<br />
	</strong></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">Policies are well meant so I have given them a balcony view. I clearly think that NRB has tried its level best to meet some of the needs of the current economic state. Reducing CRR (Cash Reserve Ratio), for example, is good as it injects liquidity but it drives up some amount of inflationary tendencies. You have to understand that every action has an equal and opposite reaction. Increasing exposure to the deprived sector is certainly a good measure, especially when we know that farmers and the micro credit side of things require some amount of stability. However, I would like to see well-run, professionally-managed and well-governed micro credit institutions that can use this extra amount of liquidity coming their way. This would help create productive assets in the hands of the farmers so that the entire ethos around farming communities can gain sustainably from micro credit. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">The bottom-line is that while the policies are well meant, they need to be managed and supervised to the end. There are other areas where it has tried to adjust such as the Basel II issues as there has to be better accounting procedures and stress management techniques. The banks have to be prepared for event based risks. Therefore, on the whole, there is a good effort on the central bank's part as far as the monetary policy is concerned. But if it could be combined with great oversight by the concerned stakeholders, you have a winning strategy for the country. I am an optimist as far as Nepal is concerned. It's but natural that when things stack up, people can feel deprived and adopt a pessimistic approach. The people of Nepal are very resilient and it's time their patience got paid back in terms of good governance. The central bank needs to have a good embedded structure on which some of these policies can be grown upon. Policy interventions are great when they get implemented in the right fashion. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin: 5.65pt 0in 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><strong>Standard Chartered in Nepal has remained shy on investing in long-term projects such as hydropower and road infrastructure. What, do you think, are the possible bottlenecks?<br />
	<br />
	</strong></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">We clearly believe that Nepal has been imbued by god by several natural resources. Hydropower is one area where the country can really subsist and actually become a force for growth for the entire region. Underinvestment is due to several counts such as lack of transparency, clear policy directives and long term stability. The FDI which comes in this country is restricted to short-term investments and areas of quick generation of goods and services. However, long term investment in infrastructure, broadly speaking, has been lacking, for sure. We have to create easier barriers to entry, longer trade protocols and cut down on double taxation that exists, perhaps, within certain geographies. We also have to allow the investors vision for at least a longer period of time. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">Bank and multi-lateral finance is always there. We already have done work in the past on hydro electricity in Nepal and are looking at a good pipeline of similar products. As a bank and a brand name, we are `Here for good which means we are here for the medium and the long term. Our commitment to Nepal is unquestionable and therefore, if we have to support the growth of infrastructure, we will certainly exercise our might. The bank is strongly behind these sectors. Hydro and roads etc take time as these are huge projects which are to be governed by several other global rules. We are quite happy to consider them, provided the right investments come along.&nbsp;</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin: 5.65pt 0in 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><strong>You must have faced a lot of pressure to accept more deposits in recent times due to a large number of people withdrawing their money from small institutions. Has there been a substantive change in your deposit patterns owing to this development?<br />
	<br />
	</strong></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">This is true not just for Nepal and this has been happening right through the period of turmoil and uncertainty. Whenever there is uncertainty in any market, there is flight to quality. People like to resort to safer havens in times of uncertainty. We are open to business in Nepal and if people so believe that in the interest of risk mitigation, they wish to move their hard earned money to a safer institution, we will not stand in their way. However, we will go through the normal protocol of good governance by looking at customer details etc and then we would bank for them. It's part of our day-to-day business, we are not in this business of just going and garnering liquidity from the market. But if it comes to us at the price point that we would like to take at, we would certainly accept it. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin: 5.65pt 0in 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><strong>We understand there is serious homework being done on mergers and acquisitions of a number of banks in Nepal. How close are you on this front?<br />
	<br />
	</strong></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">Well, it's public domain knowledge that even the Nepal Bankers Association has written to the central bank asking for tax incentives etc in the event of buying distressed assets or for mergers and acquisitions if there were. Our own view in this matter is very clear. In this part of the world, the economies are growing very productive and organically and there is a load of growth potential. Therefore, banks like ours would be more interested in looking at organic growth. On the other hand, acquisitions come at a cost. It has to do with people, culture, system integration etc and sometimes, it is difficult to get the math right. From a Nepali context, we are very happy right now with our organic engine of growth. We want to believe in primarily using the engine of origination rather than buying out an asset originated institution. We believe in our origination capabilities because we understand credit best in terms of the market that we are in and given the number of years that we are on the ground. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin: 5.65pt 0in 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><strong><img align="right" alt="" border="2" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/inter1.jpg" style="width: 210px; height: 267px;" vspace="10" />How long do you think Nepal's interest rates would be as high as they are? Aren't high interest rates detrimental to the growth of industrial and manufacturing sectors?<br />
	<br />
	</strong></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">This has got to do with some amount of demand and supply economics, cost of capital etc. Nepal is an unrated economy and we have imputed some ratings to the economy given the existing economic and political risks the country is attached to. Today, if you are to benchmark your savings bond for five years at 10 per cent which is an indicative rate, we don't have too many instruments that are longer term which will give you an indication of what the cost of funds or doing business in Nepal is. While I don't have a very firm view on where the interest rates are going to be, I believe they will remain the way they are for a short to medium term. The rate today correctly implies the cost of doing business in this country, part of which is the cost of capital. It is heightened because along with the cost of capital, there is liquidity risk and so many other market and non-market operational credit risks which pour into increasing the total cost of the fund. I believe that this is here to stay for a while unless and until we have a systemic kind of revamping of risk. We have to have central bank and all its adjuncts come out and play a constructive role in rebuilding some of these elements of risk. We will then have cross-border and country risks and the overall risk of the cost of capital come down. It will then reflect in cheaper interest rates. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">No entrepreneur or industry would like a high cost of credit as it mirrors heavily on their balance sheet. It reduces their strength to leverage the balance sheet and there are other cost elements too that are unique to Nepal such as the cost of staff and security, which, is not so large in other neighbouring countries. Therefore, it is to the extent of dampening entrepreneurial streak of modern day manufacturing. I believe that it's not a good story and there must be a different form of intervention where given the inherent risk of doing business in Nepal, the leverage allowed to such institutions should be higher. For example, if there is eight per cent leverage on a non-banking financial intermediary, it can be decided to give a higher leverage to such institutions. It is because resources are at a premium for such people and as long as the business model is good and the shareholders are willing to support the model, it should be allowed by law to higher leverage such institutions. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin: 5.65pt 0in 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><strong>Being a reasonable global player, how do you think Nepal can benefit from the ever growing economies of China and India? How do you see Nepal's prospect as an off-shore financial hub being a transit economy between the two giants?<br />
	<br />
	</strong></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">Nepal is a landlocked country but it has two great neighbours who, I think, are committed to the sovereignty and growth of Nepal. To cite an old idiom, some trade is better than no trade. Nepal would have to use the depth and resources available to it through these two strong economies. These are the future economies of this world and, therefore, Nepal stands to benefit in the long run. There is a lot of work happening already: visiting delegations from both countries, plenty of solidarity and joint ventures. There is a lot of country-to-country donor aided support in some of the more required areas of infrastructure. Nepal has everything to benefit from positively engaging with both its northern and southern partners. Both these countries bring a lot of good and appropriate technology which sometimes may not require power and capital-intensive kind of investments. All in all, if the political ambitions of Nepal are evinced right, there is tremendous opportunity for growth in the economic sector. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="line-height: 115%;">Nepal has been a part of the silk route for some time now and the people of Nepal are almost like global citizens. Almost every family in Nepal has a member working overseas which brings a lot of globalisation even into the villages. People have seen various cultures and experienced much while living overseas. Therefore, trade is an inevitable benefit to Nepal. You have to look at areas where you have a positive trading account with not just India and China but even with countries like Bangladesh and Pakistan. Nepal has to use its foreign and economic policies all geared in a very integrated and systematic approach to get the right kind of foreign investments and create value added commodities which its neighbours would seek. Besides, tax and double taxation protocols will have to be readdressed so as to meet the regional needs. <br />
	<br />
	<br />
	</span></span></div>',
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			'description' => 'Joseph Silvanus  joined Standard Chartered Bank Nepal Limited as its new Chief Executive Officer in July 2011. A student of Economics at St......',
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			'id' => '416',
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			'title' => 'Joseph Massey',
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			'content' => '<p>
	<span style="font-size:14px;"><strong>Interview : August 2011 - 'Second Phase Of Growth Would Depend On Developed Capital Market'</strong></span></p>
<p>
	<span style="font-size:14px;"><strong><br />
	<br />
	<br />
	</strong></span></p>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><img align="left" alt="" border="1" height="200" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/int1.jpg" style="margin:10px; padding:10px;" vspace="5" width="120" />Joseph Massey is Chairman of South Asian Federation of Exchanges (SAFE), a forum of exchanges with 32 members from South Asian Region, UAE and Mauritius. SAFE works for the development of capital markets in the region and offers itself as a platform to these exchanges for global integration. Massey is also the Managing Director and CEO of MCX-SX, which currently offers currency derivatives trading and is the most recent entrant to India's public-trading exchanges. He has over 18 years of experience in the corporate and financial arena and worked with organisations like Life Insurance Corporation of India, the Reserve Bank of India (RBI), Stock Holding Corporation of India, Multi Commodity Exchange of India Ltd, Interconnected Stock Exchange of India and the Vadodara Stock Exchange. Massey was in Nepal during the executive committee meeting of the SAFE from July 6 to 8. In an interview with Gaurav Aryal of <i>New Business Age</i>, Massey shared his views on capital markets of South Asia and the current status of the Nepali share market. Excerpts:</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>What is the scope for growth of secondary markets in South Asian countries?<br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">I think, post-global crisis, this region is emerging as a high growth region because of the natural demand that it has got and also the governments are very keen to develop each sector so that more employment is created and global investors are willing to come and actually invest. If you look from a capital market perspective, there is demand both from primary and secondary markets. Whichever country you take in the SAARC region, it still has to make tremendously large progress in terms of domestic penetration. That market is huge. Then, we have another opportunity which is in global market. I think all economies have very large opportunity to develop in the secondary market.</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Except India, other countries in South Asia have not been able to develop much in this field. What is the problem you see?<br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">There are couple of prerequisites for the market to develop. Indian market has a history of 130/140 years. Over such a long period, we have developed the culture of investment. Despite that, we have penetrated the market relatively less. Indian market is&nbsp;more developed because we have more instruments, more investors, more companies, good infrastructure, clearing corporations, guaranteed good regulation, and infrastructure which is comparable to the best in the world. However, there are many products that we still don't have and now India is aspiring to create those products. India has progressed but it still has a lot to do. Rest of the countries, based on their position in the cycle of economic development, could have reached some level of development in the exchanges. We expect that to happen over a period of time. When global fund comes to one region or one country, visibility of the entire region gets enhanced. Today, you see a lot of funds coming to India. Soon those companies will come and set up their companies in India. Once they set up their companies and invest there, they will also gradually look for what market opportunities are there in the region. India is gradually opening up and Indian citizens can invest outside. Once we open up the market more, a lot of investment from global market will come to India and from there they will go to the other countries of the region. I think the level of development depends on the scale of economy and how much it has developed. But it need not necessarily take the same length of time for each country to reach the same stage of development. We can cut short the time by learning from other's experience. Highlight</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Foreign institutional investors and foreign direct investors are still hesitant to enter this region whereas they are going to Taiwan, Singapore etc. Why so?<br />
	<br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">These countries have been rapidly growing for a very long time. So, the global communities have already identified those destinations. As a result, in&nbsp;the last 20/30 years, their regulatory system and infrastructure have developed so much that the global investors don't see a difference between these countries and their home markets. In SAARC region, some countries have progressed well while others have not. But we all know the model that we have to implement. We just need a more concentrated effort in finding out what are the gaps; what they have and what we don't have. And, we can put regulation and infrastructure in place. The domestic demand being so large, we will see the same level of capital coming in this region eventually. Today, we are not there but we need not take another 30 years to reach there. We can reach there in next five years.</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>What is the objective of creatig a South Asian network of stock exchanges?<br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">I think we are all determined to do this. We understand each country has its regulatory mechanism and its own capital account laws. But we want to sensitise the countries that economies of scale will be realised if this region can work as one unit. Relatively, hard infrastructures like road, transport and others may take time to be developed. Financial market is soft infrastructure which can happen easily. The secondary and tertiary gains of developing an efficient financial market are very large compared to manufacturing and few primary sectors. So, instead of developing the manufacturing sector first and then going to the financial services, it would be a good idea that in this region we shift focus to financial services and the advantage of financial services trickle down to the rest of the economy. Our cost of fund will reduce and we will be able to raise more funds for developing infrastructure, for economic activity and as a result all benefits will flow such as more jobs, better education and necessary infrastructure. So, more capital gets attracted and suddenly we will get out of the vicious cycle. Today, we are in a vicious cycle of low capital, low infrastructure and therefore, low investment. All countries can't achieve the same level of infrastructure simultaneously, but when some of them achieve a level, the trickle-down benefit will happen to the entire region.</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Protection of small investors in capital markets is taken as a major challenge. How can such network protect the&nbsp;investors?<br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">At SAFE, we have identified the global best practices. Each country has adopted these global best practices which are prescribed by IOSCO (International Organisation of Securities Commissions). What SAFE does is that the good practices of one country are shared with others. We don't wait for those countries to learn these things over a period of time. We are sharing these experiences with each other so, until real business can get done, we can share a lot of knowhow and ensure that the level of knowledge of each one is the same.</span></span></div>
<div style="text-align: justify;">
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	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Why are South Asian governments hesitant in opening their markets for international investment?<br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">We are saying that we need to have investor protection. So, should we open the market or not? The first level of investor protection is that you have better infrastructure for trade, better laws, and more capital to protect them. All these things can come if you have a market of significant size. We want the best protection to be given to the domestic investors. But we cannot provide that as our markets are very narrow, we don't have all the products, we don't have large number of investors, our trading volume is small and the number of companies is low. You know that the total income from such market will be naturally very less. So, we need to invest more in increasing the capital, improving law and, giving the investor better safety. If you widen the investor base then obviously it will generate more resources. You will be able to draw more resources into the infrastructure, set up a clearing corporation, depository, have best tools and educate your people better. So, you need the capital market to be very efficient. Today, each country has domestic investors but they are very few. We need institutional investors who can bring in big money and take a deeper and longer view. So, once we complete this, we have to complete the market by getting good quality investors by offering all the products available today in the global markets. Once you create these two, your protection will improve; your market will become safe because your market is aligned to global market. If the investors are investing in the growth of Nepal, you get a diversified base of investors in which some are taking a view with 10 years, some with five years, and some with just one year or less. When you get the mix of all of them, your market will be stable. Some may go out but many others will stay.&nbsp;</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>How do you see the future of capital market in this region?<br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">I think there are three or four facts which indicate that the future of capital market is enormously good. All the countries in this region more or less have the same level of development. They are developing and gradually going up the scale. In the initial phases, all of them are dominated by the public sector enterprises. Public sector enterprises naturally have the challenge of resources. Since the demand of economy is very large, there is a requirement of private capital and private production in order to supply that requirement which the public sector will not be able to deliver. The public sector has reached its level and now the private sector has to come up. It has to come up in infrastructure, education, manufacturing, services and everywhere. For developing all these, the people need risk capital. The risk capital can only come from the capital market. So, I think one is dependent on other. If you have a robust capital market, more people will be able to raise capital and set up an economic enterprise which will create more jobs and more business ventures. It is a cycle. Every economy has realised that we have gone through the stage where the public sector was dominant and&nbsp;banks had a major role to play. Second phase of growth is going to be dependent on developed capital market that should have equity, bond, derivative, service management etc. so that people can raise short term money and long term money. Then, we will see private enterprises start coming in. </span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Experiences have shown that the derivative trade has distorted the natural growth of the market. Can South Asia region avoid such distortion?<br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><img align="right" alt="inteview" border="1" height="287" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/int.jpg" style="margin:5px;padding:5px;" vspace="5" width="400" />SAFE is advocating an exchange traded market where derivatives get traded on the exchanges. They are safe because the counterparty has a guarantee from a clearing corporation. They are better risk-managed, more tightly regulated, and more transparent. As a result, exchange traded market is always a safe market. In 2008 and in the earlier 1998 crisis, what went wrong was outside the exchanges. So, the lesson from the 2008 crisis is that&nbsp;we should get more and more products on the exchanges. Second lesson is we can have laws which are similar all over the world. So, G20 is now advocating that we should have such norms and regulation that are similar in all countries. The advantage SAARC region has is that we don't have to make the same errors some other countries have made. We now already have better regulation on banking system and in the securities market, we have all the institutions developed, most countries have depository, clearing corporations and most countries now trade on electronic system. Having built an infrastructure that is similar to global environment and global rules that are gradually becoming common, I think we are operating on a much safer market.</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Many prominent stock exchanges like those in Europe and Japan have either crashed or remained stagnant for a long&nbsp;time now. Is it so because those economies have reached the point of saturation?<br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">Post-2008, two things have happened. While the exchange traded markets are same, their economy is slowing down and the financial system has observed a very large amount of loss. It will take a long time for them to come out of these losses that they have suffered outside the exchanges. Secondly, those economies are diversifying to come back to high growth phase. In doing so they are investing outside the country. You can't increase the economic growth significantly if the economy is already developed. So, they will only have to look at investing and business opportunities in rest of the world. The good news is while Europe and the US are slowing down, Asia and Africa are&nbsp;growing. If you look at world growth perspective, today there is more demand than it was before. According to a recent news, Boeing is supplying US$ 30 billion worth of planes but all these planes are going outside US. The world economic structure is changing. There is more demand outside Europe and US. And the world community is happy. It does not matter whether I sell my planes in US or outside US. In this process, companies benefit, the society where they work benefits, overall the whole world benefits. So, until the global market continues to be on a growth stage, I think it is a good news and more and more of this will continue to happen. Today, we are living in the era when the world market has more or less started looking similar or at least it has aspirations to look similar. So, we are getting into more openness, more transparency, similar regulation, more international trade. The growth of one will cause growth in other. I think the world economy will continue to grow, especially these emerging economies and developing countries will continue to grow for next 30/40 years and it is good news to the rest of the world.</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Do you see the possibility of instruments and mechanism like regional mutual funds in South Asia to invest in the share market?<br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">One of the discussions that we had both with the SAARC secretariat and the central bank here was in this very line. We should try and create some kind of regional hub in which we could have institutions which are not only taking domestic view but are taking the regional view. It could be regional investors, regional mutual funds and exchanges with cross border trading. It will depend on how much time it will take for each regulator and each country to digest that. But I think in the foreseeable future, in next two to three years time some of these concepts will actually become a reality.</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Now, the commodities future trade is also booming in the region. And they seem to have posed sort of regulatory challenge. In Nepal such market is blamed to have facilitated capital flight. How is your view? <br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">Commodities markets are markets for risk management. Secondly, they are market for giving price signals of what is expected to happen in future so that policy makers can take policy measures three months or six months in advance. Third, the physical market for commodities lack transparency, they are fragmented. To give a common view to the rest of the world on what is happening in this market, whether there is crisis building up or not you need to have an efficient futures market. An efficient futures market also brings an efficient physical market. I don't agree that commodities market cause flight of capital because it is essentially a market for risk management. People will not invest very large amount of money until they invest in the physical market. Futures contract should be for one, two or three months which is not a long-term investment. Typically, flight of capital takes place because of other natural economic indicators like high inflation, low growth of economy and interest rate structure. The domestic capital has to remain here and does not have an option. But if it is global capital, it goes to the most efficient market which has high growth, low interest bearing and good opportunity for growth. Commodities markets are rational markets. These markets will look at the fundamental demand and supply. Based on the fundamental demand and supply, price recovery will take place. </span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">If someone is buying wheat, cotton or gold, that means the price of that commodity in the future can go up. But the price&nbsp;of a commodity futures contract will go up only if the physical commodity goes up. Physical gold is going up because someone is buying physical gold. They are too integrated together. Physical market demand and supply is dependent on actual consumption and actual supply. I don't think we should panic at the price fluctuation in the commodities exchanges. However, if we can have&nbsp;regulatory system, more transparent system, better safeguard on exchange, clearing corporation it will eb better because then some of these worries&nbsp;will go away. </span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Of late, the share market index as well as confidence of investors has remained low in Nepal. How can these be bolstered up ?<br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">There are no shortcuts to it. When an economy is going through a low cycle and if you only have domestic market, the entire country has one view. You donâ€™t have a contrary view from anyone else because you only have individual retail investors. Their appetite to take a long term call is very minimal. So, when your market is going through slowdown, the individual investors will be more scared so they will also take a view which is not more than a day. Now, you need someone who can take a view which is for one month, one year or five years. This can only be done by institutional investors. So, it is paramount that Nepal tries and builds up domestic institutional investor community so you can put mutual funds in place. I don't know how your pension industry is, but I can be pretty sure that some of those funds will come and they will invest in the capital market. And insurance industry too can invest in capital market. This is level one. You now have a person who is willing to take a call which is a longer term. But still they are domestic and have a view which is not very diversified. If you can adjust global investors inside, you will have a view which is very different. They are willing to take a call which is much longer, in much larger quantum of money because now the stocks are available very cheap. Their cost of borrowing will be less. They can come and do large borrowing and as a result the market will grow up. So, in a market which goes to such a long term low cycle, the only way to break out of the cycle is by ensuring that institutional money both from domestic and global markets gets attracted to the country and I think you should do that.</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	<br />
	</span></span></div>',
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			'description' => 'Joseph Massey is Chairman of South Asian Federation of Exchanges (SAFE), a forum of exchanges with 32 members from South Asian Region, UAE and Mauritius. SAFE works....',
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		'Article' => array(
			'id' => '388',
			'article_category_id' => '46',
			'title' => 'Dr Thomas Gass',
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			'content' => '<p>
	<span style="font-size: 14px;"><strong><br />
	</strong></span></p>
<p>
	<span style="font-size:14px;"><strong>The Taxpayers Of This Country Are The Major Donors To Nepal (july 2011)</strong></span></p>
<p>
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	 </p>
<div style="text-align: justify;">
	<span style="font-size: 12px;"><strong><img align="left" alt="taxpayers" border="1" height="195" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/interview(4).jpg" style="width: 139px; height: 195px;margin:10px;padding:10px;" vspace="5" width="139" />Dr Thomas Gass</strong> is the first residential Ambassador of Switzerland to Nepal. He was previously Switzerland's ambassador to the United Nations in New York and spent five years there prior to arriving in Nepal. He holds a PhD in biology and began his career with the Swiss Agency for Development and Cooperation (SDC) in 1988. He has held positions in the Swiss civil service and with the United Nations. Gass was the Vice-President of the executive board of the United Nations Development Programme and United Nations Population Fund. He has also lived in Guyana and worked in Africa and the former Soviet Union. In an interview with Pinaki Roy of <i>New Business Age</i>, Gass discussed a diverse range of issues from Swiss cooperation and its impact on the Nepali society to the constitution writing process in Nepal. Excerpts:<br />
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<div style="text-align: justify;">
	<span style="font-size: 12px;"><br />
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;"><strong>Switzerland is among the few countries that initiated financial assistance to Nepal since 1959. How do you evaluate Swiss cooperation over the last 52 years?<br />
	<br />
	<br />
	</strong></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">I would say that this has been an extremely fruitful partnership that has encompassed mutual learning and has evolved over the time as any working partnership should. Initially, Switzerland implemented many projects directly and we had up to 100 experts working here at a time in the 1970s. We work differently today as we place more emphasis on the leadership and the coordination of the government and make use of national capacities for our projects here. We work through the ministries, INGOs and the local NGOs among others.<br />
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 12px;">One of your primary objectives has been to build rural infrastructure, particularly, the suspension bridges. Do you systematically assess the economic impact of these bridges constructed mainly by Swiss support?<br />
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	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">Yes, we do systematically assess the impact of our projects. But we don't assess these projects only in an economic way; we also look at them from a social and inclusion point of view. Over 1,600 trail bridges have been built and 3,500 maintained in the last 10 years. As a result, over 4.8 million people have better access to services through safer river crossings. On an average, each bridge has reduced walking distance by 2.5 hours and about 4 million person-days of employment have been generated through these bridges. These bridges are turnkey projects constructed by the villagers and the community. In the last four years alone, school attendance has risen by 22-27 per cent and visits to health centres have increased by 20 per cent on an average in places close to the newly built bridges. So, these are the kind of evaluations that we have. </span></div>
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 12px;">Forestry is a major area that you have been contributing to. However, the Swiss government has diverted its attention from forestry to other areas of late. What could be the possible reasons for this?<br />
	<br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">We certainly have invested a great deal of time and resources in forestry and it's true that we have been focusing on some other areas too. However, let me correct you by saying that we are still interested in forestry. We are and will continue to invest in forestry. To give you the figures, we have been supporting the previously-funded forest project since 1991 which will end this year. The project has resulted in reversed deforestation for 185,000 hectares of government-managed forests. It has also improved the condition for 135,000 hectares of community-managed forests in the three districts where SDC [Swiss Development Corporation] has been active. Additionally, increased availability of forest products has contributed to sustainable livelihood of 145,000 families and 16,000 person-days of forest based employment have been generated for the poor. Strong multi-stakeholders mechanism and participation from empowered community groups were crucial while achieving these results.<br />
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">We are currently planning and preparing a multi-stakeholder forest programme together with DFID and Finland with the Ministry of Forest and Soil Conservation in a supporting and facilitating role. It will build on our respective experiences and extend its impact to a great number of districts spanning over 10 years. The programme will cover about 60-65 districts of the total 75 districts in Nepal. Therefore, I would say that our presence in the forestry sector is probably more than ever.<br />
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 12px;">You have tried to link Swiss contribution with entrepreneurship, for example, the employment fund. As a drastic departure, you have chosen to work with private companies as trainers. How successful has the idea been?<br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">We have been engaged in vocational skill training since the 1950s with cheese and carpet production. We then moved into more formal vocational training with technical schools such as the one in Balaju.&nbsp;We were also associated with the Technical School in Jiri in the 1980s and the Training Institute for Technical Instruction (TITI) in the 1990s. </span></div>
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">This cooperation changed over the time because many more national capacities were becoming available in the formal training sector. At the same time, we realised that we were reaching only a small number of trainees through formal training who could perhaps afford on their own. We started partnering with private entities as training providers to reach the poorer segment of the society as well. It is easier to target disadvantaged and marginalised groups through our new approach. The onus is now on the training provider to find the first employment for the trainees. We feel that vocational training responds more directly to the needs of the labour market through this approach. </span></div>
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	<strong><span style="font-size: 12px;"><br />
	The Swiss government was supporting the promotion of good governance. Do you think it has contributed towards transformation of government practices in Nepal?<br />
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">The money that Switzerland invests into its development cooperation with Nepal comes from the Swiss tax payers. It is therefore absolutely essential that we give adequate attention to good governance and fiduciary management of the projects funded by us. And, we hope that it has a positive influence on the communities and the ministries we work with. Like any other country, Nepal requires good governance across the board from the villages to the central government and from the local associations to the major national parties. Our influence is obviously less at these levels. It is the Nepali people that have to hold their politicians and administration accountable for their respective actions. </span></div>
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">On our part, we have promoted and tried to practise public hearings and public accountability for our projects at the local and district levels. We have seen that there are concerns to begin with while we practise accountability. However, all parties are satisfied after the entire exercise is over. The local and district administrations also realise that such practices actually strengthen their credibility. At the same time, the population too gains a lot of confidence. </span></div>
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 12px;">You have been working with the same partner, Pro Public, for over 15 years now. How do you justify this association for such a long period of time?<br />
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">Yes, we have had a very long cooperation for sure. But one has to acknowledge that Pro Public has a great deal of experience. They have been in the field for a long time and have been in many places so we have to give them credit for that. The current phase of the project with Pro Public is coming to an end this year and we haven't yet decided who will be our future partner. We believe that we need support from an independent organisation that helps the public hand to build up its credibility through public hearing. It does not necessarily have to be advocacy or accusing the administration on its weak points. It is more about building the capacity and confidence to face the public by being transparent. There is a niche for these kinds of activities in every district which makes our projects and the work of the local administration so much more effective.</span></div>
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	<strong><span style="font-size: 12px;">Some of your projects like Jiri Multi-Purpose Development Project have been completely abandoned. What should Nepal do to make such projects and development sustainable?<br />
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	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">Well, the question is not about what should Nepal do. It's rather about what should the development partners both Nepali and Foreign do. First, the projects have to respond to a real need in order to be sustainable. They need to respond to the demand by the beneficiaries and these needs may evolve over a period of time because the beneficiaries and their aspirations evolve. Second, the projects also have to be of appropriate size and be constantly adaptive. It is because the counterparts the national entities can take over some of the responsibilities of the projects in a more convincing way. Therefore, these are the two elements that help projects become sustainable. The projects are the tools to deliver certain services that need to continue. </span></div>
<div style="margin-bottom: 0.0001pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;"><br />
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	</span></div>
<div style="margin-bottom: 0.0001pt; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 12px;">The issue of inclusion is in the forefront of development debate lately. Is this the right approach given that it would further consolidate caste as ethnic identity just to get the&nbsp; </span></strong><strong><span style="font-size: 12px;">desired benefits?<br />
	<br />
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	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 12px;"><img align="left" alt="thomas" border="1" height="244" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/img1(2).jpg" style="margin: 10px; padding: 10px;" vspace="5" width="400" /></span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">The benefits of social and economic development frequently do not get distributed equitably in societies that are very diverse and strongly compartmentalised. This leads to frustration and conflict. Invariably, there is an accumulation of wealth and power by those who already have it rather by the ones who don't have it. This has been experienced in many countries and it has been experienced in Nepal too.&nbsp;The other problem is that the potential of the diversity of a nation is not unleashed. Imagine a family, village or a country where all the decisions are taken only by men. For example, I can't imagine not involving my wife in decision making. She may have many skills, knowledge and competencies that I lack. The same is true for a country where a single ethnic or linguistic community is controlling all the decisions. This way, you are invariably reducing the development potential of your country to a fraction of what it could be otherwise.&nbsp;</span></div>
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	<span style="font-size: 12px;"><br />
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 12px;">Given the climate change, how do you think issues like bio-diversity can be addressed?<br />
	<br />
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	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">The problem with climate change is that we don't really know the end effect especially in a country like Nepal where there are so many ecological zones. Some places might become drier and others wetter so there could be a lot of fluctuation. The diversity in nature is the insurance policy against change. That's why nature has been created the way it is, with a lot of diversity where one plant may die and another may survive. The diversity has to be maintained in order to adapt to the changes that we don't know about. And therefore, natural bio-diversity and agricultural bio-diversity have to be promoted very actively keeping the climate change in mind. Farmers in Nepal who live in very diverse environments can help maintain and cultivate agricultural bio-diversity that would help the country resist and be more resilient to climate change and its effects. But the community and the country as a whole has to recognise that service. It's not just the food production, it goes beyond that. This is a little complicated&nbsp; it means that you have to start thinking about environmental services by getting the farmers some kind of support that is more than just the minimum payment. <br />
	<br />
	<br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;"><br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 12px;">The Swiss government is the major donor towards supporting constitution writing process but it doesn't seem to have yielded any results. What do you think is the problem with constitution writing in Nepal?<br />
	<br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">The taxpayers of this country are the major donors to Nepal. They are the ones who pay the salaries of the parliamentarians and indirectly, the politicians. Therefore, the investment of the international community cannot be compared with the investment of the people of this country in terms of time and resources. Changing the direction and design of a country takes time. It requires a lot of focus and motivation and the need to make compromises. This is in the hands of the Nepali politicians who have to come together for an agreement and then be able to share their findings with the general population at large to achieve a consensus. The current generation of the politicians owe this to the country. The constitution in my country also took a long time. We can be here as friends, nudging and criticising but in a constructive and positive way. We certainly hope that the constitution writing process in Nepal will now move forward. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;"><br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 12px;">Many people think that Swiss federalism model is appropriate for Nepal. How do you view this idea?<br />
	<br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">I strongly believe that Nepal needs to find its own model. What I can say though is that Swiss federalism is not about autonomy and independence. It is about how our cantons (provinces in your case) can work together building on reciprocal strengths and diversity to work in a united way for a stronger country. That requires a lot of compromises. One can never see one's own problems only. The provinces in my country need each other and I assume that it would be the same in Nepal. The policy makers can have a positive bias towards their own provinces. Previously, anyone who had a vision and was ambitious for Nepal focused on Kathmandu. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;"><br />
	</span></div>
<div style="text-align: justify;">
	<span style="font-size: 12px;"><span style="line-height: 115%;">In the future, the people would like to be identified by their respective regions and will be looking for strengths and resource development of their own provinces. The sense of pride for belonging to a certain province will come into play which was not there earlier. It helps but you can never lose out of perspective that a province is not viable by itself and requires to be complemented by other provinces. Therefore, everyone needs to understand that Nepal, as a single entity, needs to establish credibility at the international level. <br />
	<br />
	<br />
	<br />
	</span></span></div>',
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			'created' => '2011-08-22',
			'modified' => '2012-09-16',
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			'description' => 'Dr Thomas Gass is the first residential Ambassador of Switzerland to Nepal. He was previously Switzerland's ambassador to the United Nations in New York and spent five years there prior to arriving in Nepal.',
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		'Article' => array(
			'id' => '297',
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			'title' => 'Dr Supachai Panitchpakdi',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<span style="font-size: 14px;"><strong><br />
	</strong></span></p>
<p>
	<span style="font-size: 14px;"><strong>Trade Should Be Harnessed To Ensure Development</strong></span></p>
<p>
	 </p>
<p>
	<span style="font-size:14px;"><strong><br />
	</strong></span></p>
<div style="text-align: justify;">
	<span style="font-size:12px;"><img align="left" alt="WTO" border="1" height="185" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/interview1(1).jpg" style="width: 266px; height: 185px;margin:10px;padding:10px;" vspace="5" width="266" />Dr Supachai Panitchpakdi is the Secretary-General of the UN Conference on Trade and Development (UNCTAD), a post he first took up in September 2005. Prior to this, he was the Director-General of the World Trade Organisation (WTO). A PhD in Economic Planning and Development from the Netherlands School of Economics (now Erasmus University Rotterdam), he also served as Thailand's Deputy Prime Minister, Minister of Commerce and Deputy Minister of Finance on different times.&nbsp;Dr Supachai was in Kathmandu recently to attend the Regional Workshop on Productive Capacities, Economic Growth and Poverty Reduction in Asian and the Pacific LDCs. In an interview with Gaurav Aryal of <i>New Business Age</i>, he shared his views on economic, trade and development issues of the Least Developed Countries (LDCs).&nbsp;Excerpts:</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><br />
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	</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><strong>UNCTAD is organising a series of regional workshops to disseminate the findings of its reports such as Least Developed Countries Report, UNCTADâ's Division for Africa, Least Developed Countries and Special Programmes (ALDC) etc. What are the general findings of these reports?<br />
	<br />
	</strong></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;">We are trying to concentrate on the areas of structural adjustments mainly in supporting the work of the states. We are trying to create productive capacity which means jobs creation, investment in infrastructure, investment in power plants and education. Our findings say that economic growth is needed to create social welfare for people. It does not happen automatically. So, there has to be definite development governance that would direct all the gains from growth to areas that would give people the right to participate, have transparency and decision making process as well as in the areas of trade. LDCs are essentially small economies. So, we think an LDC should make efforts to mainstream trade policy into its national development policy. The domestic markets are not enough to maintain basic demand so they need external demand too. For this, they need access in the international market. Special concessions given by the advanced countries for the LDCs will be crucial. It should be the heart of what we call early harvest for Doha negotiation.</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><br />
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	</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><strong>What can Nepal learn from the experience of other developing countries?<br />
	<br />
	</strong></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;">First of all, development governance is very important. If you look at countries like Malaysia and Korea, these developing countries have actually showed the way for industrialisation process where the government has been taking the lead. They support industrial zones, put up investment policy that attract foreign direct investment (FDI) in technology related areas and create trade infrastructure in terms of ports, transportation facilities and trading firms. For example, they have trading firms that help promote the products in foreign countries. Nepal can also learn from their monetary policy that is customer focal. In the area of tourism, Nepal is doing well but it can certainly do better. More investment is required to attract tourists but it is important at the same time, to keep the negative effect of tourism under control.</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><br />
	<br />
	</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><strong>Despite having ample resources, poor countries have extremely low economic growth. Could you highlight the key issues where LDCs like Nepal fail in formulating trade and economic policies?<br />
	<br />
	</strong></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;">I am not clear about Nepal but many LDCs have remained too dependent on few commodities. They have also failed most of the time to pursue positive development. This is an area in which it needs investment from the government sector for extended service, irrigation projects, water management and to build roads in the rural areas.&nbsp;The government also needs to provide support and subsidies for farmers in rural areas where they do not enjoy enough income to sustain themselves. LDCs also need to sustain in the areas of gender and women. In Africa, for example, women are the most underutilised productive capacity. In Asia, we still need legal reform that would put women rights, wage level, welfare treatment, education etc at par with men.&nbsp;LDCs can also learn from countries that have performed well in domestic resource mobilisation because one has to develop the domestic financial market. The banking system must be solid and it needs prudential supervision by the government so that more savings can be mobilised. You can have more resources here in Nepal itself and you don't have to be totally dependent on foreign aid.</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><br />
	<br />
	</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><strong>You have been part of the Thai Government in the past. What should be the agenda of LDC governments on the level of policy making and implementation, to increase the export trade volume?<br />
	<br />
	</strong></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;">The LDCs will have to invest in capacity to produce, to begin with. For example, if you have some food products, you may need to process food products as well in order to add value. Similarly, if you have some minerals, then you should think of investing in the processing of minerals. In Thailand we invested in canning of tuna fish which has been doing exceedingly well. We used to produce automobile spare parts to begin with but gradually we started producing automobiles on our own. So, you have to start from somewhere and try to move up the ladder all the time. I would recommend that LDCs having niche in certain areas have to keep adding value. Importance of technology is one lesson we have learnt in Thailand. Innovation and technology depends on the quality of education. Education must be guided in a way that would promote research. In Thailand, university professors and academics are encouraged to conduct more research and innovate. Foreign companies are also being attracted to the country to learn technology from. </span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><br />
	<br />
	</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><strong>LDCS are largely dependent on donors and face heavy foreign debt. They also lack fundamental base of stable politics and proper policy implementation. Amid such complexities, how can countries move on the right path of development and poverty reduction?<br />
	<br />
	</strong></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;">Well, I think these are more controversial issues than the development policies. You must have growth to be able to have social investment and welfare but, of course, a loan is not enough. In order to transfer growth into social development, you probably need a policy on socio protection and inclusive development. It means that you would have to try to spread growth throughout the country. You need growth to be well distributed and not concentrated in certain areas only. It means decentralisation. You need to decentralise the authorities of the government and the investment activities. Investment has to be made into rural network of roads and means of transportation. Both skilled and unskilled people need help as well. If you look at the informal sector particularly, there are a lot of people being underpaid. You have to be able to initiate social programmes that would help guarantee employment. The employment guarantee programme in India could be one shining example. I feel that such programmes help support rural families. I also like the Bolsa Familia programme in Brazil where government financial support is given to families on condition that children must attend school until secondary education. These are some of the obvious measures that are needed to produce the impact from economic growth for social welfare. </span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><br />
	<br />
	</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><strong><img align="right" alt="reduction" border="1" height="214" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/interview(1).jpg" style="width: 171px; height: 214px;margin:10px;padding:10px;" vspace="5" width="171" />What should be the role of the development partners in addressing the issues of development and poverty reduction in the LDCs?<br />
	<br />
	</strong></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;">Development partners normally provide financial means. They have a target to meet - a contribution of 0.15 to 0.2 per cent of the GNP - which has to be given to the LDCs. However, they are giving only 0.09 per cent which is too low. I think the target should be met. The development partners should work on transfer of technology. This is not in financial terms but in terms of intellectual property rights. There should be some sort of open software system that can be accessed by the LDCs so that proprietorship could be opened up for people to search. I would say, in the trade areas as per the Doha agenda, they can give concessions to the LDCs as an early harvest. They don't need to wait until the end of the round to give concessions in the form of duty- and quota-free concessions for trade facilitation and in the areas of outsourcing of services. These are some of the areas which, I believe, could be done in terms of green economy. I also expect the green fund for the LDCs or the green development mechanism to be established. Some of these arrangements would pay special attention to the roles of the LDCs and they should be granted special assistance in these funding ranges. </span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><br />
	<br />
	</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><strong>How do you view the current debate on aid for trade?<br />
	<br />
	</strong></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;">Aid for trade is a good programme to mainstream trade into development. For us at UNCTAD, aid for trade means aid for trade for development. So, trade should be harnessed for serving this purpose. We have been talking about the need for more productive investment and investment in trade infrastructure, development training of skill negotiators, the need to setup the right commercial institutions and the right legal framework. You must have the legal people who understand the Trade-Related Aspects of Intellectual Property Rights (TRIPS) issues. You may also need to have the IT court. The aid for trade should also help in the areas of providing capacity to accomplish more work in environment and trade. UNCTAD believes the new areas of green economy would provide for opportunities to invest in renewable and energy products. I think â€˜aid for trade can help pave the way to support transfer of technology and training of scientists and engineers. This would also help in bringing the LDCs to new rounds of opportunities courtesy the green economy.</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><br />
	<br />
	</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><strong>In poor countries, the governments try to tread a middle path between the models of controlled economy and free economy. How do you evaluate Nepal's trade and more specifically, its economic policy?<br />
	<br />
	</strong></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;">To be fair to the government in Nepal, I am not qualified enough to emphasise on what Nepali economy should be doing. But I do see the role of the government being evolved here. I hope it will evolve in a way where there won't be too many controls. It is important for the Nepali government to be balanced in its role along with its evolving policies. The direction we would like to advise is to go into what we call development governance. This will help policies being directed at getting the development strategy right. The government should not look at market reform, competition and pricing policy only. It must have the market work so as to attract new projects that would create employment. Productive investment should be encouraged. Nepal needs a monetary policy that would mobilise more funds and keep interest rates not too high. It would mean the fiscal policy will have to be directed at needs to create the perfect infrastructure. It will also mean that the exchange rate policy needs to be flexible. And you have to have the exchange rate at a level that will be stable and will help make your products competitive.</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><br />
	<br />
	</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><strong>Questions are often raised in poor countries about the value and benefit of being WTO members. Anti-WTO activists accuse that WTO policies are pro-rich and poor countries simply can't afford to abide by WTO policies. What do you have to say?<br />
	<br />
	</strong></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;">Well, being a WTO member is not enough. It won't help a country if it doesn't work on it to make itself strong in competition. So, being a WTO member is like being presented with opportunities to take advantage of the markets around the world. Taking advantage from the market depends on domestic policies. The domestic policies must drive forward to do more work in the areas of trade infrastructure, business improvement, skills training, development of science of the exported products and standard of products that would meet international standards. The technical barriers to trade and technical standards of manufactured products are also important. You also need the right laws to take benefits from the membership of the WTO. Being the member of the WTO is not a free ride, for sure.</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><br />
	<br />
	</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><strong>What's the equation between UNCTAD and WTO in terms of policies?<br />
	<br />
	</strong></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;">UNCTAD and WTO follow similar policies and support and complement each other. For instance, UNCTAD has been doing a lot of work in the area of capacity building while WTO is doing the same in the area of trade. We support the WTO in areas of trade facilitation and negotiation and trade and environment negotiation. We do the work on investment policies that WTO cannot do due to the lack of investment agreement at WTO. Being the focal point for investment policy for the UN system, we have been giving advice on investment policies to developing countries around the world. We advise them on investment agreement, investment promotion, policies etc. So, this actually complements WTO on what it cannot do. Also in the area of competition laws and consumer protection which WTO could not agree, we are providing assistance for countries to establish competition laws and consumer protection. Therefore, I think we do play a complementary role. The pace of trade liberalisation might have been a little too fast for developing countries. They may have not been able to reap benefits because they were not well prepared. The WTO also agrees now that in order to garner benefits from trade liberalisation, well preparedness and trade mainstreaming into the development process are essential. </span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><br />
	<br />
	</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><strong>How would you like Nepal to take advantage from huge and growing markets on both sides of its borders?<br />
	<br />
	</strong></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;">Asia is now the growth port of the world. This is an area where growth is maintained at a very high level and quite stably. I think Nepal is situated in the right place with major countries surrounding it like India and China and South East Asia within close proximity. There should be a definite government policy to direct trade cooperation with all these countries. Such endeavours are supported by Asian Development Bank also. Cooperation is not always easy among neighbouring countries. However, you must concentrate on joint projects like transportation or regional projects taking part in joint programmes like tourism promotion etc. I think you should make use of having a deeper integration with South East Asian and North Asian countries in the region besides China and India. </span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><br />
	<br />
	</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><strong>Will it be sustainable for LDCs to look for export trade only?<br />
	<br />
	</strong></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;">No. Sustainability is more than just export trade. It means you must have social equality, look after ecology and environment and invest in forestation to keep forests alive and growing. You have to invest in water management and human resources that will make for sustainable development. Therefore, it's not only export trade that would drive you. You must have a combination of inclusive policies that would shape the benefits of growth and trade equally. </span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><br />
	<br />
	</span></div>',
			'published' => true,
			'created' => '2011-05-31',
			'modified' => '2012-09-16',
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			'description' => 'Dr Supachai Panitchpakdi  is the Secretary-General of the UN Conference on Trade and Development (UNCTAD), a post he first took up in September 2005. Prior to this, he was the Director-General of the World Trade Organisation (WTO). A PhD in Economic Planning and.....',
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			'id' => '249',
			'article_category_id' => '46',
			'title' => 'Mark E Hansen',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<span style="font-size: 14px;"><strong><br />
	</strong></span></p>
<p>
	<span style="font-size:14px;"><strong>What Gets Measured, Gets Done</strong></span></p>
<p class="ANSWER">
	 </p>
<p class="ANSWER">
	<br />
	<span class="MyriadPro"><span lang="EN-GB"><img align="" alt="" border="1" height="220" hspace="5" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/interview1.jpg" style="width: 224px; height: 220px;margin:10px;padding:10px;" vspace="5" width="224" /><br />
	</span></span></p>
<p class="ANSWER">
	<span class="MyriadPro"><span lang="EN-GB"><br />
	</span></span><span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">Mark E Hansen</span></span></strong><span class="MyriadPro"><span lang="EN-GB">, the Head of Asia Governance and Strategic Initiatives at Standard Chartered Bank, serves on the Bank's Asia <br />
	</span></span></span></span><br />
	<span class="MyriadPro"><span lang="EN-GB">Geographic Management Committee. He has a Masters in Economics from UC Berkeley and a BA with honours from Cornell University. He was previously a partner at strategy consulting firm Booz Allen &amp; Hamilton. In an interview with Pinaki Roy of <i>New Business Age</i> during his recent visit to Kathmandu, Hansen spoke in detail about various aspects of corporate governance. He has over 25 years of experience in strategic transformation and performance improvement programmes and has been involved in the development of Standard Chartered's executive leadership training programme. Hansen also put forth Standard Chartered's take on mergers and acquisitions, in the light of Nepali banking sector's latest merger rhetoric. Excerpts:<br />
	<br />
	<br />
	</span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">How do you look at the overall impact of corporate governance in private sector, specifically banking operations?</span></span></strong></span></span></p>
<p>
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.1pt;">I think it's becoming increasingly important from several perspectives. One is from the investor's perspective. Investors want to invest in institutions that they believe have strong corporate governance, to ensure the security of their investment. It's not just an emerging market issue; it's a developed country issue. The fate of big companies such as Enron, MCI, WorldCom and Lehman Brothers have all raised questions about the appropriateness of corporate governance. As the world continues to evolve, investors as well as customers want to do business with institutions they believe are doing the right thing. In the financial sector, we think it's a point of differentiation for Standard Chartered Bank where we have such strong corporate governance. And it's well appreciated by the regulators in the countries that we operate in. We pride ourselves on having high standards. We are well managed and governed. So, we believe we are at the front end of the trend that will put increasing emphasis on corporate governance. We pride ourselves in Nepal because we are a listed company here. And we make sure that we are on the cutting edge of best practices.&nbsp;</span><span lang="EN-GB"> <br />
	</span></span></span></span></p>
<p>
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">When did Standard Chartered Bank first envision the importance of corporate governance? How has it helped spearhead the system so far?</span></span></strong></span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.1pt;">It's been there for a long time. We have always had in our structure a form of country management with governance as well as the businesses. Sometimes it's more towards the business side and at other, towards the governance side. But it's a bit like a check and balance system that you would see in political systems where you have a legislative, an executive and a judicial branch. In ours, we have our businesses and then we have the governance. They serve as a healthy tension and a check and balance between the two. By design, we have always had our businesses focused on shorter term. It is about making the numbers for the year and the governance function having the more strategic perspective. It predates the governance crisis that happened in the west. It was impacted by certain events in the UK in the 1970s and 1980s and later in the US. But all that did was force us to be more rigorous and more introspective about how we can do this better.<br />
	<br />
	</span></span></span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">How important is the role of institutional investors in increasing the professional diligence of your bank as a corporate entity?</span></span></strong></span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.1pt;">It's quite important. We have large sovereign funds, long term institutional funds, insurance companies as well as a reasonably diversified investor base. We think that diversity is a strength because it helps us work through many different constituents. The institutional investors tend to have a longer term perspective which is important. One of the concerns that I think exists in the academic press today is that they focus too much on the short term, on quarterly profits. We only report our financials semi annually. We would like to look and take a longer term perspective like the investors do. The other point I have always raised is that the investor base is expanding, actually. For example, we are listed in India now so it's not just the western investors in London. We now have Indian investors in Mumbai, Hong Kong investors in Hong Kong and Chinese investors in Shanghai.</span><span lang="EN-GB"> <br />
	</span></span></span></span></p>
<p>
	 </p>
<p>
	 </p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">A board of directors often plays a key role in corporate governance. How do they go about ensuring accountability of the organisation to its owners and authorities?</span></span></strong></span></span></p>
<p class="ANSWER">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.1pt;">If you look at the directors roles, it's important that they understand sharing the responsibilities they take on. What has been happening in the past is that in some institutions they were very lightweight. The practice still exists in a few companies but it is starting to disappear from most of them. Today, the directors have to come prepared, contribute and interface with the regulators. Everyone Capital Markets, Regulators and the Institutions expect the directors to perform. As for our own subsidiaries, we have quite a rigorous process for selecting and then assessing directors on a regular basis. </span></span></span></span></p>
<p>
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">Who are the parties to corporate governance that have an interest, direct or indirect, in the effective performance of an organisation?</span></span></strong></span></span></p>
<p class="ANSWER">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.15pt;">It's a wide group of stakeholders. First, the investors who want to know if the money is put in a well run and governed institution. Second, the banking and capital markets regulators because they want the assurance that the propriety in compliance with regulations is embedded in the organisation that starts with the governance function. And then the customers, increasingly, because they want to know they are doing business with the right organisation. The employees too have an interest. And I say this particularly in Asia because a number of banks and local companies are family-run entities. They have a particular management and governance style. In fact, the part of the problem is that the management and governance aren't separated. So, I think the establishment of appropriate governance and a separation of governance from the management are quite important for the evolution of companies in the Asian markets.</span></span></span></span></p>
<p>
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">Could you tell us about the key elements of good corporate governance principles? </span></span></strong></span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.1pt;">The first one is compliance which focuses on bringing the global best practises. It also recognises that one has to adhere to local regulations. Therefore, it is a binding constraint issue. We try and incorporate the best practices but we also have to accept the local constraints. The second is integrity and transparency. The best way to demonstrate corporate governance is actually the transparency by which you disclose all your financial information as well as other information about the organisation. The third is process which, though boring, is quite important. The discipline around the varying board agendas, getting papers circulated beforehand, having meetings at appropriate times, correctly managing etc are part of this. It's very administrative but critical for the impact on the working style of the board of directors. This way you make sure that the board is focusing on the right thing and getting its work done efficiently. The final one is the measurement of the board's effectiveness. You need a process to self-examine yourself. It's not necessary to bring in outside experts to determine that. The clich what gets measured, gets done is true.</span><span lang="EN-GB"> <br />
	</span></span></span></span></p>
<p>
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">What are the consequences of not having good corporate governance?</span></span></strong></span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.1pt;">As I mentioned earlier in this interview, the many recent corporate scandals MCI WorldCom, Enron, Lehman Brothers to name just a few of the more well-known failures from poor corporate governance evidence some of the consequences. Investors lose money. Employees lose their jobs. Regulation may be increased to the point where it becomes very costly and burdensome. Stakeholders trust in business diminishes.&nbsp; The trust which underpins market economies becomes eroded. I think the latter is a lot of the reason why corporate governance is becoming more important to consumers, investors and the society at large. Increasingly, consumers prefer to buy products and services from, employees prefer to work at, and investors prefer to invest in companies who are well-governed and who exhibit good corporate governance.</span><span lang="EN-GB"> <br />
	</span></span></span></span></p>
<p>
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">The Enron collapse is an example of misleading financial reporting. How crucial is quality financial reporting for the corporate governance system to function effectively? </span></span></strong></span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.1pt;">It's absolutely crucial. Because if you cannot trust the numbers, there is no way you can make an economic or financial assessment. I think the financial crisis did not come as a surprise for many because irregular accounting practices existed in the system. Markets function on information and to a certain extent, on trust. If the information cannot be trusted, they don't have market values.</span><span lang="EN-GB"> <br />
	</span></span></span></span></p>
<p>
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">What are the barriers to good corporate governance and their corrective measures? </span></span></strong></span></span></p>
<p class="ANSWER">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.1pt;">Let me focus on what helps make good corporate governance. First, there must be a clear separation of governance and management responsibilities. Second, the directors should be willing to dedicate time and effort to be effective board members. Third, the independent directors must protect minority shareholders rights.&nbsp; Fourth, a strong audit committee has to be supported by a reputable and capable external auditor and an independent and strong internal audit function. Fifth, there must be clear, accurate and timely management and financial information.&nbsp; Finally, a board effectiveness review process has to be in place to measure individual contributions and the collective effectiveness of the board. This must be supported by effective company law and regulations which clearly define the corporate governance framework in an unambiguous manner. The form <i>per se</i> is less important than the substance, since there are different models of how to structure governance in a company, for example, Anglo-American models Vs continental European models.</span></span></span></span></p>
<p>
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">Can you attribute Standard Chartered Bank's stupendous success to effective functioning of corporate governance?</span></span></strong></span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.05pt;">Yes, we view corporate governance quite importantly. I am in charge of corporate governance for all of Asia. And we have a counterpart for the remainder of the bank in Africa, the Middle East and the western countries. We pride ourselves on following best practices not only with the UK board but also our subsidiary boards. Nepal is a good example because we are not just a subsidiary here. We are a listed company and we pride ourselves not only on the financial results we have. We do believe that the governance of the entity here is part of the reason why we are so successful. Again, it allows us to identify issues early on, with a good board and a good governance process in place. It makes you see the risks down the road and helps you position for them. One of the things that might be of interest to your readers is that we actually changed our process and set up two new sub-committees on our board in London. The first one is called brand and values which focuses on the soft side of the company. We think that it's absolutely important to have values in a new organisation. The next is that we have split risk and audit. The audit committee focuses more on audit results and is backward looking while the risk committee is forward looking and focuses on new things on the horizon.&nbsp;</span><span lang="EN-GB"> <br />
	</span></span></span></span></p>
<p class="questionsforinterview">
	 </p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">Nepal's banking sector is talking mergers of late. What is Standard Chartered's take on this? </span></span></strong></span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.05pt;">In general, we prefer to grow organically and not through acquisitions because it's easier and more within our control. The degree of certainty about outcome is higher. I have worked on a number of acquisitions for the bank in Indonesia, Korea and Taiwan. Acquisitions are hard. A lot of management consultants will tell you that most acquisitions fail. And it's not normally due to financial reasons. They fail because of the difficulties and efforts required to integrate two separate entities. A lot of it surrounds not necessarily the business side but the soft side the people, values etc. In effect, you are taking another institution and marrying it to your institution. The cultures, values and perspectives aren't similar. It's very challenging and runs the risk of a strife in the management in the long term. I will give you a good example. As you know, we bought Grindlays Bank some years ago. The Grindlays deal worked very well for us and it has always been one of our best acquisitions. Not only because it has provided us a wonderful footprint in South Asia but also because the culture of the two merging banks in question, was very similar. Grindlays was a bank with strong local roots and a global perspective. Some of the other acquisitions we have done recently were that of very local banks. We had to adapt the way we worked, to fit in with the Korean and Taiwanese context, for example. It can definitely work like most other things in life it's a trade off. On Nepal specifically, we do think that there is a need for some consolidation. You have too many banks given the size of the financial sector here.&nbsp; </span><span lang="EN-GB"><br />
	</span></span></span></span></p>
<p>
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">Does the Standard Chartered Bank have any specific plan in mind? Have you set your sights on any particular brand that you want to acquire?</span></span></strong></span></span></p>
<p class="MsoNormal">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.1pt;">We will look at opportunities that come our way but our bias will always be towards organic growth. We are quite happy with organic growth and will not pursue acquisition as such. Even if there was anything on the cards, our corporate governance practice does not allow me to disclose any specific information. Nepal is a market that's of interest to us. We will look at the market growth and keep different options in mind. But the organic option will always be our preferred option.&nbsp; </span></span><br />
	</span></span></p>
<p>
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
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			'id' => '815',
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			'title' => 'Interview January 2013',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<strong><span style="font-size:16px;">‘The young generation &nbsp;is coming forward &nbsp;seeking opportunities in business’</span></strong></p>
<p>
	<img align="right" alt="" height="360" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/hari_bhakta_sharma.jpg" style="margin:0 0 0 10px;" width="210" /></p>
<address style="text-align: right;">
	<strong>Hari Bhakta Sharma</strong></address>
<address style="text-align: right;">
	<strong>Board Member</strong></address>
<address style="text-align: right;">
	<strong>Confederation of Nepalese Industries (CNI)</strong></address>
<p style="text-align: justify;">
	 </p>
<p style="text-align: justify;">
	Hari Bhakta Sharma is an executive board member of the Confederation of Nepalese Industries (CNI), a ‘think tank’ of Nepal’s industrial sector. He is also the executive director of Deurali-Janta Pharmaceuticals Private Limited (DJPL), a leading pharmaceutical company that has been an inspiration to Nepal’s manufacturing sector. In an interview with New Business Age, Sharma emphasizes on the brighter sides of the Nepali economy, the economic environment in the country and the need for developing the private sector, among other issues.&nbsp;</p>
<p>
	<strong>Excerpts:&nbsp;</strong></p>
<p style="text-align: justify;">
	<strong>How do you view the current economic situation of Nepal? Where is it heading?</strong></p>
<p style="text-align: justify;">
	There are two different ways to evaluate our economy. One is the evaluation of our overall economic growth. Nepal has achieved &nbsp;a growth rate of 3-5 per cent despite the ongoing political confusion. The Nepali economy is primarily driven by remittance. The disposable income of individual households increased with the increasing flow of remittance over the past 5-7 years. Remittance has raised the purchasing power of Nepalis and their consumption rate. The manufacturing sector, on the other hand, is becoming weaker every year and it is important how the increased consumption demand in Nepal is being fulfilled. The manufacturing sector’s contribution to the GDP has decreased gradually over the past decade. In 2012, for example, the manufacturing sector’s contribution to the GDP was around six per cent, a sharp decline from around 14 per cent a decade back.</p>
<p style="text-align: justify;">
	The consumption demand in Nepal is being met through imports. We import goods worth billions of rupees every year. The dependence on imports has impacted our manufacturing sector causing a decline in the production trend. And now we don’t find our stand in the international trade and do not know where we can compete and what the core advantages we have.Soaring imports have raised the government’s revenue. &nbsp;That’s why the government’s policies are facilitating import. &nbsp;If we do not redress these policies immediately, the power shortage, and other problems including the labour problem and political instability will take a heavy toll on the manufacturing sector, further deteriorating the employment situation in the country.&nbsp;</p>
<p style="text-align: justify;">
	Power shortage has become a chronic problem. Around 11-12 hours of power-cut everyday has made the production cost high. Second, there is a vacuum at the policy level. Although it is said that we are going to adopt a federal structure of governance, it is not yet clear to many what a federal system is and how many federal states will be there. Due to these reasons, there has been no significant investment during the past eight years. So, there has been no expansion of industrial investment in Nepal. Lastly, there is no clear economic policy. There is no common ground regarding the future economy of Nepal.&nbsp;</p>
<p style="text-align: justify;">
	<strong>How serious are the labour problems for manufacturing sector?&nbsp;</strong></p>
<p style="text-align: justify;">
	Labour problems are manageable; the industries can tackle these problems. But there is seemingly no solution to the power problem and the political instability. Due to the lack of clarity on the federal system to be adopted, investors are apprehensive about future tax system. For example, they don’t know how the products produced in Biratnagar and sold in Chitwan will be taxed. When these things become clear, investors will come to Nepal.&nbsp;</p>
<p style="text-align: justify;">
	<strong>We often talk about a private sector-led economy. But it is said that the private sector in Nepal lacks the vision of a broad-based economic growth and sustainable development. What are your views?</strong></p>
<p style="text-align: justify;">
	Since Nepal’s overall capacity to create enterprise is in the initial stage, it would not be fair to expect a high performance from the Nepali private sector. The private sector in Nepal is also a part of the Nepali society; it is as good or bad as the society is. Work culture and government policies directly affect enterprise.</p>
<p style="text-align: justify;">
	&nbsp;If we compare our development with that of China, India, Pakistan or south East Asian countries like Malaysia, Indonesia or Thailand, we find that we have poor governance in both private and government sectors. Also, our innovative capacity is poorer than theirs. The Nepali private sector is learning to be globally competitive. It is also learning to manage enterprises and managing companies properly.&nbsp;</p>
<p style="text-align: justify;">
	<strong>There are many organizations like FNCCI, CNI and other NGOs and INGOs working for the private sector. How do you assess their roles and activities?&nbsp;</strong></p>
<p style="text-align: justify;">
	If we talk about CNI, the purpose of establishing this organization was to make a positive impact on the climate of investment in Nepal and help make policy changes to transform Nepal into an investment friendly country. We create awareness about the industrial environment in Nepal and develop linkages among entrepreneurs. &nbsp;We are here to help create the right business environment, conduct dialogue at the policy level and help &nbsp;formulate policies that would attract investment to the country. When CNI was established, the country’s situation was volatile, politically unstable and unpredictable. This could be why the initiatives and efforts made by CNI were not pursued by the implementing agencies of the government.&nbsp;</p>
<p style="text-align: justify;">
	<img align="right" alt="" height="344" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/hari_bhakta_sharma(1).jpg" style="margin:0 0px 0 15px;" width="362" /></p>
<p>
	<strong><span style="font-size:16px;"><br />
	</span></strong></p>
<p>
	<strong><span style="font-size:16px;">"The Nepali private sector is learning to be globally competitive. It is also learning to manage enterprises and managing companies properly."</span></strong></p>
<p style="text-align: justify;">
	<strong><span style="font-size:16px;"><br />
	</span></strong></p>
<p style="text-align: justify;">
	<strong>Could you please elaborate a bit on the initiatives made by CNI for the development of Nepal’s industry sector?&nbsp;</strong></p>
<p style="text-align: justify;">
	We basically focused on three fundamental issues. First, we prepared documents on the country’s Industrial Policy after a lot of homework. We then submitted these documents to the Ministry of Industry. We wanted a number of changes in the policy. &nbsp;Second, we have been saying that the Nepali Enterprise Act needs a lot of improvement as the law formulated in 2049 BS has become obsolete. This issue needs to be addressed urgently.</p>
<p style="text-align: justify;">
	The previous industrial policy had incorporated &nbsp;many of our suggestions. However, the suggestions were not implemented because the Act was &nbsp;not amended. At the policy level, we have been trying to make the politicians aware about investment and the development of enterprises. We have been trying to create an investment-enabling environment. We have been trying to find ways to &nbsp;increase &nbsp;the income of Nepalis. We have been organizing economic summits. &nbsp;&nbsp;</p>
<p style="text-align: justify;">
	<strong>It is said that CNI was established because of the over politicization of the private sector. What do you say?</strong></p>
<p style="text-align: justify;">
	CNI was established because there was a need for an organization which could support the formulation of pro-private sector policies, help create an investment-friendly environment, and assure the investors about the long-term benefits of investing in Nepal. Such an institution was lacking in the country which led to the birth of CNI. Ever since its establishment, CNI has tried to do its bit for the industry sector as well as the entire economy. CNI has already passed through the test phase. If you compare the achievements we have made over the past one decade with that of any other similar organization, then you will know how hard we have been trying to improve things. Since we focus on the manufacturing sector, we raise issues and problems faced by this sector.&nbsp;</p>
<p style="text-align: justify;">
	<strong>It is said that the main reason behind the lack of &nbsp;re-investment in Nepal’s manufacturing sector is its inability to compete with China and India. For this reason, many believe &nbsp;that manufacturing does not have prospects in Nepal and are therefore importing instead. What do you have to say?&nbsp;</strong></p>
<p style="text-align: justify;">
	I do not agree with this. Deurali Janata Pharmaceuticals &nbsp;(DJPL) is one example that &nbsp;will prove this hypothesis wrong. Though the state provides five per cent discount on the import of medicines, DJPL has been able to produce quality medicines at competitive prices. The company has grown over the years. There are many areas in manufacturing where we can be competitive. All we need to do is identify and develop products with &nbsp;comparative advantage.&nbsp;</p>
<p style="text-align: justify;">
	<strong>So, what are the areas were you see comparative advantage?&nbsp;</strong></p>
<p style="text-align: justify;">
	Now is the time to go for hi-tech products. We should be able to identify the industries which can develop technologies and can also be competitive, for example bio-pharmaceuticals, IT sector and the health sector. Hydropower and tourism are two other sectors with lots of prospects; they are growing. If we improve the quality of service in tourism, we can get more benefits even from the current number of tourist arrivals. We are indeed sandwiched between India and China, but we have a great bio-diversity which makes us a country with high potentials in high-value crops. Likewise, there is a great scope for innovation and investment in the agriculture sector. We need to develop agricultural lands as enterprises but we have been developing them as properties. Agriculture is the base of a number of manufacturing industries.&nbsp;</p>
<p style="text-align: justify;">
	<strong>The government has listed the three sectors you mentioned above as the priority sectors. Still, we are unable to exploit them. Why?&nbsp;</strong></p>
<p style="text-align: justify;">
	The political instability in the country has kept the investors at bay. It seems the investors are in the wait and watch mood now. They are waiting for our discourse on federalism, future economic policy etc to take a concrete shape. Politicians should understand that their speeches alone won’t bring investment to Nepal. It’s a country’s political and business environment and the right rules regulations and policies that draw investment. We lack all these things. How will investors come to Nepal?&nbsp;</p>
<p style="text-align: justify;">
	<strong>What are the fundamental reforms needed to develop these sectors?&nbsp;</strong></p>
<p style="text-align: justify;">
	A common understanding among the politicians on the country’s economic agenda is a must. Parties in the government as well as in the opposition should understand that there should be a clear economic agenda which clearly depicts the dos and don’ts. No significant investment will come to Nepal unless the politicians have a common economic agenda prepared without any prejudice against anyone. We also need to depoliticize the economic issues so that industry, trade, and employment generation could grow smoothly. We have to keep in mind that we need domestic as well as foreign investors.&nbsp;</p>
<p style="text-align: justify;">
	<strong>That means there is no hope for growth in investment?</strong></p>
<p style="text-align: justify;">
	If there were no hopes, we won’t be in this business anymore. What I want to say is we lost a very good time. After the popular uprising of April 2006, &nbsp;the international community has had positive expectations from Nepal; we have many helping hands around. &nbsp;But we have so far failed to understand this and cash in on the opportunity. We couldn’t learn to depoliticize economy and development.&nbsp;</p>
<p style="text-align: justify;">
	Moreover, the politicians &nbsp;haven’t learnt from the mistakes they made in the past. They have spent 15 long years repeating the same mistakes. But still we hope that the time is not as bad as some people assume today.&nbsp;</p>
<p style="text-align: justify;">
	<strong>But other countries which have gone through conflicts, for example Sri- Lanka, have made progress. Why couldn’t Nepal?&nbsp;</strong></p>
<p style="text-align: justify;">
	I want to say that the generation I belong to is worried about the young blood. This young generation which could create enterprise is fleeing the country; here, I am not talking about those who go abroad for employment. This has made a very serious impact on our economy. This is why our GDP hasn’t grown in a massive way. However, we should appreciate that we have a positive growth both in the GDP and state revenue. The number of people wishing to invest in Nepal is also growing slowly. &nbsp;</p>
<p style="text-align: justify;">
	Other countries which have progressed despite undergoing a conflict in recent times attached high priority to their economies even during the time of conflict, not to mention after the conflict. Conflict-hit countries like Sri-Lanka and Bangladesh were able to maintain their growths as they had attached high priority to their economies. The Bangladeshi Cabinet has five ministers from the private sector. Those people who did not contest the parliamentary elections but were considered to be the best managers are appointed as ministers there. But in Nepal everybody seems to be thinking that only politicians can become ministers.&nbsp;</p>
<p style="text-align: justify;">
	In Sri- Lanka, you find an amazing system of governance. Every Sri Lankan ministry has at least one advisor from the private sector; they had two advisors during the conflict period. The government in Nepal only seeks loyalty from the businessmen. The knowledge of the entrepreneurs, their professional abilities and skills are not given due respect. They are judged based on their political inclinations or affiliations. This is why the inputs from professionals and technical experts of the private sector have not reached the higher level.&nbsp;</p>
<p style="text-align: justify;">
	<strong>Nepal has scored 50.2 on the economic freedom index 2012, becoming the 147th most-free economy in the world. How do you view this development in relation to the industrial environment in the country?</strong></p>
<p style="text-align: justify;">
	Regarding this issue, we have been focusing on a few things. One, we have been demanding that the Industrial Enterprises Act be amended according to the present needs. &nbsp;Two, &nbsp;the indicators of cost of doing business - for example corruption which is becoming socially acceptable - should be controlled. Three, as I mentioned already, the prime reason of the low ranking of our country on the economic freedom index is due to the unclear policies &nbsp;and the political instability. Things will improve once there is political stability.&nbsp;</p>
<p style="text-align: justify;">
	<strong>How do you find the current business environment in Nepal in comparison with the time you joined in?</strong></p>
<p style="text-align: justify;">
	I came into business some 22 years ago. There are some sectors which have made progress over this period, for example, the pharmaceutical sector and the banking and finance sector. Today a good project in Nepal stands a better chance of getting financed because of the development in the banking sector. Another good development is the young generation grown up over the past 20 years is coming forward seeking opportunities in businesses. These young people want to create enterprise on their own and are ready to take risks.&nbsp;</p>
<p style="text-align: justify;">
	There is some negativity, too. The level of corruption has risen. There are people who enjoy in others’ income rather than earning by themselves. The politicians have over-politicized almost every sector including the industrial sector. The result is less productivity in terms of individual capacity and high indulgence of the entrepreneurs in politics. In every sector, a person who is politically motivated and affiliated is selected regardless of their capability.</p>
<p style="text-align: justify;">
	<strong>Why are the pharmaceutical companies not seen aggressive in efforts to export their products?</strong></p>
<p style="text-align: justify;">
	Registration of pharmaceutical products internationally is a very difficult process. For pharmaceutical products, like medicines, companies need to scientifically prove their products, assure the consumers that the products are safe, GMP certified and so on. Another reason that makes us apprehensive to accept orders is the fear of not being able to deliver the products on time. Because of problems like power shortage and unpredictable labour problems and strikes, we always question ourselves whether we would be able to deliver the orders on time.&nbsp;</p>
<p style="text-align: justify;">
	We have just around 20 years of history in the development of pharmaceutical products. Based on my experience, I can say that there is a long way to go for Nepal’s pharmaceutical industry. It’s a highly regulated business. Unlike &nbsp;India, Brazil, the US and many other countries, Nepal is not considered &nbsp;as a country which can produce high-value medicinal products. India took 40 years to enter the export market while China took 35. We are just into 20 or 22 years of entering the pharmaceutical business. We hope to enter the export market faster than that. &nbsp;</p>
<p style="text-align: justify;">
	<strong>Why is the problem of substandard drugs in Nepal unresolved?&nbsp;</strong></p>
<p style="text-align: justify;">
	The private sector alone cannot resolve this problem. We can just facilitate the government in this process. &nbsp;We have been organizing awareness programmes against substandard drugs. The government has the authority and the mechanism to control substandard medicines. The medicines that are available at the pharmacies need be monitored and controlled by the government. We are ready to help the government in this matter.&nbsp;</p>
<p style="text-align: justify;">
	<strong>How is DJPL presenting itself in the global market? What are your upcoming plans?&nbsp;</strong></p>
<p style="text-align: justify;">
	Our primary objective during these 20 years was to learn, make our technologies world class, and establish our business globally. Now that our foundation is ready, our next step is to help reduce the import of medicines, at least those medicines which Nepal can manufacture itself. There are many products which Nepal needs to produce itself. But since we have been importing them from other countries for ages, we have not really thought along these lines. Now is the time &nbsp;to think about substituting &nbsp;the import by producing quality products. The most important thing we want to do now is promote healthier living. We want to produce health products other than medicines – health supplements. &nbsp;Taking medications after falling sick is normal. However, there are products for a healthier life, products that help prevent sickness. We &nbsp;too can produce such products. &nbsp;&nbsp;</p>
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<p class="Pa18">
	<span style="font-size:12px;"><strong><strong><span style="font-size:12px;"><span class="A17"><img alt="intrview december 2012" border="1" height="351" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/kenchini.jpg" vspace="10" width="203" /><br />
	<br />
	Nepal Country Director </span></span></strong></strong></span></p>
<p class="MsoNormal">
	<span style="font-size:12px;"><span class="A56">Kenichi Yokoyama </span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:12px;"><span class="A17"><span style="line-height: 115%; font-family: &quot;Calibri&quot;,&quot;sans-serif&quot;;">Asian Development Bank<br />
	<br />
	<br />
	</span></span></span></strong></p>
<p>
	 </p>
<p class="MsoNormal">
	<span style="font-size:12px;"><strong><span class="A63"><br />
	‘We have been actively involved <span style="line-height: 115%; font-family: &quot;Calibri&quot;,&quot;sans-serif&quot;;">in the energy sector’</span></span><span style="font-size:12px;"><span class="A63"><span style="line-height: 115%; font-family: &quot;Calibri&quot;,&quot;sans-serif&quot;;"> <br />
	</span></span></span></strong></span></p>
<p>
	<span style="font-size:12px;"><span class="A17"><span style="line-height: 115%; font-family: &quot;Calibri&quot;,&quot;sans-serif&quot;;">&nbsp;</span></span></span><span style="font-size:12px;"> </span></p>
<p class="MsoNormal">
	<span style="font-size:12px;"><span class="A64"><span style="line-height: 115%; font-family: &quot;Calibri&quot;,&quot;sans-serif&quot;;">Kenichi Yokoyama is Nepal Country Director for the Asian Development Bank (ADB), a Manila-based multilateral development finance institution dedicated to alleviating poverty in Asia and the Pacific. Yokoyama was serving as the principal water resources specialist at ADB´s South Asia department before he assumed current responsibilities on March 26, 2012. In an interview with New Business Age, Yokoyama sheds light on the ADB-funded projects in the water, energy, agriculture and other sectors in Nepal. Excerpts: </span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:12px;"><span class="A64"><span style="line-height: 115%; font-family: &quot;Calibri&quot;,&quot;sans-serif&quot;;">&nbsp;</span></span></span></p>
<p class="Default" style="margin-top:5.0pt;text-align:justify;line-height:10.05pt">
	<strong><span style="font-size:12px;"><span style="color: windowtext;">Melamchi, the ADB-financed water supply project, is in a new controversy now after the Chinese contractor left the work. How will the project move ahead now? </span></span></strong><br />
	<span style="font-size:12px;"><span style="color: windowtext;">&nbsp;</span></span></p>
<p>
	<span style="font-size:12px;">ADB is committed to supporting the construction of the Melamchi tunnel work, the water treatment plant and the distribution system. With a population of around three million, the Kathmandu Valley has been facing an acute water shortage. This is a huge developmental constraint. We have been facilitating the Nepal government in the completion of the tunnel and other works on time. </span><span style="font-size:12px;"> </span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span><span style="font-size:12px;">It is unfortunate that the Chinese contractor had to leave the project because of some issues related to work progress. Now, we are supporting the government to go for immediate rebidding. The government is looking for first class contractors. Such contractors from China, Korea, India, France and other European countries have shown interest in the project. We hope that the government will be able to hire a new contractor by March 2013 and complete the project by March 2016. </span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span style="font-size:12px;">But this has increased the cost of the project and delayed it further. Will the project complete within the new deadline?</span></strong></p>
<p class="Default">
	<span style="font-size:12px;">The topmost priority for the government is to identify a qualified contractor with high experience in similar tunnel works. Although there are concerns about the cost, we have to think about the seriousness of the water shortage problem in Kathmandu which calls for urgent attention. We have to ensure that the Melamchi project is completed on time.<br />
	</span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:12px;">Despite the many ups and downs seen over the almost past seven years, ADB remains associated with the project. The only reason for this association is that we feel that Melamchi is an important project. We have been holding regular discussions with the Ministry of Urban Development on the specific actions to be taken to take the project forward, including the swift selection of an internationally reputed, committed, dedicated and efficient contractor who can build a high quality infrastructure. Given the importance of the Melamchi project in addressing the water demand of the 2.6 million people living in the Kathmandu Valley, ADB remains fully committed to <span style="color: black;">providing the necessary support to the Government of Nepal to complete the project by early 2016 or earlier. </span></span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong></p>
<p class="Default">
	<strong><strong><span style="font-size:12px;">&nbsp;</span></strong></strong></p>
<p class="Default">
	<strong><span style="font-size:12px;"><span style="color: black;">ADB’s recent fund for water projects in Nepal is said to be aimed at improving irrigation and prevent water-induced disasters. How is it different from other water projects?<br />
	</span> <br />
	</span></strong></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">These projects aim to bring about higher rural livelihood. The government is seeking support for rapid agricultural transformation. In that context, we are supporting irrigation and water disaster mitigation risk management projects. We are building on the achievements made thus far. In irrigation, Nepal has comparative advantage in having irrigation systems managed by farmers. Building on this, ADB is supporting agriculture development for making it more profitable and commercial so that the farmers can increase their income.</span> <br />
	</span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:12px;"><span style="color: black;">Nowadays, effective water management is a critical challenge for many countries. Particularly in the dry season, many countries are facing a shortage of water supply. Nepal, too, needs an effective water management system. The country ought to fulfill additional industrial needs while protecting the conventional water users. An efficient and equitable distribution of irrigation water is also pretty much needed to increase the farmers’ income.</span></span></p>
<p class="Default">
	<strong><span style="font-size:12px;"><br />
	</span></strong></p>
<p class="Default">
	<strong><strong><span style="font-size:12px;">&nbsp;</span></strong></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span style="font-size:12px;"><span style="color: black;">Once again, ADB recently listed the West Seti Project among the newly proposed ones. How do you want to participate in this project?</span></span></strong></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span><span style="font-size:12px;"><span style="color: black;">It’s not the West Seti, but the Upper Seti project, located in Tanahun district, that ADB is supporting. Actually, we are submitting a proposal for this project to the ADB Board early next year. The name of the project is Tanahu Hydropower Project. It is a 140MW storage project. It could help address the power shortage of not only Kathmandu but the country as a whole.<br />
	<br />
	</span> <br />
	</span></p>
<p class="Default">
	<strong><span style="font-size:12px;"><span style="color: black;">ABD seems to have planned to involve itself quite heavily in the energy sector through new projects like Tanahu hydro and continue with other ongoing energy sector programs. What is the strategy?&nbsp;&nbsp; </span></span></strong><span style="font-size:12px;"><br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Our assistance strategy is to support the government to address the most critical development constraints including infrastructure, its management system, and delivery of effective public service to the needy people including the poorest. Addressing the critical infrastructure bottlenecks is of high priority. The country is facing acute power shortage. Electricity is available only six hours a day in the dry season. How can industries come to Nepal and operate in such a situation? ADB has been actively involved in the energy sector with previous assistance in Kali Gandaki A and Khimti Hydropower projects, which account for some 30 percent of the country’s generation capacity at the moment. The Tanahu project, which is a storage project, will add additional 140 MWand can provide a stable power supply during the dry season.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">We will support the efficient implementation of the Tanahu Hydro Project. There are two other ongoing projects in transmission and distribution, respectively. We are also supporting NEA in its institutional reforms which includes enhancing its financial position by increasing tariff, reducing distribution loss and providing electricity to private industries and local stakeholders more efficiently.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Default">
	<strong><span style="font-size:12px;"><span style="color: black;">Many ADB-supported projects – mainly those in the agriculture sector - are discontinued after the completion of the first phase. Why?&nbsp;&nbsp; </span></span></strong><br />
	<br />
	<span style="font-size:12px;"><span style="color: black;">Our programs are aimed at demonstrating how development can be pursued most effectively. For example, there was a community ground water project where a community ground water group was set up and provided with shallow tube-well systems. The beneficiaries can now do triple cropping with tube-well irrigation with proper maintenance of the tube-wells, which they are able to manage. Likewise, projects such as community irrigation and commercial agriculture are helping establish sustainable development systems. The government can replicate similar projects.<br />
	<br />
	</span> <br />
	</span></p>
<p class="Pa8" style="text-align:justify">
	<strong><span style="font-size:12px;"><span style="color: black;">It is said that $ 15.3 million that ADB had allocated for various projects such as commercial agriculture, community irrigation, skill development programs, etc, could not be used. What is the reality?&nbsp;&nbsp; </span></span></strong><br />
	<br />
	<span style="font-size:12px;"><span style="color: black;">The projects need to follow a specific timeline. There are also cases where the actual cost of implementation is lower than the initial projection. For example, in one of the strategic road projects, the bidding price was lower than the estimated price, thanks to the competition and devaluation of the Nepali Rupee, resulting in substantial savings. In the irrigation sector, too, the project cost is often lower than the estimated cost because of competitive bidding. There are some cases where the project implementing agency has limited absorptive capacity. Overall, we have identified $15 million savings this year, but we are also discussing with the government that these savings could be used for other projects in Nepal, such as additional financing requirement of the Melamchi project. </span></span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span style="font-size:12px;">&nbsp;</span><span style="font-size:12px;"><span style="color: black;">What would be your investment portfolio for the next couple of years for Nepal? Will it increase? </span></span></strong></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong><span style="font-size:12px;"><span style="color: black;">The allocation of the Asian Development Fund (ADF) is decided biannually, and the amount for the year 2013 -14 is to be finalized at the end of this year. At this moment, we expect it to be at least about $ 250 million per annum. </span></span></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span><br />
	<span style="font-size:12px;">&nbsp;</span></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span style="font-size:12px;"><span style="color: black;">Could you please highlight ADB’s present development assistance priorities for Nepal? </span></span></strong></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong><span style="font-size:12px;"><span style="color: black;">The thrust of ADB’s ongoing country partnership strategy for Nepal (2010-2013) is to help sustain the hard-won gains of the country’s peace process by promoting broad-based inclusive economic growth, inclusive social development, governance and capacity building, as well as climate change adaptation and environmental sustainability.&nbsp;&nbsp; </span><br />
	</span></p>
<p>
	<span style="font-size:12px;"><span style="color: black;">ADB’s assistance supports Nepal in different sectors such as agriculture and natural resources, education, water supply and other municipal infrastructures and services, transport, information and communication technology and finance and energy. We support these operations through the promotion of gender equality and social inclusion, regional cooperation and integration, public private partnerships, along with greater engagement of the civil society and NGOs. </span></span><span style="font-size:12px;"> </span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span><span style="font-size:12px;"><span style="color: black;">Our new country partnership strategy for Nepal is being formulated in consultation with the Nepal Government. ADB’s support will focus on addressing the country’s development constraints including energy, transport, urban and rural infrastructures and skill development. To support these priorities, ADB will also promote governance, private sector development, regional integration, gender and social inclusion and climate change adaption. </span></span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span style="font-size:12px;"><span style="color: black;">Could you please briefly describe ADB’s assistance in the agriculture sector? </span></span></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	 </p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span><span style="font-size:12px;"><span style="color: black;">ADB has been Nepal’s main development partner in agriculture. Agriculture remains the largest component of ADB’s assistance to Nepal. ADB has supported in increasing the production of crops and livestock, raising agricultural income and creating employment opportunities for rural people. ADB’s assistance to Nepal includes support for agricultural credit, small farmer development, livestock, irrigation, agricultural roads, forestry, and crop diversification. ADB is also supporting the government’s preparation for the Agriculture Development Strategy that will set out the long-term vision and strategy for the agriculture sector for the next 20 years, and priority programs for the next 10 years. </span></span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span style="font-size:12px;"><span style="color: black;">&nbsp;</span></span></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span style="font-size:12px;"><span style="color: black;">What is the recent development in ADB’s funding for the transport sector? </span></span></strong></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong><span style="font-size:12px;"><span style="color: black;">We have been supporting the construction of strategic roads network. Similarly, we are supporting the Sub-regional Transport Enhancement Project which was approved in 2010. All contracts have been signed for this project and the work progress is about 30 per cent. A new transport project of about $100 million is envisaged for 2013. We are also planning another project based on a new lending modality called the multi-tranche financing facility for 2014 for the transport sector. The idea is to provide a long-term financing framework of $200- 250 million, based on which individual sub- loans will be launched. </span></span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong></p>
<p class="Default">
	<strong><span style="font-size:12px;"><span style="color: black;">ADB is preparing to provide support for setting up a new CTEVT- like structure under the Ministry of Education. Would you please highlight the program?</span> <br />
	</span></strong></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">ADB is not providing assistance to a new CTEVT- like structure under the Ministry of Education. However, ADB will support the Government of Nepal, through the proposed Skills Development Project to develop a market responsive and social- and gender-responsive Technical Education and Vocational Training (TEVT) by assisting the implementation of policy, institutional and operational reforms, delivery of demand-oriented skills training, short-term market oriented skills training focusing on excluded groups, and effective project management and monitoring and evaluation.<br />
	<br />
	</span> <br />
	</span></p>
<p class="Default">
	<strong><span style="font-size:12px;"><span style="color: black;">For the last few years, ADB, DFID and WB had started to implement synchronized programs to avoid duplication. Why have you abandoned this practice now?&nbsp;&nbsp; </span></span></strong><br />
	<br />
	<span style="font-size:12px;"><span style="color: black;">We have been continuously working together with the World Bank, DFID and JICA, who are our co-members in the Nepal Portfolio Performance Review process. The government is taking the lead, and a meeting is held annually to discuss and resolve issues to enhance project implementation performance. Issues like public finance, management, procurement, human resource management and management of the development regions. These issues are critically influencing the implementation of the developmental projects. Implementation of the concept of e-bidding for infrastructure works is almost complete. This allows bidders to submit their bids through internet. This can substantially enhance the transparency and efficiency of the bidding process.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">For new development programs, a close coordination and collaboration among the development partners is maintained as an established practice in project preparation and appraisal, to avoid any duplication. Efforts are also being made to develop a common sector roadmap or result framework and define programs within the framework and pursuing the possibility of co-financing as much as possible.</span><br />
	<br />
	<br />
	</span></p>
<p>
	<strong><span style="font-size:12px;"><span style="color: black;">Despite great donor involvement in programs like the School Sector Reform, the achievement has been negligible, mainly converting government schools into community-run ones. What is the reason?&nbsp;&nbsp; </span></span></strong></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Default">
	<br />
	<span style="font-size:12px;"><span style="color: black;">In the school sector, we have to take into account that we have started from a very low base. Nepal has significant challenges such as difficult geography and remoteness in the mountain region. I don’t agree that the achievement has been negligible. If you look at the statistics, primary school enrollment was barely 60 percent in 1990; it is 95 percent now - a significant change brought about by education programs. However, it is also true that some significant challenges still remain, such as the quality of education and a high percentage of dropout. Prudent financial management of the education development fund, too, is an issue. Building on the progress made, I believe these constraints can also be addressed gradually. We have a donor co-ordination mechanism, which enables all the donors to work together to make the most efficient progress by avoiding duplication.</span></span></p>
<p class="Default">
	<strong><span style="font-size:12px;"><br />
	</span></strong></p>
<p class="Default">
	<strong><span style="font-size:12px;"><span style="color: black;">ADB has supported to modernize Nepal’s capital market. What are the latest developments in this regard?</span> </span></strong></p>
<p>
	<span style="font-size:12px;"><span style="color: black;">ADB is supporting Nepal’s efforts to develop the capital and bond markets to attract and promote private investment. For this, we have an ongoing Capital Markets and Infrastructure Capacity Support Project. Under the project, a team of consultants is being selected. There are two components of this project. The first is to support the capital market development, particularly the bond market. The second one aims to develop an enabling environment for public private partnership (PPP), identify investors, design and carry out feasibility studies. We hope to mobilize the consultants by early 2013. </span></span><span style="font-size:12px;"> </span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span><span style="font-size:12px;"><span style="color: black;">We are also discussing with the Government of Nepal the opportunity for ADB to issue local currency bonds that will help provide long-term financing for private infrastructure investment and also help develop the country’s bond market.&nbsp;&nbsp; </span></span></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span style="font-size:12px;"><span style="color: black;">How do you view the progress of ADB’s projects in Nepal? </span></span></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	 </p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">The country assistance program evaluation (CAPE) conducted by ADB’s Operations Evaluation Department a few years back found that overall, ADB’s lending program had a positive impact socially, environmentally and economically. These projects have helped reduce not only poverty but also gender disparity and social exclusion by benefiting the poor.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Some of ADB’s programs are directly targeted at the poor and some are indirectly targeted, but the ultimate objective is poverty reduction. Results can be seen from the assistance that ADB has been providing over the years. For instance, the transport system in the country has greatly improved — the main strategic road network as well as the rural roads connecting the remote parts of the country. This has helped improve public service delivery and livelihoods in these areas. ADB’s assistance has also contributed in improving the living standards of the rural communities through the provision of improved water supply and sanitation facilities. However, we recognize that the assistance we provide needs to be more effective in terms of reaching the poor and vulnerable and sustaining these development benefits.</span><br />
	</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span style="font-size:12px;"><span style="color: black;">How have you viewed Nepal’s inability to bring about a full-fledged budget at the beginning of the fiscal year? How has it affected your support? </span></span></strong></p>
<p>
	<span style="font-size:12px;"><span style="color: black;">Although the government could not bring a full budget, a one-third interim budget was provided. We are working with the government so that the developmental activities are least affected in the given context. As far as the ongoing projects supported by ADB and other donors are concerned, the ordinance (budget) has a special provision to allow the government to provide enough funds through budgetary reallocation. Nevertheless, we remain concerned how the necessary funds would be allocated in a smooth and timely manner for efficient project implementation under the present circumstance. </span></span><span style="font-size:12px;"> </span></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp; <br />
	</span></strong></p>
<p class="Default">
	<strong><span style="font-size:12px;"><span style="color: black;">What are the challenges facing the development projects in Nepal?&nbsp;&nbsp; </span></span></strong><span style="font-size:12px;"><br />
	</span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:12px;"><span style="color: black;">In general, projects in Nepal face the challenge of timely implementation due to the country’s difficult topography and remoteness of many districts. Poor infrastructures and limited human resource capacities are the other challenges. In some cases, implementation of the projects has been affected by local strikes as well. </span></span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">The political transition process has been slow and is still fraught with risks and challenges for development activities. In particular, the absence of elected local bodies since July 2002 has been a major impediment to governance, service delivery, and development works at the local level.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">In addition, labour unrest in the fragile political environment, coupled with acute power shortage, has constrained the revival of key sectors of the economy and private investments. Thus, improving basic infrastructure and strengthening governance and public and market institutions is very crucial for Nepal.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Despite these challenges, the performance of ADB’s project portfolio has improved. This also demonstrates the hard efforts by the government agencies that implement the ADB-financed projects. While the overall performance still remains below ADB’s wide average, I am hopeful that this progressive improvement will continue under the strong partnership with ADB.</span></span></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:12px;"><span style="color: black;">How do you view the current economic situation of Nepal?</span></span></p>
<p class="MsoNormal">
	<span style="font-size:12px;"><span style="line-height: 115%; color: black;">Despite the difficult political environment and the global economic slowdown, Nepal has been able to preserve a reasonable macroeconomic stability with a moderate and steady economic growth. We are pleased to note that the government’s and Nepal Rastra Bank’s proactive policy measures on the vulnerability of the banking sector and rising inflation have eased the problems in recent months, although the risks remain. The external position, too, has remained stable with the widening trade deficit being offset by sustained increase in remittance inflows and tourism receipts. However, exports continue to be sluggish due to the long-term structural weaknesses in the economy. Although agricultural growth could slow down in FY 2013 because of the late monsoon and shortage of chemical fertilizers, we believe that Nepal will be able to maintain a moderate growth supported by the service sector.</span></span></p>
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	<span style="font-size:14.0pt">Chief Operating Officer </span></span><span class="A25"><br />
	<span myriad="" style="font-size:14.0pt;line-height:
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	<span class="A65"><span mso-bidi-theme-font:="" new="" style="font-size:13.0pt;mso-bidi-font-family:" times="">Phil Humphreys is the Chief Operating Officer of the Northern Division of Coca-Cola Sabco based in Dubai. He joined Coca-Cola Sabco in September 2010. He has a strong background in international FMCG sales and marketing. He has also worked with leading international brands such as Johnnie Walker, Smirnoff, Guinness, and an array of other leading brands within the Diageo and Nestle portfolios. He completed the PED/MBA equivalent programme at IMD, Lausanne, Switzerland as well as various other International Management and Executive Development Programmes. </span></span></p>
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	<span class="A65"><span mso-bidi-theme-font:="" new="" style="font-size:13.0pt;mso-bidi-font-family:" times="">&nbsp;</span></span></p>
<p class="Default" style="mso-line-height-alt:10.05pt">
	<span class="A65"><span mso-bidi-theme-font:="" new="" style="font-size:13.0pt;mso-bidi-font-family:" times="">&nbsp;</span></span></p>
<p class="Default" style="mso-line-height-alt:10.05pt">
	<span class="A65"><span mso-bidi-theme-font:="" new="" style="font-size:13.0pt;mso-bidi-font-family:" times="">Humphrey’s leadership quality and keen business senses has helped him achieve significant positions in leading global companies. As the Chief Operating Officer at Coca-Cola Sabco (Northern Division), he is currently leading developing markets in the form of the franchises of Vietnam, Cambodia, Nepal, Sri Lanka and Ethiopia. He is also a member of the Coca-Cola Sabco Group Executive Committee. In an interview with New Business Age, Humphrey shared his plans for Coca-Cola Company in Nepal and market strategies among numerous other issues. Excerpts: </span></span></p>
<p class="Default" style="mso-line-height-alt:10.05pt">
	<span class="A65"><span mso-bidi-theme-font:="" new="" style="font-size:13.0pt;mso-bidi-font-family:" times="">&nbsp;</span></span></p>
<p class="Default" style="mso-line-height-alt:10.05pt">
	<span new="" style="font-size:
13.0pt;mso-bidi-font-family:" times="">&nbsp;<img alt="phil" border="1" height="300" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/phil22.jpg" vspace="10" width="393" /></span></p>
<p class="Default">
	<strong><span style="font-size:10.0pt;color:#211D1E">You joined Coca-Cola Sabco in September 2010. How have you made a difference in this period?</span></strong></p>
<p>
	<span style="font-size:10.0pt;color:#211D1E">Nepal is one of the five countries that I am looking after. In Nepal, I inherited an already good business. We took up the business in 2004 and we have had the business as franchise for eight years now. Every year from 2007 onward, we have delivered double digit growth both on the top and bottom lines. One of the things that we talk a lot about Nepal strategy is amazing relationships with people as one of the strengths. We spend a lot of time engaging with Nepali people both at the plant and in the field. We also spend a lot of energy in engaging with our stakeholders and believe in power of relationships. That is one of the things that have really happened in the last two years since I joined the company. As far as engagements go, every year we </span><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">measure how engaged our people are. Last year it was incredible 96 per cent, which is the highest in the whole company. Out of 11 countries, there is no other country in Sabco with higher engagement than that. </span></p>
<p class="Default">
	<strong>&nbsp;</strong></p>
<p class="Default">
	<strong>&nbsp;</strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">You have an extensive experience in the FMCG field and possess in-depth knowledge of global brand development. How do you view your current experience at Coke?</span></strong></p>
<p>
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">The key thing about the system at Coca – Cola is to work in partnership and collaboration. For example, you can do everything in Nepal from marketing and selling to distribution while Coca-Cola Company owns the brand and does all the corporate marketing. So, one of the things about the system is to collaborate really well and maintain tension in the conversation. You have got to challenge and be there with each other. I had not experienced this kind of a system before and never experienced working for a private company before. Therefore, these are new experiences for me. In Nepal, we have set up two publicly listed companies and majority of shareholding is our own while we do have a number of knowledgeable people as minority shareholders. We are heavily backed by a private company who can make decisions easily. We are part of a public company here and need to make agreement through our annual general meetings. For example, we are building a new plant in Bharatpur which is a US$ 25 million investment. That is about four times the average injection capital that we would put into the country. It is going to be fantastic and I am really excited because it not only creates a lot of new job opportunities but it is also going to give us PET plastic bottles.</span></p>
<p class="Pa10" style="text-align:justify;text-indent:14.0pt">
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">&nbsp;<br />
	<br />
	<img alt="phil" border="1" height="306" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/phil45.jpg" vspace="10" width="432" /><br />
	</span></p>
<p>
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">How far have you reached in your expansion plan for Coca-Cola in Nepal?</span></strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:"><br />
	<br />
	We are going through our plans right now and always look at three year plans. We want to be a non alcoholic energy drinks company by 2013. We want retailers, customers and consumers to able to come to us and get anything they want from our portfolio. They can get sparkling drinks right now but they can’t get juice, water and energy drinks. That is going to be part of our expansion in the coming years as we are definitely interested in these areas. We are in discussion with our partner about the possibility at the moment and also looking after the water facility in one of our existing plants. I am expecting to play a much broader role in this non alcoholic drink segment in a year’s time. We have a lot of opportunities as this country is very much an emerging market. </span></p>
<p class="Default">
	<strong>&nbsp;</strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Where will you reach in the next two years after the expansion and all these investments?</span><br />
	</strong></p>
<p>
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">We try to think a little further than just one, two or three years. In a country like this, you cannot just look forward to 2013 only. I think that the non alcoholic drinks market in this country is basically worth 25 million cases right now. It would probably grow to become a 200 million case business by 2020. This is a brilliant place to be in for doing business from a consumer perspective even though it is not the easiest place to do business from regulations perspective. But what matters at the end of the day is that Nepali consumers are demanding more from a company like ours. </span></p>
<p class="Default">
	 </p>
<p>
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Is there a chance that you will start bottling canned beverages here in Nepal?</span></strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:"><br />
	<br />
	Probably not at the moment because we have various other options that we can look at. The market for canned beverages is still very small. For the next few years, the glass bottle is going to be continuously very important part of the battle between Coke and Pepsi. We are going to make sure that it is affordable and everybody has access to Coca-Cola. Our mantra for the year is ‘within arm’s reach’. Now my dream is to have our quality products in different packaging formats which people can rely on and get those products literally within arm’s reach. That is a big responsibility and most important thing is to do it in a sustainable way. </span></p>
<p class="Default">
	 </p>
<p>
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">The overall transaction of your competitor comes more from food business than the sale of cola drinks. Have you ever thought to focus on the food business as well?</span></strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:"><br />
	<br />
	We will not be getting into the food business. Anything is possible in terms of partnerships as such but whether Bottlers Nepal Pvt Ltd will ever buy a food company is something I can’t predict about right now. Taking up secondary distribution is possibly an option but it’s definitely not a priority right now. We want to sell Coca-Cola, Sprite, Fanta and Kinley and want to and open as many new outlets as possible to give people an opportunity to retail our products. Food business is not the direction for Coca-Cola Company, it is soft drinks only.</span><br />
	&nbsp; <br />
	<br />
	<img alt="phil" border="1" height="306" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/phil45(1).jpg" vspace="10" width="432" /><br />
	 </p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Is there any negative impact for cola industry in Nepal like in India because of the propaganda against cola from certain quarters? </span></strong></p>
<p>
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Not at the moment though of course we do need to be careful. There has been some negative publicity against soft drinks but I think there is a great opportunity for us in this industry to come together as non alcoholic beverages industry and actually do some better work right now. I think we always need to be very careful about NGOs’ and public perception of soft drinks but I personally have massive confidence in our products. It is time for educating consumers that Coca-Cola is about health and wellness. The average consumption of Coca-Cola here is nine bottles per capita for an entire year so there is a lot of room. We have a lot to do about giving back to this country - getting involved in education, sustainability and renewable energy. These are the three areas we are going to significantly focus on. I think we will be doing well if we show the government and our consumers that we are a locally responsible business. </span></p>
<p class="Default">
	 </p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">You have changed the focus of your advertising campaigns from electronic and print media to hoarding boards. What is the targeted outcome that you are looking at? </span></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	 </p>
<p>
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">I am a marketer by background so I love all those stuffs. The time was right for us to do something different few months ago and we started printing Kathmandu around February this year. Everywhere you went, you saw boards with Rs 20 for 350 ml bottle of Coke. Personally, I think it is the right way to go right now for Nepal. I call it visibility but it needs to be the part of the whole 360 degree integrated campaign. You can’t just have it on TV or a single media. I would like people to see our brand wherever they go and not just when they go home and switch on their television sets. You will continue to see a lot of them in the future as well. </span></p>
<p class="Default">
	 </p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">What are the new CSR activities that Bottlers Nepal is coming out with? </span></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	 </p>
<p>
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:"><br />
	We are going to focus particularly on water usage because our water usage ratio is pretty low. The Coca-Cola Company is very happy with us and the team here has done a great job so we will continue to focus on it. That means we are going to give more water back to the ground than we basically take out. So, a good example of this is rainwater harvesting projects that we are doing at number of places in association with the NGOs. We have also organised environment cleaning campaigns. Another thing that we will be doing but have not really started yet is to facilitate solar energy run coolers. </span></p>
<p class="Default">
	 </p>
<p>
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">What are the new changes that you are making in different fields of Bottlers Nepal’s operations?</span></strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:"><br />
	<br />
	The big thing is adding a new facility that we have not done for years. We are also going to expand the portfolio of non alcoholic drinks. We will also be putting a lot more people into frontline sales to execute our operations more efficiently. </span></p>
<p class="Default">
	 </p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Coke conducted a study recently on shoppers’ loyalty and retail dynamics. What were the findings about the behaviour of Nepali consumers? </span></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	 </p>
<p>
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">We understood a little more about how shoppers shop than we already knew. One of the things we learned a lot about was that Coke clearly stands out when you put Coca-Cola, Sprite or Fanta, particularly Coca-Cola, next to another product which is associated with an occasion. Another aspect about Nepali consumers was that they like simplicity, they don’t like complications. That was a great message, as many times, big company like us tend to over engineer the world. The fact that simplicity of packaging and product never ever changes the taste of the product, was a great finding for us. </span></p>
<p class="Default">
	 </p>
<p>
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">How is Coke changing its business strategy in Nepal in regard to these findings? What is the targeted increase in your market share? </span> </strong></p>
<p class="MsoNormal">
	<strong>&nbsp;</strong> <span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">I think consumer and meal occasions are changing. My demand is that every eating and drinking outlet I go to should have a poster with Momo or another Nepali dish plus Coke and their combined price. That is really the big change that is currently being done. People always drink Coca-Cola at a little grocery out there but now there is going to be a big shift in the mindset of the consumers. As for market share increase, the general rule for us is we are very happy if we can get one per cent market share rise per year.</span></p>
<p class="MsoNormal">
	<span style="font-size:10.0pt;line-height:115%;color:#211D1E">&nbsp;</span></p>
<p class="MsoNormal">
	 </p>',
			'published' => true,
			'created' => '2012-12-06',
			'modified' => '2013-01-04',
			'keywords' => '',
			'description' => 'Phil Humphreys is the Chief Operating Officer of the Northern Division of Coca-Cola Sabco based in Dubai. He joined Coca-Cola Sabco in September 2010. He has a strong background in international FMCG sales and marketing. He has also worked with leading international brands such as Johnnie Walker, Smirnoff, Guinness, and an array of other leading brands within the Diageo and Nestle portfolios. He completed the PED/MBA equivalent programme at IMD, Lausanne, Switzerland as well as various other International Management and Executive Development Programmes.',
			'sortorder' => '632',
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	),
	(int) 3 => array(
		'Article' => array(
			'id' => '721',
			'article_category_id' => '46',
			'title' => 'Justin Sargent',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p class="MsoNormal">
	<span style="font-size:20px;"><strong><span class="A31"><span style="line-height: 115%;">‘Social Research has a Huge Scope in this Part of the World’</span></span></strong></span></p>
<p class="MsoNormal">
	<span style="font-size:20px;"><br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A31"><span style="line-height: 115%; font-family: "><span style="font-size:20px;"><strong>&nbsp;</strong></span><img alt="Justin Sargent " border="1" height="403" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/interview_11.jpg" vspace="10" width="277" /><br />
	</span></span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Justin Sargent </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span class="A16">Managing Director-India </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A16"><span style="line-height: 115%; font-family: ">Nielsen</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A16"><span style="line-height: 115%; font-family: ">&nbsp;</span></span></span></p>
<p class="Pa24" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span class="A58">Justin Sargent is the Managing Director for Nielsen India's Consumer Business. He is leading Nielsen's consumer businesses (Retail Measurement Services, Consumer Research, BASES, Advance Analytical Consulting) including Client Leadership, Client Service and Product Leadership initiatives. He graduated from Warwick University, England with a BSc in Mathematics, Operational Research, Statistics and Economics. Langer has held a number of senior positions at Nielsen across the globe, including the position of RMS Executive Director - Australia, and most recently Managing Director - UK &amp; Ireland. </span></span></p>
<p class="Pa24" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span class="A58">&nbsp;</span></span></p>
<p class="Pa24" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span class="A58">He is currently based in Mumbai, India and focuses on the strategy of listening to the consumers to get more consumers' insight. The Nielsen Company is a global information and media company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence, mobile measurement, trade shows and business publications. It is planning to continue growing its business by applying its strategies of driving more consumers' insights and generating a more complete understanding of consumers. In an interview with New Business Age, Langer talked about importance of Nielsen numbers and major plans for its Nepal operations among a host of other issues. Excerpts:<br style="mso-special-character:line-break" />
	<br />
	<br />
	<img alt="Justin Sargent " border="1" height="419" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/interview_12.jpg" vspace="10" width="287" /><br style="mso-special-character:line-break" />
	</span></span></p>
<p class="Pa24" style="margin-top:5.0pt">
	<span style="font-size:14px;"><strong><span class="A58"><br />
	</span><span style="color: rgb(34, 30, 31);">Please give us an overview of Nielsen’s business in this region that includes Nepal and India. <br style="mso-special-character:line-break" />
	<br style="mso-special-character:line-break" />
	</span></strong></span></p>
<p class="Default">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The Nielsen’s South Asia operation covers countries like India, Bangladesh, Sri Lanka and Nepal. It’s quite a sizeable region for Nielsen in this developing part of the world. Like multinationals, we view countries like India, Nepal and other parts of South Asia as areas of priority where our clients are investing to find out their consumers’ size. Nielsen has been in India since 1960s and in Nepal since early 1990s. We are increasingly focusing on these two countries as our clients are seeking growth here.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Nielsen in Nepal has a full range of services. It is mainly known for measurement services. Most of our clients are particularly from the fast moving consumer goods (FMCG) sector and hence they demand to understand how they are performing, in comparison to their competitors. We also do a lot of work with NGOs and help them understand factors that can help them promote and influence the country’s growth. We work for AED, PSI and some other USAID-funded projects in Nepal in addition to a host of multinational companies like Coca- Cola, Colgate-Palmolive and Procter &amp; Gamble to name a few.&nbsp; </span><br />
	</span></p>
<p class="Default">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">A huge part of our business is dedicated to these two services. Our business is growing well in Nepal and the clients seem increasingly interested in this market. It seems to be the right time for us to consider how to elevate to the next level and how to potentially bring in further expansion. Maybe, we could bring some new analogical products that have worked well elsewhere, in other developing markets.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Social research has a huge scope in this part of the world. In India, we also work in sectors including government organizations and the NGOs, for example, UNICEF. We also work with projects on big, important sectors like health and education. FMCG is an area that Nielsen tends to put in a lot of time and energy into. Nielsen is a global company so we are constantly looking for the climax in different countries, and Nepal is now in its climax. It has many centers of attraction and the GDP growth of the country is four per cent which is still pretty attractive compared to a lot of western economies.</span><br />
	</span></p>
<p class="Pa8">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">We developed the social research practice that works right across South Asia. We have experts that tend to work across the different countries. For example, we utilize the microfinance expertise from Bangladesh in other countries. We have a team on the ground here in Nepal that lives by the company’s principles. However, we are bringing in more expertise to the Nepali marketplace to see what we can do in the social research sphere as a whole. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;<img alt="Justin Sargent " border="1" height="491" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/interviw_13.jpg" vspace="10" width="306" /></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Default">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal"><span style="color: rgb(34, 30, 31);">Could you please provide us some insight on the topline retail and consumer trends from the perspective of the Indian market?</span></b> <br />
	</span></p>
<p class="Pa8" style="text-indent:14.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">India has a huge population and big traditional trade. We have seen a lot of growth in that country, especially in the rural areas. Though modern trade is still small – only six per cent – compared to traditional trade, we have started observing changes in trends. It’s growing fast and more consumers are looking for convenience and choice. We have started to notice a lot of trading for more branded products. We notice a lot of use of technology including social media and smart phones. Consumers have grown a lot savvier and their expectations are increasing. This might be helpful in changing people’s perspectives, packaging perspectives and value perspectives. One thing which is very consistent in India is the value. We do service right around the world and India always comes top in terms of value consciousness. A lot of consumers increasingly shop around for promotion to make sure they can remain value conscious and still satisfy their increasing aspirations. <br style="mso-special-character:line-break" />
	</span></span></p>
<p class="Default">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Our clients’ business and even the Nielsen’s business both saw this high trend basically three to four years ago. GDP growth is a little lower this year, which is forecasted now at six percent. However, global manufactures and local Indian multinational companies alike, are pretty positive about the future.</span><br />
	<br />
	</span></p>
<p class="Default">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal"><span style="color: rgb(34, 30, 31);">Yours is a privately held company active in approximately 100 countries, with its headquarters in New York, USA. How big an advantage is this when you deal with global clients?</span></b> <br />
	</span></p>
<p class="Pa8" style="text-indent:14.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">When a global client is working with us, they may know Nielsen already. We assure the country manager of a global client locally that we will share our best practices with them and suggest that the service is worth exploiting. Our local teams are mostly in the field, visiting local clients to relate to them and understand their perspectives. Nielsen’s methodologies are globally consistent; however, we do tend to tailor them in order to meet specific needs of the marketplace. For example, when we spoke to our clients in Nepal, they expressed that they wanted us to represent certain regions and towns in more detail than we might have for others. We don’t have this service in other countries but developed it to match their demand of covering some of the towns in greater detail. We believe that the best global practice methodologies should be open for local customization. </span></span></p>
<p class="Pa8">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Listening to a client’s need is a critical process and an important element of our strategy because clients know best where they are going and with what strategy. They can naturally express their needs. Therefore, listening is a critical part of our job while delighting clients is our aspiration. However, different clients have different needs so we need to balance between occasions and between realities. We have to bring the realities from a commercial firm with the right product to the market. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Default">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal">&nbsp;</b></span></p>
<p class="Default">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal"><span style="color: rgb(34, 30, 31);">How do you explain the importance of Nielsen numbers?</span> <br />
	</b></span></p>
<p class="Pa8">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Nielsen numbers tell our clients what their market share is, how fast the market is growing, and where they are in the competition. We are proud of being an independent company. We focus on using the Nielsen’s number to guide the expertise’s planning. We invest a lot of time in quality management, ensuring that we have got the right field management practices and the right amulets to interpret those numbers because we know how much our clients rely on the Nielsen’s number. Before I joined Nielsen, I used to work at Procter &amp; Gamble as a category marketing analyst many years ago in the UK. Every week a Nielsen’s number used to come around and that is when I first realized how much weight these numbers carry. </span></span></p>
<p class="Pa24" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The way in which people used the number were for making investment decisions, judging their performances in the market or looking after factors like distribution, product prices and level of competition. We tend to advise companies a lot in terms of what the distribution strategies should be and the likely pricing strategy they should adopt. Nielsen’s number is the bed rock for a lot of the decisions being made in the marketplace. </span></span></p>
<p class="Pa24" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="Default">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal"><span style="color: rgb(34, 30, 31);">What are the major plans for Nielsen Nepal?</span></b> <br />
	</span></p>
<p class="Pa8" style="text-indent:14.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The main purpose of my visit to Nepal is spending time with the management team and deciding on the next steps to be taken for the development of business in this country. Nepali clients’ expectations are increasing, so we are looking into the areas where potential improvements can be made. One area that we are considering is whether or not to expand coverage of measurement products into rural areas. We have not decided whether it is the right measure to take. We are also looking at a particular social research base to elaborate more expertise and bring in some more technical capabilities into Nepal in order to improve the level of understanding. We are also looking forward to introduce other services that we also have in other countries, for example, analytics. This could be an advantage for Nepal because they know how to go to the next level, to expand the distribution and to improve their competitive businesses. We have a number of analytics with capabilities in consideration. We are looking forward to listening to our clients’ view point. We would certainly like to build more presence in Nepal because our clients are demanding it. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;<img alt="Justin Sargent " border="1" height="430" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/intreview_2012.jpg" vspace="10" width="231" /></span></p>
<p class="Default">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal"><span style="color: rgb(34, 30, 31);">You joined Nielsen way back in 1993 and have held senior positions across the globe since. How do you assess this association over the period of almost two decades now?</span></b> <br />
	</span></p>
<p class="Default">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">From a personal perspective, Nielsen has provided me with lots of opportunities. When I joined Nielsen, I didn’t think that I would still be here 20 years later. Fortunately for me, I was given increasingly challenging assignments throughout which has allowed me to travel across different continents like Europe, Australia and Asia. Currently, I am working in India. Working in different countries engaging with different people, thinking about and understanding the clients’ needs and facing business challenges, has been very stimulating indeed. Nielsen has come across a lot of transformation in 20 years’ time including its ownership.</span> <br />
	</span></p>
<p class="Pa8" style="text-indent:14.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Nielsen focuses on shifting developments and as I mentioned before, moving people around is a big part of our strategy. Moving people to the developing market is good for learning about what works for a developing market. We can then reverse, innovate and take the best of practices to the developing market. But it also means you can look elsewhere, may be in the US or Europe, that could be a relevant market like India or Nepal. Nielsen’s strategies on talent developments and moving people around the world are incredibly one of the great things that it wants to share with other companies. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Default">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal"><span style="color: rgb(34, 30, 31);">Could you please elaborate on why is transferring talents so important?</span></b> <br />
	</span></p>
<p class="Default">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The general principal of moving people around is either for different jobs within a country or across different countries. It provides people with different experiences, perspectives and learning opportunities that eventually lead to career building. It is equally important from a company’s perspective as transferring people is also about transferring ideas, embracing innovations and sharing the best skills within and beyond boundaries. A big part of Nielsen’s strategy is to be a company exporting talent around the globe. We are fortunately one of the beneficiaries of that as we get to carry out a number of different assignments in different countries.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Default">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal"><span style="color: rgb(34, 30, 31);">Could you highlight the integral components of a transparent communications culture?</span></b> <br />
	</span></p>
<p class="Pa8">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">This is something that I have always strongly believed in. You have to be very candid, honest and open to both your peers and clients. When you communicate very frankly, you recognize people better. It is a fundamental philosophy of mine to lead a very honest communication because it is the only way to build trust and loyalty in general. It’s about celebrating and recognizing people. The transparent communication culture is not limited among the colleagues, rather it also extends to our clients by being very open with them. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Default">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal"><span style="color: rgb(34, 30, 31);">What are your recommendations to organizations for building a ‘client first’ mindset?</span></b> <br />
	</span></p>
<p class="Default">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">‘Client First’ mindset is all about thoughtfulness. Instead of offering Nielsen’s products immediately, I first inquire about what my clients need and how we can satisfy them better. Once you build a ‘client first’ mindset it will eventually benefit your business strategies because then you are developing your products and services according to the clients’ needs. It improves your client’s service because your clients can relate to and make use of them. Besides, at the end of the day, it ensures that our services are up to the mark. ’Client First’ mindset is something that I have passionately believed in during my entire career. Even if we talk beyond Nielsen, the same philosophy rules the most successful companies. From a marketing stand point, it is necessary to listen to the customers. Since there are new technologies emerging, we should utilize them to listen to the customers’ voice. For example, the social network and blogs could be powerful tools. Even the CEOs of many companies have started going out on the streets to understand customers’ needs.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">Things are rapidly changing in countries like India and Nepal. If you are constantly in touch with people, you could know more about them particularly the way in which people adopt technology. You have to constantly engage with customers to understand what is important for your brand and how could you keep it desirable for them. Understanding technology and customers to flourish your brand is something that can certainly be achieved by building a ‘client first’ mindset.<br />
	<br style="mso-special-character:line-break" />
	<br style="mso-special-character:line-break" />
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<p class="MsoNormal">
	<span style="font-size:24px;"><span class="A66"><span myriad="" style="line-height: 115%;">‘Tunnel Project Is A Litmus Test For The Private Sector’<br />
	<br />
	</span></span></span></p>
<p class="MsoNormal">
	<span class="A66"><span myriad="" style="font-size:43.5pt;line-height:
115%;font-family:">&nbsp;<img alt="kushkmarjoshi" border="1" height="251" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/interview(8).jpg" vspace="10" width="303" /></span></span></p>
<p class="MsoNormal">
	<span mso-bidi-font-family:="" myriad="" style="font-size:14.0pt;mso-bidi-font-size:11.0pt;
line-height:115%;font-family:">Kush Kumar Joshi <br />
	Chairman <br />
	Nepal Purbadhar Bikash Company Ltd</span></p>
<p class="MsoNormal">
	<span mso-bidi-font-family:="" myriad="" style="font-size:14.0pt;mso-bidi-font-size:11.0pt;
line-height:115%;font-family:">&nbsp;</span></p>
<p class="Pa19">
	<span class="A67"><span style="font-size:13.0pt">Kush Kumar Joshi is the Chairman of Nepal Purbadhar Bikash Company Limited (NPBCL) that is to develop the Kathmandu-Kulekhani- Hetauda Tunnel (KKHT) Highway that would substantially reduce the Kathmandu-Hetauda driving distance. <br />
	<br />
	NPBCL will be constructing the 50-kilometre long four-lane highway that will have approximately two 5.5 kilometre long tunnels for oncoming and going traffic between Kathmandu and Hetauda. The company will construct and operate the tunnel road in public-private-people partnership (4P) modality under the Private Financing in Build and Operation of Infrastructure 2006 act. A leading industrialist of Nepal, Joshi is also the Immediate Past President of Federation of Nepalese Chambers of Commerce and Industry (FNCCI), and the Chairman of Liberty Energy, Himalayan Bamboo Pvt Ltd and Managing Director of Nepal Ekarat Engineering Co Pvt Ltd. <br />
	<br style="mso-special-character:line-break" />
	<br style="mso-special-character:line-break" />
	</span></span></p>
<p class="MsoNormal">
	<span class="A67"><span myriad="" style="font-size:13.0pt;line-height:
115%;font-family:">In an interview with Gaurav Aryal of New Business Age, Joshi talked about the tunnel project as well as the country</span></span><span class="A67"><span style="font-size:13.0pt;line-height:115%;font-family:">’</span></span><span class="A67"><span mso-bidi-font-family:="" myriad="" style="font-size:13.0pt;line-height:115%;font-family:">s overall investment environment. Excerpts:</span></span></p>
<p class="Pa10" style="text-indent:14.0pt">
	<span class="A67"><span myriad="" style="font-size:13.0pt;line-height:
115%;font-family:">&nbsp;</span></span><strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:"><br />
	<img alt="kush kumar joshi" border="1" height="251" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/interview_333.jpg" vspace="10" width="250" /><br />
	<br />
	For the first time in Nepal, the private sector is developing a major road project. As the leader of this project, how do you plan to execute it? <br />
	<br style="mso-special-character:line-break" />
	</span></strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">It is indeed the first time the government has entrusted a private company with such a big responsibility. It is an honour to share the weight of the government in enriching the lives of Nepali people. The concept of making shortest road from Hetauda to Kathmandu was conceptualised more than 50 years ago. Everyone knows this will be the shortest distance to link these two cities but due to socio-political reasons, the mechanism to construct the road was not finalised earlier. This time around, a new approach of 4P model - public, private and people participation - is taken to revive this initiative. People’s participation in a massive scale is the main strength of this approach. The local people presently have to take a longer route to travel to Kathmandu despite a possible shorter alternative there. This project would be a matter of dignity for every Nepali when it will be completed solely with Nepali resources, technology and management. That is a motivating factor for all of us. <br />
	<br />
	<br style="mso-special-character:line-break" />
	</span><strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">What is the progress towards the financial closure of the project? <br />
	<br />
	</span></strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">The government has granted us this project for 30 years as per the People, Private and Public Partnership (4P) Modality under Private Financing in Build and Operation of Infrastructures 2006 act. The cost of the project is estimated around US$ 350 million and that money is going to be raised from amongst ourselves. Once we complete the feasibility study by November 2012, we will have the concession agreement with the government on technical and financial issues as well as the toll fee. <br />
	<br />
	<br style="mso-special-character:line-break" />
	</span><strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">You have set a timeline of three-and-a-half-years for the completion of the project. As many projects are failing to meet their deadlines, what is the basis of your optimism to meet your deadline? <br />
	</span></strong><br />
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">The main possible hurdles in a project are fund collection, local disturbances and not getting a license. In our case, the government has already granted a license to us not only for DPR but also for execution of the project. The main strengths of this initiative are the local people. The local landowners are ready to contribute to this project by providing their land after a proper valuation. We are not buying the land; instead the value of the land will be treated as their equity investment in the project. Thus the main likely cause of local disturbance is not there. <br style="mso-special-character:line-break" />
	</span></p>
<p class="Pa10" style="text-indent:14.0pt">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">The other main issue is fund collection. So far, we have received a warm response to our initiative and people are more than willing to invest in such a project that not only has high rate of return but also contributes in developing the infrastructure of the country. This will be the first time Nepali people will be involved in such kind of project. Our people have always been depending on financial support from donor countries, banks or the government. But, this project will make massive mobilisation of people – business community, local people, NRN community and the Nepali workers abroad - for generating funds. Another key component is the Nepali construction companies who will not only be the contractors but also major investors in this mega project. There is plenty of liquidity in the capital and money market but there are not enough good projects for investment. So, this good project will have no problem of funds. And we are hopeful to complete the project within the set deadline. <br style="mso-special-character:line-break" />
	<br style="mso-special-character:line-break" />
	</span></p>
<p class="Pa10" style="text-indent:14.0pt">
	<strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">Disputes on land acquisition and paying compensation have proven major issues while developing such projects. What is the basis for your optimism that your arrangement will work this time? <br style="mso-special-character:line-break" />
	</span></strong><br />
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">The modality we have come up with for this project is very unique. As I said earlier, we are not trying to buy land – it is more or less like a barter system and a participatory approach. Before deciding the alignment and making the survey, we had a lot of interactions with the locals and received a commitment from them regarding the project. The most important aspect is that they positively want to see this road built. The local community is ready to invest 75 per cent of the actual valuation of their land to the project and hold 25 per cent with themselves. This is a great step towards making a change. The locals have not just said that they want the road built but they have actually played a significant role in making this initiative a success. And if an existing house is needed to demolish for the road, we are committed to build another house for the owner. This, I think, is beauty or the strength of this entire project.</span><strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:"><br />
	<br />
	<br />
	<img alt="kush kumar" border="1" height="264" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/inteview_11.jpg" vspace="10" width="317" /><br />
	<br />
	<br />
	The KKHT highway is considered a project of national pride and a model to invite foreign investment in infrastructure development. How will this project be able to live up to this expectation? <br />
	<br style="mso-special-character:line-break" />
	</span></strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">We have huge potentials in infrastructure. One can see the level of service we are providing to the people in energy, road, drinking water, medical facilities, the basic needs for the people where we need investment whether from domestic or the international investors. The deficit in infrastructure is such huge, domestic investment is simply not enough. But we need to build up the confidence level of investors by providing a guarantee through the policy, political commitment and, most importantly, from the domestic investment. If our project will thrive, it would be a benchmark for other investors to emulate. A successful project such as this will have foreign investors to get interested to work on other projects. This should be a milestone for all Nepalis. I hope that this will surely lure foreign investors to collaborate with local investors and develop the infrastructures in the country. <br />
	<br />
	<br style="mso-special-character:line-break" />
	</span><strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">You have said that the project will return the investment to its investors in six to eight years from the date of operation. Wouldn’t this proposition make the highway a costly road to travel for the general public? <br />
	<br style="mso-special-character:line-break" />
	</span></strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">It is going to be a win-win situation for passengers as well as vehicle owners as they will be saving both fuel and time. If a truck or a passenger bus is today making a single round trip a day between Hetauda and Kathmandu, the completion of this road will enable them to make several round trips a day. Instead of four hours, the distance from Kathmandu to Hetauda will be covered in 45 minutes once this road comes into operation. Quite naturally, the frequency of travel will be more and transport entrepreneurs can earn more money besides, of course, saving on fuel. The toll fee will be very low and I am sure the users of this road will find it economical and not just save time but also money. <br />
	<br />
	<br style="mso-special-character:line-break" />
	</span><strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">Do you think that investing in infrastructure will give enough yield to the private sector? What will be the model of investment in your company’s future projects? <br />
	<br style="mso-special-character:line-break" />
	</span></strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">First of all, the license granted to us is a historical one. We always talk about the government not giving priority to the private sector and not giving investment opportunity or packages for infrastructure development. This is the first time the government has given a priority project to the private sector. Now, it is our turn to prove that we can do it. If we can do it ourselves, the trust on the private sector will be heightened. This is a litmus test for the private sector to prove that we can do it. For future projects, we may use foreign investment as well as equity based or debt and equity based modality. We will be trying to bring in equity participation for future projects as much as possible. Once this project is completed, NPBCL will become the largest company in Nepal valued at US$ 315 million. A sustainable mechanism and a proven track record will then be part of the company’s resume. We will be hoping for huge projects coming our way and perhaps we could look at large scale storage hydropower projects too. This is going to be the biggest company in Nepal enjoying massive public participation. The ownership will be divided among many people and benefits shared by all. <br />
	<br style="mso-special-character:line-break" />
	<strong><br style="mso-special-character:line-break" />
	</strong></span></p>
<p class="Pa10">
	<strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">What are the other similar projects in the pipeline for NPBCL? <br />
	<br style="mso-special-character:line-break" />
	</span></strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">The other similar projects coming up include road extension plans from Hetauda to Narayanghat and Hetauda to Birgunj but that will be taken only after the current project completes a whole lap. The traffic from Kathmandu to Eastern and Western Nepal is huge. This project is now envisaged for westbound traffic and people from Far West will travel via this road. Once the proposed new road from Hetauda to Narayanghat is opened, the drive from Narayanghat to Kathmandu will take only one-and-a-half hours. All the traffic coming to Kathmandu via Mugling will be diverted to the newly built road.<br style="mso-special-character:line-break" />
	<strong><br style="mso-special-character:line-break" />
	</strong></span></p>
<p class="Default" style="margin-top:5.0pt;line-height:10.05pt">
	<strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">This project is to utilise Nepali resources only for its development. Is there a possibility of similar big projects with Nepali investment only?</span></strong><span mso-bidi-theme-font:="" new="" style="font-size:10.0pt;mso-bidi-font-family:" times=""> <br />
	</span></p>
<p class="Default" style="margin-top:5.0pt;line-height:10.05pt">
	<span mso-bidi-theme-font:="" new="" style="font-size:10.0pt;mso-bidi-font-family:" times="">Many other people are trying to emulate this particular project. For example, the NRN Association has a 100 million dollar fund and they are trying to develop 100 MW hydropower project on their own. Some other companies too are trying to build hydropower projects with Nepali investment only. There are two important bases for the development of a country, one is roads and the other is electricity. Therefore, our next project will focus on energy because there is a lack of storage-based project in hydropower currently. After the success of this project, we will work towards mega storage projects. <br />
	<br />
	<br />
	<img alt="kush kumar joshi" border="1" height="387" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/kushkumar.jpg" vspace="10" width="208" /><br />
	<br />
	</span></p>
<p class="Default" style="margin-top:5.0pt;line-height:10.05pt">
	<strong><span mso-bidi-theme-font:="" new="" style="font-size:10.0pt;mso-bidi-font-family:" times="">What is your opinion on allowing investment abroad from Nepal? </span></strong></p>
<p class="Default" style="margin-top:5.0pt;line-height:10.05pt">
	 </p>
<p class="Default">
	<strong><span mso-bidi-theme-font:="" new="" style="font-size:10.0pt;mso-bidi-font-family:" times="">&nbsp;</span></strong><span style="font-size:10.0pt;
color:#211D1E">We are observing Nepal Investment Year and trying to invite foreign investment to Nepal. Given this situation, what kind of message will the Nepali and foreign investors get if Nepali investment in other countries is made an option indeed? Having said so, even if we have an opportunity to invest in foreign countries, it must come with certain conditions. The criterion should be – one must be an expert in one’s own field, have good brand recognition at home and willing to expand. Expansion requires investment and in such case, one needs to have a chance to expand and to promote the products and technology in some other country. Ultimately, the benefit should come to one’s own country.</span></p>
<p class="Default">
	<span style="font-size:10.0pt;
color:#211D1E">For example, an airline must have its branch in other countries for marketing and promotions. In such a case, one has to invest in foreign countries. Similarly, if you have a good and well-known brand in Nepal and want to export but the cost of competition in other countries may make it not feasible to produce in Nepal and export. Then you should be allowed to produce your own brand in other countries. This will be similar to what multinational companies do. If you have your own brand image for product that is made in Nepal, it will benefit if you establish your factory abroad and promote your own product. But let’s focus on investing within Nepal first.</span></p>
<p class="Default">
	 </p>
<p class="Pa23" style="margin-top:5.0pt">
	<strong><span style="font-size:10.0pt;
color:#211D1E">How do you judge the efficiency of the current FNCCI leadership? </span></strong></p>
<p class="Pa23" style="margin-top:5.0pt">
	 </p>
<p class="Pa10" style="text-indent:14.0pt">
	&nbsp;<span style="font-size:10.0pt;
color:#211D1E">There are a lot of issues, which have scope to be tackled more efficiently by the FNCCI. It looks like they are focusing on the investment year but they must handle local issues first. Given the situation where the fate of the government hangs in the balance one needs to know how the policies are being driven and focus on pressing to bring the full annual budget of the government at the earliest. Similarly, the policies meant to attract foreign investment for the Nepal Investment Year must be established. Priorities on issues like areas of investment and backing up the investment are more important than to celebrate the investment year itself. The investment board has the law and bylaws to backup the investment package and the same will be applied for other investments also. There are a lot of things that FNCCI can do as an apex body of the business community. </span></p>
<p class="Default">
	 </p>
<p class="Pa23" style="margin-top:5.0pt">
	<strong><span style="font-size:10.0pt;
color:#211D1E">Are business prospects for Nepal improving? What are the bottlenecks?<br />
	</span></strong></p>
<p class="Default">
	<span style="font-size:10.0pt;color:#211D1E">Everybody knows about the prospects Nepal has. We talk about tourism, hydropower, infrastructure and others but the business community has to push the government to create a proper environment and identify the priority projects for investment. The ongoing political turmoil is not giving a good sign to the investors to come to Nepal and invest.</span></p>
<p class="Pa10">
	<span style="font-size:10.0pt;color:#211D1E">There are three issues – energy crisis, labour issues and unstable government policies. Energy is the prerequisite because without energy, nobody will come to invest here. Labour issues have also discouraged investors. These two things must be prioritised and cleared by the government and the investment board to encourage investment. We also need to have consistent policies. Changes in policies every time there is change in the government will not attract any investments in Nepal. We have been asking the government and the political parties to come up with a common minimum economic agenda. Establishing a common minimum economic agenda will give a positive signal to the investors. </span></p>
<p class="Default">
	 </p>
<p class="Pa23" style="margin-top:5.0pt">
	<strong><span style="font-size:10.0pt;
color:#211D1E">You have been demanding reforms in the public procurement system. Would you please explain it? </span></strong></p>
<p class="Pa23" style="margin-top:5.0pt">
	 </p>
<p class="Default">
	&nbsp;<span style="font-size:10.0pt;color:#211D1E">The government has to prioritise domestic product. Any company’s first area of business is the local market. Once they have a good position in the local market, they can improve their quality, productivity and be assured about their growth. Having delivered their basic service, they can then think about exporting.</span></p>
<p class="MsoNormal">
	<span style="font-size:10.0pt;line-height:115%;color:#211D1E">The government has to provide a level playing field for the domestic producers by buying their products, but at the same time it should be monitoring the price and quality as well. At this point of time the government has not been able to accomplish these objectives. The government always seeks cheap foreign products and does not care for the quality. Our argument is, local products do not need incentives instead they need to be promoted so that they can be competitive, qualitative and eventually become export oriented. The government has to give confidence to investors by prioritising the purchase of local products. That is why we are saying that the procurement act has to be revised by making it mandatory to buy local products.<br />
	<br />
	<br />
	<br />
	</span></p>',
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			'description' => 'Kush Kumar Joshi is the Chairman of Nepal Purbadhar Bikash Company Limited (NPBCL) that is to develop the Kathmandu-Kulekhani- Hetauda Tunnel (KKHT) Highway that would substantially reduce the Kathmandu-Hetauda driving distance.',
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			'id' => '676',
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			'title' => 'Chandra Prasad Dhakal',
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			'content' => '<p>
	<span style="font-size: 14px;"><strong><br />
	</strong></span></p>
<p>
	<span style="font-size:14px;"><strong>The Three-way Merger Has Consolidated The Global IME Bank’</strong></span></p>
<p>
	<span style="font-size:14px;"><strong><br />
	<br />
	</strong></span></p>
<p>
	<strong><img alt="interview" border="1" height="371" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/interview(7).jpg" vspace="5" width="300" /><br />
	<br />
	Chandra Prasad Dhakal <br />
	Chairman <br />
	Global IME Bank <br />
	</strong><br />
	<br />
	Chandra Prasad Dhakal is the Chairman of Global IME Bank. He is also the President of International Money Express (IME). Born in a middle class family of Baglung district of Nepal, he has by now established himself as a leading entrepreneur of the country in a relatively short span of time. Dhakal is a member of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Executive Committee and the Co-ordinator at Investment Development Forum of FNCCI. He is also a member of the Nepal Investment Board constituted by the Government, besides being an honorary consul for Indonesia. He is currently looking forward to explore business expansion in association with Nepali as well as foreign companies. In an interview with New Business Age, Dhakal talked about recent three-way merger among Global Bank, IME Finance and Lord Buddha Finance creating the Global IME Bank and prescribed measures of bringing remittances through formal banking channels, among a host of other issues. Excerpts: <br />
	<br />
	<strong><br />
	While mergers in Nepali BFIs are usually between two companies, yours is a three-way merger. How did that become possible? <br />
	</strong><br />
	First, we were convinced with the fact that a merger between banks and financial institutions (BFIs) can certainly add value into the eventual entity as we have seen from the latest merger trend. A merger between two companies is normal but for the first time in the history of Nepali BFIs, Global Bank signed a merger agreement with two other financial institutions. At the beginning of the process, we had Global Bank and IME Financial Institution had signed a memorandum of understanding and later, the promoters of Lord Buddha Financial Institution submitted their merger proposal in a meeting with the Global Bank management. Thus, the successful completion of the process of all three companies led to the formation of Global IME Bank. The amalgamation of the three companies has made Global IME Bank stronger in terms of the capital assets, networking, product diversity and quality of customer services. As the promoters of all three institutions are from different sectors, it has created a synergy for us to explore new business sectors with possible expansion plans. The Global IME Group is strongly committed to provide its banking and other financial services to areas that are thus far deprived of formal financial services. <br />
	<br />
	<br />
	<strong>Where would the Global IME Bank like to focus after becoming such a stronger new entity after the merger? <br />
	</strong><br />
	The Global Bank already had a strong presence in the industry and that has been further fortified in terms of networking following the merger. Now Global IME Bank is the only private sector commercial bank with the most extensive network of 62 branch offices in 13 zones. We are resolute enough to extend financial services through our innovative products in both urban and rural areas. We would be utilizing our potential to explore new areas of investment covering almost every possible productive sectors of Nepal. Along with it, in the medium or long term, we aspire to establish at least one branch office in each district of Nepal. Retail banking is one of the top agendas in our priority list. <br />
	<br />
	<br />
	<strong>The bank has issued debentures worth Rs 400 million as part of a strategy to expand the capital base. Do you have any specific investment plan for that fund? <br />
	</strong><br />
	The paid up capital of Global IME Bank has augmented to Rs 2.18 billion after the merger of the three companies. And with the debentures issued worth Rs 400 million, our overall capital size has reached Rs 2.58 billion. The increased capital base will definitely support our business expansion plans in the future in national as well as international levels. We are planning to aggressively expand our businesses in the areas that other commercial banks in Nepal have not explored so far. <br />
	<br />
	For example, agriculture is a very important sector of our economy. However, the private sector investment in this sector including those of BFIs is very negligible so far. Unlike other commercial banks, we are taking a different approach to increase investment in the agriculture sector. Currently, most commercial banks are focusing on businesses of more organized sector and corporate clients as their main transaction base. Departing from this trend, Global IME Bank has plans to finance agriculture and related productive sectors for their development to the fullest potential. <br />
	<br />
	It is evident by now that the financial services to the agro sector from the state owned banks alone is not enough for developing the agriculture sector so long as it can contribute more to the national economy. By financing for the commercialization of the agriculture, Global IME Bank would also be supporting the government plans and policies to increase the contribution of the agricultural sector to country’s GDP. Besides this, we will soon start to work towards minimizing operational risk of the Bank by focusing more on retail banking. This means our main transaction base for both deposit and lending will be the common people, although we will not shy away from corporate and institutional banking.</p>
<p>
	<br />
	<strong>Benefits of the merger apart, grievances and disputes too come up in the process among promoters of different institutions as well as at the top-level management and employees. How did you handle the situation? <br />
	<br />
	</strong>After the merger, the number of staffs under the Global IME Group has increased for sure. Managing all the employees of the three companies that were in existence before the merger has been indeed a very challenging task for us. However, we have received support from all levels of employees including the Chief Executive Officers of all the three companies, the board of directors and other stakeholders of all three entities. Employees as well as our promoters are aware that after the introduction of comprehensive merger bylaws by the central bank, a class ‘A’ bank has successfully merged with two other class ‘C’ financial institutions for the first time in Nepal’s financial history. This, in fact, is a historical achievement for the entire system. Everyone involved in this process has put his/her priority second to the very goal of merger among these institutions. I am confident that there will be no grievances amongst our promoters and the employees in the future as well. <br />
	<br />
	<br />
	<strong>You also have a very strong presence in Nepal’s inbound remittance business. How is the remittance industry doing at present? <br />
	</strong><br />
	The current fiscal year has witnessed a 36 per cent growth in the inflow of remittances. It is comparatively higher than the growth rate of the previous years. The flow of remittance has grown substantially in recent years due to the increased number of Nepalis going abroad for employment. Likewise, the recent appreciation in the value of dollar is also responsible for growing figures on remittance income. It is sad but true that the existing political instability and constitutional vacuum will continue to create unemployment in the days to come. Hence, the trend of people going to foreign countries seeking employment opportunities is not likely to slow down in the immediate future. This will undoubtedly increase the amount of inbound remittance in the future as well. <br />
	<br />
	<br />
	<strong>It is often alleged that a large amount of workers’ remittances enter the country thorough illegal channels. What is your prescription to control it? <br />
	</strong><br />
	We can control the flow of remittance through informal channels only when we find the reasons behind it. We need to pinpoint the reasons which take people to choose nonbanking channels over the available legal ones. The obvious answer to it is the inability of Nepali financial institutions in providing banking channels to all the people willing to transfer their hard earned money to Nepal. In this regard, IME was the first Nepali financial institution to start its services to bring in remittances through a banking channel, 12 years ago. Prior to it, there was banking or legal channel available to send remittances from abroad and people entirely relied on the ‘hundi’ transactions. The trend of remittance coming in through informal channels has been reduced to a large extent after the establishment of IME. The objective of the Global IME Group is to create an easy mechanism for Nepalis living abroad to transfer their funds conveniently through the banking channels. <br />
	<br />
	But, I must mention here that we also have a fully functional system and products in place that address all the needs of fund transfer. For example, our foreign employment agencies need to pay a certain amount in foreign exchange to the companies in the Gulf countries or Malaysia that place orders to Nepali companies. But that is not possible legally and they are compelled to use ‘hundi’ for this purpose. If we can legally channel the agency commission, the illegal transfer will automatically reduce. Wherever a functional channel exists, there is possibility of both way movements of funds. <br />
	<br />
	The flow of remittance from India is also very nominal. About four million Nepalis are believed to be working in India and a very high majority of them use non-banking channels to transfer funds as they find it hasslesome and uneasy to remit through the banking channels. After the commencement of the Indo- Nepal remittance policy three months ago, the remittance flow from India is gradually increasing. Currently, IME has been networking with United Bank of India (UBI) which has around 1,600 branch offices across India. We do hope to reverse the trend of remitting through informal channels once we are able to make this networking with UBI branches throughout India fully functional. <br />
	<br />
	International Money Express (IME) has its reach in over 25 countries for bringing remittance to Nepal. It has strategic alliances with various exchange companies and commercial banks in Malaysia, the Middle East, Australia, UK and USA. IME Remit has also formed an alliance with companies like Money Gram International, Xpress Money, EZRemit and Instant Cash, for global access. I strongly believe that we can certainly combat the flow of remittance through informal channels in the long run if we can introduce appropriate bylaws and products to meet the needs of all stakeholders of the remittance business. <br />
	<br />
	<br />
	<strong>Both domestic and foreign investors are reluctant to invest in Nepal citing political instability. When do you think the situation will improve? <br />
	</strong><br />
	The political instability has definitely led towards a wait-andwatch situation for everybody, mainly the potential large investors. In spite of it, we should all move ahead with a positive attitude as business is also about taking risks and succeeding in it. Therefore, I think that companies investing during the crisis period can gain in the long term and make profits at a later stage. We are losing enormous opportunities due to the difficult circumstances that we currently face at home. I am sure there will be no looking back once the political issues are sorted out. I hope that it happens sooner than later and Nepal becomes one of the best destinations for investment. <br />
	<br />
	<br />
	<strong>The central bank has recently announced new Monetary Policy for FY 2012/13. Has it addressed issues raised by the banking community? <br />
	</strong><br />
	This Monetary Policy does not seem to have addressed remittance much. However, it has encouraged opening of bank branches and contact offices in countries like India and South Korea which are major remittance originating destinations. It is a positive step towards directing inflow of remittance through legal channels. Another important development is that the Nepalis can now exchange 2,500 dollars every time they go abroad. Earlier, when an individual or an organization submitted the required documents to banks and financial institutions, they could exchange up to 6,000 dollars maximum. This amount has now been increased up to 10,000 dollars. Similarly, the traders could earlier make a maximum payment of 25,000 dollars through Draft/TT while importing goods from countries apart from India. That has now been increased to 30,000 dollars. All these measures are the positive aspects of this policy. <br />
	<br />
	<br />
	<strong>How are different companies in the IME Group fold doing? What are your diversification plans? <br />
	</strong><br />
	From the perspective of a consolidated corporate group, we are involved in Automotives, Energy, Pharmaceuticals, Technology, Trading and Travel &amp; Tours besides Banking &amp; Finance and Remittance. IME Group has its presence in energy sector through Himalayan Power Partner Pvt Ltd, Mountain Energy Nepal Pvt Ltd and IME Oxygen Pvt Ltd. It is also one of the established players in the trading sector of Nepal. IME Group’s trading subsidiary – C M Trading – has been successful in penetrating major European markets with the exports of its Pashmina products for the last oneand- a-half decade now. <br />
	<br />
	The group has also been overseeing real estate and property lending through its trading subsidiary. IME Group has a presence in the tourism sector too, since 1995. It has Across Travels &amp; Tours Pvt Ltd, one of the leading travel agents accredited by IATA that has successfully carved a niche in the tourism industry. As far as the group’s financial services are concerned, there has been a massive transformation in the size of the Global IME Bank after the merger. Its paid-up capital has jumped to Rs 2.18 billion. <br />
	<br />
	It has debentures portfolio of Rs 400 million and lending is at the range of Rs 20 billion against the deposits of Rs 26 billion. The financial structure of the company has thus grown and opened new avenues for investment. In terms of networking, we are the largest amongst the private sector commercial banks. We have a total of 56 ATM counters, 70,000 shareholders, 650 employees, and 255,000 depositors. Currently, we are concentrating to expand our banking facilities in each district of the country and also set our focus on branchless banking. <br />
	<br />
	<br />
	<strong>You are planning to tie up with a foreign joint venture in several other sectors beyond banking and remittance services. Can you please share the developments? <br />
	</strong><br />
	To begin with, we first need to have a strong networking in order to tie up with foreign joint ventures. Our merger has reinforced the networking mechanism we had and it will certainly help us expand our business with the foreign companies in the days ahead. With the increased financial structures and widened networking, we look forward to collaborate with foreign companies in the near future. The process of Global IME Bank’s tie up with a possible foreign joint venture is in the pipeline right now. <br />
	<br />
	<br />
	<strong>You are also involved in the automobile business. How has been your auto venture doing? <br />
	</strong><br />
	We made a foray into this evergrowing sector in 2009 representing some of the renowned international automotive manufacturers as an authorized 3S distributor. Currently, our products from Asian Motor Works (AMW) – an Indian automobile company which produces trucks and trippers – is doing quite good. We have been associated with the company as it manufactures quality automobile products. Initially, the business did not go as well as we had anticipated because the crusher industries were on the verge of shutting down. Therefore, the trucks and trippers were difficult to be sold. However, in view of the improved situation, the products of AMW are gradually finding feet in the Nepali market. <br />
	<br />
	<br />
	<strong>You were planning to develop a fun park. What has been the progress so far? <br />
	</strong><br />
	We have reached almost to the final phase of planning to develop the said fun park which will be set up in the Chandragiri hills in the south west of Kathmandu. As part of our plan, we are working towards setting up a cable car route from Thankot in Kathmandu to the Chandragiri summit. We are consulting with various developers as well as considering different theme parks to make our fun park a complete recreation destination. Given the busy city life of Kathmandu, there is no place for the inhabitants of the capital to spend some quality time with their family and friends. Although, we are working on a new concept, we want to explore new areas of business as part of our expansion plans. We intend to start our project at the soonest possible and develop an affordable fun park for all. <br />
	<br />
	<br />
	 </p>',
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			'created' => '2012-08-16',
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			'description' => 'Chandra Prasad Dhakal is the Chairman of Global IME Bank. He is also the President of International Money Express (IME). Born in a middle class family of Baglung district of Nepal, he has by now established himself as a leading entrepreneur of the country in a relatively short span of time. Dhakal is a member of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Executive Committee and the Co-ordinator at Investment Development Forum of FNCCI',
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			'title' => 'Salman Lafit Rawn',
			'sub_title' => '',
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			'content' => '<p>
	<span style="font-size: 14px;"><strong><br />
	</strong></span></p>
<p>
	<span style="font-size:14px;"><strong>We Have To Work According To Consumer Psychology’</strong></span></p>
<p>
	<span style="font-size:14px;"><strong><br />
	<br />
	<br />
	</strong></span></p>
<p>
	<img alt="rawn" border="1" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/rawn-interview(1).jpg" style="width: 230px; height: 350px;" vspace="5" /><br />
	<br />
	<strong>Salman Latif Rawn <br />
	Country Manager, Nepal <br />
	Coca-Cola Sabco <br />
	</strong><br />
	<br />
	<br />
	Salman Lafit Rawn is the country manager of Coca-Cola franchise in Nepal since January 2012. Prior to joining Coca - Cola, he had worked in the capacity of the General Manager at Pepsi Cola franchise Iran. He has also worked as the Country Manager at Alokozay Group of Companies in Dubai – UAE . From 2005 to 2007 he was with coca-cola company managing its franchise in Afganistan in the capacity of Country General Manager. An MBA Graduate from the institute of Business Administration in Lahore, Rawn has more than 25 years of extensive and successful experience in the Fast Moving Consumer Goods (FMCG) industry. In an Interview with New Business Age Rawn shared the expansion and investment plans of his company for Nepal and also shed light on the existing challenges. Excerpts: <br />
	<br />
	<strong><br />
	We have heard about the massive expansion plan of Coca-Cola in Nepal. Would you like to shed light on it? <br />
	<br />
	</strong><br />
	The Coca-Cola Group has been working on the expansion of the available categories of its beverage. Right now, we are only doing the Returnable Glass (RGB) and PET business categories. We are investing 23 million USD in a new plant in Terai this year which will be the group’s largest single-time investment in Nepal so far. Internationally, we have many areas where we work in, for example, juice, water and energy drinks. Taking into account the uniqueness and demand of this market, we are planning to introduce some of those products here in the coming years. <br />
	<br />
	<br />
	It’s tough bringing investment in Nepal or convincing people for funding, especially when the political and business environment is not very constructive. However, we have managed to bring investment this time and we are hopeful that if we could use it well, we could bring in more money for this country. <br />
	<br />
	<strong><br />
	What can be the positive outlook for this investment? <br />
	</strong><br />
	<br />
	If we are making profit from this country, we also have to return something to it. There will be new expansions in terms of investing in the plant and machines and it will create new employment opportunities for people. Besides, we will be contributing more to the government exchequer. Nepal is a landlocked country where we need to import most of the raw materials which means that more money will go to the government coffer in the form of Customs Duty or Value Added Tax (VAT) <br />
	<br />
	<strong><br />
	I believe that Coca-Cola has not introduced a wide range of products that are available in many other countries. What are you doing in this regard? <br />
	</strong><br />
	<br />
	Coca-Cola has a wide range of products. Unfortunately, the size of the market is too small to produce all of those products in Nepal. Putting up a manufacturing facility for everything produced by the group will be highly capital intensive. However, we are trying to bring machines which can produce multiple products. Another constraint for this is the per capita income of the Nepali people which is very low. An ordinary Nepali citizen would not spend much on beverages. We are more dependent on tourists and their consumption trend. But this does not mean that we will not introduce any new products in Nepal; we will first import a new product range in Nepal from our plants in the neighbouring country. If we see demand for those products in the market, we will then accordingly set up the manufacturing plant here. We can introduce juice, water and energy drinks and add more flavours to the existing products in the future. <br />
	<br />
	<br />
	<strong>Though the per capita income of the Nepalis is still low, the distribution system for products like beverages has expanded in Nepal in recent years due massive expansion in road network. Has not this development in infrastructure helped in increasing the business prospects? <br />
	</strong><br />
	<br />
	These aspects are not enough because we have to work according to consumer psychology. It has been discovered through our consumer researches and direct discussion with the consumers that people living in European countries and Western territories don’t limit their beverage consumption only to events or family gatherings. It is part of their regular life as well whereas in Nepal, there is still a trend to consume beverage during particular events and festivals or in the presence of guests. The per capita soft drink consumption of the Nepalis is less than eight bottles a year in comparison to other South Asian countries where it is anywhere from 24 to 48 bottles a year. It will certainly be safe for us to introduce new range of products as and when Coca-Cola becomes a part of the Nepali people’s everyday lives. <br />
	<br />
	<br />
	<strong>Coca Cola enjoyed 70-80 percent of market share in Nepal till a few years ago. That figure is now reduced to 66 per cent due to aggressive marketing from the competitor. What are you doing to regain the lost market share? <br />
	</strong><br />
	<br />
	I have worked in markets where we had as much as 92 per cent market share. But these percentages are not attainable when there are two competitive companies operating in the same market. The reality is that when two companies are working competitively, market shares settle down somewhere between 60 and 40. I have worked both with Pepsi and Coke and I know where the market share of Coke is higher than Pepsi or vice-versa and what are the reasons behind it. Our objective behind expansion and investment is to have greater market share and product availability during the peak season. If my production capacity does not allow me to reach everyone during the peak season when they want to consume my product, people will not consume my products in the future. It’s because that opportunity will be grabbed by someone else. So we are trying to regain that lost opportunity which someone else has grabbed. And the moment we have that, the lost market share will automatically come back to us. <br />
	<br />
	<br />
	<strong>What are Coca-Cola’s marketing strategies in Nepal that has helped the brand to maintain its market leader position? <br />
	<br />
	</strong><br />
	Multinational companies implement different marketing strategies at different locations. Despite having a vast range of products in their portfolio, they do consider various aspects for example, which market to go, when to go, what amount of market maturity to seek etc before launching their products. You might find some products in Nepal that are imported in the quantity of thousands or hundreds. However, when it comes to manufacture those products here, it is imperative to justify the required investment. It is the same with us so we are waiting for the right time to introduce additional products. <br />
	<br />
	<br />
	<strong>Bottlers Nepal – the Nepali bottler of Coke – had won the Country of the Year Award in 2010. When next can we expect a similar feat from Coca- Cola’s Nepal operation? <br />
	</strong><br />
	<br />
	We bagged the ‘Country of the Year Award’ continuously for two years in 2009 and 2010. There are nine countries in the group now and all of them compete for this award. Surely, there are countries that have advanced technologies such as South Africa. There is Sri Lanka, Uganda, Ethiopia and we are competing with all of them. But even this year, we won two awards— Employee Engagement Award and Best Water Usage Award. We are competing again and hope to get the Country of the Year Award in the coming years. <br />
	<br />
	<br />
	<strong>How has the ongoing financial crisis affected the soft drinks market in Nepal? <br />
	<br />
	</strong><br />
	We, or for that matter, any other FMCG companies have been seriously affected on two counts. First, with all those days of closures, the production has been disturbed. Second, the distribution of the product has become very difficult. Continuous bandhs have affected our transportation system adversely and a weak transportation mechanism impacts our production system as well. We produce less when there isn’t enough transportation facility available. When we produce less, the cost per case goes high and it affects us as producers as well as the consumers. <br />
	<br />
	<br />
	<strong>What kind of challenges do you see in your job in the Nepali market? <br />
	<br />
	</strong><br />
	Electricity is a very big challenge because we are in a business where products are best served when they are chilled. We have distributed refrigerators to the outlets in the market but they cannot sell chilled drinks due to power outage. Another challenge is gasoline or diesel prices which increase every couple of months or so. At the same time, we can’t increase the price of our products to adjust accordingly. The frequent hike in petroleum prices also makes it difficult for us to decide on our annual budget. The third biggest challenge is the dollar rate fluctuation which has been impacting us heavily as we have to import 90 per cent of the raw material that we use. <br />
	<br />
	<br />
	<strong>Is that the reason for you to reduce your advertising budget? <br />
	<br />
	</strong><br />
	We have not reduced our advertising budget as such. We have rather changed the focus of our advertising campaigns. For example, if there is lesser electricity, the people will be watching television for a lesser duration of time. So we thought of diverting our investment from electronic mediums to advertising through hoarding boards that are more visible and do not get impacted by power outage. You can see increased number of such hoarding boards in the Kathmandu Valley when you move around. There is hardly any main road where Coca-Cola is not present so it’s just a shift of focus. <br />
	<br />
	<br />
	<strong>How do you view the present competition in Nepal’s soft drink market? <br />
	</strong><br />
	<br />
	There are two major categories in the Carbonated Soft Drink (CSD) industry —water and flavoured drinks. There is no ‘A’ Class player in water so far in Nepal which is dominated by a few local brands available in the market. However, there is a competition between two players in the flavoured drinks category. Our competitor is trying to build a market for itself and so are we. But the good thing is that our share of the market pie becomes bigger with the growth in the market size. I could see that as an industry, we are less dependent on trying to eat each other’s pie. Instead, we are trying to increase the total size of the market. The fight between the two companies was stringent in the past but it is not the same anymore because a person working for Coca-Cola today can work for Pepsi tomorrow and vice-versa. At present, the fight is more indirect for example; it is for the space in the outlets. The general size of our grocery shops is small so it’s not just the soft drinks producers but the entire FMCG industry that is jostling for space in the outlets. <br />
	<br />
	<br />
	<strong>It is said that one of the major problems in the Nepali market is that of arrears in collection of dues from the distributors. How is your experience? <br />
	<br />
	</strong><br />
	We don’t have such issues. I have also talked with other FMCG companies and even they are not operating on credits. However, I don’t say that we don’t have any arrears at all. There are credits in the market but these are secure credits. Our distributors are working with us for a reasonable period of time so there is a certain level of credibility in our relations. If we realise that a distributor or distributing channel might land us in troubled waters, we prefer not to extend any unsecured business with them. <br />
	<br />
	<br />
	<strong>Bottlers Nepal has increased its spending on CSR activities in recent years. Can you tell us about the new CSR activities that are being planned? <br />
	<br />
	</strong><br />
	I could see a huge chunk of activities this year coming under our CSR initiatives apart from our regular activities. We have been working on water utilisation, plantation and education and we have also been sponsoring certain orphanages. Our new project is to extend support to women entrepreneurs so we have adopted a vision “5 BY 20” which is a commitment to empower 5 million women to turn successful entrepreneurs by the 2020. Nepal has also been selected for the project from the South-West Asia Region. A senior person representing the Director level of the India Division of the Coca- Cola Company will be visiting Nepal next week to explore the details of the campaign. The Senior Vice President of the division will accompany him and together they will be setting different criteria. The criteria will entail aspects like who can qualify, what can be the measures to qualify and what will be an appropriate form of support for women entrepreneurs etc. Another project which we are going to introduce is ‘Support My School’. It is about kids who run away from schools, are not interested in study and do not have access to studies. This big campaign will be looking at ways to help them through uniforms, books, building libraries and classrooms etc. <br />
	<br />
	<br />
	<strong>As a global operator, what are the challenges you face in a country like Nepal? <br />
	<br />
	</strong><br />
	Nepal is among the very few countries in the world which are landlocked. It does not have much of its own revenue generation. To analyse how much people can buy from us and what things they will be interested in, we will have to watch their source of revenue. Like I said earlier, the smaller base of the country, lack of electricity and diesel, and dollar rate fluctuation are the major challenges in bringing big investment to this country. Another problem is that of finding the right people to work because the Nepali industry is small. Had there been multiple industries, there would have been a bigger pool of human resource to choose from. <br />
	<br />
	<br />
	<strong>What kind of government support are you looking for? <br />
	</strong><br />
	<br />
	The government should see the quantum of direct or indirect taxes and exchequers that we are paying. If it increases the excise duty or other duties at a very abnormal rate to industries like us, bringing investment to this country and creating opportunities for employment will be difficult. We are trying to expand our business so we need facilitation in technology and computerisation from the government. We will not be able to bring investment to this country if we have to wait years-on-end for approval on bringing software and technology. At present, we are trying to bring in a software called SAP and it’s already been a year since we applied to the Inland Revenue Department for the approval. Our application is simply gathering dust there. SAP will enable our headquarters to evaluate our work and access our records through our central server. It is easier to operate when this system is installed and therefore, we have been requesting the government to approve our application. We are not the first company in Nepal to use this software as there are some other companies that are already using the same technology. We have explained this to the government authorities but they told us to wait for the permission. We have met the concerned officials and satisfied all their queries but there is no progress so far. How can we bring more technology and investment in this country if the government does not facilitate manufacturing industry with the required technologies? It is our sincere request to the government to do the needful and approve our application on the SAP software. <br />
	<br />
	<br />
	 </p>',
			'published' => true,
			'created' => '2012-08-10',
			'modified' => '2012-09-16',
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			'description' => 'Salman Lafit Rawn is the country manager of Coca-Cola franchise in Nepal since January 2012. Prior to joining Coca - Cola, he had worked in the capacity of the General Manager at Pepsi Cola franchise Iran. He has also worked as the Country Manager at Alokozay Group of Companies in Dubai – UAE',
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			'id' => '586',
			'article_category_id' => '46',
			'title' => 'Anant SIyer',
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			'content' => '<p>
	<strong><br />
	</strong></p>
<p>
	<span style="font-size:14px;"><strong>We Will Continue Providing Brand Delight To Nepali Consumers<br />
	</strong></span></p>
<p>
	 </p>
<p>
	Anant SIyer is the Chief Operating Officer, RPC – East &amp; Nepal at United Spirits Limited (USL), the world’s third largest spirits maker by volume. He has over 27 years of experience in the industry and has earlier handled several key positions since joining the UB group in June 1992. In his current position, he will be responsible for USL’s operations in Eastern India and Nepal. He says, “We would like to participate in the growth that the government envisions for this country and be a part of the evolving Nepal<br />
	growth story.”</p>
<p>
	 </p>
<p>
	<strong><img align="right" alt="interview" border="5" height="193" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/interview2.jpg" vspace="5" width="150" />You, along with your seniors, had created USL's strategy for Nepal close to a decade-and-a-half ago. What is the purpose of your visit to Nepal this time around?</strong></p>
<p>
	It is to get myself reintroduced to our trade partners in the city as well as throughout the country as I have just taken over as the Chief Operating Officer for Nepal apart from my responsibilities in the eastern part of India. The second reason of my being here is that Gautam Mullick, our Country Manager here, is retiring after 14 long years of being in Nepal. You can call his being here as a circle of life because my seniors and I had made the original strategy for Nepal on behalf of UB Group and Nepal Liquors close to 15 years ago. At that point of time, we had selected him to be posted here.</p>
<p>
	From very small beginnings, we have now reached a position of strength. In earlier days, the market was small and so was the industry and globalisation was just coming into the subcontinent. With the kind of boom that has happened over the years, drinking of good spirits has also gone up. The Nepali consumer has been exposed to good blend and excellent tamper proof packaging like guala caps etc over a period of time. We have done very well and haven't looked back over the last oneand- a-half decade.</p>
<p>
	<strong>Do you think, USL with its 15 years presence in Nepal, have accomplished the objectives it had set out to achieve?</strong></p>
<p>
	Objectives in an organisation are set on an annual basis. It all dovetails into the vision we have for the organisation in Nepal. A vision is a long term goal that determines strategy which in turn sets objectives. Our objectives are ever evolving and ever growing so we cannot say that our objectives have been met. Our vision is to continue to grow in Nepal with the industry growth, remain market leaders and continue to provide full product and brand delight to the Nepali consumers.</p>
<p>
	The consumers experience for our brands has to be superlative and truly international so that the Nepali consumer knows he is getting the same kind of quality and product experience which he will receive anywhere else when he travels. It is an integral part of our organisational DNA that we keep on growing therefore, our objectives are not static and they change in accordance with the changing environment. The annual objectives always become better and more challenging but they all telescope into our overall vision for Nepal. We want to continue as the leading spirits marketer in the country and ensure that we give quality and delightful consumer experience. <strong><br />
	</strong></p>
<p>
	<strong>How do you assess USL's performance in India and other emerging markets?</strong></p>
<p>
	If you look at how we have performed in India, you will find that we are very clear about growing. We have close to two-thirds of the market share in India. We are now going to look at emerging markets and do have a huge strategy for markets in South Asia, Africa etc. We intend to grow by providing the consumers with good quality brands which provide delight to the consumers. We do a lot in terms of distribution and schemes to ensure reach and make our products available for every single pocket.</p>
<p>
	<strong>What is your reading of the Nepali market at this point of time?</strong></p>
<p>
	There is a growing middle class coming up in Nepal for so many years now which is very encouraging. When the economy grows, it helps people feel good and they want to enjoy themselves. We believe that socially responsible alcohol consumption is good in its own way, however, people should be aware. They must follow the laws of the land and thatâ€™s what we endeavour. We have a wonderful team of distributors located all over Nepal and they have been with us for many years. We continue to seek their help in ensuring that our products reach our consumers in the pack sizes of their preference which fits their pockets. We are the first company in Nepal to come up with 90 ml, 60 ml, guala caps etc which speaks volume of the fact that we keep on evolving.<strong><br />
	</strong></p>
<p>
	<strong>UB Group's most visible brand Kingfi sher Beer is not available in Nepal</strong>.<strong>What could be the possible reasons behind this glaring exclusion?</strong></p>
<p>
	Kingfisher Beer is actually managed by our sister organisation United Breweries and as far as I know, they had a presence in Nepal at a point of time. However, I am not aware of the latest developments in terms of its strategy for Nepal. Kingfisher is a wonderful and truly international brand and one of the real successes of this subcontinent. You will find it in many countries such as the US, Canada, England, France, Italy, Singapore, Hong Kong, Thailand etc. Kingfisher Beer is available either in restaurants that is on-trade or as off-trade. On my part, I can certainly communicate with my colleagues in the Breweries Division about the huge latent demand for the brand here. I am sure that they would want to look at this possibility again.</p>
<p>
	<strong>How have you fared on your liquor brands in this country?</strong></p>
<p>
	Luckily for us, most of our brands have succeeded pretty vigorously. Our success has been in premium whisky segment like Antiquity and Signature both being brand leaders. McDowellâ's No 1 and McDowell's Platinum have also done well while Blue Ribbon Gin is the sole leader in its category. We have received a setback in the Vodka segment but it's only a matter of time before we bounce back. Even though we are a small player in the Rum category, we have done well for ourselves and we will intend growing as there is definitely a market for Rum here.</p>
<p>
	<strong>Tell us a little about the competition you face from some other renowned brands available in Nepal.</strong></p>
<p>
	Competition has come and some of the competitor brands have been doing well but that's how business is. We don't fear the competition because as an organisation, we evolve with the consumers and step ahead. If you remember, when we launched Signature Whisky, it was Nepalâ€™s best whisky produced at that time. Today, we are right there with our successful brands Antiquity Red and Antiquity Blue. Our Antiquity Blue is as good as any value scotch available in the market and can take them head on. I believe that competition is always healthy, it keeps us on our toes and we respect our competition.</p>
<p>
	The reason for the success of our group is that we are a very humble and straight shooting organisation. We don't allow our domination of any category or market to ever get into our head and don't browbeat or pressurise. Instead, we believe in growing with the market and ensure that our partners in progress the trade partners, retailers etc are conducting their businesses successfully. We keep all our stakeholders internal as well as external happy. In a market scenario, ups and downs always happen and market positions keep changing. Competition has grown over the years just as we did but if you look at the size, we have close to two-thirds of the market share in Nepal. Our objective is that we not only reach two-thirds in terms of volume but also in terms of earnings. In this endeavour, we have ensured that in the premium segment, we have a huge share of the market.</p>
<p>
	As for the prestige segment, it's only a matter of time that we regain the market share which we have lost over the last five years or so. I welcome competition as it does not allow complacency to set in. We would all like to be one step ahead of competition by ensuring product improvement and everything else that we do in the market.</p>
<p>
	<strong>You just mentioned that you would like to reach two-thirds in terms of earnings too. How do you go about achieving that?</strong></p>
<p>
	That is certainly our endeavour but it is not to fufill through the two-thirds market share that we enjoy. We improve our bottom line by ensuring that the products we sell are more premium category which we have succeeded in and will continue to succeed at. We do efficiencies in manufacturing and selling so there are ways and means to ensure that our bottom line gets affected. I am not even suggesting remotely by any means that one side should curb it so that the other side should get it. The intent is that if the consumer gets a product at the right price, the market grows and so does the revenue.</p>
<p>
	<strong>Now that you will be looking after Nepal operations for some time to come, what would be your expectations from the government here?</strong></p>
<p>
	We only hope that the government helps the industries such that it can help the revenue. As you know, the government also gets its last share of revenue from excise and taxes but year-on-year, rising taxes substantially will eventually lead to killing the golden goose. Every government around the world is cash strapped and we understand that Nepal is no exception but our prayer to the government is not to tax indiscriminately. Because the higher you tax, it gives the unscrupulous elements the opportunity to make spurious products. Given the arbitrage of the substantial tax amount, these elements enter into the market. They may not sell their products in the cities where there is better policing and supervision but they definitely sell them in the rural areas where people are neither very literate nor do they have the choice. Normally, these products are sold very cheap but they have unnecessary side effects. It also allows illegal activities to happen and as a result, there is an increase in corruption.</p>
<p>
	A spurious manufacturer takes advantage of this arbitrage and makes a lot of money. In the bargain, everybody loses right from the consumer to the government and us too as an industry. We understand that by all means, there is a proportion which needs to go to the government but it should be reasonable. At the end of the day, the government is also here to work for the welfare of its citizens so it needs money. But as businesses, we cannot keep on hiking prices because it will go over a certain tide. If the inflation is 10 per cent and the prices go up by 20 per cent, people are still not going to stop drinking. But one has to take a very long term view on this rather than a short term fix.</p>
<p>
	As I said a short while ago, the revenue grows when the market grows otherwise the revenue regresses. As prices increase, consumers tend to drink lower category drinks instead of premium ones. Since the excise duty is less in lower categories, the government tends to earn lower per case or bottle than in the higher categories. Hence, the government's revenue regresses eventually. I would also like to add that in this country, VAT is a pure form VAT which is good.</p>
<p>
	When you charge tax on small items of daily use such as biscuits, soaps, toothpastes etc, the tax is small so people don't mind paying. But when the tax amount is higher, people don't like paying which is human tendency anywhere in the world. Our suggestion is: please charge your tax but don't charge multiple times. The sales tax people can collect taxes from say, 100 distributors, instead of collecting them from 47,000 retailers that we have spread across Nepal. It will enable the government collect taxes easier and cleaner and ultimately, it's the same amount.</p>
<p>
	<strong>Being an Indian conglomerate, could you single out the most challenging aspect of doing business in Nepal?</strong></p>
<p>
	First and foremost, we are very multinational in our nature now as we are present in many countries. I would say that our roots are sub continental instead of only being Indian. When this group was born many years ago through acquisitions followed by start up ventures, we had our presence in many markets. For example, we had a small business in Nepal going on that we reactivated 15 years ago. The fruits of that success and strategy are now here after dealing in Nepal over a period of time. There have been lots of challenges but we have weathered them. We have learnt to cope up and adapt to the market and that's a great asset of being from the sub continent. I don't think we are very different from each other in the way we look at life, for example, our beliefs in god, family and value system etc. We follow a similar culture even though we may speak different languages we have so many languages in India too. It is easier to adapt much faster being from the sub continent. We have always maintained healthy relationships with all our stakeholders in Nepal the authorities, trade partners, key opinion leading consumers, associations etc.<strong><br />
	</strong></p>
<p>
	<strong>Do you see yourself making greater inroads into this market? How do you plan to treat this country as a market in the future?</strong></p>
<p>
	We are planning to launch many more brands in the premium range in Nepal since it is a very critical market for us. You must be aware that we also have our own distillery in Biratnagar and we are investing in it on a continued basis. It is important for us to ensure that we continue to remain leaders and grow with the market. We will continue to treat the market in Nepal with respect as we have always done. The market has tremendous potential as always and lot of growth opportunities are available. We will continue to ensure that we invest in brands in this country and that our consumers are happy and satisfied with our brands. In this way, all stakeholders consumers, trade, authorities and the company will remain aligned and satisfied which is very critical for us. We would like to participate in the growth that the government envisions for this country and be a part of the evolving Nepal growth story.&nbsp; <br />
	<br />
	 </p>',
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			'description' => 'It is to get myself reintroduced to our trade partners in the city as well as throughout the country as I have just taken over as the Chief Operating Officer for Nepal apart from my responsibilities in the eastern part of India',
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			'id' => '525',
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			'title' => 'Sunil Kaushal',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<span style="font-size: 14px;"><strong><br />
	</strong></span></p>
<p>
	<span style="font-size:14px;"><strong>We Are Focused On The Basics Of Banking<br />
	</strong></span></p>
<p>
	 </p>
<p>
	<strong><br />
	</strong></p>
<p>
	<strong><img alt="" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/interview(5).jpg" /><br />
	</strong></p>
<p>
	<strong><br />
	</strong></p>
<p>
	<strong>Sunil Kaushal</strong> is the newly appointed Chairman of Standard Chartered Bank Nepal Limited. Kaushal is likely to assume a senior role in the South Asia region, the announcement of which is likely to happen soon. He is currently the President and CEO of Standard Chartered Bank (Taiwan) Limited. He has over 23 years of banking experience and held several senior roles with the bank across different markets including Global Head SME Banking and New Ventures in Singapore. Prior to joining Standard Chartered Bank, he had also worked for Bank of America and HDFC Bank. In an interview with Pinaki Roy of New Business Age, Kaushal shared his views on the global banking scenario and Standard Chartered Bank's presence in the key world markets. Excerpts: <br />
	<br />
	<br />
	<strong>You have been appointed the new Chairman of Standard Chartered Bank in Nepal. What kind of vision do you have in mind for Standard Chartered Bank's operations here in Nepal? <br />
	</strong><br />
	<br />
	First of all, I think you would appreciate that we have created a very solid platform in the last 25 years in Nepal. At our AGM held recently, we declared a solid set of results given the tough market environment that prevails. The vision is to build on a strong platform that we have got here. We are very well positioned for a balance across wholesale as well as consumer banking, in the years to come. <br />
	<br />
	<br />
	<strong>You have been at the helm of affairs in Taiwan for quite some time now. Could you highlight some interesting events during your tenure while heading Taiwan operations? </strong><br />
	<br />
	<br />
	I have been fortunate enough to have worked at many locations outside my home country and Taiwan has been one of the overseas postings for me. Taiwan was particularly interesting for the bank because we had three acquisitions there. What was also quite interesting was the acquisition of a bank Hsinchu International Bank that was much larger than ours. The other two were Asia Trust Bank (for licensing) and American Express Bank (global acquisition). It was about assimilating the culture putting the three acquisitions together, integrating them and then building on the platform. The results of Taiwan have been pretty strong. <br />
	<br />
	<br />
	<strong>How has Standard Chartered differentiated itself as a bank when compared to some other global banking giants in terms of performance and branding? </strong><br />
	<br />
	<br />
	In terms of performance, we have delivered time and again as well as enjoyed great ratings upgrade for as long as one can remember. If you look at our share prices, we are one of the few banks which trade at premium to book value. We are present in the right markets Africa, <br />
	<br />
	Asia and the Middle East which stayed relatively better even during the financial crisis. And when the recovery happened on an absolute basis, these markets did fantastically well. We have a long history in these markets around 150 years presence in most of them so we have the depth and breadth of relationships in these markets. <br />
	<br />
	<br />
	Our strategy has been very clear in terms of focusing on these markets and relying on the basics of banking to deliver our performance. We have been there for our customers by being open for business and that is a very big thing. It is as big today at a time when big institutions globally are undergoing stress, talking about cutting headcount and reducing presence. On the contrary, we are still very much in a growth mode so we stand in a unique and differentiated position. We were the only international bank which consistently delivered record profits even during the financial crisis whereas most banks were struggling to break even. <br />
	<br />
	<br />
	Standard Chartered brand has been created over a period of time and we owe it to the management teams in different markets for taking the right decisions with the depth of the local knowledge that they have. The trust that the bank has created over time is especially evident during financial crises when we always see a flight to quality in terms of the customer deposits coming to us. We have proven that people feel secure while trusting their money with us. The best part is that we don't rest on our laurels and continuously try to keep ahead of the market. These are challenging times globally but we are very well positioned and quite differentiated from the competition. <br />
	<br />
	<strong><br />
	Despite the global economic crisis, Standard Chartered Bank figures among the largest profit earning international banks. How do you view this success? </strong><br />
	<br />
	<br />
	It is about being distinctive in our strategy which has resulted in our differentiated financial performance. In fact, we have delivered eight straight years of record profits, and are the only international bank to have received a ratings upgrade by all the three global rating agencies since the start of the financial crisis. Our performance, as you mentioned, has been very strong in the closing statement that we came out with recently which reiterates our differentiated position further. <br />
	<br />
	<br />
	Among the reasons for this is that we are focused on the basics of banking having a strong capital base, focusing on our clients and customers, having a strong balance sheet in terms of liquidity and being open for business. Besides, we are present in the right markets Asia, Africa and Middle East which are actually experiencing good growth as compared to the west which is facing challenges that all of us are aware of. <br />
	<br />
	<strong><br />
	Of late, the financial world is again embroiled in a crisis of sorts, like the Eurozone debt crisis. How do you analyse this situation and what kind of impact will this have on the banking scenario across different markets? </strong><br />
	<br />
	<br />
	In terms of global impact, we have all been hearing about banks wanting to require potential recapitalisation. The impact is applicable across all markets as some of the European banks pulled back because they had to reduce their risk related assets. These banks had to reduce their exposure so that the capital comes up to the level of 9 per cent that EU has mandated by the middle of next year. It's very difficult for them to go out and raise capital at this price when they are not into utilizing their earnings. <br />
	<br />
	<br />
	There is clearly a stress on liquidity for certain banks because of the fear of the exposure that they have to the European markets. Fortunately, for a bank such as ours which has no exposure to the distressed markets in Europe, it creates opportunities for us given the funding, strong balance sheets and capital position that we have. We are looking at these opportunities in different markets and monitoring them quite closely. <br />
	<strong><br />
	<br />
	Standard Chartered, as I understand, has always propagated organic growth. Do you think there will ever be a shift in this line of thought and probably the bank could look at the issue of mergers and acquisitions more favourably in the foreseeable future? <br />
	</strong><br />
	<br />
	If you look at the last decade or so, our focus is absolutely on organic growth but we have local opportunities which are inorganic as they presented themselves. Therefore, more than being a matter of choice, it is about having the right blend. Though we are focused on organic growth as a bank, we will surely consider if a right opportunity comes up. <br />
	<br />
	<br />
	<strong>Tell us about Standard Chartered Bank's India and South Asia operations which you are tipped to take over in due course? </strong><br />
	<br />
	<br />
	India is huge for us and South Asia is big for us as a region and I am excited about the opportunity. <br />
	<br />
	<br />
	In terms of market situation, it will be obviously different from my posting at Taiwan which was already a developed market. But I also have been through different roles globally which provided me with an opportunity to look at diverse markets from Korea in the east to Nigeria in the west. Therefore, I do have the understanding of managing different markets and challenges are something that I always look forward to. <br />
	<br />
	<strong><br />
	You have also been the Global Head for SMEs and New Ventures in Singapore. What are your plans to this effect for your operations in the South Asia region? </strong><br />
	<br />
	<br />
	The SME sector is already quite large for us in the markets in South Asia. It's about building on the strong track record that we have in the sector. SMEs are the core to any economy typically when they constitute 90-95 per cent of the enterprises and contribute 65-70 per cent of the employment. Even during the financial crisis, we have been out there supporting the SMEs and again that is something which differentiates us. SMEs augur well for South Asia as there is potential growth in the economies because of the sheer confidence of SMEs to the economies in the region. <br />
	<br />
	<br />
	<strong>Talking about India, there are recent reports that suggest the Indian economy may not be growing at the same breakneck speed that it so promised until about a couple of years ago, for a variety of reasons. How big an impact will it have on the fortunes of the banking conglomerates in the country? </strong><br />
	<br />
	<br />
	One has to look at the situation in terms of the overall context. India has had very strong growth in the past many years.There are some signs of moderation but I think it is only a short term phenomenon there is no denying the fundamental strength of the economy and we as an organisation are very bullish about the long term potential of the market. The big story about India remains unchanged in terms of its medium and long term prospects; we should not read too much into a slowdown in the last few quarters. <br />
	<br />
	<br />
	<strong>Standard Chartered Bank's profits in India have come under pressure after five years of accelerated growth. How, do you think, a difference can be made in this context? </strong><br />
	<br />
	<br />
	Standard Chartered in India has had a fantastic growth over the last decade or so and the team there has done an incredible job, with profits growing fivefold in the last five years. As I said, it's a short term blip and clearly, there are immense opportunities in the Indian market. We are well positioned as an institution having been in that market for 150 years, to really capitalise on the growth opportunities the economy presents. <br />
	<br />
	<br />
	<strong>China is the fastest growing economy in the world. How well placed is Standard Chartered Bank in the country given its immense potential? </strong><br />
	<br />
	<br />
	We do have a sizeable presence in China with a fully-owned banking subsidiary which operates over 70 outlets. We will very soon be looking at crossing the 90 mark in terms of the outlets that we have in the country. We have been present in China for around 150 years and it's one of the fastest growing markets for our bank in terms of revenue momentum and growth. <br />
	<br />
	<br />
	So, the Chinese market has immense opportunities for us and a bank such as ourselves, is very well positioned given our long history in that particular market. We can certainly be more aggressive in China but we also have to balance the opportunity with the investment. And I don't think we have held back on any investment in China as it's a market where we see great potential and growth.</p>
<p>
	 </p>',
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			'created' => '2012-01-21',
			'modified' => '2012-09-16',
			'keywords' => '',
			'description' => 'Sunil Kaushal is the newly appointed Chairman of Standard Chartered Bank Nepal Limited. Kaushal is likely to assume a senior role in the South Asia region, the announcement of which is likely to happen soon. He is currently the President and CEO of Standard Chartered Bank (Taiwan) Limited.',
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			'id' => '477',
			'article_category_id' => '46',
			'title' => 'Pasi Koistinen',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<span style="font-size: 14px;"><strong><br />
	</strong></span></p>
<p>
	<span style="font-size:14px;"><strong>We Want To Make Mobile Telephony More Affordable</strong></span></p>
<p>
	 </p>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Pasi Koistinen </strong>is the President and CEO of Ncell Private Limited, which became the largest telecomoperator in Nepal some months back overtaking the state-owned Nepal Telecom. The company reached the figure of six million customers recently. Ncell, the first private telecom operator of Nepal was rebranded to its current name in 2010. Nordic telecom giant TeliaSonera has a large stake in the company. Koistinen joined TeliaSonera as a Director in 1998 and took up the position of Ncell CEO in May 2009. He has also served in top managerial level in diverse fields like hospitality business, advertising agencies and telecom service in countries like Finland, Singapore and China. In an interview with Gaurav Aryal of New Business Age, Koistinen shares his views on Ncell's growth, Nepal's telecommunication market and a whole lot of other issues. Excerpts: <img align="right" alt="Ncell" border="2" height="279" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/interview_pic2.jpg" style="margin:10px; padding:10px;" vspace="10" width="180" /></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Ncell's customer base has crossed six million. How sustainable is this rapid growth in the number of customers? </strong><br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">We have reached six million customers but the penetration is still low in Nepal. We are talking probably somewhere in the region of 50 per cent, meaning that only half of the population have mobile phone connectivity. So, there is still a huge potential. We are expecting the same kind of growth in the future as well because we believe that people need mobile phones. We have experienced rapid growth in the last two years and increased the customer base by three million within a year. So, mathematically speaking, we should have nine million customers after a year if everything goes as expected. The growth is sustainable because every customer we get into the system is generating revenue. The most important aspect is that our customers are happy with us. Therefore, we plan to continue investing in our operations. <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>At the time of rebranding, Ncell had only about 2.2 million customers. It has taken a giant leap since, in terms of customer base, coverage and brand name. What is the secret of this huge success? </strong> <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">Rebranding was like a new promise not only for our customers but also for our company and the employees to increase the overall customer service level. So, we decided to invest heavily in the network and subsequently, the rebranding exercise. We doubled the network before the rebranding to make sure that we have something to operate that is good quality network. When we started marketing the new brand, it was an entity of this whole package of services. Service, in our case, is very intangible in the sense that people call each other and there may be 100 million transactions each day. We have to guarantee that these transactions are successful because it's only then that people will come to us. I think this was a major reason for our huge success. Of course, rebranding was another very essential component of our success.<br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>With this tremendous growth, Ncell must be making a huge profi t now. How are you doing on revenue? </strong> <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">Well, it depends what you call a profit. We are not profitable yet if you talk about cash flow which is the main issue when talking about profitability. Revenues are good and we have gained a lot of market share during the last couple of years. But we have invested a lot on infrastructure as well so a big investment takes time to recover. We are spending three to five times more in infrastructure than in other TeliaSonera countries due to difficult terrain and climate. We have to remain humble towards our customers and give them good services and hope that results will follow in due time. <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>What kind of policies do you have to attract more customers especially from rural areas? </strong><br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">As you must have seen, we have had a lot of campaigns in rural areas. We want to support the campaigns knowing well that not everybody in Nepal has the same amount of money. Therefore, we have had a lot of rural campaigns to make mobile telephony more affordable for everybody. <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Though Ncell has sold more than six million SIM cards, it is said that a large number of SIM cards issued are not in operation. What is the actual number of your active mobile phone customers? </strong> <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">Active ratio varies, of course. Out of the over six million sim cards we are talking about, we know that some of them are not currently in operation. There are people who switch on their phones at certain times only for receiving calls because it does not cost anything for the receiver. The active ratio varies between 80 per cent to anywhere close to 100 per cent. For example, it was almost 100 per cent when we had the earthquake on 18 September. <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Tell us about TeliaSonera's Nepal experience in comparison with other countries? </strong></span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">TeliaSonera has been very happy about the investment in Nepal. We are already in number three position among all nine countries in terms of number of users. So, naturally TeliaSonera is very satisfied with what we have done here. </span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>How is the response to your smart phone service like Blackberry? <br />
		</strong></span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">We launched Blackberry because we wanted to make a difference and we are the only operator selling Blackberry in Nepal. We knew from other markets as well that Blackberry will become an essential service for the people who need to be connected while on the move and people who have enough money. In this respect, we are very happy about it. This is an exlusive service targeted at an affluent segment of the market. <br />
		<br />
		We also have Ncell Pro which is a very good approach. In the longer run, we are expecting it to be a great success because we combine the handsets and talk time, sim card, data package and sms package as one set that is easy to buy. But it takes time for people to realise the benefits of it. <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>It is said that Ncell and NTC the two telecom giants have left no space for new telecom operators. Is it really that diffi cult for new comers to penetrate in the telecommunication market now? How many operators do you think this market can sustain? </strong> <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">Well, this is a free market and anybody can invest and operate here. However, we do not have many companies in Nepal who are ready to take the risk by investing first. TeliaSonera has a history of entering emerging markets early. Kazakhstan was among the emerging markets we entered soon after Soviet Union collapsed, in 1994. It takes time to build the kind of massive operations that we have so it's not an easy business. I personally believe that this market can sustain three operators. </span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><img align="left" alt="ncell" border="1" height="426" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/interview_pic1.jpg" style="width: 356px; height: 426px;margin:10px;padding:10px;" vspace="5" width="356" /></strong></span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>What is your take on the practice of squatting on the spectrum license? </strong> <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">We actually have enough spectrum allocated to us and so far we have paid for the spectrum and the license in full. We have also fulfilled all the requirements of the NTA concerning the licenses including the spectrum. On our part, we are clear and it's not for me to analyse about some other companies holding spectrum. NTA too has introduced a fee for companies not using the spectrum effectively enough. It has the provision to penalise them for the so called holding of frequencies. </span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>What are your expectations from the regulatory authority for the improvement in quality of services along with this sectors growth and expansion? </strong><br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">Many things have been clear in the sense that we want to have a level playing field. Especially, when NTC is a government corporation, they do have the advantage of being in the country earlier than us. But the biggest issue is that they are not following NTA regulations. Let me give you an example. There is a rule that the congestion between the operators can be maximum 0.1 per cent meaning that one call out of 1000 can fail. Now, the situation is that for the past two-and-a-half years, I have been here and we have been talking about NTC not being able to give us enough capacity and units so that our subscribers can freely call the NTC network. During the peak hours, the congestion can be up to 60 per cent which is unfair. <br />
		<br />
		We had a very open discussion with NTC and NTA asking them to give us the space because we want to build a good telecom infrastructure company in this country. But, we are compelled to follow what someone else is doing. We don't want to be dependent on our competitors and want them to follow the regulations that are laid out. There is also the issue of cross subsidising, meaning, if you have an NTC mobile phone, you can call the NTC landline without any interconnection charge. However, in our case, we have to pay 52 paisa for every minute when our customers make calls to their network. This means that we cannot be price competitive with NTC on that level and this, of course, is a very wrong practice. <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Some time ago, Ncell had commented that the authority was biased against the private telecom operators and especially Ncell. What was the biased treatment? </strong> <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">We are the biggest foreign investor in Nepal so we are requesting for equal treatment and equal level playing field. For examplem, for permission requirement, foreign exchange permission and license renewal fees should be equal for all operators which has not been the case so far. </span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>WiMAX and 4G spectrum are not issued by the authority yet. Why do you think they are rigid about it? </strong> <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">To tell you the truth, 4G is essential. But it is not urgent because we are totally occupied building the 2G network. We have always seen that people are very keen on using wireless broadband. Our Ncell Connect became the number one ISP in the country within a period of eight or nine months which really proves that people are willing to have wireless internet connection. I don't believe in WiMAX at all as it is a very limited kind of technology with no handsets available and promises to be an expensive proposition. I really intend to request the government to concentrate on GSM because evolution such as the 4G will continue to take place. <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Do you think 4G will be suitable for Nepal?</strong> <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">Sure, because it gives excellent speed for data surfing. Now with HSPA, we can go up to 3.6 mbps and with HSPA plus, we can go up over 7 mbps. For instance, when 4G was launched in Sweden, it brought huge improvement to data speed. <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>How long will your aggressive marketing continue?</strong> <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">I hope that we continue in the same manner forever. This is a continuous business and we have to give people value for money and time. Marketing is not only about marketing communication, but also about best customer experience. Marketing communication gives promises via billboards and advertisements. But we have to fulfill those promises with other aspects of the infrastructure - network, billing system, call centre, point of sales etc. Our aggressive marketing has reached us this far. So, we are more than happy to continue practicing it and hope that it pays us great dividends in the long run. </span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><br />
		</strong></span></span></p>
</div>',
			'published' => true,
			'created' => '2011-10-11',
			'modified' => '2012-09-16',
			'keywords' => '',
			'description' => 'Pasi Koistinen is the President and CEO of Ncell Private Limited, which became the largest telecom
operator in Nepal some months back overtaking the state-owned Nepal Telecom. The company
reached the figure of six million customers recently. Ncell, the first private telecom operator of Nepal
was rebranded to its current name in 2010.',
			'sortorder' => '387',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
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	),
	(int) 10 => array(
		'Article' => array(
			'id' => '445',
			'article_category_id' => '46',
			'title' => 'Joseph Silvanus',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<span style="font-size:14px;"><strong>Interview: September 2011 - There Is Much To Gain And Look Forward To</strong></span><br />
	<br />
	 </p>
<div style="text-align: justify;">
	<span style="font-size:12px;"><img align="left" alt="interview" border="1" height="227" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/sep-int.jpg" style="width: 319px; height: 227px;margin:10px;padding:10px;" vspace="10" width="319" />Joseph Silvanus<span style="letter-spacing: 0.05pt;"> joined Standard Chartered Bank Nepal Limited as its new Chief Executive Officer in July 2011. A student of Economics at St Stephen's College, Delhi University, followed by a management degree from Mumbai University, he had a brief stint with established FMCG names such as Voltas Ltd and Pepsi Foods Pvt Ltd before moving over to the banking sector. A banker for over 18 years, Silvanus has worked with ANZ Grindlays Bank followed by Standard Chartered Bank across various geographies. He has vast exposure to consumer banking operations having managed branches, marketing operations, business analytics, services and service quality and project management. In his most recent role as Regional Head of Development Organisations for South Asia, he played a pivotal leadership role in engaging multilateral/bilateral agencies and DFIs for directing specific programme-based support towards Asia. In an interview with </span>Pinaki Roy <span style="letter-spacing: 0.05pt;">of </span><i>New Business Age</i><span style="letter-spacing: 0.05pt;">, Silvanus shared his views on Standard Chartered Bank's phenomenal success over the years and his plans for Nepal operations. Excerpts:</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin: 5.65pt 0in 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><strong>You have just joined in. Do you have new plans in mind for Standard Chartered Bank's operations here in Nepal?<br />
	<br />
	</strong></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">Nepal continues to be very important from a South Asian perspective of Standard Chartered Bank. It is now my turf to be able to grow the relative importance of Nepal in the overall scheme of things. Having consumer banking and wholesale banking as the two basic engines of growth for us does not mean that we will have quantum changes about the way we do our business in this part of the world. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">We will continue to grow the engines albeit with some level of caution because of the underlying situation Nepal is experiencing right now. But I personally see a lot of advantages that can be derived even through this phase of Nepali economics. The changes that I will bring, perhaps, is to leverage the Group businesses, expertise and the best practices. I can be a catalyst for that and we have internally discussed as a team that we will have more of these engagements. The businesses will reap the benefits of these visits and conversations that I had with the rest of the Standard Chartered Group. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin: 5.65pt 0in 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><strong><img align="left" alt="interview" border="1" height="396" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/inter.jpg" style="width: 224px; height: 396px;margin:10px;padding:10px;" vspace="5" width="224" />This must be an encouraging year for Standard Chartered as it is one of the largest profit earning international banks despite the global economic crisis. What do you attribute this success to?<br />
	<br />
	</strong></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">After receiving the Group results just over a couple of weeks ago, it convinced ourselves that we have done exceedingly well. I am absolutely delighted to see the results. We registered ninth consecutive record first half profit and double digits growth both for the top line (11 per cent) and profits (17 per cent). Everyone is delighted including the investors and shareholders and obviously, the businesses know what they are going to do for the rest of the year. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">Looking closer home in Nepal, I think we have achieved much. It's been a tough year with issues of liquidity and governance coming through the financial network. There has also been some amount of uncertainty because of the global businesses impacting Nepal's economy. Nevertheless, I believe that both consumer banking and wholesale banking and the respective support functions have all got together to give value to local Nepali shareholders. There has been good EPS (Earnings per Share) and top line growth as well as effective cost management at a time when we really needed to look inward and reduce expenditures coming through unforeseen circumstances. We have done well as a bank in Nepal on all fronts and have continued to be strong both on capital and liquidity. Therefore, from a group as well as country's standpoint, there is much to gain and look forward to. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin: 5.65pt 0in 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><strong>One of Standard Chartered's unique features is successful lending to SMEs. Do you plan to expand or review the lending policy?<br />
	<br />
	</strong></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">SMEs have always been an engine of growth for the bank. Asia is typically a burgeoning economy for entrepreneurs and Nepal is no exception. If you look around, you can see how entrepreneurs are converting opportunities on a daily basis and the way banks are supporting them. For us, SME is a perfect space between the lower end of consumer banking and the upper end of corporate banking. The segment is very well placed. We have appropriate products that take care of all their requirements such as Working Capital and Term lending, Trade &amp; Guarantee lines and Margin based lending. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">However, we must realise that while SMEs are the global engine of growth for the group, we have to tread with caution when it comes to Nepal. We have to be able to create equitable mortgages as most of our SME lending is based on some form of fixed collateral. Therefore, we have to play as per the rules of the game.&nbsp;We are trying to bring in a few products that are used in the group in the area of margin based lending. It is an important engine of growth not only from the bank's perspective but from a social point of view as well. We are creating a lot of headroom for growth, engagement and employment opportunities. These will have plenty of forward linkages because the entrepreneurs will be able to subsist. Access to finance is a key issue for SME business the world over. We see ourselves as a force that could help meet that latent need. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin: 5.65pt 0in 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><strong>The Nepal Rastra Bank (NRB) has brought several new measures in its monetary policy. How have you viewed this policy?<br />
	<br />
	</strong></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">Policies are well meant so I have given them a balcony view. I clearly think that NRB has tried its level best to meet some of the needs of the current economic state. Reducing CRR (Cash Reserve Ratio), for example, is good as it injects liquidity but it drives up some amount of inflationary tendencies. You have to understand that every action has an equal and opposite reaction. Increasing exposure to the deprived sector is certainly a good measure, especially when we know that farmers and the micro credit side of things require some amount of stability. However, I would like to see well-run, professionally-managed and well-governed micro credit institutions that can use this extra amount of liquidity coming their way. This would help create productive assets in the hands of the farmers so that the entire ethos around farming communities can gain sustainably from micro credit. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">The bottom-line is that while the policies are well meant, they need to be managed and supervised to the end. There are other areas where it has tried to adjust such as the Basel II issues as there has to be better accounting procedures and stress management techniques. The banks have to be prepared for event based risks. Therefore, on the whole, there is a good effort on the central bank's part as far as the monetary policy is concerned. But if it could be combined with great oversight by the concerned stakeholders, you have a winning strategy for the country. I am an optimist as far as Nepal is concerned. It's but natural that when things stack up, people can feel deprived and adopt a pessimistic approach. The people of Nepal are very resilient and it's time their patience got paid back in terms of good governance. The central bank needs to have a good embedded structure on which some of these policies can be grown upon. Policy interventions are great when they get implemented in the right fashion. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin: 5.65pt 0in 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><strong>Standard Chartered in Nepal has remained shy on investing in long-term projects such as hydropower and road infrastructure. What, do you think, are the possible bottlenecks?<br />
	<br />
	</strong></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">We clearly believe that Nepal has been imbued by god by several natural resources. Hydropower is one area where the country can really subsist and actually become a force for growth for the entire region. Underinvestment is due to several counts such as lack of transparency, clear policy directives and long term stability. The FDI which comes in this country is restricted to short-term investments and areas of quick generation of goods and services. However, long term investment in infrastructure, broadly speaking, has been lacking, for sure. We have to create easier barriers to entry, longer trade protocols and cut down on double taxation that exists, perhaps, within certain geographies. We also have to allow the investors vision for at least a longer period of time. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">Bank and multi-lateral finance is always there. We already have done work in the past on hydro electricity in Nepal and are looking at a good pipeline of similar products. As a bank and a brand name, we are `Here for good which means we are here for the medium and the long term. Our commitment to Nepal is unquestionable and therefore, if we have to support the growth of infrastructure, we will certainly exercise our might. The bank is strongly behind these sectors. Hydro and roads etc take time as these are huge projects which are to be governed by several other global rules. We are quite happy to consider them, provided the right investments come along.&nbsp;</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin: 5.65pt 0in 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><strong>You must have faced a lot of pressure to accept more deposits in recent times due to a large number of people withdrawing their money from small institutions. Has there been a substantive change in your deposit patterns owing to this development?<br />
	<br />
	</strong></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">This is true not just for Nepal and this has been happening right through the period of turmoil and uncertainty. Whenever there is uncertainty in any market, there is flight to quality. People like to resort to safer havens in times of uncertainty. We are open to business in Nepal and if people so believe that in the interest of risk mitigation, they wish to move their hard earned money to a safer institution, we will not stand in their way. However, we will go through the normal protocol of good governance by looking at customer details etc and then we would bank for them. It's part of our day-to-day business, we are not in this business of just going and garnering liquidity from the market. But if it comes to us at the price point that we would like to take at, we would certainly accept it. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin: 5.65pt 0in 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><strong>We understand there is serious homework being done on mergers and acquisitions of a number of banks in Nepal. How close are you on this front?<br />
	<br />
	</strong></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">Well, it's public domain knowledge that even the Nepal Bankers Association has written to the central bank asking for tax incentives etc in the event of buying distressed assets or for mergers and acquisitions if there were. Our own view in this matter is very clear. In this part of the world, the economies are growing very productive and organically and there is a load of growth potential. Therefore, banks like ours would be more interested in looking at organic growth. On the other hand, acquisitions come at a cost. It has to do with people, culture, system integration etc and sometimes, it is difficult to get the math right. From a Nepali context, we are very happy right now with our organic engine of growth. We want to believe in primarily using the engine of origination rather than buying out an asset originated institution. We believe in our origination capabilities because we understand credit best in terms of the market that we are in and given the number of years that we are on the ground. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin: 5.65pt 0in 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><strong><img align="right" alt="" border="2" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/inter1.jpg" style="width: 210px; height: 267px;" vspace="10" />How long do you think Nepal's interest rates would be as high as they are? Aren't high interest rates detrimental to the growth of industrial and manufacturing sectors?<br />
	<br />
	</strong></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">This has got to do with some amount of demand and supply economics, cost of capital etc. Nepal is an unrated economy and we have imputed some ratings to the economy given the existing economic and political risks the country is attached to. Today, if you are to benchmark your savings bond for five years at 10 per cent which is an indicative rate, we don't have too many instruments that are longer term which will give you an indication of what the cost of funds or doing business in Nepal is. While I don't have a very firm view on where the interest rates are going to be, I believe they will remain the way they are for a short to medium term. The rate today correctly implies the cost of doing business in this country, part of which is the cost of capital. It is heightened because along with the cost of capital, there is liquidity risk and so many other market and non-market operational credit risks which pour into increasing the total cost of the fund. I believe that this is here to stay for a while unless and until we have a systemic kind of revamping of risk. We have to have central bank and all its adjuncts come out and play a constructive role in rebuilding some of these elements of risk. We will then have cross-border and country risks and the overall risk of the cost of capital come down. It will then reflect in cheaper interest rates. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">No entrepreneur or industry would like a high cost of credit as it mirrors heavily on their balance sheet. It reduces their strength to leverage the balance sheet and there are other cost elements too that are unique to Nepal such as the cost of staff and security, which, is not so large in other neighbouring countries. Therefore, it is to the extent of dampening entrepreneurial streak of modern day manufacturing. I believe that it's not a good story and there must be a different form of intervention where given the inherent risk of doing business in Nepal, the leverage allowed to such institutions should be higher. For example, if there is eight per cent leverage on a non-banking financial intermediary, it can be decided to give a higher leverage to such institutions. It is because resources are at a premium for such people and as long as the business model is good and the shareholders are willing to support the model, it should be allowed by law to higher leverage such institutions. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin: 5.65pt 0in 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><strong>Being a reasonable global player, how do you think Nepal can benefit from the ever growing economies of China and India? How do you see Nepal's prospect as an off-shore financial hub being a transit economy between the two giants?<br />
	<br />
	</strong></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">Nepal is a landlocked country but it has two great neighbours who, I think, are committed to the sovereignty and growth of Nepal. To cite an old idiom, some trade is better than no trade. Nepal would have to use the depth and resources available to it through these two strong economies. These are the future economies of this world and, therefore, Nepal stands to benefit in the long run. There is a lot of work happening already: visiting delegations from both countries, plenty of solidarity and joint ventures. There is a lot of country-to-country donor aided support in some of the more required areas of infrastructure. Nepal has everything to benefit from positively engaging with both its northern and southern partners. Both these countries bring a lot of good and appropriate technology which sometimes may not require power and capital-intensive kind of investments. All in all, if the political ambitions of Nepal are evinced right, there is tremendous opportunity for growth in the economic sector. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="line-height: 115%;">Nepal has been a part of the silk route for some time now and the people of Nepal are almost like global citizens. Almost every family in Nepal has a member working overseas which brings a lot of globalisation even into the villages. People have seen various cultures and experienced much while living overseas. Therefore, trade is an inevitable benefit to Nepal. You have to look at areas where you have a positive trading account with not just India and China but even with countries like Bangladesh and Pakistan. Nepal has to use its foreign and economic policies all geared in a very integrated and systematic approach to get the right kind of foreign investments and create value added commodities which its neighbours would seek. Besides, tax and double taxation protocols will have to be readdressed so as to meet the regional needs. <br />
	<br />
	<br />
	</span></span></div>',
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			'created' => '2011-10-02',
			'modified' => '2012-09-16',
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			'description' => 'Joseph Silvanus  joined Standard Chartered Bank Nepal Limited as its new Chief Executive Officer in July 2011. A student of Economics at St......',
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			'id' => '416',
			'article_category_id' => '46',
			'title' => 'Joseph Massey',
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			'content' => '<p>
	<span style="font-size:14px;"><strong>Interview : August 2011 - 'Second Phase Of Growth Would Depend On Developed Capital Market'</strong></span></p>
<p>
	<span style="font-size:14px;"><strong><br />
	<br />
	<br />
	</strong></span></p>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><img align="left" alt="" border="1" height="200" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/int1.jpg" style="margin:10px; padding:10px;" vspace="5" width="120" />Joseph Massey is Chairman of South Asian Federation of Exchanges (SAFE), a forum of exchanges with 32 members from South Asian Region, UAE and Mauritius. SAFE works for the development of capital markets in the region and offers itself as a platform to these exchanges for global integration. Massey is also the Managing Director and CEO of MCX-SX, which currently offers currency derivatives trading and is the most recent entrant to India's public-trading exchanges. He has over 18 years of experience in the corporate and financial arena and worked with organisations like Life Insurance Corporation of India, the Reserve Bank of India (RBI), Stock Holding Corporation of India, Multi Commodity Exchange of India Ltd, Interconnected Stock Exchange of India and the Vadodara Stock Exchange. Massey was in Nepal during the executive committee meeting of the SAFE from July 6 to 8. In an interview with Gaurav Aryal of <i>New Business Age</i>, Massey shared his views on capital markets of South Asia and the current status of the Nepali share market. Excerpts:</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>What is the scope for growth of secondary markets in South Asian countries?<br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">I think, post-global crisis, this region is emerging as a high growth region because of the natural demand that it has got and also the governments are very keen to develop each sector so that more employment is created and global investors are willing to come and actually invest. If you look from a capital market perspective, there is demand both from primary and secondary markets. Whichever country you take in the SAARC region, it still has to make tremendously large progress in terms of domestic penetration. That market is huge. Then, we have another opportunity which is in global market. I think all economies have very large opportunity to develop in the secondary market.</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Except India, other countries in South Asia have not been able to develop much in this field. What is the problem you see?<br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">There are couple of prerequisites for the market to develop. Indian market has a history of 130/140 years. Over such a long period, we have developed the culture of investment. Despite that, we have penetrated the market relatively less. Indian market is&nbsp;more developed because we have more instruments, more investors, more companies, good infrastructure, clearing corporations, guaranteed good regulation, and infrastructure which is comparable to the best in the world. However, there are many products that we still don't have and now India is aspiring to create those products. India has progressed but it still has a lot to do. Rest of the countries, based on their position in the cycle of economic development, could have reached some level of development in the exchanges. We expect that to happen over a period of time. When global fund comes to one region or one country, visibility of the entire region gets enhanced. Today, you see a lot of funds coming to India. Soon those companies will come and set up their companies in India. Once they set up their companies and invest there, they will also gradually look for what market opportunities are there in the region. India is gradually opening up and Indian citizens can invest outside. Once we open up the market more, a lot of investment from global market will come to India and from there they will go to the other countries of the region. I think the level of development depends on the scale of economy and how much it has developed. But it need not necessarily take the same length of time for each country to reach the same stage of development. We can cut short the time by learning from other's experience. Highlight</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Foreign institutional investors and foreign direct investors are still hesitant to enter this region whereas they are going to Taiwan, Singapore etc. Why so?<br />
	<br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">These countries have been rapidly growing for a very long time. So, the global communities have already identified those destinations. As a result, in&nbsp;the last 20/30 years, their regulatory system and infrastructure have developed so much that the global investors don't see a difference between these countries and their home markets. In SAARC region, some countries have progressed well while others have not. But we all know the model that we have to implement. We just need a more concentrated effort in finding out what are the gaps; what they have and what we don't have. And, we can put regulation and infrastructure in place. The domestic demand being so large, we will see the same level of capital coming in this region eventually. Today, we are not there but we need not take another 30 years to reach there. We can reach there in next five years.</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>What is the objective of creatig a South Asian network of stock exchanges?<br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">I think we are all determined to do this. We understand each country has its regulatory mechanism and its own capital account laws. But we want to sensitise the countries that economies of scale will be realised if this region can work as one unit. Relatively, hard infrastructures like road, transport and others may take time to be developed. Financial market is soft infrastructure which can happen easily. The secondary and tertiary gains of developing an efficient financial market are very large compared to manufacturing and few primary sectors. So, instead of developing the manufacturing sector first and then going to the financial services, it would be a good idea that in this region we shift focus to financial services and the advantage of financial services trickle down to the rest of the economy. Our cost of fund will reduce and we will be able to raise more funds for developing infrastructure, for economic activity and as a result all benefits will flow such as more jobs, better education and necessary infrastructure. So, more capital gets attracted and suddenly we will get out of the vicious cycle. Today, we are in a vicious cycle of low capital, low infrastructure and therefore, low investment. All countries can't achieve the same level of infrastructure simultaneously, but when some of them achieve a level, the trickle-down benefit will happen to the entire region.</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Protection of small investors in capital markets is taken as a major challenge. How can such network protect the&nbsp;investors?<br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">At SAFE, we have identified the global best practices. Each country has adopted these global best practices which are prescribed by IOSCO (International Organisation of Securities Commissions). What SAFE does is that the good practices of one country are shared with others. We don't wait for those countries to learn these things over a period of time. We are sharing these experiences with each other so, until real business can get done, we can share a lot of knowhow and ensure that the level of knowledge of each one is the same.</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Why are South Asian governments hesitant in opening their markets for international investment?<br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">We are saying that we need to have investor protection. So, should we open the market or not? The first level of investor protection is that you have better infrastructure for trade, better laws, and more capital to protect them. All these things can come if you have a market of significant size. We want the best protection to be given to the domestic investors. But we cannot provide that as our markets are very narrow, we don't have all the products, we don't have large number of investors, our trading volume is small and the number of companies is low. You know that the total income from such market will be naturally very less. So, we need to invest more in increasing the capital, improving law and, giving the investor better safety. If you widen the investor base then obviously it will generate more resources. You will be able to draw more resources into the infrastructure, set up a clearing corporation, depository, have best tools and educate your people better. So, you need the capital market to be very efficient. Today, each country has domestic investors but they are very few. We need institutional investors who can bring in big money and take a deeper and longer view. So, once we complete this, we have to complete the market by getting good quality investors by offering all the products available today in the global markets. Once you create these two, your protection will improve; your market will become safe because your market is aligned to global market. If the investors are investing in the growth of Nepal, you get a diversified base of investors in which some are taking a view with 10 years, some with five years, and some with just one year or less. When you get the mix of all of them, your market will be stable. Some may go out but many others will stay.&nbsp;</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>How do you see the future of capital market in this region?<br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">I think there are three or four facts which indicate that the future of capital market is enormously good. All the countries in this region more or less have the same level of development. They are developing and gradually going up the scale. In the initial phases, all of them are dominated by the public sector enterprises. Public sector enterprises naturally have the challenge of resources. Since the demand of economy is very large, there is a requirement of private capital and private production in order to supply that requirement which the public sector will not be able to deliver. The public sector has reached its level and now the private sector has to come up. It has to come up in infrastructure, education, manufacturing, services and everywhere. For developing all these, the people need risk capital. The risk capital can only come from the capital market. So, I think one is dependent on other. If you have a robust capital market, more people will be able to raise capital and set up an economic enterprise which will create more jobs and more business ventures. It is a cycle. Every economy has realised that we have gone through the stage where the public sector was dominant and&nbsp;banks had a major role to play. Second phase of growth is going to be dependent on developed capital market that should have equity, bond, derivative, service management etc. so that people can raise short term money and long term money. Then, we will see private enterprises start coming in. </span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Experiences have shown that the derivative trade has distorted the natural growth of the market. Can South Asia region avoid such distortion?<br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><img align="right" alt="inteview" border="1" height="287" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/int.jpg" style="margin:5px;padding:5px;" vspace="5" width="400" />SAFE is advocating an exchange traded market where derivatives get traded on the exchanges. They are safe because the counterparty has a guarantee from a clearing corporation. They are better risk-managed, more tightly regulated, and more transparent. As a result, exchange traded market is always a safe market. In 2008 and in the earlier 1998 crisis, what went wrong was outside the exchanges. So, the lesson from the 2008 crisis is that&nbsp;we should get more and more products on the exchanges. Second lesson is we can have laws which are similar all over the world. So, G20 is now advocating that we should have such norms and regulation that are similar in all countries. The advantage SAARC region has is that we don't have to make the same errors some other countries have made. We now already have better regulation on banking system and in the securities market, we have all the institutions developed, most countries have depository, clearing corporations and most countries now trade on electronic system. Having built an infrastructure that is similar to global environment and global rules that are gradually becoming common, I think we are operating on a much safer market.</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Many prominent stock exchanges like those in Europe and Japan have either crashed or remained stagnant for a long&nbsp;time now. Is it so because those economies have reached the point of saturation?<br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">Post-2008, two things have happened. While the exchange traded markets are same, their economy is slowing down and the financial system has observed a very large amount of loss. It will take a long time for them to come out of these losses that they have suffered outside the exchanges. Secondly, those economies are diversifying to come back to high growth phase. In doing so they are investing outside the country. You can't increase the economic growth significantly if the economy is already developed. So, they will only have to look at investing and business opportunities in rest of the world. The good news is while Europe and the US are slowing down, Asia and Africa are&nbsp;growing. If you look at world growth perspective, today there is more demand than it was before. According to a recent news, Boeing is supplying US$ 30 billion worth of planes but all these planes are going outside US. The world economic structure is changing. There is more demand outside Europe and US. And the world community is happy. It does not matter whether I sell my planes in US or outside US. In this process, companies benefit, the society where they work benefits, overall the whole world benefits. So, until the global market continues to be on a growth stage, I think it is a good news and more and more of this will continue to happen. Today, we are living in the era when the world market has more or less started looking similar or at least it has aspirations to look similar. So, we are getting into more openness, more transparency, similar regulation, more international trade. The growth of one will cause growth in other. I think the world economy will continue to grow, especially these emerging economies and developing countries will continue to grow for next 30/40 years and it is good news to the rest of the world.</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Do you see the possibility of instruments and mechanism like regional mutual funds in South Asia to invest in the share market?<br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">One of the discussions that we had both with the SAARC secretariat and the central bank here was in this very line. We should try and create some kind of regional hub in which we could have institutions which are not only taking domestic view but are taking the regional view. It could be regional investors, regional mutual funds and exchanges with cross border trading. It will depend on how much time it will take for each regulator and each country to digest that. But I think in the foreseeable future, in next two to three years time some of these concepts will actually become a reality.</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Now, the commodities future trade is also booming in the region. And they seem to have posed sort of regulatory challenge. In Nepal such market is blamed to have facilitated capital flight. How is your view? <br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">Commodities markets are markets for risk management. Secondly, they are market for giving price signals of what is expected to happen in future so that policy makers can take policy measures three months or six months in advance. Third, the physical market for commodities lack transparency, they are fragmented. To give a common view to the rest of the world on what is happening in this market, whether there is crisis building up or not you need to have an efficient futures market. An efficient futures market also brings an efficient physical market. I don't agree that commodities market cause flight of capital because it is essentially a market for risk management. People will not invest very large amount of money until they invest in the physical market. Futures contract should be for one, two or three months which is not a long-term investment. Typically, flight of capital takes place because of other natural economic indicators like high inflation, low growth of economy and interest rate structure. The domestic capital has to remain here and does not have an option. But if it is global capital, it goes to the most efficient market which has high growth, low interest bearing and good opportunity for growth. Commodities markets are rational markets. These markets will look at the fundamental demand and supply. Based on the fundamental demand and supply, price recovery will take place. </span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">If someone is buying wheat, cotton or gold, that means the price of that commodity in the future can go up. But the price&nbsp;of a commodity futures contract will go up only if the physical commodity goes up. Physical gold is going up because someone is buying physical gold. They are too integrated together. Physical market demand and supply is dependent on actual consumption and actual supply. I don't think we should panic at the price fluctuation in the commodities exchanges. However, if we can have&nbsp;regulatory system, more transparent system, better safeguard on exchange, clearing corporation it will eb better because then some of these worries&nbsp;will go away. </span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Of late, the share market index as well as confidence of investors has remained low in Nepal. How can these be bolstered up ?<br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">There are no shortcuts to it. When an economy is going through a low cycle and if you only have domestic market, the entire country has one view. You donâ€™t have a contrary view from anyone else because you only have individual retail investors. Their appetite to take a long term call is very minimal. So, when your market is going through slowdown, the individual investors will be more scared so they will also take a view which is not more than a day. Now, you need someone who can take a view which is for one month, one year or five years. This can only be done by institutional investors. So, it is paramount that Nepal tries and builds up domestic institutional investor community so you can put mutual funds in place. I don't know how your pension industry is, but I can be pretty sure that some of those funds will come and they will invest in the capital market. And insurance industry too can invest in capital market. This is level one. You now have a person who is willing to take a call which is a longer term. But still they are domestic and have a view which is not very diversified. If you can adjust global investors inside, you will have a view which is very different. They are willing to take a call which is much longer, in much larger quantum of money because now the stocks are available very cheap. Their cost of borrowing will be less. They can come and do large borrowing and as a result the market will grow up. So, in a market which goes to such a long term low cycle, the only way to break out of the cycle is by ensuring that institutional money both from domestic and global markets gets attracted to the country and I think you should do that.</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	<br />
	</span></span></div>',
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			'description' => 'Joseph Massey is Chairman of South Asian Federation of Exchanges (SAFE), a forum of exchanges with 32 members from South Asian Region, UAE and Mauritius. SAFE works....',
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			'id' => '388',
			'article_category_id' => '46',
			'title' => 'Dr Thomas Gass',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<span style="font-size: 14px;"><strong><br />
	</strong></span></p>
<p>
	<span style="font-size:14px;"><strong>The Taxpayers Of This Country Are The Major Donors To Nepal (july 2011)</strong></span></p>
<p>
	<br />
	 </p>
<div style="text-align: justify;">
	<span style="font-size: 12px;"><strong><img align="left" alt="taxpayers" border="1" height="195" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/interview(4).jpg" style="width: 139px; height: 195px;margin:10px;padding:10px;" vspace="5" width="139" />Dr Thomas Gass</strong> is the first residential Ambassador of Switzerland to Nepal. He was previously Switzerland's ambassador to the United Nations in New York and spent five years there prior to arriving in Nepal. He holds a PhD in biology and began his career with the Swiss Agency for Development and Cooperation (SDC) in 1988. He has held positions in the Swiss civil service and with the United Nations. Gass was the Vice-President of the executive board of the United Nations Development Programme and United Nations Population Fund. He has also lived in Guyana and worked in Africa and the former Soviet Union. In an interview with Pinaki Roy of <i>New Business Age</i>, Gass discussed a diverse range of issues from Swiss cooperation and its impact on the Nepali society to the constitution writing process in Nepal. Excerpts:<br />
	<br />
	</span></div>
<div style="text-align: justify;">
	<span style="font-size: 12px;"><br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;"><strong>Switzerland is among the few countries that initiated financial assistance to Nepal since 1959. How do you evaluate Swiss cooperation over the last 52 years?<br />
	<br />
	<br />
	</strong></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">I would say that this has been an extremely fruitful partnership that has encompassed mutual learning and has evolved over the time as any working partnership should. Initially, Switzerland implemented many projects directly and we had up to 100 experts working here at a time in the 1970s. We work differently today as we place more emphasis on the leadership and the coordination of the government and make use of national capacities for our projects here. We work through the ministries, INGOs and the local NGOs among others.<br />
	<br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;"><br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 12px;">One of your primary objectives has been to build rural infrastructure, particularly, the suspension bridges. Do you systematically assess the economic impact of these bridges constructed mainly by Swiss support?<br />
	<br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">Yes, we do systematically assess the impact of our projects. But we don't assess these projects only in an economic way; we also look at them from a social and inclusion point of view. Over 1,600 trail bridges have been built and 3,500 maintained in the last 10 years. As a result, over 4.8 million people have better access to services through safer river crossings. On an average, each bridge has reduced walking distance by 2.5 hours and about 4 million person-days of employment have been generated through these bridges. These bridges are turnkey projects constructed by the villagers and the community. In the last four years alone, school attendance has risen by 22-27 per cent and visits to health centres have increased by 20 per cent on an average in places close to the newly built bridges. So, these are the kind of evaluations that we have. </span></div>
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 12px;">Forestry is a major area that you have been contributing to. However, the Swiss government has diverted its attention from forestry to other areas of late. What could be the possible reasons for this?<br />
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	<span style="font-size: 12px;">We certainly have invested a great deal of time and resources in forestry and it's true that we have been focusing on some other areas too. However, let me correct you by saying that we are still interested in forestry. We are and will continue to invest in forestry. To give you the figures, we have been supporting the previously-funded forest project since 1991 which will end this year. The project has resulted in reversed deforestation for 185,000 hectares of government-managed forests. It has also improved the condition for 135,000 hectares of community-managed forests in the three districts where SDC [Swiss Development Corporation] has been active. Additionally, increased availability of forest products has contributed to sustainable livelihood of 145,000 families and 16,000 person-days of forest based employment have been generated for the poor. Strong multi-stakeholders mechanism and participation from empowered community groups were crucial while achieving these results.<br />
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">We are currently planning and preparing a multi-stakeholder forest programme together with DFID and Finland with the Ministry of Forest and Soil Conservation in a supporting and facilitating role. It will build on our respective experiences and extend its impact to a great number of districts spanning over 10 years. The programme will cover about 60-65 districts of the total 75 districts in Nepal. Therefore, I would say that our presence in the forestry sector is probably more than ever.<br />
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	<strong><span style="font-size: 12px;">You have tried to link Swiss contribution with entrepreneurship, for example, the employment fund. As a drastic departure, you have chosen to work with private companies as trainers. How successful has the idea been?<br />
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">We have been engaged in vocational skill training since the 1950s with cheese and carpet production. We then moved into more formal vocational training with technical schools such as the one in Balaju.&nbsp;We were also associated with the Technical School in Jiri in the 1980s and the Training Institute for Technical Instruction (TITI) in the 1990s. </span></div>
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">This cooperation changed over the time because many more national capacities were becoming available in the formal training sector. At the same time, we realised that we were reaching only a small number of trainees through formal training who could perhaps afford on their own. We started partnering with private entities as training providers to reach the poorer segment of the society as well. It is easier to target disadvantaged and marginalised groups through our new approach. The onus is now on the training provider to find the first employment for the trainees. We feel that vocational training responds more directly to the needs of the labour market through this approach. </span></div>
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	<strong><span style="font-size: 12px;"><br />
	The Swiss government was supporting the promotion of good governance. Do you think it has contributed towards transformation of government practices in Nepal?<br />
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	<span style="font-size: 12px;">The money that Switzerland invests into its development cooperation with Nepal comes from the Swiss tax payers. It is therefore absolutely essential that we give adequate attention to good governance and fiduciary management of the projects funded by us. And, we hope that it has a positive influence on the communities and the ministries we work with. Like any other country, Nepal requires good governance across the board from the villages to the central government and from the local associations to the major national parties. Our influence is obviously less at these levels. It is the Nepali people that have to hold their politicians and administration accountable for their respective actions. </span></div>
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">On our part, we have promoted and tried to practise public hearings and public accountability for our projects at the local and district levels. We have seen that there are concerns to begin with while we practise accountability. However, all parties are satisfied after the entire exercise is over. The local and district administrations also realise that such practices actually strengthen their credibility. At the same time, the population too gains a lot of confidence. </span></div>
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	<strong><span style="font-size: 12px;">You have been working with the same partner, Pro Public, for over 15 years now. How do you justify this association for such a long period of time?<br />
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">Yes, we have had a very long cooperation for sure. But one has to acknowledge that Pro Public has a great deal of experience. They have been in the field for a long time and have been in many places so we have to give them credit for that. The current phase of the project with Pro Public is coming to an end this year and we haven't yet decided who will be our future partner. We believe that we need support from an independent organisation that helps the public hand to build up its credibility through public hearing. It does not necessarily have to be advocacy or accusing the administration on its weak points. It is more about building the capacity and confidence to face the public by being transparent. There is a niche for these kinds of activities in every district which makes our projects and the work of the local administration so much more effective.</span></div>
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 12px;">Some of your projects like Jiri Multi-Purpose Development Project have been completely abandoned. What should Nepal do to make such projects and development sustainable?<br />
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">Well, the question is not about what should Nepal do. It's rather about what should the development partners both Nepali and Foreign do. First, the projects have to respond to a real need in order to be sustainable. They need to respond to the demand by the beneficiaries and these needs may evolve over a period of time because the beneficiaries and their aspirations evolve. Second, the projects also have to be of appropriate size and be constantly adaptive. It is because the counterparts the national entities can take over some of the responsibilities of the projects in a more convincing way. Therefore, these are the two elements that help projects become sustainable. The projects are the tools to deliver certain services that need to continue. </span></div>
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	<strong><span style="font-size: 12px;">The issue of inclusion is in the forefront of development debate lately. Is this the right approach given that it would further consolidate caste as ethnic identity just to get the&nbsp; </span></strong><strong><span style="font-size: 12px;">desired benefits?<br />
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 12px;"><img align="left" alt="thomas" border="1" height="244" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/img1(2).jpg" style="margin: 10px; padding: 10px;" vspace="5" width="400" /></span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">The benefits of social and economic development frequently do not get distributed equitably in societies that are very diverse and strongly compartmentalised. This leads to frustration and conflict. Invariably, there is an accumulation of wealth and power by those who already have it rather by the ones who don't have it. This has been experienced in many countries and it has been experienced in Nepal too.&nbsp;The other problem is that the potential of the diversity of a nation is not unleashed. Imagine a family, village or a country where all the decisions are taken only by men. For example, I can't imagine not involving my wife in decision making. She may have many skills, knowledge and competencies that I lack. The same is true for a country where a single ethnic or linguistic community is controlling all the decisions. This way, you are invariably reducing the development potential of your country to a fraction of what it could be otherwise.&nbsp;</span></div>
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	<strong><span style="font-size: 12px;">Given the climate change, how do you think issues like bio-diversity can be addressed?<br />
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">The problem with climate change is that we don't really know the end effect especially in a country like Nepal where there are so many ecological zones. Some places might become drier and others wetter so there could be a lot of fluctuation. The diversity in nature is the insurance policy against change. That's why nature has been created the way it is, with a lot of diversity where one plant may die and another may survive. The diversity has to be maintained in order to adapt to the changes that we don't know about. And therefore, natural bio-diversity and agricultural bio-diversity have to be promoted very actively keeping the climate change in mind. Farmers in Nepal who live in very diverse environments can help maintain and cultivate agricultural bio-diversity that would help the country resist and be more resilient to climate change and its effects. But the community and the country as a whole has to recognise that service. It's not just the food production, it goes beyond that. This is a little complicated&nbsp; it means that you have to start thinking about environmental services by getting the farmers some kind of support that is more than just the minimum payment. <br />
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 12px;">The Swiss government is the major donor towards supporting constitution writing process but it doesn't seem to have yielded any results. What do you think is the problem with constitution writing in Nepal?<br />
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">The taxpayers of this country are the major donors to Nepal. They are the ones who pay the salaries of the parliamentarians and indirectly, the politicians. Therefore, the investment of the international community cannot be compared with the investment of the people of this country in terms of time and resources. Changing the direction and design of a country takes time. It requires a lot of focus and motivation and the need to make compromises. This is in the hands of the Nepali politicians who have to come together for an agreement and then be able to share their findings with the general population at large to achieve a consensus. The current generation of the politicians owe this to the country. The constitution in my country also took a long time. We can be here as friends, nudging and criticising but in a constructive and positive way. We certainly hope that the constitution writing process in Nepal will now move forward. </span></div>
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 12px;">Many people think that Swiss federalism model is appropriate for Nepal. How do you view this idea?<br />
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">I strongly believe that Nepal needs to find its own model. What I can say though is that Swiss federalism is not about autonomy and independence. It is about how our cantons (provinces in your case) can work together building on reciprocal strengths and diversity to work in a united way for a stronger country. That requires a lot of compromises. One can never see one's own problems only. The provinces in my country need each other and I assume that it would be the same in Nepal. The policy makers can have a positive bias towards their own provinces. Previously, anyone who had a vision and was ambitious for Nepal focused on Kathmandu. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;"><br />
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<div style="text-align: justify;">
	<span style="font-size: 12px;"><span style="line-height: 115%;">In the future, the people would like to be identified by their respective regions and will be looking for strengths and resource development of their own provinces. The sense of pride for belonging to a certain province will come into play which was not there earlier. It helps but you can never lose out of perspective that a province is not viable by itself and requires to be complemented by other provinces. Therefore, everyone needs to understand that Nepal, as a single entity, needs to establish credibility at the international level. <br />
	<br />
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	</span></span></div>',
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			'created' => '2011-08-22',
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			'description' => 'Dr Thomas Gass is the first residential Ambassador of Switzerland to Nepal. He was previously Switzerland's ambassador to the United Nations in New York and spent five years there prior to arriving in Nepal.',
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		'Article' => array(
			'id' => '297',
			'article_category_id' => '46',
			'title' => 'Dr Supachai Panitchpakdi',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<span style="font-size: 14px;"><strong><br />
	</strong></span></p>
<p>
	<span style="font-size: 14px;"><strong>Trade Should Be Harnessed To Ensure Development</strong></span></p>
<p>
	 </p>
<p>
	<span style="font-size:14px;"><strong><br />
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<div style="text-align: justify;">
	<span style="font-size:12px;"><img align="left" alt="WTO" border="1" height="185" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/interview1(1).jpg" style="width: 266px; height: 185px;margin:10px;padding:10px;" vspace="5" width="266" />Dr Supachai Panitchpakdi is the Secretary-General of the UN Conference on Trade and Development (UNCTAD), a post he first took up in September 2005. Prior to this, he was the Director-General of the World Trade Organisation (WTO). A PhD in Economic Planning and Development from the Netherlands School of Economics (now Erasmus University Rotterdam), he also served as Thailand's Deputy Prime Minister, Minister of Commerce and Deputy Minister of Finance on different times.&nbsp;Dr Supachai was in Kathmandu recently to attend the Regional Workshop on Productive Capacities, Economic Growth and Poverty Reduction in Asian and the Pacific LDCs. In an interview with Gaurav Aryal of <i>New Business Age</i>, he shared his views on economic, trade and development issues of the Least Developed Countries (LDCs).&nbsp;Excerpts:</span></div>
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	<span style="font-size:12px;"><strong>UNCTAD is organising a series of regional workshops to disseminate the findings of its reports such as Least Developed Countries Report, UNCTADâ's Division for Africa, Least Developed Countries and Special Programmes (ALDC) etc. What are the general findings of these reports?<br />
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<div style="text-align: justify;">
	<span style="font-size:12px;">We are trying to concentrate on the areas of structural adjustments mainly in supporting the work of the states. We are trying to create productive capacity which means jobs creation, investment in infrastructure, investment in power plants and education. Our findings say that economic growth is needed to create social welfare for people. It does not happen automatically. So, there has to be definite development governance that would direct all the gains from growth to areas that would give people the right to participate, have transparency and decision making process as well as in the areas of trade. LDCs are essentially small economies. So, we think an LDC should make efforts to mainstream trade policy into its national development policy. The domestic markets are not enough to maintain basic demand so they need external demand too. For this, they need access in the international market. Special concessions given by the advanced countries for the LDCs will be crucial. It should be the heart of what we call early harvest for Doha negotiation.</span></div>
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	<span style="font-size:12px;"><strong>What can Nepal learn from the experience of other developing countries?<br />
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<div style="text-align: justify;">
	<span style="font-size:12px;">First of all, development governance is very important. If you look at countries like Malaysia and Korea, these developing countries have actually showed the way for industrialisation process where the government has been taking the lead. They support industrial zones, put up investment policy that attract foreign direct investment (FDI) in technology related areas and create trade infrastructure in terms of ports, transportation facilities and trading firms. For example, they have trading firms that help promote the products in foreign countries. Nepal can also learn from their monetary policy that is customer focal. In the area of tourism, Nepal is doing well but it can certainly do better. More investment is required to attract tourists but it is important at the same time, to keep the negative effect of tourism under control.</span></div>
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	<span style="font-size:12px;"><strong>Despite having ample resources, poor countries have extremely low economic growth. Could you highlight the key issues where LDCs like Nepal fail in formulating trade and economic policies?<br />
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<div style="text-align: justify;">
	<span style="font-size:12px;">I am not clear about Nepal but many LDCs have remained too dependent on few commodities. They have also failed most of the time to pursue positive development. This is an area in which it needs investment from the government sector for extended service, irrigation projects, water management and to build roads in the rural areas.&nbsp;The government also needs to provide support and subsidies for farmers in rural areas where they do not enjoy enough income to sustain themselves. LDCs also need to sustain in the areas of gender and women. In Africa, for example, women are the most underutilised productive capacity. In Asia, we still need legal reform that would put women rights, wage level, welfare treatment, education etc at par with men.&nbsp;LDCs can also learn from countries that have performed well in domestic resource mobilisation because one has to develop the domestic financial market. The banking system must be solid and it needs prudential supervision by the government so that more savings can be mobilised. You can have more resources here in Nepal itself and you don't have to be totally dependent on foreign aid.</span></div>
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	<span style="font-size:12px;"><strong>You have been part of the Thai Government in the past. What should be the agenda of LDC governments on the level of policy making and implementation, to increase the export trade volume?<br />
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<div style="text-align: justify;">
	<span style="font-size:12px;">The LDCs will have to invest in capacity to produce, to begin with. For example, if you have some food products, you may need to process food products as well in order to add value. Similarly, if you have some minerals, then you should think of investing in the processing of minerals. In Thailand we invested in canning of tuna fish which has been doing exceedingly well. We used to produce automobile spare parts to begin with but gradually we started producing automobiles on our own. So, you have to start from somewhere and try to move up the ladder all the time. I would recommend that LDCs having niche in certain areas have to keep adding value. Importance of technology is one lesson we have learnt in Thailand. Innovation and technology depends on the quality of education. Education must be guided in a way that would promote research. In Thailand, university professors and academics are encouraged to conduct more research and innovate. Foreign companies are also being attracted to the country to learn technology from. </span></div>
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	<span style="font-size:12px;"><strong>LDCS are largely dependent on donors and face heavy foreign debt. They also lack fundamental base of stable politics and proper policy implementation. Amid such complexities, how can countries move on the right path of development and poverty reduction?<br />
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<div style="text-align: justify;">
	<span style="font-size:12px;">Well, I think these are more controversial issues than the development policies. You must have growth to be able to have social investment and welfare but, of course, a loan is not enough. In order to transfer growth into social development, you probably need a policy on socio protection and inclusive development. It means that you would have to try to spread growth throughout the country. You need growth to be well distributed and not concentrated in certain areas only. It means decentralisation. You need to decentralise the authorities of the government and the investment activities. Investment has to be made into rural network of roads and means of transportation. Both skilled and unskilled people need help as well. If you look at the informal sector particularly, there are a lot of people being underpaid. You have to be able to initiate social programmes that would help guarantee employment. The employment guarantee programme in India could be one shining example. I feel that such programmes help support rural families. I also like the Bolsa Familia programme in Brazil where government financial support is given to families on condition that children must attend school until secondary education. These are some of the obvious measures that are needed to produce the impact from economic growth for social welfare. </span></div>
<div style="text-align: justify;">
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<div style="text-align: justify;">
	<span style="font-size:12px;"><strong><img align="right" alt="reduction" border="1" height="214" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/interview(1).jpg" style="width: 171px; height: 214px;margin:10px;padding:10px;" vspace="5" width="171" />What should be the role of the development partners in addressing the issues of development and poverty reduction in the LDCs?<br />
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<div style="text-align: justify;">
	<span style="font-size:12px;">Development partners normally provide financial means. They have a target to meet - a contribution of 0.15 to 0.2 per cent of the GNP - which has to be given to the LDCs. However, they are giving only 0.09 per cent which is too low. I think the target should be met. The development partners should work on transfer of technology. This is not in financial terms but in terms of intellectual property rights. There should be some sort of open software system that can be accessed by the LDCs so that proprietorship could be opened up for people to search. I would say, in the trade areas as per the Doha agenda, they can give concessions to the LDCs as an early harvest. They don't need to wait until the end of the round to give concessions in the form of duty- and quota-free concessions for trade facilitation and in the areas of outsourcing of services. These are some of the areas which, I believe, could be done in terms of green economy. I also expect the green fund for the LDCs or the green development mechanism to be established. Some of these arrangements would pay special attention to the roles of the LDCs and they should be granted special assistance in these funding ranges. </span></div>
<div style="text-align: justify;">
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	<span style="font-size:12px;"><strong>How do you view the current debate on aid for trade?<br />
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<div style="text-align: justify;">
	<span style="font-size:12px;">Aid for trade is a good programme to mainstream trade into development. For us at UNCTAD, aid for trade means aid for trade for development. So, trade should be harnessed for serving this purpose. We have been talking about the need for more productive investment and investment in trade infrastructure, development training of skill negotiators, the need to setup the right commercial institutions and the right legal framework. You must have the legal people who understand the Trade-Related Aspects of Intellectual Property Rights (TRIPS) issues. You may also need to have the IT court. The aid for trade should also help in the areas of providing capacity to accomplish more work in environment and trade. UNCTAD believes the new areas of green economy would provide for opportunities to invest in renewable and energy products. I think â€˜aid for trade can help pave the way to support transfer of technology and training of scientists and engineers. This would also help in bringing the LDCs to new rounds of opportunities courtesy the green economy.</span></div>
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<div style="text-align: justify;">
	<span style="font-size:12px;"><strong>In poor countries, the governments try to tread a middle path between the models of controlled economy and free economy. How do you evaluate Nepal's trade and more specifically, its economic policy?<br />
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<div style="text-align: justify;">
	<span style="font-size:12px;">To be fair to the government in Nepal, I am not qualified enough to emphasise on what Nepali economy should be doing. But I do see the role of the government being evolved here. I hope it will evolve in a way where there won't be too many controls. It is important for the Nepali government to be balanced in its role along with its evolving policies. The direction we would like to advise is to go into what we call development governance. This will help policies being directed at getting the development strategy right. The government should not look at market reform, competition and pricing policy only. It must have the market work so as to attract new projects that would create employment. Productive investment should be encouraged. Nepal needs a monetary policy that would mobilise more funds and keep interest rates not too high. It would mean the fiscal policy will have to be directed at needs to create the perfect infrastructure. It will also mean that the exchange rate policy needs to be flexible. And you have to have the exchange rate at a level that will be stable and will help make your products competitive.</span></div>
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	</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><strong>Questions are often raised in poor countries about the value and benefit of being WTO members. Anti-WTO activists accuse that WTO policies are pro-rich and poor countries simply can't afford to abide by WTO policies. What do you have to say?<br />
	<br />
	</strong></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;">Well, being a WTO member is not enough. It won't help a country if it doesn't work on it to make itself strong in competition. So, being a WTO member is like being presented with opportunities to take advantage of the markets around the world. Taking advantage from the market depends on domestic policies. The domestic policies must drive forward to do more work in the areas of trade infrastructure, business improvement, skills training, development of science of the exported products and standard of products that would meet international standards. The technical barriers to trade and technical standards of manufactured products are also important. You also need the right laws to take benefits from the membership of the WTO. Being the member of the WTO is not a free ride, for sure.</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><br />
	<br />
	</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><strong>What's the equation between UNCTAD and WTO in terms of policies?<br />
	<br />
	</strong></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;">UNCTAD and WTO follow similar policies and support and complement each other. For instance, UNCTAD has been doing a lot of work in the area of capacity building while WTO is doing the same in the area of trade. We support the WTO in areas of trade facilitation and negotiation and trade and environment negotiation. We do the work on investment policies that WTO cannot do due to the lack of investment agreement at WTO. Being the focal point for investment policy for the UN system, we have been giving advice on investment policies to developing countries around the world. We advise them on investment agreement, investment promotion, policies etc. So, this actually complements WTO on what it cannot do. Also in the area of competition laws and consumer protection which WTO could not agree, we are providing assistance for countries to establish competition laws and consumer protection. Therefore, I think we do play a complementary role. The pace of trade liberalisation might have been a little too fast for developing countries. They may have not been able to reap benefits because they were not well prepared. The WTO also agrees now that in order to garner benefits from trade liberalisation, well preparedness and trade mainstreaming into the development process are essential. </span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><br />
	<br />
	</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><strong>How would you like Nepal to take advantage from huge and growing markets on both sides of its borders?<br />
	<br />
	</strong></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;">Asia is now the growth port of the world. This is an area where growth is maintained at a very high level and quite stably. I think Nepal is situated in the right place with major countries surrounding it like India and China and South East Asia within close proximity. There should be a definite government policy to direct trade cooperation with all these countries. Such endeavours are supported by Asian Development Bank also. Cooperation is not always easy among neighbouring countries. However, you must concentrate on joint projects like transportation or regional projects taking part in joint programmes like tourism promotion etc. I think you should make use of having a deeper integration with South East Asian and North Asian countries in the region besides China and India. </span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><br />
	<br />
	</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><strong>Will it be sustainable for LDCs to look for export trade only?<br />
	<br />
	</strong></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;">No. Sustainability is more than just export trade. It means you must have social equality, look after ecology and environment and invest in forestation to keep forests alive and growing. You have to invest in water management and human resources that will make for sustainable development. Therefore, it's not only export trade that would drive you. You must have a combination of inclusive policies that would shape the benefits of growth and trade equally. </span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><br />
	<br />
	</span></div>',
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			'description' => 'Dr Supachai Panitchpakdi  is the Secretary-General of the UN Conference on Trade and Development (UNCTAD), a post he first took up in September 2005. Prior to this, he was the Director-General of the World Trade Organisation (WTO). A PhD in Economic Planning and.....',
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			'title' => 'Mark E Hansen',
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			'content' => '<p>
	<span style="font-size: 14px;"><strong><br />
	</strong></span></p>
<p>
	<span style="font-size:14px;"><strong>What Gets Measured, Gets Done</strong></span></p>
<p class="ANSWER">
	 </p>
<p class="ANSWER">
	<br />
	<span class="MyriadPro"><span lang="EN-GB"><img align="" alt="" border="1" height="220" hspace="5" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/interview1.jpg" style="width: 224px; height: 220px;margin:10px;padding:10px;" vspace="5" width="224" /><br />
	</span></span></p>
<p class="ANSWER">
	<span class="MyriadPro"><span lang="EN-GB"><br />
	</span></span><span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">Mark E Hansen</span></span></strong><span class="MyriadPro"><span lang="EN-GB">, the Head of Asia Governance and Strategic Initiatives at Standard Chartered Bank, serves on the Bank's Asia <br />
	</span></span></span></span><br />
	<span class="MyriadPro"><span lang="EN-GB">Geographic Management Committee. He has a Masters in Economics from UC Berkeley and a BA with honours from Cornell University. He was previously a partner at strategy consulting firm Booz Allen &amp; Hamilton. In an interview with Pinaki Roy of <i>New Business Age</i> during his recent visit to Kathmandu, Hansen spoke in detail about various aspects of corporate governance. He has over 25 years of experience in strategic transformation and performance improvement programmes and has been involved in the development of Standard Chartered's executive leadership training programme. Hansen also put forth Standard Chartered's take on mergers and acquisitions, in the light of Nepali banking sector's latest merger rhetoric. Excerpts:<br />
	<br />
	<br />
	</span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">How do you look at the overall impact of corporate governance in private sector, specifically banking operations?</span></span></strong></span></span></p>
<p>
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.1pt;">I think it's becoming increasingly important from several perspectives. One is from the investor's perspective. Investors want to invest in institutions that they believe have strong corporate governance, to ensure the security of their investment. It's not just an emerging market issue; it's a developed country issue. The fate of big companies such as Enron, MCI, WorldCom and Lehman Brothers have all raised questions about the appropriateness of corporate governance. As the world continues to evolve, investors as well as customers want to do business with institutions they believe are doing the right thing. In the financial sector, we think it's a point of differentiation for Standard Chartered Bank where we have such strong corporate governance. And it's well appreciated by the regulators in the countries that we operate in. We pride ourselves on having high standards. We are well managed and governed. So, we believe we are at the front end of the trend that will put increasing emphasis on corporate governance. We pride ourselves in Nepal because we are a listed company here. And we make sure that we are on the cutting edge of best practices.&nbsp;</span><span lang="EN-GB"> <br />
	</span></span></span></span></p>
<p>
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">When did Standard Chartered Bank first envision the importance of corporate governance? How has it helped spearhead the system so far?</span></span></strong></span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.1pt;">It's been there for a long time. We have always had in our structure a form of country management with governance as well as the businesses. Sometimes it's more towards the business side and at other, towards the governance side. But it's a bit like a check and balance system that you would see in political systems where you have a legislative, an executive and a judicial branch. In ours, we have our businesses and then we have the governance. They serve as a healthy tension and a check and balance between the two. By design, we have always had our businesses focused on shorter term. It is about making the numbers for the year and the governance function having the more strategic perspective. It predates the governance crisis that happened in the west. It was impacted by certain events in the UK in the 1970s and 1980s and later in the US. But all that did was force us to be more rigorous and more introspective about how we can do this better.<br />
	<br />
	</span></span></span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">How important is the role of institutional investors in increasing the professional diligence of your bank as a corporate entity?</span></span></strong></span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.1pt;">It's quite important. We have large sovereign funds, long term institutional funds, insurance companies as well as a reasonably diversified investor base. We think that diversity is a strength because it helps us work through many different constituents. The institutional investors tend to have a longer term perspective which is important. One of the concerns that I think exists in the academic press today is that they focus too much on the short term, on quarterly profits. We only report our financials semi annually. We would like to look and take a longer term perspective like the investors do. The other point I have always raised is that the investor base is expanding, actually. For example, we are listed in India now so it's not just the western investors in London. We now have Indian investors in Mumbai, Hong Kong investors in Hong Kong and Chinese investors in Shanghai.</span><span lang="EN-GB"> <br />
	</span></span></span></span></p>
<p>
	 </p>
<p>
	 </p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">A board of directors often plays a key role in corporate governance. How do they go about ensuring accountability of the organisation to its owners and authorities?</span></span></strong></span></span></p>
<p class="ANSWER">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.1pt;">If you look at the directors roles, it's important that they understand sharing the responsibilities they take on. What has been happening in the past is that in some institutions they were very lightweight. The practice still exists in a few companies but it is starting to disappear from most of them. Today, the directors have to come prepared, contribute and interface with the regulators. Everyone Capital Markets, Regulators and the Institutions expect the directors to perform. As for our own subsidiaries, we have quite a rigorous process for selecting and then assessing directors on a regular basis. </span></span></span></span></p>
<p>
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">Who are the parties to corporate governance that have an interest, direct or indirect, in the effective performance of an organisation?</span></span></strong></span></span></p>
<p class="ANSWER">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.15pt;">It's a wide group of stakeholders. First, the investors who want to know if the money is put in a well run and governed institution. Second, the banking and capital markets regulators because they want the assurance that the propriety in compliance with regulations is embedded in the organisation that starts with the governance function. And then the customers, increasingly, because they want to know they are doing business with the right organisation. The employees too have an interest. And I say this particularly in Asia because a number of banks and local companies are family-run entities. They have a particular management and governance style. In fact, the part of the problem is that the management and governance aren't separated. So, I think the establishment of appropriate governance and a separation of governance from the management are quite important for the evolution of companies in the Asian markets.</span></span></span></span></p>
<p>
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">Could you tell us about the key elements of good corporate governance principles? </span></span></strong></span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.1pt;">The first one is compliance which focuses on bringing the global best practises. It also recognises that one has to adhere to local regulations. Therefore, it is a binding constraint issue. We try and incorporate the best practices but we also have to accept the local constraints. The second is integrity and transparency. The best way to demonstrate corporate governance is actually the transparency by which you disclose all your financial information as well as other information about the organisation. The third is process which, though boring, is quite important. The discipline around the varying board agendas, getting papers circulated beforehand, having meetings at appropriate times, correctly managing etc are part of this. It's very administrative but critical for the impact on the working style of the board of directors. This way you make sure that the board is focusing on the right thing and getting its work done efficiently. The final one is the measurement of the board's effectiveness. You need a process to self-examine yourself. It's not necessary to bring in outside experts to determine that. The clich what gets measured, gets done is true.</span><span lang="EN-GB"> <br />
	</span></span></span></span></p>
<p>
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">What are the consequences of not having good corporate governance?</span></span></strong></span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.1pt;">As I mentioned earlier in this interview, the many recent corporate scandals MCI WorldCom, Enron, Lehman Brothers to name just a few of the more well-known failures from poor corporate governance evidence some of the consequences. Investors lose money. Employees lose their jobs. Regulation may be increased to the point where it becomes very costly and burdensome. Stakeholders trust in business diminishes.&nbsp; The trust which underpins market economies becomes eroded. I think the latter is a lot of the reason why corporate governance is becoming more important to consumers, investors and the society at large. Increasingly, consumers prefer to buy products and services from, employees prefer to work at, and investors prefer to invest in companies who are well-governed and who exhibit good corporate governance.</span><span lang="EN-GB"> <br />
	</span></span></span></span></p>
<p>
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">The Enron collapse is an example of misleading financial reporting. How crucial is quality financial reporting for the corporate governance system to function effectively? </span></span></strong></span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.1pt;">It's absolutely crucial. Because if you cannot trust the numbers, there is no way you can make an economic or financial assessment. I think the financial crisis did not come as a surprise for many because irregular accounting practices existed in the system. Markets function on information and to a certain extent, on trust. If the information cannot be trusted, they don't have market values.</span><span lang="EN-GB"> <br />
	</span></span></span></span></p>
<p>
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">What are the barriers to good corporate governance and their corrective measures? </span></span></strong></span></span></p>
<p class="ANSWER">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.1pt;">Let me focus on what helps make good corporate governance. First, there must be a clear separation of governance and management responsibilities. Second, the directors should be willing to dedicate time and effort to be effective board members. Third, the independent directors must protect minority shareholders rights.&nbsp; Fourth, a strong audit committee has to be supported by a reputable and capable external auditor and an independent and strong internal audit function. Fifth, there must be clear, accurate and timely management and financial information.&nbsp; Finally, a board effectiveness review process has to be in place to measure individual contributions and the collective effectiveness of the board. This must be supported by effective company law and regulations which clearly define the corporate governance framework in an unambiguous manner. The form <i>per se</i> is less important than the substance, since there are different models of how to structure governance in a company, for example, Anglo-American models Vs continental European models.</span></span></span></span></p>
<p>
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">Can you attribute Standard Chartered Bank's stupendous success to effective functioning of corporate governance?</span></span></strong></span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.05pt;">Yes, we view corporate governance quite importantly. I am in charge of corporate governance for all of Asia. And we have a counterpart for the remainder of the bank in Africa, the Middle East and the western countries. We pride ourselves on following best practices not only with the UK board but also our subsidiary boards. Nepal is a good example because we are not just a subsidiary here. We are a listed company and we pride ourselves not only on the financial results we have. We do believe that the governance of the entity here is part of the reason why we are so successful. Again, it allows us to identify issues early on, with a good board and a good governance process in place. It makes you see the risks down the road and helps you position for them. One of the things that might be of interest to your readers is that we actually changed our process and set up two new sub-committees on our board in London. The first one is called brand and values which focuses on the soft side of the company. We think that it's absolutely important to have values in a new organisation. The next is that we have split risk and audit. The audit committee focuses more on audit results and is backward looking while the risk committee is forward looking and focuses on new things on the horizon.&nbsp;</span><span lang="EN-GB"> <br />
	</span></span></span></span></p>
<p class="questionsforinterview">
	 </p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">Nepal's banking sector is talking mergers of late. What is Standard Chartered's take on this? </span></span></strong></span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.05pt;">In general, we prefer to grow organically and not through acquisitions because it's easier and more within our control. The degree of certainty about outcome is higher. I have worked on a number of acquisitions for the bank in Indonesia, Korea and Taiwan. Acquisitions are hard. A lot of management consultants will tell you that most acquisitions fail. And it's not normally due to financial reasons. They fail because of the difficulties and efforts required to integrate two separate entities. A lot of it surrounds not necessarily the business side but the soft side the people, values etc. In effect, you are taking another institution and marrying it to your institution. The cultures, values and perspectives aren't similar. It's very challenging and runs the risk of a strife in the management in the long term. I will give you a good example. As you know, we bought Grindlays Bank some years ago. The Grindlays deal worked very well for us and it has always been one of our best acquisitions. Not only because it has provided us a wonderful footprint in South Asia but also because the culture of the two merging banks in question, was very similar. Grindlays was a bank with strong local roots and a global perspective. Some of the other acquisitions we have done recently were that of very local banks. We had to adapt the way we worked, to fit in with the Korean and Taiwanese context, for example. It can definitely work like most other things in life it's a trade off. On Nepal specifically, we do think that there is a need for some consolidation. You have too many banks given the size of the financial sector here.&nbsp; </span><span lang="EN-GB"><br />
	</span></span></span></span></p>
<p>
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">Does the Standard Chartered Bank have any specific plan in mind? Have you set your sights on any particular brand that you want to acquire?</span></span></strong></span></span></p>
<p class="MsoNormal">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.1pt;">We will look at opportunities that come our way but our bias will always be towards organic growth. We are quite happy with organic growth and will not pursue acquisition as such. Even if there was anything on the cards, our corporate governance practice does not allow me to disclose any specific information. Nepal is a market that's of interest to us. We will look at the market growth and keep different options in mind. But the organic option will always be our preferred option.&nbsp; </span></span><br />
	</span></span></p>
<p>
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></p>',
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			'title' => 'Interview January 2013',
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			'content' => '<p>
	<strong><span style="font-size:16px;">‘The young generation &nbsp;is coming forward &nbsp;seeking opportunities in business’</span></strong></p>
<p>
	<img align="right" alt="" height="360" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/hari_bhakta_sharma.jpg" style="margin:0 0 0 10px;" width="210" /></p>
<address style="text-align: right;">
	<strong>Hari Bhakta Sharma</strong></address>
<address style="text-align: right;">
	<strong>Board Member</strong></address>
<address style="text-align: right;">
	<strong>Confederation of Nepalese Industries (CNI)</strong></address>
<p style="text-align: justify;">
	 </p>
<p style="text-align: justify;">
	Hari Bhakta Sharma is an executive board member of the Confederation of Nepalese Industries (CNI), a ‘think tank’ of Nepal’s industrial sector. He is also the executive director of Deurali-Janta Pharmaceuticals Private Limited (DJPL), a leading pharmaceutical company that has been an inspiration to Nepal’s manufacturing sector. In an interview with New Business Age, Sharma emphasizes on the brighter sides of the Nepali economy, the economic environment in the country and the need for developing the private sector, among other issues.&nbsp;</p>
<p>
	<strong>Excerpts:&nbsp;</strong></p>
<p style="text-align: justify;">
	<strong>How do you view the current economic situation of Nepal? Where is it heading?</strong></p>
<p style="text-align: justify;">
	There are two different ways to evaluate our economy. One is the evaluation of our overall economic growth. Nepal has achieved &nbsp;a growth rate of 3-5 per cent despite the ongoing political confusion. The Nepali economy is primarily driven by remittance. The disposable income of individual households increased with the increasing flow of remittance over the past 5-7 years. Remittance has raised the purchasing power of Nepalis and their consumption rate. The manufacturing sector, on the other hand, is becoming weaker every year and it is important how the increased consumption demand in Nepal is being fulfilled. The manufacturing sector’s contribution to the GDP has decreased gradually over the past decade. In 2012, for example, the manufacturing sector’s contribution to the GDP was around six per cent, a sharp decline from around 14 per cent a decade back.</p>
<p style="text-align: justify;">
	The consumption demand in Nepal is being met through imports. We import goods worth billions of rupees every year. The dependence on imports has impacted our manufacturing sector causing a decline in the production trend. And now we don’t find our stand in the international trade and do not know where we can compete and what the core advantages we have.Soaring imports have raised the government’s revenue. &nbsp;That’s why the government’s policies are facilitating import. &nbsp;If we do not redress these policies immediately, the power shortage, and other problems including the labour problem and political instability will take a heavy toll on the manufacturing sector, further deteriorating the employment situation in the country.&nbsp;</p>
<p style="text-align: justify;">
	Power shortage has become a chronic problem. Around 11-12 hours of power-cut everyday has made the production cost high. Second, there is a vacuum at the policy level. Although it is said that we are going to adopt a federal structure of governance, it is not yet clear to many what a federal system is and how many federal states will be there. Due to these reasons, there has been no significant investment during the past eight years. So, there has been no expansion of industrial investment in Nepal. Lastly, there is no clear economic policy. There is no common ground regarding the future economy of Nepal.&nbsp;</p>
<p style="text-align: justify;">
	<strong>How serious are the labour problems for manufacturing sector?&nbsp;</strong></p>
<p style="text-align: justify;">
	Labour problems are manageable; the industries can tackle these problems. But there is seemingly no solution to the power problem and the political instability. Due to the lack of clarity on the federal system to be adopted, investors are apprehensive about future tax system. For example, they don’t know how the products produced in Biratnagar and sold in Chitwan will be taxed. When these things become clear, investors will come to Nepal.&nbsp;</p>
<p style="text-align: justify;">
	<strong>We often talk about a private sector-led economy. But it is said that the private sector in Nepal lacks the vision of a broad-based economic growth and sustainable development. What are your views?</strong></p>
<p style="text-align: justify;">
	Since Nepal’s overall capacity to create enterprise is in the initial stage, it would not be fair to expect a high performance from the Nepali private sector. The private sector in Nepal is also a part of the Nepali society; it is as good or bad as the society is. Work culture and government policies directly affect enterprise.</p>
<p style="text-align: justify;">
	&nbsp;If we compare our development with that of China, India, Pakistan or south East Asian countries like Malaysia, Indonesia or Thailand, we find that we have poor governance in both private and government sectors. Also, our innovative capacity is poorer than theirs. The Nepali private sector is learning to be globally competitive. It is also learning to manage enterprises and managing companies properly.&nbsp;</p>
<p style="text-align: justify;">
	<strong>There are many organizations like FNCCI, CNI and other NGOs and INGOs working for the private sector. How do you assess their roles and activities?&nbsp;</strong></p>
<p style="text-align: justify;">
	If we talk about CNI, the purpose of establishing this organization was to make a positive impact on the climate of investment in Nepal and help make policy changes to transform Nepal into an investment friendly country. We create awareness about the industrial environment in Nepal and develop linkages among entrepreneurs. &nbsp;We are here to help create the right business environment, conduct dialogue at the policy level and help &nbsp;formulate policies that would attract investment to the country. When CNI was established, the country’s situation was volatile, politically unstable and unpredictable. This could be why the initiatives and efforts made by CNI were not pursued by the implementing agencies of the government.&nbsp;</p>
<p style="text-align: justify;">
	<img align="right" alt="" height="344" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/hari_bhakta_sharma(1).jpg" style="margin:0 0px 0 15px;" width="362" /></p>
<p>
	<strong><span style="font-size:16px;"><br />
	</span></strong></p>
<p>
	<strong><span style="font-size:16px;">"The Nepali private sector is learning to be globally competitive. It is also learning to manage enterprises and managing companies properly."</span></strong></p>
<p style="text-align: justify;">
	<strong><span style="font-size:16px;"><br />
	</span></strong></p>
<p style="text-align: justify;">
	<strong>Could you please elaborate a bit on the initiatives made by CNI for the development of Nepal’s industry sector?&nbsp;</strong></p>
<p style="text-align: justify;">
	We basically focused on three fundamental issues. First, we prepared documents on the country’s Industrial Policy after a lot of homework. We then submitted these documents to the Ministry of Industry. We wanted a number of changes in the policy. &nbsp;Second, we have been saying that the Nepali Enterprise Act needs a lot of improvement as the law formulated in 2049 BS has become obsolete. This issue needs to be addressed urgently.</p>
<p style="text-align: justify;">
	The previous industrial policy had incorporated &nbsp;many of our suggestions. However, the suggestions were not implemented because the Act was &nbsp;not amended. At the policy level, we have been trying to make the politicians aware about investment and the development of enterprises. We have been trying to create an investment-enabling environment. We have been trying to find ways to &nbsp;increase &nbsp;the income of Nepalis. We have been organizing economic summits. &nbsp;&nbsp;</p>
<p style="text-align: justify;">
	<strong>It is said that CNI was established because of the over politicization of the private sector. What do you say?</strong></p>
<p style="text-align: justify;">
	CNI was established because there was a need for an organization which could support the formulation of pro-private sector policies, help create an investment-friendly environment, and assure the investors about the long-term benefits of investing in Nepal. Such an institution was lacking in the country which led to the birth of CNI. Ever since its establishment, CNI has tried to do its bit for the industry sector as well as the entire economy. CNI has already passed through the test phase. If you compare the achievements we have made over the past one decade with that of any other similar organization, then you will know how hard we have been trying to improve things. Since we focus on the manufacturing sector, we raise issues and problems faced by this sector.&nbsp;</p>
<p style="text-align: justify;">
	<strong>It is said that the main reason behind the lack of &nbsp;re-investment in Nepal’s manufacturing sector is its inability to compete with China and India. For this reason, many believe &nbsp;that manufacturing does not have prospects in Nepal and are therefore importing instead. What do you have to say?&nbsp;</strong></p>
<p style="text-align: justify;">
	I do not agree with this. Deurali Janata Pharmaceuticals &nbsp;(DJPL) is one example that &nbsp;will prove this hypothesis wrong. Though the state provides five per cent discount on the import of medicines, DJPL has been able to produce quality medicines at competitive prices. The company has grown over the years. There are many areas in manufacturing where we can be competitive. All we need to do is identify and develop products with &nbsp;comparative advantage.&nbsp;</p>
<p style="text-align: justify;">
	<strong>So, what are the areas were you see comparative advantage?&nbsp;</strong></p>
<p style="text-align: justify;">
	Now is the time to go for hi-tech products. We should be able to identify the industries which can develop technologies and can also be competitive, for example bio-pharmaceuticals, IT sector and the health sector. Hydropower and tourism are two other sectors with lots of prospects; they are growing. If we improve the quality of service in tourism, we can get more benefits even from the current number of tourist arrivals. We are indeed sandwiched between India and China, but we have a great bio-diversity which makes us a country with high potentials in high-value crops. Likewise, there is a great scope for innovation and investment in the agriculture sector. We need to develop agricultural lands as enterprises but we have been developing them as properties. Agriculture is the base of a number of manufacturing industries.&nbsp;</p>
<p style="text-align: justify;">
	<strong>The government has listed the three sectors you mentioned above as the priority sectors. Still, we are unable to exploit them. Why?&nbsp;</strong></p>
<p style="text-align: justify;">
	The political instability in the country has kept the investors at bay. It seems the investors are in the wait and watch mood now. They are waiting for our discourse on federalism, future economic policy etc to take a concrete shape. Politicians should understand that their speeches alone won’t bring investment to Nepal. It’s a country’s political and business environment and the right rules regulations and policies that draw investment. We lack all these things. How will investors come to Nepal?&nbsp;</p>
<p style="text-align: justify;">
	<strong>What are the fundamental reforms needed to develop these sectors?&nbsp;</strong></p>
<p style="text-align: justify;">
	A common understanding among the politicians on the country’s economic agenda is a must. Parties in the government as well as in the opposition should understand that there should be a clear economic agenda which clearly depicts the dos and don’ts. No significant investment will come to Nepal unless the politicians have a common economic agenda prepared without any prejudice against anyone. We also need to depoliticize the economic issues so that industry, trade, and employment generation could grow smoothly. We have to keep in mind that we need domestic as well as foreign investors.&nbsp;</p>
<p style="text-align: justify;">
	<strong>That means there is no hope for growth in investment?</strong></p>
<p style="text-align: justify;">
	If there were no hopes, we won’t be in this business anymore. What I want to say is we lost a very good time. After the popular uprising of April 2006, &nbsp;the international community has had positive expectations from Nepal; we have many helping hands around. &nbsp;But we have so far failed to understand this and cash in on the opportunity. We couldn’t learn to depoliticize economy and development.&nbsp;</p>
<p style="text-align: justify;">
	Moreover, the politicians &nbsp;haven’t learnt from the mistakes they made in the past. They have spent 15 long years repeating the same mistakes. But still we hope that the time is not as bad as some people assume today.&nbsp;</p>
<p style="text-align: justify;">
	<strong>But other countries which have gone through conflicts, for example Sri- Lanka, have made progress. Why couldn’t Nepal?&nbsp;</strong></p>
<p style="text-align: justify;">
	I want to say that the generation I belong to is worried about the young blood. This young generation which could create enterprise is fleeing the country; here, I am not talking about those who go abroad for employment. This has made a very serious impact on our economy. This is why our GDP hasn’t grown in a massive way. However, we should appreciate that we have a positive growth both in the GDP and state revenue. The number of people wishing to invest in Nepal is also growing slowly. &nbsp;</p>
<p style="text-align: justify;">
	Other countries which have progressed despite undergoing a conflict in recent times attached high priority to their economies even during the time of conflict, not to mention after the conflict. Conflict-hit countries like Sri-Lanka and Bangladesh were able to maintain their growths as they had attached high priority to their economies. The Bangladeshi Cabinet has five ministers from the private sector. Those people who did not contest the parliamentary elections but were considered to be the best managers are appointed as ministers there. But in Nepal everybody seems to be thinking that only politicians can become ministers.&nbsp;</p>
<p style="text-align: justify;">
	In Sri- Lanka, you find an amazing system of governance. Every Sri Lankan ministry has at least one advisor from the private sector; they had two advisors during the conflict period. The government in Nepal only seeks loyalty from the businessmen. The knowledge of the entrepreneurs, their professional abilities and skills are not given due respect. They are judged based on their political inclinations or affiliations. This is why the inputs from professionals and technical experts of the private sector have not reached the higher level.&nbsp;</p>
<p style="text-align: justify;">
	<strong>Nepal has scored 50.2 on the economic freedom index 2012, becoming the 147th most-free economy in the world. How do you view this development in relation to the industrial environment in the country?</strong></p>
<p style="text-align: justify;">
	Regarding this issue, we have been focusing on a few things. One, we have been demanding that the Industrial Enterprises Act be amended according to the present needs. &nbsp;Two, &nbsp;the indicators of cost of doing business - for example corruption which is becoming socially acceptable - should be controlled. Three, as I mentioned already, the prime reason of the low ranking of our country on the economic freedom index is due to the unclear policies &nbsp;and the political instability. Things will improve once there is political stability.&nbsp;</p>
<p style="text-align: justify;">
	<strong>How do you find the current business environment in Nepal in comparison with the time you joined in?</strong></p>
<p style="text-align: justify;">
	I came into business some 22 years ago. There are some sectors which have made progress over this period, for example, the pharmaceutical sector and the banking and finance sector. Today a good project in Nepal stands a better chance of getting financed because of the development in the banking sector. Another good development is the young generation grown up over the past 20 years is coming forward seeking opportunities in businesses. These young people want to create enterprise on their own and are ready to take risks.&nbsp;</p>
<p style="text-align: justify;">
	There is some negativity, too. The level of corruption has risen. There are people who enjoy in others’ income rather than earning by themselves. The politicians have over-politicized almost every sector including the industrial sector. The result is less productivity in terms of individual capacity and high indulgence of the entrepreneurs in politics. In every sector, a person who is politically motivated and affiliated is selected regardless of their capability.</p>
<p style="text-align: justify;">
	<strong>Why are the pharmaceutical companies not seen aggressive in efforts to export their products?</strong></p>
<p style="text-align: justify;">
	Registration of pharmaceutical products internationally is a very difficult process. For pharmaceutical products, like medicines, companies need to scientifically prove their products, assure the consumers that the products are safe, GMP certified and so on. Another reason that makes us apprehensive to accept orders is the fear of not being able to deliver the products on time. Because of problems like power shortage and unpredictable labour problems and strikes, we always question ourselves whether we would be able to deliver the orders on time.&nbsp;</p>
<p style="text-align: justify;">
	We have just around 20 years of history in the development of pharmaceutical products. Based on my experience, I can say that there is a long way to go for Nepal’s pharmaceutical industry. It’s a highly regulated business. Unlike &nbsp;India, Brazil, the US and many other countries, Nepal is not considered &nbsp;as a country which can produce high-value medicinal products. India took 40 years to enter the export market while China took 35. We are just into 20 or 22 years of entering the pharmaceutical business. We hope to enter the export market faster than that. &nbsp;</p>
<p style="text-align: justify;">
	<strong>Why is the problem of substandard drugs in Nepal unresolved?&nbsp;</strong></p>
<p style="text-align: justify;">
	The private sector alone cannot resolve this problem. We can just facilitate the government in this process. &nbsp;We have been organizing awareness programmes against substandard drugs. The government has the authority and the mechanism to control substandard medicines. The medicines that are available at the pharmacies need be monitored and controlled by the government. We are ready to help the government in this matter.&nbsp;</p>
<p style="text-align: justify;">
	<strong>How is DJPL presenting itself in the global market? What are your upcoming plans?&nbsp;</strong></p>
<p style="text-align: justify;">
	Our primary objective during these 20 years was to learn, make our technologies world class, and establish our business globally. Now that our foundation is ready, our next step is to help reduce the import of medicines, at least those medicines which Nepal can manufacture itself. There are many products which Nepal needs to produce itself. But since we have been importing them from other countries for ages, we have not really thought along these lines. Now is the time &nbsp;to think about substituting &nbsp;the import by producing quality products. The most important thing we want to do now is promote healthier living. We want to produce health products other than medicines – health supplements. &nbsp;Taking medications after falling sick is normal. However, there are products for a healthier life, products that help prevent sickness. We &nbsp;too can produce such products. &nbsp;&nbsp;</p>
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<p class="Pa18">
	<span style="font-size:12px;"><strong><strong><span style="font-size:12px;"><span class="A17"><img alt="intrview december 2012" border="1" height="351" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/kenchini.jpg" vspace="10" width="203" /><br />
	<br />
	Nepal Country Director </span></span></strong></strong></span></p>
<p class="MsoNormal">
	<span style="font-size:12px;"><span class="A56">Kenichi Yokoyama </span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:12px;"><span class="A17"><span style="line-height: 115%; font-family: &quot;Calibri&quot;,&quot;sans-serif&quot;;">Asian Development Bank<br />
	<br />
	<br />
	</span></span></span></strong></p>
<p>
	 </p>
<p class="MsoNormal">
	<span style="font-size:12px;"><strong><span class="A63"><br />
	‘We have been actively involved <span style="line-height: 115%; font-family: &quot;Calibri&quot;,&quot;sans-serif&quot;;">in the energy sector’</span></span><span style="font-size:12px;"><span class="A63"><span style="line-height: 115%; font-family: &quot;Calibri&quot;,&quot;sans-serif&quot;;"> <br />
	</span></span></span></strong></span></p>
<p>
	<span style="font-size:12px;"><span class="A17"><span style="line-height: 115%; font-family: &quot;Calibri&quot;,&quot;sans-serif&quot;;">&nbsp;</span></span></span><span style="font-size:12px;"> </span></p>
<p class="MsoNormal">
	<span style="font-size:12px;"><span class="A64"><span style="line-height: 115%; font-family: &quot;Calibri&quot;,&quot;sans-serif&quot;;">Kenichi Yokoyama is Nepal Country Director for the Asian Development Bank (ADB), a Manila-based multilateral development finance institution dedicated to alleviating poverty in Asia and the Pacific. Yokoyama was serving as the principal water resources specialist at ADB´s South Asia department before he assumed current responsibilities on March 26, 2012. In an interview with New Business Age, Yokoyama sheds light on the ADB-funded projects in the water, energy, agriculture and other sectors in Nepal. Excerpts: </span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:12px;"><span class="A64"><span style="line-height: 115%; font-family: &quot;Calibri&quot;,&quot;sans-serif&quot;;">&nbsp;</span></span></span></p>
<p class="Default" style="margin-top:5.0pt;text-align:justify;line-height:10.05pt">
	<strong><span style="font-size:12px;"><span style="color: windowtext;">Melamchi, the ADB-financed water supply project, is in a new controversy now after the Chinese contractor left the work. How will the project move ahead now? </span></span></strong><br />
	<span style="font-size:12px;"><span style="color: windowtext;">&nbsp;</span></span></p>
<p>
	<span style="font-size:12px;">ADB is committed to supporting the construction of the Melamchi tunnel work, the water treatment plant and the distribution system. With a population of around three million, the Kathmandu Valley has been facing an acute water shortage. This is a huge developmental constraint. We have been facilitating the Nepal government in the completion of the tunnel and other works on time. </span><span style="font-size:12px;"> </span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span><span style="font-size:12px;">It is unfortunate that the Chinese contractor had to leave the project because of some issues related to work progress. Now, we are supporting the government to go for immediate rebidding. The government is looking for first class contractors. Such contractors from China, Korea, India, France and other European countries have shown interest in the project. We hope that the government will be able to hire a new contractor by March 2013 and complete the project by March 2016. </span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span style="font-size:12px;">But this has increased the cost of the project and delayed it further. Will the project complete within the new deadline?</span></strong></p>
<p class="Default">
	<span style="font-size:12px;">The topmost priority for the government is to identify a qualified contractor with high experience in similar tunnel works. Although there are concerns about the cost, we have to think about the seriousness of the water shortage problem in Kathmandu which calls for urgent attention. We have to ensure that the Melamchi project is completed on time.<br />
	</span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:12px;">Despite the many ups and downs seen over the almost past seven years, ADB remains associated with the project. The only reason for this association is that we feel that Melamchi is an important project. We have been holding regular discussions with the Ministry of Urban Development on the specific actions to be taken to take the project forward, including the swift selection of an internationally reputed, committed, dedicated and efficient contractor who can build a high quality infrastructure. Given the importance of the Melamchi project in addressing the water demand of the 2.6 million people living in the Kathmandu Valley, ADB remains fully committed to <span style="color: black;">providing the necessary support to the Government of Nepal to complete the project by early 2016 or earlier. </span></span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong></p>
<p class="Default">
	<strong><strong><span style="font-size:12px;">&nbsp;</span></strong></strong></p>
<p class="Default">
	<strong><span style="font-size:12px;"><span style="color: black;">ADB’s recent fund for water projects in Nepal is said to be aimed at improving irrigation and prevent water-induced disasters. How is it different from other water projects?<br />
	</span> <br />
	</span></strong></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">These projects aim to bring about higher rural livelihood. The government is seeking support for rapid agricultural transformation. In that context, we are supporting irrigation and water disaster mitigation risk management projects. We are building on the achievements made thus far. In irrigation, Nepal has comparative advantage in having irrigation systems managed by farmers. Building on this, ADB is supporting agriculture development for making it more profitable and commercial so that the farmers can increase their income.</span> <br />
	</span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:12px;"><span style="color: black;">Nowadays, effective water management is a critical challenge for many countries. Particularly in the dry season, many countries are facing a shortage of water supply. Nepal, too, needs an effective water management system. The country ought to fulfill additional industrial needs while protecting the conventional water users. An efficient and equitable distribution of irrigation water is also pretty much needed to increase the farmers’ income.</span></span></p>
<p class="Default">
	<strong><span style="font-size:12px;"><br />
	</span></strong></p>
<p class="Default">
	<strong><strong><span style="font-size:12px;">&nbsp;</span></strong></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span style="font-size:12px;"><span style="color: black;">Once again, ADB recently listed the West Seti Project among the newly proposed ones. How do you want to participate in this project?</span></span></strong></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span><span style="font-size:12px;"><span style="color: black;">It’s not the West Seti, but the Upper Seti project, located in Tanahun district, that ADB is supporting. Actually, we are submitting a proposal for this project to the ADB Board early next year. The name of the project is Tanahu Hydropower Project. It is a 140MW storage project. It could help address the power shortage of not only Kathmandu but the country as a whole.<br />
	<br />
	</span> <br />
	</span></p>
<p class="Default">
	<strong><span style="font-size:12px;"><span style="color: black;">ABD seems to have planned to involve itself quite heavily in the energy sector through new projects like Tanahu hydro and continue with other ongoing energy sector programs. What is the strategy?&nbsp;&nbsp; </span></span></strong><span style="font-size:12px;"><br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Our assistance strategy is to support the government to address the most critical development constraints including infrastructure, its management system, and delivery of effective public service to the needy people including the poorest. Addressing the critical infrastructure bottlenecks is of high priority. The country is facing acute power shortage. Electricity is available only six hours a day in the dry season. How can industries come to Nepal and operate in such a situation? ADB has been actively involved in the energy sector with previous assistance in Kali Gandaki A and Khimti Hydropower projects, which account for some 30 percent of the country’s generation capacity at the moment. The Tanahu project, which is a storage project, will add additional 140 MWand can provide a stable power supply during the dry season.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">We will support the efficient implementation of the Tanahu Hydro Project. There are two other ongoing projects in transmission and distribution, respectively. We are also supporting NEA in its institutional reforms which includes enhancing its financial position by increasing tariff, reducing distribution loss and providing electricity to private industries and local stakeholders more efficiently.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Default">
	<strong><span style="font-size:12px;"><span style="color: black;">Many ADB-supported projects – mainly those in the agriculture sector - are discontinued after the completion of the first phase. Why?&nbsp;&nbsp; </span></span></strong><br />
	<br />
	<span style="font-size:12px;"><span style="color: black;">Our programs are aimed at demonstrating how development can be pursued most effectively. For example, there was a community ground water project where a community ground water group was set up and provided with shallow tube-well systems. The beneficiaries can now do triple cropping with tube-well irrigation with proper maintenance of the tube-wells, which they are able to manage. Likewise, projects such as community irrigation and commercial agriculture are helping establish sustainable development systems. The government can replicate similar projects.<br />
	<br />
	</span> <br />
	</span></p>
<p class="Pa8" style="text-align:justify">
	<strong><span style="font-size:12px;"><span style="color: black;">It is said that $ 15.3 million that ADB had allocated for various projects such as commercial agriculture, community irrigation, skill development programs, etc, could not be used. What is the reality?&nbsp;&nbsp; </span></span></strong><br />
	<br />
	<span style="font-size:12px;"><span style="color: black;">The projects need to follow a specific timeline. There are also cases where the actual cost of implementation is lower than the initial projection. For example, in one of the strategic road projects, the bidding price was lower than the estimated price, thanks to the competition and devaluation of the Nepali Rupee, resulting in substantial savings. In the irrigation sector, too, the project cost is often lower than the estimated cost because of competitive bidding. There are some cases where the project implementing agency has limited absorptive capacity. Overall, we have identified $15 million savings this year, but we are also discussing with the government that these savings could be used for other projects in Nepal, such as additional financing requirement of the Melamchi project. </span></span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span style="font-size:12px;">&nbsp;</span><span style="font-size:12px;"><span style="color: black;">What would be your investment portfolio for the next couple of years for Nepal? Will it increase? </span></span></strong></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong><span style="font-size:12px;"><span style="color: black;">The allocation of the Asian Development Fund (ADF) is decided biannually, and the amount for the year 2013 -14 is to be finalized at the end of this year. At this moment, we expect it to be at least about $ 250 million per annum. </span></span></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span><br />
	<span style="font-size:12px;">&nbsp;</span></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span style="font-size:12px;"><span style="color: black;">Could you please highlight ADB’s present development assistance priorities for Nepal? </span></span></strong></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong><span style="font-size:12px;"><span style="color: black;">The thrust of ADB’s ongoing country partnership strategy for Nepal (2010-2013) is to help sustain the hard-won gains of the country’s peace process by promoting broad-based inclusive economic growth, inclusive social development, governance and capacity building, as well as climate change adaptation and environmental sustainability.&nbsp;&nbsp; </span><br />
	</span></p>
<p>
	<span style="font-size:12px;"><span style="color: black;">ADB’s assistance supports Nepal in different sectors such as agriculture and natural resources, education, water supply and other municipal infrastructures and services, transport, information and communication technology and finance and energy. We support these operations through the promotion of gender equality and social inclusion, regional cooperation and integration, public private partnerships, along with greater engagement of the civil society and NGOs. </span></span><span style="font-size:12px;"> </span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span><span style="font-size:12px;"><span style="color: black;">Our new country partnership strategy for Nepal is being formulated in consultation with the Nepal Government. ADB’s support will focus on addressing the country’s development constraints including energy, transport, urban and rural infrastructures and skill development. To support these priorities, ADB will also promote governance, private sector development, regional integration, gender and social inclusion and climate change adaption. </span></span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span style="font-size:12px;"><span style="color: black;">Could you please briefly describe ADB’s assistance in the agriculture sector? </span></span></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	 </p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span><span style="font-size:12px;"><span style="color: black;">ADB has been Nepal’s main development partner in agriculture. Agriculture remains the largest component of ADB’s assistance to Nepal. ADB has supported in increasing the production of crops and livestock, raising agricultural income and creating employment opportunities for rural people. ADB’s assistance to Nepal includes support for agricultural credit, small farmer development, livestock, irrigation, agricultural roads, forestry, and crop diversification. ADB is also supporting the government’s preparation for the Agriculture Development Strategy that will set out the long-term vision and strategy for the agriculture sector for the next 20 years, and priority programs for the next 10 years. </span></span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span style="font-size:12px;"><span style="color: black;">&nbsp;</span></span></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span style="font-size:12px;"><span style="color: black;">What is the recent development in ADB’s funding for the transport sector? </span></span></strong></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong><span style="font-size:12px;"><span style="color: black;">We have been supporting the construction of strategic roads network. Similarly, we are supporting the Sub-regional Transport Enhancement Project which was approved in 2010. All contracts have been signed for this project and the work progress is about 30 per cent. A new transport project of about $100 million is envisaged for 2013. We are also planning another project based on a new lending modality called the multi-tranche financing facility for 2014 for the transport sector. The idea is to provide a long-term financing framework of $200- 250 million, based on which individual sub- loans will be launched. </span></span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong></p>
<p class="Default">
	<strong><span style="font-size:12px;"><span style="color: black;">ADB is preparing to provide support for setting up a new CTEVT- like structure under the Ministry of Education. Would you please highlight the program?</span> <br />
	</span></strong></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">ADB is not providing assistance to a new CTEVT- like structure under the Ministry of Education. However, ADB will support the Government of Nepal, through the proposed Skills Development Project to develop a market responsive and social- and gender-responsive Technical Education and Vocational Training (TEVT) by assisting the implementation of policy, institutional and operational reforms, delivery of demand-oriented skills training, short-term market oriented skills training focusing on excluded groups, and effective project management and monitoring and evaluation.<br />
	<br />
	</span> <br />
	</span></p>
<p class="Default">
	<strong><span style="font-size:12px;"><span style="color: black;">For the last few years, ADB, DFID and WB had started to implement synchronized programs to avoid duplication. Why have you abandoned this practice now?&nbsp;&nbsp; </span></span></strong><br />
	<br />
	<span style="font-size:12px;"><span style="color: black;">We have been continuously working together with the World Bank, DFID and JICA, who are our co-members in the Nepal Portfolio Performance Review process. The government is taking the lead, and a meeting is held annually to discuss and resolve issues to enhance project implementation performance. Issues like public finance, management, procurement, human resource management and management of the development regions. These issues are critically influencing the implementation of the developmental projects. Implementation of the concept of e-bidding for infrastructure works is almost complete. This allows bidders to submit their bids through internet. This can substantially enhance the transparency and efficiency of the bidding process.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">For new development programs, a close coordination and collaboration among the development partners is maintained as an established practice in project preparation and appraisal, to avoid any duplication. Efforts are also being made to develop a common sector roadmap or result framework and define programs within the framework and pursuing the possibility of co-financing as much as possible.</span><br />
	<br />
	<br />
	</span></p>
<p>
	<strong><span style="font-size:12px;"><span style="color: black;">Despite great donor involvement in programs like the School Sector Reform, the achievement has been negligible, mainly converting government schools into community-run ones. What is the reason?&nbsp;&nbsp; </span></span></strong></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Default">
	<br />
	<span style="font-size:12px;"><span style="color: black;">In the school sector, we have to take into account that we have started from a very low base. Nepal has significant challenges such as difficult geography and remoteness in the mountain region. I don’t agree that the achievement has been negligible. If you look at the statistics, primary school enrollment was barely 60 percent in 1990; it is 95 percent now - a significant change brought about by education programs. However, it is also true that some significant challenges still remain, such as the quality of education and a high percentage of dropout. Prudent financial management of the education development fund, too, is an issue. Building on the progress made, I believe these constraints can also be addressed gradually. We have a donor co-ordination mechanism, which enables all the donors to work together to make the most efficient progress by avoiding duplication.</span></span></p>
<p class="Default">
	<strong><span style="font-size:12px;"><br />
	</span></strong></p>
<p class="Default">
	<strong><span style="font-size:12px;"><span style="color: black;">ADB has supported to modernize Nepal’s capital market. What are the latest developments in this regard?</span> </span></strong></p>
<p>
	<span style="font-size:12px;"><span style="color: black;">ADB is supporting Nepal’s efforts to develop the capital and bond markets to attract and promote private investment. For this, we have an ongoing Capital Markets and Infrastructure Capacity Support Project. Under the project, a team of consultants is being selected. There are two components of this project. The first is to support the capital market development, particularly the bond market. The second one aims to develop an enabling environment for public private partnership (PPP), identify investors, design and carry out feasibility studies. We hope to mobilize the consultants by early 2013. </span></span><span style="font-size:12px;"> </span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span><span style="font-size:12px;"><span style="color: black;">We are also discussing with the Government of Nepal the opportunity for ADB to issue local currency bonds that will help provide long-term financing for private infrastructure investment and also help develop the country’s bond market.&nbsp;&nbsp; </span></span></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span style="font-size:12px;"><span style="color: black;">How do you view the progress of ADB’s projects in Nepal? </span></span></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	 </p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">The country assistance program evaluation (CAPE) conducted by ADB’s Operations Evaluation Department a few years back found that overall, ADB’s lending program had a positive impact socially, environmentally and economically. These projects have helped reduce not only poverty but also gender disparity and social exclusion by benefiting the poor.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Some of ADB’s programs are directly targeted at the poor and some are indirectly targeted, but the ultimate objective is poverty reduction. Results can be seen from the assistance that ADB has been providing over the years. For instance, the transport system in the country has greatly improved — the main strategic road network as well as the rural roads connecting the remote parts of the country. This has helped improve public service delivery and livelihoods in these areas. ADB’s assistance has also contributed in improving the living standards of the rural communities through the provision of improved water supply and sanitation facilities. However, we recognize that the assistance we provide needs to be more effective in terms of reaching the poor and vulnerable and sustaining these development benefits.</span><br />
	</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span style="font-size:12px;"><span style="color: black;">How have you viewed Nepal’s inability to bring about a full-fledged budget at the beginning of the fiscal year? How has it affected your support? </span></span></strong></p>
<p>
	<span style="font-size:12px;"><span style="color: black;">Although the government could not bring a full budget, a one-third interim budget was provided. We are working with the government so that the developmental activities are least affected in the given context. As far as the ongoing projects supported by ADB and other donors are concerned, the ordinance (budget) has a special provision to allow the government to provide enough funds through budgetary reallocation. Nevertheless, we remain concerned how the necessary funds would be allocated in a smooth and timely manner for efficient project implementation under the present circumstance. </span></span><span style="font-size:12px;"> </span></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp; <br />
	</span></strong></p>
<p class="Default">
	<strong><span style="font-size:12px;"><span style="color: black;">What are the challenges facing the development projects in Nepal?&nbsp;&nbsp; </span></span></strong><span style="font-size:12px;"><br />
	</span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:12px;"><span style="color: black;">In general, projects in Nepal face the challenge of timely implementation due to the country’s difficult topography and remoteness of many districts. Poor infrastructures and limited human resource capacities are the other challenges. In some cases, implementation of the projects has been affected by local strikes as well. </span></span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">The political transition process has been slow and is still fraught with risks and challenges for development activities. In particular, the absence of elected local bodies since July 2002 has been a major impediment to governance, service delivery, and development works at the local level.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">In addition, labour unrest in the fragile political environment, coupled with acute power shortage, has constrained the revival of key sectors of the economy and private investments. Thus, improving basic infrastructure and strengthening governance and public and market institutions is very crucial for Nepal.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Despite these challenges, the performance of ADB’s project portfolio has improved. This also demonstrates the hard efforts by the government agencies that implement the ADB-financed projects. While the overall performance still remains below ADB’s wide average, I am hopeful that this progressive improvement will continue under the strong partnership with ADB.</span></span></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:12px;"><span style="color: black;">How do you view the current economic situation of Nepal?</span></span></p>
<p class="MsoNormal">
	<span style="font-size:12px;"><span style="line-height: 115%; color: black;">Despite the difficult political environment and the global economic slowdown, Nepal has been able to preserve a reasonable macroeconomic stability with a moderate and steady economic growth. We are pleased to note that the government’s and Nepal Rastra Bank’s proactive policy measures on the vulnerability of the banking sector and rising inflation have eased the problems in recent months, although the risks remain. The external position, too, has remained stable with the widening trade deficit being offset by sustained increase in remittance inflows and tourism receipts. However, exports continue to be sluggish due to the long-term structural weaknesses in the economy. Although agricultural growth could slow down in FY 2013 because of the late monsoon and shortage of chemical fertilizers, we believe that Nepal will be able to maintain a moderate growth supported by the service sector.</span></span></p>
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<p class="MsoNormal">
	<span class="A3"><span style="font-size:16.0pt"><img alt="phil" border="1" height="301" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/phil11.jpg" vspace="10" width="382" /><br />
	Phil Humphreys </span></span><span class="A25"><br />
	<span style="font-size:14.0pt">Chief Operating Officer </span></span><span class="A25"><br />
	<span myriad="" style="font-size:14.0pt;line-height:
115%;font-family:">Coca-Cola Sabco</span></span></p>
<p class="MsoNormal">
	<span class="A25"><span myriad="" style="font-size:14.0pt;line-height:
115%;font-family:">&nbsp;</span></span></p>
<p class="Default" style="mso-line-height-alt:10.05pt">
	<span class="A65"><span mso-bidi-theme-font:="" new="" style="font-size:13.0pt;mso-bidi-font-family:" times="">Phil Humphreys is the Chief Operating Officer of the Northern Division of Coca-Cola Sabco based in Dubai. He joined Coca-Cola Sabco in September 2010. He has a strong background in international FMCG sales and marketing. He has also worked with leading international brands such as Johnnie Walker, Smirnoff, Guinness, and an array of other leading brands within the Diageo and Nestle portfolios. He completed the PED/MBA equivalent programme at IMD, Lausanne, Switzerland as well as various other International Management and Executive Development Programmes. </span></span></p>
<p class="Default" style="mso-line-height-alt:10.05pt">
	<span class="A65"><span mso-bidi-theme-font:="" new="" style="font-size:13.0pt;mso-bidi-font-family:" times="">&nbsp;</span></span></p>
<p class="Default" style="mso-line-height-alt:10.05pt">
	<span class="A65"><span mso-bidi-theme-font:="" new="" style="font-size:13.0pt;mso-bidi-font-family:" times="">&nbsp;</span></span></p>
<p class="Default" style="mso-line-height-alt:10.05pt">
	<span class="A65"><span mso-bidi-theme-font:="" new="" style="font-size:13.0pt;mso-bidi-font-family:" times="">Humphrey’s leadership quality and keen business senses has helped him achieve significant positions in leading global companies. As the Chief Operating Officer at Coca-Cola Sabco (Northern Division), he is currently leading developing markets in the form of the franchises of Vietnam, Cambodia, Nepal, Sri Lanka and Ethiopia. He is also a member of the Coca-Cola Sabco Group Executive Committee. In an interview with New Business Age, Humphrey shared his plans for Coca-Cola Company in Nepal and market strategies among numerous other issues. Excerpts: </span></span></p>
<p class="Default" style="mso-line-height-alt:10.05pt">
	<span class="A65"><span mso-bidi-theme-font:="" new="" style="font-size:13.0pt;mso-bidi-font-family:" times="">&nbsp;</span></span></p>
<p class="Default" style="mso-line-height-alt:10.05pt">
	<span new="" style="font-size:
13.0pt;mso-bidi-font-family:" times="">&nbsp;<img alt="phil" border="1" height="300" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/phil22.jpg" vspace="10" width="393" /></span></p>
<p class="Default">
	<strong><span style="font-size:10.0pt;color:#211D1E">You joined Coca-Cola Sabco in September 2010. How have you made a difference in this period?</span></strong></p>
<p>
	<span style="font-size:10.0pt;color:#211D1E">Nepal is one of the five countries that I am looking after. In Nepal, I inherited an already good business. We took up the business in 2004 and we have had the business as franchise for eight years now. Every year from 2007 onward, we have delivered double digit growth both on the top and bottom lines. One of the things that we talk a lot about Nepal strategy is amazing relationships with people as one of the strengths. We spend a lot of time engaging with Nepali people both at the plant and in the field. We also spend a lot of energy in engaging with our stakeholders and believe in power of relationships. That is one of the things that have really happened in the last two years since I joined the company. As far as engagements go, every year we </span><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">measure how engaged our people are. Last year it was incredible 96 per cent, which is the highest in the whole company. Out of 11 countries, there is no other country in Sabco with higher engagement than that. </span></p>
<p class="Default">
	<strong>&nbsp;</strong></p>
<p class="Default">
	<strong>&nbsp;</strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">You have an extensive experience in the FMCG field and possess in-depth knowledge of global brand development. How do you view your current experience at Coke?</span></strong></p>
<p>
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">The key thing about the system at Coca – Cola is to work in partnership and collaboration. For example, you can do everything in Nepal from marketing and selling to distribution while Coca-Cola Company owns the brand and does all the corporate marketing. So, one of the things about the system is to collaborate really well and maintain tension in the conversation. You have got to challenge and be there with each other. I had not experienced this kind of a system before and never experienced working for a private company before. Therefore, these are new experiences for me. In Nepal, we have set up two publicly listed companies and majority of shareholding is our own while we do have a number of knowledgeable people as minority shareholders. We are heavily backed by a private company who can make decisions easily. We are part of a public company here and need to make agreement through our annual general meetings. For example, we are building a new plant in Bharatpur which is a US$ 25 million investment. That is about four times the average injection capital that we would put into the country. It is going to be fantastic and I am really excited because it not only creates a lot of new job opportunities but it is also going to give us PET plastic bottles.</span></p>
<p class="Pa10" style="text-align:justify;text-indent:14.0pt">
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">&nbsp;<br />
	<br />
	<img alt="phil" border="1" height="306" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/phil45.jpg" vspace="10" width="432" /><br />
	</span></p>
<p>
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">How far have you reached in your expansion plan for Coca-Cola in Nepal?</span></strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:"><br />
	<br />
	We are going through our plans right now and always look at three year plans. We want to be a non alcoholic energy drinks company by 2013. We want retailers, customers and consumers to able to come to us and get anything they want from our portfolio. They can get sparkling drinks right now but they can’t get juice, water and energy drinks. That is going to be part of our expansion in the coming years as we are definitely interested in these areas. We are in discussion with our partner about the possibility at the moment and also looking after the water facility in one of our existing plants. I am expecting to play a much broader role in this non alcoholic drink segment in a year’s time. We have a lot of opportunities as this country is very much an emerging market. </span></p>
<p class="Default">
	<strong>&nbsp;</strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Where will you reach in the next two years after the expansion and all these investments?</span><br />
	</strong></p>
<p>
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">We try to think a little further than just one, two or three years. In a country like this, you cannot just look forward to 2013 only. I think that the non alcoholic drinks market in this country is basically worth 25 million cases right now. It would probably grow to become a 200 million case business by 2020. This is a brilliant place to be in for doing business from a consumer perspective even though it is not the easiest place to do business from regulations perspective. But what matters at the end of the day is that Nepali consumers are demanding more from a company like ours. </span></p>
<p class="Default">
	 </p>
<p>
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Is there a chance that you will start bottling canned beverages here in Nepal?</span></strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:"><br />
	<br />
	Probably not at the moment because we have various other options that we can look at. The market for canned beverages is still very small. For the next few years, the glass bottle is going to be continuously very important part of the battle between Coke and Pepsi. We are going to make sure that it is affordable and everybody has access to Coca-Cola. Our mantra for the year is ‘within arm’s reach’. Now my dream is to have our quality products in different packaging formats which people can rely on and get those products literally within arm’s reach. That is a big responsibility and most important thing is to do it in a sustainable way. </span></p>
<p class="Default">
	 </p>
<p>
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">The overall transaction of your competitor comes more from food business than the sale of cola drinks. Have you ever thought to focus on the food business as well?</span></strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:"><br />
	<br />
	We will not be getting into the food business. Anything is possible in terms of partnerships as such but whether Bottlers Nepal Pvt Ltd will ever buy a food company is something I can’t predict about right now. Taking up secondary distribution is possibly an option but it’s definitely not a priority right now. We want to sell Coca-Cola, Sprite, Fanta and Kinley and want to and open as many new outlets as possible to give people an opportunity to retail our products. Food business is not the direction for Coca-Cola Company, it is soft drinks only.</span><br />
	&nbsp; <br />
	<br />
	<img alt="phil" border="1" height="306" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/phil45(1).jpg" vspace="10" width="432" /><br />
	 </p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Is there any negative impact for cola industry in Nepal like in India because of the propaganda against cola from certain quarters? </span></strong></p>
<p>
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Not at the moment though of course we do need to be careful. There has been some negative publicity against soft drinks but I think there is a great opportunity for us in this industry to come together as non alcoholic beverages industry and actually do some better work right now. I think we always need to be very careful about NGOs’ and public perception of soft drinks but I personally have massive confidence in our products. It is time for educating consumers that Coca-Cola is about health and wellness. The average consumption of Coca-Cola here is nine bottles per capita for an entire year so there is a lot of room. We have a lot to do about giving back to this country - getting involved in education, sustainability and renewable energy. These are the three areas we are going to significantly focus on. I think we will be doing well if we show the government and our consumers that we are a locally responsible business. </span></p>
<p class="Default">
	 </p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">You have changed the focus of your advertising campaigns from electronic and print media to hoarding boards. What is the targeted outcome that you are looking at? </span></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	 </p>
<p>
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">I am a marketer by background so I love all those stuffs. The time was right for us to do something different few months ago and we started printing Kathmandu around February this year. Everywhere you went, you saw boards with Rs 20 for 350 ml bottle of Coke. Personally, I think it is the right way to go right now for Nepal. I call it visibility but it needs to be the part of the whole 360 degree integrated campaign. You can’t just have it on TV or a single media. I would like people to see our brand wherever they go and not just when they go home and switch on their television sets. You will continue to see a lot of them in the future as well. </span></p>
<p class="Default">
	 </p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">What are the new CSR activities that Bottlers Nepal is coming out with? </span></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	 </p>
<p>
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:"><br />
	We are going to focus particularly on water usage because our water usage ratio is pretty low. The Coca-Cola Company is very happy with us and the team here has done a great job so we will continue to focus on it. That means we are going to give more water back to the ground than we basically take out. So, a good example of this is rainwater harvesting projects that we are doing at number of places in association with the NGOs. We have also organised environment cleaning campaigns. Another thing that we will be doing but have not really started yet is to facilitate solar energy run coolers. </span></p>
<p class="Default">
	 </p>
<p>
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">What are the new changes that you are making in different fields of Bottlers Nepal’s operations?</span></strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:"><br />
	<br />
	The big thing is adding a new facility that we have not done for years. We are also going to expand the portfolio of non alcoholic drinks. We will also be putting a lot more people into frontline sales to execute our operations more efficiently. </span></p>
<p class="Default">
	 </p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Coke conducted a study recently on shoppers’ loyalty and retail dynamics. What were the findings about the behaviour of Nepali consumers? </span></strong></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	 </p>
<p>
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">We understood a little more about how shoppers shop than we already knew. One of the things we learned a lot about was that Coke clearly stands out when you put Coca-Cola, Sprite or Fanta, particularly Coca-Cola, next to another product which is associated with an occasion. Another aspect about Nepali consumers was that they like simplicity, they don’t like complications. That was a great message, as many times, big company like us tend to over engineer the world. The fact that simplicity of packaging and product never ever changes the taste of the product, was a great finding for us. </span></p>
<p class="Default">
	 </p>
<p>
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">How is Coke changing its business strategy in Nepal in regard to these findings? What is the targeted increase in your market share? </span> </strong></p>
<p class="MsoNormal">
	<strong>&nbsp;</strong> <span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">I think consumer and meal occasions are changing. My demand is that every eating and drinking outlet I go to should have a poster with Momo or another Nepali dish plus Coke and their combined price. That is really the big change that is currently being done. People always drink Coca-Cola at a little grocery out there but now there is going to be a big shift in the mindset of the consumers. As for market share increase, the general rule for us is we are very happy if we can get one per cent market share rise per year.</span></p>
<p class="MsoNormal">
	<span style="font-size:10.0pt;line-height:115%;color:#211D1E">&nbsp;</span></p>
<p class="MsoNormal">
	 </p>',
			'published' => true,
			'created' => '2012-12-06',
			'modified' => '2013-01-04',
			'keywords' => '',
			'description' => 'Phil Humphreys is the Chief Operating Officer of the Northern Division of Coca-Cola Sabco based in Dubai. He joined Coca-Cola Sabco in September 2010. He has a strong background in international FMCG sales and marketing. He has also worked with leading international brands such as Johnnie Walker, Smirnoff, Guinness, and an array of other leading brands within the Diageo and Nestle portfolios. He completed the PED/MBA equivalent programme at IMD, Lausanne, Switzerland as well as various other International Management and Executive Development Programmes.',
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	(int) 3 => array(
		'Article' => array(
			'id' => '721',
			'article_category_id' => '46',
			'title' => 'Justin Sargent',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p class="MsoNormal">
	<span style="font-size:20px;"><strong><span class="A31"><span style="line-height: 115%;">‘Social Research has a Huge Scope in this Part of the World’</span></span></strong></span></p>
<p class="MsoNormal">
	<span style="font-size:20px;"><br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A31"><span style="line-height: 115%; font-family: "><span style="font-size:20px;"><strong>&nbsp;</strong></span><img alt="Justin Sargent " border="1" height="403" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/interview_11.jpg" vspace="10" width="277" /><br />
	</span></span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Justin Sargent </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span class="A16">Managing Director-India </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A16"><span style="line-height: 115%; font-family: ">Nielsen</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A16"><span style="line-height: 115%; font-family: ">&nbsp;</span></span></span></p>
<p class="Pa24" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span class="A58">Justin Sargent is the Managing Director for Nielsen India's Consumer Business. He is leading Nielsen's consumer businesses (Retail Measurement Services, Consumer Research, BASES, Advance Analytical Consulting) including Client Leadership, Client Service and Product Leadership initiatives. He graduated from Warwick University, England with a BSc in Mathematics, Operational Research, Statistics and Economics. Langer has held a number of senior positions at Nielsen across the globe, including the position of RMS Executive Director - Australia, and most recently Managing Director - UK &amp; Ireland. </span></span></p>
<p class="Pa24" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span class="A58">&nbsp;</span></span></p>
<p class="Pa24" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span class="A58">He is currently based in Mumbai, India and focuses on the strategy of listening to the consumers to get more consumers' insight. The Nielsen Company is a global information and media company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence, mobile measurement, trade shows and business publications. It is planning to continue growing its business by applying its strategies of driving more consumers' insights and generating a more complete understanding of consumers. In an interview with New Business Age, Langer talked about importance of Nielsen numbers and major plans for its Nepal operations among a host of other issues. Excerpts:<br style="mso-special-character:line-break" />
	<br />
	<br />
	<img alt="Justin Sargent " border="1" height="419" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/interview_12.jpg" vspace="10" width="287" /><br style="mso-special-character:line-break" />
	</span></span></p>
<p class="Pa24" style="margin-top:5.0pt">
	<span style="font-size:14px;"><strong><span class="A58"><br />
	</span><span style="color: rgb(34, 30, 31);">Please give us an overview of Nielsen’s business in this region that includes Nepal and India. <br style="mso-special-character:line-break" />
	<br style="mso-special-character:line-break" />
	</span></strong></span></p>
<p class="Default">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The Nielsen’s South Asia operation covers countries like India, Bangladesh, Sri Lanka and Nepal. It’s quite a sizeable region for Nielsen in this developing part of the world. Like multinationals, we view countries like India, Nepal and other parts of South Asia as areas of priority where our clients are investing to find out their consumers’ size. Nielsen has been in India since 1960s and in Nepal since early 1990s. We are increasingly focusing on these two countries as our clients are seeking growth here.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Nielsen in Nepal has a full range of services. It is mainly known for measurement services. Most of our clients are particularly from the fast moving consumer goods (FMCG) sector and hence they demand to understand how they are performing, in comparison to their competitors. We also do a lot of work with NGOs and help them understand factors that can help them promote and influence the country’s growth. We work for AED, PSI and some other USAID-funded projects in Nepal in addition to a host of multinational companies like Coca- Cola, Colgate-Palmolive and Procter &amp; Gamble to name a few.&nbsp; </span><br />
	</span></p>
<p class="Default">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">A huge part of our business is dedicated to these two services. Our business is growing well in Nepal and the clients seem increasingly interested in this market. It seems to be the right time for us to consider how to elevate to the next level and how to potentially bring in further expansion. Maybe, we could bring some new analogical products that have worked well elsewhere, in other developing markets.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Social research has a huge scope in this part of the world. In India, we also work in sectors including government organizations and the NGOs, for example, UNICEF. We also work with projects on big, important sectors like health and education. FMCG is an area that Nielsen tends to put in a lot of time and energy into. Nielsen is a global company so we are constantly looking for the climax in different countries, and Nepal is now in its climax. It has many centers of attraction and the GDP growth of the country is four per cent which is still pretty attractive compared to a lot of western economies.</span><br />
	</span></p>
<p class="Pa8">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">We developed the social research practice that works right across South Asia. We have experts that tend to work across the different countries. For example, we utilize the microfinance expertise from Bangladesh in other countries. We have a team on the ground here in Nepal that lives by the company’s principles. However, we are bringing in more expertise to the Nepali marketplace to see what we can do in the social research sphere as a whole. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;<img alt="Justin Sargent " border="1" height="491" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/interviw_13.jpg" vspace="10" width="306" /></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Default">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal"><span style="color: rgb(34, 30, 31);">Could you please provide us some insight on the topline retail and consumer trends from the perspective of the Indian market?</span></b> <br />
	</span></p>
<p class="Pa8" style="text-indent:14.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">India has a huge population and big traditional trade. We have seen a lot of growth in that country, especially in the rural areas. Though modern trade is still small – only six per cent – compared to traditional trade, we have started observing changes in trends. It’s growing fast and more consumers are looking for convenience and choice. We have started to notice a lot of trading for more branded products. We notice a lot of use of technology including social media and smart phones. Consumers have grown a lot savvier and their expectations are increasing. This might be helpful in changing people’s perspectives, packaging perspectives and value perspectives. One thing which is very consistent in India is the value. We do service right around the world and India always comes top in terms of value consciousness. A lot of consumers increasingly shop around for promotion to make sure they can remain value conscious and still satisfy their increasing aspirations. <br style="mso-special-character:line-break" />
	</span></span></p>
<p class="Default">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Our clients’ business and even the Nielsen’s business both saw this high trend basically three to four years ago. GDP growth is a little lower this year, which is forecasted now at six percent. However, global manufactures and local Indian multinational companies alike, are pretty positive about the future.</span><br />
	<br />
	</span></p>
<p class="Default">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal"><span style="color: rgb(34, 30, 31);">Yours is a privately held company active in approximately 100 countries, with its headquarters in New York, USA. How big an advantage is this when you deal with global clients?</span></b> <br />
	</span></p>
<p class="Pa8" style="text-indent:14.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">When a global client is working with us, they may know Nielsen already. We assure the country manager of a global client locally that we will share our best practices with them and suggest that the service is worth exploiting. Our local teams are mostly in the field, visiting local clients to relate to them and understand their perspectives. Nielsen’s methodologies are globally consistent; however, we do tend to tailor them in order to meet specific needs of the marketplace. For example, when we spoke to our clients in Nepal, they expressed that they wanted us to represent certain regions and towns in more detail than we might have for others. We don’t have this service in other countries but developed it to match their demand of covering some of the towns in greater detail. We believe that the best global practice methodologies should be open for local customization. </span></span></p>
<p class="Pa8">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Listening to a client’s need is a critical process and an important element of our strategy because clients know best where they are going and with what strategy. They can naturally express their needs. Therefore, listening is a critical part of our job while delighting clients is our aspiration. However, different clients have different needs so we need to balance between occasions and between realities. We have to bring the realities from a commercial firm with the right product to the market. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Default">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal">&nbsp;</b></span></p>
<p class="Default">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal"><span style="color: rgb(34, 30, 31);">How do you explain the importance of Nielsen numbers?</span> <br />
	</b></span></p>
<p class="Pa8">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Nielsen numbers tell our clients what their market share is, how fast the market is growing, and where they are in the competition. We are proud of being an independent company. We focus on using the Nielsen’s number to guide the expertise’s planning. We invest a lot of time in quality management, ensuring that we have got the right field management practices and the right amulets to interpret those numbers because we know how much our clients rely on the Nielsen’s number. Before I joined Nielsen, I used to work at Procter &amp; Gamble as a category marketing analyst many years ago in the UK. Every week a Nielsen’s number used to come around and that is when I first realized how much weight these numbers carry. </span></span></p>
<p class="Pa24" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The way in which people used the number were for making investment decisions, judging their performances in the market or looking after factors like distribution, product prices and level of competition. We tend to advise companies a lot in terms of what the distribution strategies should be and the likely pricing strategy they should adopt. Nielsen’s number is the bed rock for a lot of the decisions being made in the marketplace. </span></span></p>
<p class="Pa24" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="Default">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal"><span style="color: rgb(34, 30, 31);">What are the major plans for Nielsen Nepal?</span></b> <br />
	</span></p>
<p class="Pa8" style="text-indent:14.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The main purpose of my visit to Nepal is spending time with the management team and deciding on the next steps to be taken for the development of business in this country. Nepali clients’ expectations are increasing, so we are looking into the areas where potential improvements can be made. One area that we are considering is whether or not to expand coverage of measurement products into rural areas. We have not decided whether it is the right measure to take. We are also looking at a particular social research base to elaborate more expertise and bring in some more technical capabilities into Nepal in order to improve the level of understanding. We are also looking forward to introduce other services that we also have in other countries, for example, analytics. This could be an advantage for Nepal because they know how to go to the next level, to expand the distribution and to improve their competitive businesses. We have a number of analytics with capabilities in consideration. We are looking forward to listening to our clients’ view point. We would certainly like to build more presence in Nepal because our clients are demanding it. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;<img alt="Justin Sargent " border="1" height="430" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/intreview_2012.jpg" vspace="10" width="231" /></span></p>
<p class="Default">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal"><span style="color: rgb(34, 30, 31);">You joined Nielsen way back in 1993 and have held senior positions across the globe since. How do you assess this association over the period of almost two decades now?</span></b> <br />
	</span></p>
<p class="Default">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">From a personal perspective, Nielsen has provided me with lots of opportunities. When I joined Nielsen, I didn’t think that I would still be here 20 years later. Fortunately for me, I was given increasingly challenging assignments throughout which has allowed me to travel across different continents like Europe, Australia and Asia. Currently, I am working in India. Working in different countries engaging with different people, thinking about and understanding the clients’ needs and facing business challenges, has been very stimulating indeed. Nielsen has come across a lot of transformation in 20 years’ time including its ownership.</span> <br />
	</span></p>
<p class="Pa8" style="text-indent:14.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Nielsen focuses on shifting developments and as I mentioned before, moving people around is a big part of our strategy. Moving people to the developing market is good for learning about what works for a developing market. We can then reverse, innovate and take the best of practices to the developing market. But it also means you can look elsewhere, may be in the US or Europe, that could be a relevant market like India or Nepal. Nielsen’s strategies on talent developments and moving people around the world are incredibly one of the great things that it wants to share with other companies. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Default">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal"><span style="color: rgb(34, 30, 31);">Could you please elaborate on why is transferring talents so important?</span></b> <br />
	</span></p>
<p class="Default">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The general principal of moving people around is either for different jobs within a country or across different countries. It provides people with different experiences, perspectives and learning opportunities that eventually lead to career building. It is equally important from a company’s perspective as transferring people is also about transferring ideas, embracing innovations and sharing the best skills within and beyond boundaries. A big part of Nielsen’s strategy is to be a company exporting talent around the globe. We are fortunately one of the beneficiaries of that as we get to carry out a number of different assignments in different countries.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Default">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal"><span style="color: rgb(34, 30, 31);">Could you highlight the integral components of a transparent communications culture?</span></b> <br />
	</span></p>
<p class="Pa8">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">This is something that I have always strongly believed in. You have to be very candid, honest and open to both your peers and clients. When you communicate very frankly, you recognize people better. It is a fundamental philosophy of mine to lead a very honest communication because it is the only way to build trust and loyalty in general. It’s about celebrating and recognizing people. The transparent communication culture is not limited among the colleagues, rather it also extends to our clients by being very open with them. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Default">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal"><span style="color: rgb(34, 30, 31);">What are your recommendations to organizations for building a ‘client first’ mindset?</span></b> <br />
	</span></p>
<p class="Default">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">‘Client First’ mindset is all about thoughtfulness. Instead of offering Nielsen’s products immediately, I first inquire about what my clients need and how we can satisfy them better. Once you build a ‘client first’ mindset it will eventually benefit your business strategies because then you are developing your products and services according to the clients’ needs. It improves your client’s service because your clients can relate to and make use of them. Besides, at the end of the day, it ensures that our services are up to the mark. ’Client First’ mindset is something that I have passionately believed in during my entire career. Even if we talk beyond Nielsen, the same philosophy rules the most successful companies. From a marketing stand point, it is necessary to listen to the customers. Since there are new technologies emerging, we should utilize them to listen to the customers’ voice. For example, the social network and blogs could be powerful tools. Even the CEOs of many companies have started going out on the streets to understand customers’ needs.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">Things are rapidly changing in countries like India and Nepal. If you are constantly in touch with people, you could know more about them particularly the way in which people adopt technology. You have to constantly engage with customers to understand what is important for your brand and how could you keep it desirable for them. Understanding technology and customers to flourish your brand is something that can certainly be achieved by building a ‘client first’ mindset.<br />
	<br style="mso-special-character:line-break" />
	<br style="mso-special-character:line-break" />
	</span></span></p>',
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<p class="MsoNormal">
	<span style="font-size:24px;"><span class="A66"><span myriad="" style="line-height: 115%;">‘Tunnel Project Is A Litmus Test For The Private Sector’<br />
	<br />
	</span></span></span></p>
<p class="MsoNormal">
	<span class="A66"><span myriad="" style="font-size:43.5pt;line-height:
115%;font-family:">&nbsp;<img alt="kushkmarjoshi" border="1" height="251" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/interview(8).jpg" vspace="10" width="303" /></span></span></p>
<p class="MsoNormal">
	<span mso-bidi-font-family:="" myriad="" style="font-size:14.0pt;mso-bidi-font-size:11.0pt;
line-height:115%;font-family:">Kush Kumar Joshi <br />
	Chairman <br />
	Nepal Purbadhar Bikash Company Ltd</span></p>
<p class="MsoNormal">
	<span mso-bidi-font-family:="" myriad="" style="font-size:14.0pt;mso-bidi-font-size:11.0pt;
line-height:115%;font-family:">&nbsp;</span></p>
<p class="Pa19">
	<span class="A67"><span style="font-size:13.0pt">Kush Kumar Joshi is the Chairman of Nepal Purbadhar Bikash Company Limited (NPBCL) that is to develop the Kathmandu-Kulekhani- Hetauda Tunnel (KKHT) Highway that would substantially reduce the Kathmandu-Hetauda driving distance. <br />
	<br />
	NPBCL will be constructing the 50-kilometre long four-lane highway that will have approximately two 5.5 kilometre long tunnels for oncoming and going traffic between Kathmandu and Hetauda. The company will construct and operate the tunnel road in public-private-people partnership (4P) modality under the Private Financing in Build and Operation of Infrastructure 2006 act. A leading industrialist of Nepal, Joshi is also the Immediate Past President of Federation of Nepalese Chambers of Commerce and Industry (FNCCI), and the Chairman of Liberty Energy, Himalayan Bamboo Pvt Ltd and Managing Director of Nepal Ekarat Engineering Co Pvt Ltd. <br />
	<br style="mso-special-character:line-break" />
	<br style="mso-special-character:line-break" />
	</span></span></p>
<p class="MsoNormal">
	<span class="A67"><span myriad="" style="font-size:13.0pt;line-height:
115%;font-family:">In an interview with Gaurav Aryal of New Business Age, Joshi talked about the tunnel project as well as the country</span></span><span class="A67"><span style="font-size:13.0pt;line-height:115%;font-family:">’</span></span><span class="A67"><span mso-bidi-font-family:="" myriad="" style="font-size:13.0pt;line-height:115%;font-family:">s overall investment environment. Excerpts:</span></span></p>
<p class="Pa10" style="text-indent:14.0pt">
	<span class="A67"><span myriad="" style="font-size:13.0pt;line-height:
115%;font-family:">&nbsp;</span></span><strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:"><br />
	<img alt="kush kumar joshi" border="1" height="251" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/interview_333.jpg" vspace="10" width="250" /><br />
	<br />
	For the first time in Nepal, the private sector is developing a major road project. As the leader of this project, how do you plan to execute it? <br />
	<br style="mso-special-character:line-break" />
	</span></strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">It is indeed the first time the government has entrusted a private company with such a big responsibility. It is an honour to share the weight of the government in enriching the lives of Nepali people. The concept of making shortest road from Hetauda to Kathmandu was conceptualised more than 50 years ago. Everyone knows this will be the shortest distance to link these two cities but due to socio-political reasons, the mechanism to construct the road was not finalised earlier. This time around, a new approach of 4P model - public, private and people participation - is taken to revive this initiative. People’s participation in a massive scale is the main strength of this approach. The local people presently have to take a longer route to travel to Kathmandu despite a possible shorter alternative there. This project would be a matter of dignity for every Nepali when it will be completed solely with Nepali resources, technology and management. That is a motivating factor for all of us. <br />
	<br />
	<br style="mso-special-character:line-break" />
	</span><strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">What is the progress towards the financial closure of the project? <br />
	<br />
	</span></strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">The government has granted us this project for 30 years as per the People, Private and Public Partnership (4P) Modality under Private Financing in Build and Operation of Infrastructures 2006 act. The cost of the project is estimated around US$ 350 million and that money is going to be raised from amongst ourselves. Once we complete the feasibility study by November 2012, we will have the concession agreement with the government on technical and financial issues as well as the toll fee. <br />
	<br />
	<br style="mso-special-character:line-break" />
	</span><strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">You have set a timeline of three-and-a-half-years for the completion of the project. As many projects are failing to meet their deadlines, what is the basis of your optimism to meet your deadline? <br />
	</span></strong><br />
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">The main possible hurdles in a project are fund collection, local disturbances and not getting a license. In our case, the government has already granted a license to us not only for DPR but also for execution of the project. The main strengths of this initiative are the local people. The local landowners are ready to contribute to this project by providing their land after a proper valuation. We are not buying the land; instead the value of the land will be treated as their equity investment in the project. Thus the main likely cause of local disturbance is not there. <br style="mso-special-character:line-break" />
	</span></p>
<p class="Pa10" style="text-indent:14.0pt">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">The other main issue is fund collection. So far, we have received a warm response to our initiative and people are more than willing to invest in such a project that not only has high rate of return but also contributes in developing the infrastructure of the country. This will be the first time Nepali people will be involved in such kind of project. Our people have always been depending on financial support from donor countries, banks or the government. But, this project will make massive mobilisation of people – business community, local people, NRN community and the Nepali workers abroad - for generating funds. Another key component is the Nepali construction companies who will not only be the contractors but also major investors in this mega project. There is plenty of liquidity in the capital and money market but there are not enough good projects for investment. So, this good project will have no problem of funds. And we are hopeful to complete the project within the set deadline. <br style="mso-special-character:line-break" />
	<br style="mso-special-character:line-break" />
	</span></p>
<p class="Pa10" style="text-indent:14.0pt">
	<strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">Disputes on land acquisition and paying compensation have proven major issues while developing such projects. What is the basis for your optimism that your arrangement will work this time? <br style="mso-special-character:line-break" />
	</span></strong><br />
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">The modality we have come up with for this project is very unique. As I said earlier, we are not trying to buy land – it is more or less like a barter system and a participatory approach. Before deciding the alignment and making the survey, we had a lot of interactions with the locals and received a commitment from them regarding the project. The most important aspect is that they positively want to see this road built. The local community is ready to invest 75 per cent of the actual valuation of their land to the project and hold 25 per cent with themselves. This is a great step towards making a change. The locals have not just said that they want the road built but they have actually played a significant role in making this initiative a success. And if an existing house is needed to demolish for the road, we are committed to build another house for the owner. This, I think, is beauty or the strength of this entire project.</span><strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:"><br />
	<br />
	<br />
	<img alt="kush kumar" border="1" height="264" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/inteview_11.jpg" vspace="10" width="317" /><br />
	<br />
	<br />
	The KKHT highway is considered a project of national pride and a model to invite foreign investment in infrastructure development. How will this project be able to live up to this expectation? <br />
	<br style="mso-special-character:line-break" />
	</span></strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">We have huge potentials in infrastructure. One can see the level of service we are providing to the people in energy, road, drinking water, medical facilities, the basic needs for the people where we need investment whether from domestic or the international investors. The deficit in infrastructure is such huge, domestic investment is simply not enough. But we need to build up the confidence level of investors by providing a guarantee through the policy, political commitment and, most importantly, from the domestic investment. If our project will thrive, it would be a benchmark for other investors to emulate. A successful project such as this will have foreign investors to get interested to work on other projects. This should be a milestone for all Nepalis. I hope that this will surely lure foreign investors to collaborate with local investors and develop the infrastructures in the country. <br />
	<br />
	<br style="mso-special-character:line-break" />
	</span><strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">You have said that the project will return the investment to its investors in six to eight years from the date of operation. Wouldn’t this proposition make the highway a costly road to travel for the general public? <br />
	<br style="mso-special-character:line-break" />
	</span></strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">It is going to be a win-win situation for passengers as well as vehicle owners as they will be saving both fuel and time. If a truck or a passenger bus is today making a single round trip a day between Hetauda and Kathmandu, the completion of this road will enable them to make several round trips a day. Instead of four hours, the distance from Kathmandu to Hetauda will be covered in 45 minutes once this road comes into operation. Quite naturally, the frequency of travel will be more and transport entrepreneurs can earn more money besides, of course, saving on fuel. The toll fee will be very low and I am sure the users of this road will find it economical and not just save time but also money. <br />
	<br />
	<br style="mso-special-character:line-break" />
	</span><strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">Do you think that investing in infrastructure will give enough yield to the private sector? What will be the model of investment in your company’s future projects? <br />
	<br style="mso-special-character:line-break" />
	</span></strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">First of all, the license granted to us is a historical one. We always talk about the government not giving priority to the private sector and not giving investment opportunity or packages for infrastructure development. This is the first time the government has given a priority project to the private sector. Now, it is our turn to prove that we can do it. If we can do it ourselves, the trust on the private sector will be heightened. This is a litmus test for the private sector to prove that we can do it. For future projects, we may use foreign investment as well as equity based or debt and equity based modality. We will be trying to bring in equity participation for future projects as much as possible. Once this project is completed, NPBCL will become the largest company in Nepal valued at US$ 315 million. A sustainable mechanism and a proven track record will then be part of the company’s resume. We will be hoping for huge projects coming our way and perhaps we could look at large scale storage hydropower projects too. This is going to be the biggest company in Nepal enjoying massive public participation. The ownership will be divided among many people and benefits shared by all. <br />
	<br style="mso-special-character:line-break" />
	<strong><br style="mso-special-character:line-break" />
	</strong></span></p>
<p class="Pa10">
	<strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">What are the other similar projects in the pipeline for NPBCL? <br />
	<br style="mso-special-character:line-break" />
	</span></strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">The other similar projects coming up include road extension plans from Hetauda to Narayanghat and Hetauda to Birgunj but that will be taken only after the current project completes a whole lap. The traffic from Kathmandu to Eastern and Western Nepal is huge. This project is now envisaged for westbound traffic and people from Far West will travel via this road. Once the proposed new road from Hetauda to Narayanghat is opened, the drive from Narayanghat to Kathmandu will take only one-and-a-half hours. All the traffic coming to Kathmandu via Mugling will be diverted to the newly built road.<br style="mso-special-character:line-break" />
	<strong><br style="mso-special-character:line-break" />
	</strong></span></p>
<p class="Default" style="margin-top:5.0pt;line-height:10.05pt">
	<strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">This project is to utilise Nepali resources only for its development. Is there a possibility of similar big projects with Nepali investment only?</span></strong><span mso-bidi-theme-font:="" new="" style="font-size:10.0pt;mso-bidi-font-family:" times=""> <br />
	</span></p>
<p class="Default" style="margin-top:5.0pt;line-height:10.05pt">
	<span mso-bidi-theme-font:="" new="" style="font-size:10.0pt;mso-bidi-font-family:" times="">Many other people are trying to emulate this particular project. For example, the NRN Association has a 100 million dollar fund and they are trying to develop 100 MW hydropower project on their own. Some other companies too are trying to build hydropower projects with Nepali investment only. There are two important bases for the development of a country, one is roads and the other is electricity. Therefore, our next project will focus on energy because there is a lack of storage-based project in hydropower currently. After the success of this project, we will work towards mega storage projects. <br />
	<br />
	<br />
	<img alt="kush kumar joshi" border="1" height="387" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/kushkumar.jpg" vspace="10" width="208" /><br />
	<br />
	</span></p>
<p class="Default" style="margin-top:5.0pt;line-height:10.05pt">
	<strong><span mso-bidi-theme-font:="" new="" style="font-size:10.0pt;mso-bidi-font-family:" times="">What is your opinion on allowing investment abroad from Nepal? </span></strong></p>
<p class="Default" style="margin-top:5.0pt;line-height:10.05pt">
	 </p>
<p class="Default">
	<strong><span mso-bidi-theme-font:="" new="" style="font-size:10.0pt;mso-bidi-font-family:" times="">&nbsp;</span></strong><span style="font-size:10.0pt;
color:#211D1E">We are observing Nepal Investment Year and trying to invite foreign investment to Nepal. Given this situation, what kind of message will the Nepali and foreign investors get if Nepali investment in other countries is made an option indeed? Having said so, even if we have an opportunity to invest in foreign countries, it must come with certain conditions. The criterion should be – one must be an expert in one’s own field, have good brand recognition at home and willing to expand. Expansion requires investment and in such case, one needs to have a chance to expand and to promote the products and technology in some other country. Ultimately, the benefit should come to one’s own country.</span></p>
<p class="Default">
	<span style="font-size:10.0pt;
color:#211D1E">For example, an airline must have its branch in other countries for marketing and promotions. In such a case, one has to invest in foreign countries. Similarly, if you have a good and well-known brand in Nepal and want to export but the cost of competition in other countries may make it not feasible to produce in Nepal and export. Then you should be allowed to produce your own brand in other countries. This will be similar to what multinational companies do. If you have your own brand image for product that is made in Nepal, it will benefit if you establish your factory abroad and promote your own product. But let’s focus on investing within Nepal first.</span></p>
<p class="Default">
	 </p>
<p class="Pa23" style="margin-top:5.0pt">
	<strong><span style="font-size:10.0pt;
color:#211D1E">How do you judge the efficiency of the current FNCCI leadership? </span></strong></p>
<p class="Pa23" style="margin-top:5.0pt">
	 </p>
<p class="Pa10" style="text-indent:14.0pt">
	&nbsp;<span style="font-size:10.0pt;
color:#211D1E">There are a lot of issues, which have scope to be tackled more efficiently by the FNCCI. It looks like they are focusing on the investment year but they must handle local issues first. Given the situation where the fate of the government hangs in the balance one needs to know how the policies are being driven and focus on pressing to bring the full annual budget of the government at the earliest. Similarly, the policies meant to attract foreign investment for the Nepal Investment Year must be established. Priorities on issues like areas of investment and backing up the investment are more important than to celebrate the investment year itself. The investment board has the law and bylaws to backup the investment package and the same will be applied for other investments also. There are a lot of things that FNCCI can do as an apex body of the business community. </span></p>
<p class="Default">
	 </p>
<p class="Pa23" style="margin-top:5.0pt">
	<strong><span style="font-size:10.0pt;
color:#211D1E">Are business prospects for Nepal improving? What are the bottlenecks?<br />
	</span></strong></p>
<p class="Default">
	<span style="font-size:10.0pt;color:#211D1E">Everybody knows about the prospects Nepal has. We talk about tourism, hydropower, infrastructure and others but the business community has to push the government to create a proper environment and identify the priority projects for investment. The ongoing political turmoil is not giving a good sign to the investors to come to Nepal and invest.</span></p>
<p class="Pa10">
	<span style="font-size:10.0pt;color:#211D1E">There are three issues – energy crisis, labour issues and unstable government policies. Energy is the prerequisite because without energy, nobody will come to invest here. Labour issues have also discouraged investors. These two things must be prioritised and cleared by the government and the investment board to encourage investment. We also need to have consistent policies. Changes in policies every time there is change in the government will not attract any investments in Nepal. We have been asking the government and the political parties to come up with a common minimum economic agenda. Establishing a common minimum economic agenda will give a positive signal to the investors. </span></p>
<p class="Default">
	 </p>
<p class="Pa23" style="margin-top:5.0pt">
	<strong><span style="font-size:10.0pt;
color:#211D1E">You have been demanding reforms in the public procurement system. Would you please explain it? </span></strong></p>
<p class="Pa23" style="margin-top:5.0pt">
	 </p>
<p class="Default">
	&nbsp;<span style="font-size:10.0pt;color:#211D1E">The government has to prioritise domestic product. Any company’s first area of business is the local market. Once they have a good position in the local market, they can improve their quality, productivity and be assured about their growth. Having delivered their basic service, they can then think about exporting.</span></p>
<p class="MsoNormal">
	<span style="font-size:10.0pt;line-height:115%;color:#211D1E">The government has to provide a level playing field for the domestic producers by buying their products, but at the same time it should be monitoring the price and quality as well. At this point of time the government has not been able to accomplish these objectives. The government always seeks cheap foreign products and does not care for the quality. Our argument is, local products do not need incentives instead they need to be promoted so that they can be competitive, qualitative and eventually become export oriented. The government has to give confidence to investors by prioritising the purchase of local products. That is why we are saying that the procurement act has to be revised by making it mandatory to buy local products.<br />
	<br />
	<br />
	<br />
	</span></p>',
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			'created' => '2012-10-11',
			'modified' => '2012-11-01',
			'keywords' => '',
			'description' => 'Kush Kumar Joshi is the Chairman of Nepal Purbadhar Bikash Company Limited (NPBCL) that is to develop the Kathmandu-Kulekhani- Hetauda Tunnel (KKHT) Highway that would substantially reduce the Kathmandu-Hetauda driving distance.',
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			'id' => '676',
			'article_category_id' => '46',
			'title' => 'Chandra Prasad Dhakal',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<span style="font-size: 14px;"><strong><br />
	</strong></span></p>
<p>
	<span style="font-size:14px;"><strong>The Three-way Merger Has Consolidated The Global IME Bank’</strong></span></p>
<p>
	<span style="font-size:14px;"><strong><br />
	<br />
	</strong></span></p>
<p>
	<strong><img alt="interview" border="1" height="371" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/interview(7).jpg" vspace="5" width="300" /><br />
	<br />
	Chandra Prasad Dhakal <br />
	Chairman <br />
	Global IME Bank <br />
	</strong><br />
	<br />
	Chandra Prasad Dhakal is the Chairman of Global IME Bank. He is also the President of International Money Express (IME). Born in a middle class family of Baglung district of Nepal, he has by now established himself as a leading entrepreneur of the country in a relatively short span of time. Dhakal is a member of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Executive Committee and the Co-ordinator at Investment Development Forum of FNCCI. He is also a member of the Nepal Investment Board constituted by the Government, besides being an honorary consul for Indonesia. He is currently looking forward to explore business expansion in association with Nepali as well as foreign companies. In an interview with New Business Age, Dhakal talked about recent three-way merger among Global Bank, IME Finance and Lord Buddha Finance creating the Global IME Bank and prescribed measures of bringing remittances through formal banking channels, among a host of other issues. Excerpts: <br />
	<br />
	<strong><br />
	While mergers in Nepali BFIs are usually between two companies, yours is a three-way merger. How did that become possible? <br />
	</strong><br />
	First, we were convinced with the fact that a merger between banks and financial institutions (BFIs) can certainly add value into the eventual entity as we have seen from the latest merger trend. A merger between two companies is normal but for the first time in the history of Nepali BFIs, Global Bank signed a merger agreement with two other financial institutions. At the beginning of the process, we had Global Bank and IME Financial Institution had signed a memorandum of understanding and later, the promoters of Lord Buddha Financial Institution submitted their merger proposal in a meeting with the Global Bank management. Thus, the successful completion of the process of all three companies led to the formation of Global IME Bank. The amalgamation of the three companies has made Global IME Bank stronger in terms of the capital assets, networking, product diversity and quality of customer services. As the promoters of all three institutions are from different sectors, it has created a synergy for us to explore new business sectors with possible expansion plans. The Global IME Group is strongly committed to provide its banking and other financial services to areas that are thus far deprived of formal financial services. <br />
	<br />
	<br />
	<strong>Where would the Global IME Bank like to focus after becoming such a stronger new entity after the merger? <br />
	</strong><br />
	The Global Bank already had a strong presence in the industry and that has been further fortified in terms of networking following the merger. Now Global IME Bank is the only private sector commercial bank with the most extensive network of 62 branch offices in 13 zones. We are resolute enough to extend financial services through our innovative products in both urban and rural areas. We would be utilizing our potential to explore new areas of investment covering almost every possible productive sectors of Nepal. Along with it, in the medium or long term, we aspire to establish at least one branch office in each district of Nepal. Retail banking is one of the top agendas in our priority list. <br />
	<br />
	<br />
	<strong>The bank has issued debentures worth Rs 400 million as part of a strategy to expand the capital base. Do you have any specific investment plan for that fund? <br />
	</strong><br />
	The paid up capital of Global IME Bank has augmented to Rs 2.18 billion after the merger of the three companies. And with the debentures issued worth Rs 400 million, our overall capital size has reached Rs 2.58 billion. The increased capital base will definitely support our business expansion plans in the future in national as well as international levels. We are planning to aggressively expand our businesses in the areas that other commercial banks in Nepal have not explored so far. <br />
	<br />
	For example, agriculture is a very important sector of our economy. However, the private sector investment in this sector including those of BFIs is very negligible so far. Unlike other commercial banks, we are taking a different approach to increase investment in the agriculture sector. Currently, most commercial banks are focusing on businesses of more organized sector and corporate clients as their main transaction base. Departing from this trend, Global IME Bank has plans to finance agriculture and related productive sectors for their development to the fullest potential. <br />
	<br />
	It is evident by now that the financial services to the agro sector from the state owned banks alone is not enough for developing the agriculture sector so long as it can contribute more to the national economy. By financing for the commercialization of the agriculture, Global IME Bank would also be supporting the government plans and policies to increase the contribution of the agricultural sector to country’s GDP. Besides this, we will soon start to work towards minimizing operational risk of the Bank by focusing more on retail banking. This means our main transaction base for both deposit and lending will be the common people, although we will not shy away from corporate and institutional banking.</p>
<p>
	<br />
	<strong>Benefits of the merger apart, grievances and disputes too come up in the process among promoters of different institutions as well as at the top-level management and employees. How did you handle the situation? <br />
	<br />
	</strong>After the merger, the number of staffs under the Global IME Group has increased for sure. Managing all the employees of the three companies that were in existence before the merger has been indeed a very challenging task for us. However, we have received support from all levels of employees including the Chief Executive Officers of all the three companies, the board of directors and other stakeholders of all three entities. Employees as well as our promoters are aware that after the introduction of comprehensive merger bylaws by the central bank, a class ‘A’ bank has successfully merged with two other class ‘C’ financial institutions for the first time in Nepal’s financial history. This, in fact, is a historical achievement for the entire system. Everyone involved in this process has put his/her priority second to the very goal of merger among these institutions. I am confident that there will be no grievances amongst our promoters and the employees in the future as well. <br />
	<br />
	<br />
	<strong>You also have a very strong presence in Nepal’s inbound remittance business. How is the remittance industry doing at present? <br />
	</strong><br />
	The current fiscal year has witnessed a 36 per cent growth in the inflow of remittances. It is comparatively higher than the growth rate of the previous years. The flow of remittance has grown substantially in recent years due to the increased number of Nepalis going abroad for employment. Likewise, the recent appreciation in the value of dollar is also responsible for growing figures on remittance income. It is sad but true that the existing political instability and constitutional vacuum will continue to create unemployment in the days to come. Hence, the trend of people going to foreign countries seeking employment opportunities is not likely to slow down in the immediate future. This will undoubtedly increase the amount of inbound remittance in the future as well. <br />
	<br />
	<br />
	<strong>It is often alleged that a large amount of workers’ remittances enter the country thorough illegal channels. What is your prescription to control it? <br />
	</strong><br />
	We can control the flow of remittance through informal channels only when we find the reasons behind it. We need to pinpoint the reasons which take people to choose nonbanking channels over the available legal ones. The obvious answer to it is the inability of Nepali financial institutions in providing banking channels to all the people willing to transfer their hard earned money to Nepal. In this regard, IME was the first Nepali financial institution to start its services to bring in remittances through a banking channel, 12 years ago. Prior to it, there was banking or legal channel available to send remittances from abroad and people entirely relied on the ‘hundi’ transactions. The trend of remittance coming in through informal channels has been reduced to a large extent after the establishment of IME. The objective of the Global IME Group is to create an easy mechanism for Nepalis living abroad to transfer their funds conveniently through the banking channels. <br />
	<br />
	But, I must mention here that we also have a fully functional system and products in place that address all the needs of fund transfer. For example, our foreign employment agencies need to pay a certain amount in foreign exchange to the companies in the Gulf countries or Malaysia that place orders to Nepali companies. But that is not possible legally and they are compelled to use ‘hundi’ for this purpose. If we can legally channel the agency commission, the illegal transfer will automatically reduce. Wherever a functional channel exists, there is possibility of both way movements of funds. <br />
	<br />
	The flow of remittance from India is also very nominal. About four million Nepalis are believed to be working in India and a very high majority of them use non-banking channels to transfer funds as they find it hasslesome and uneasy to remit through the banking channels. After the commencement of the Indo- Nepal remittance policy three months ago, the remittance flow from India is gradually increasing. Currently, IME has been networking with United Bank of India (UBI) which has around 1,600 branch offices across India. We do hope to reverse the trend of remitting through informal channels once we are able to make this networking with UBI branches throughout India fully functional. <br />
	<br />
	International Money Express (IME) has its reach in over 25 countries for bringing remittance to Nepal. It has strategic alliances with various exchange companies and commercial banks in Malaysia, the Middle East, Australia, UK and USA. IME Remit has also formed an alliance with companies like Money Gram International, Xpress Money, EZRemit and Instant Cash, for global access. I strongly believe that we can certainly combat the flow of remittance through informal channels in the long run if we can introduce appropriate bylaws and products to meet the needs of all stakeholders of the remittance business. <br />
	<br />
	<br />
	<strong>Both domestic and foreign investors are reluctant to invest in Nepal citing political instability. When do you think the situation will improve? <br />
	</strong><br />
	The political instability has definitely led towards a wait-andwatch situation for everybody, mainly the potential large investors. In spite of it, we should all move ahead with a positive attitude as business is also about taking risks and succeeding in it. Therefore, I think that companies investing during the crisis period can gain in the long term and make profits at a later stage. We are losing enormous opportunities due to the difficult circumstances that we currently face at home. I am sure there will be no looking back once the political issues are sorted out. I hope that it happens sooner than later and Nepal becomes one of the best destinations for investment. <br />
	<br />
	<br />
	<strong>The central bank has recently announced new Monetary Policy for FY 2012/13. Has it addressed issues raised by the banking community? <br />
	</strong><br />
	This Monetary Policy does not seem to have addressed remittance much. However, it has encouraged opening of bank branches and contact offices in countries like India and South Korea which are major remittance originating destinations. It is a positive step towards directing inflow of remittance through legal channels. Another important development is that the Nepalis can now exchange 2,500 dollars every time they go abroad. Earlier, when an individual or an organization submitted the required documents to banks and financial institutions, they could exchange up to 6,000 dollars maximum. This amount has now been increased up to 10,000 dollars. Similarly, the traders could earlier make a maximum payment of 25,000 dollars through Draft/TT while importing goods from countries apart from India. That has now been increased to 30,000 dollars. All these measures are the positive aspects of this policy. <br />
	<br />
	<br />
	<strong>How are different companies in the IME Group fold doing? What are your diversification plans? <br />
	</strong><br />
	From the perspective of a consolidated corporate group, we are involved in Automotives, Energy, Pharmaceuticals, Technology, Trading and Travel &amp; Tours besides Banking &amp; Finance and Remittance. IME Group has its presence in energy sector through Himalayan Power Partner Pvt Ltd, Mountain Energy Nepal Pvt Ltd and IME Oxygen Pvt Ltd. It is also one of the established players in the trading sector of Nepal. IME Group’s trading subsidiary – C M Trading – has been successful in penetrating major European markets with the exports of its Pashmina products for the last oneand- a-half decade now. <br />
	<br />
	The group has also been overseeing real estate and property lending through its trading subsidiary. IME Group has a presence in the tourism sector too, since 1995. It has Across Travels &amp; Tours Pvt Ltd, one of the leading travel agents accredited by IATA that has successfully carved a niche in the tourism industry. As far as the group’s financial services are concerned, there has been a massive transformation in the size of the Global IME Bank after the merger. Its paid-up capital has jumped to Rs 2.18 billion. <br />
	<br />
	It has debentures portfolio of Rs 400 million and lending is at the range of Rs 20 billion against the deposits of Rs 26 billion. The financial structure of the company has thus grown and opened new avenues for investment. In terms of networking, we are the largest amongst the private sector commercial banks. We have a total of 56 ATM counters, 70,000 shareholders, 650 employees, and 255,000 depositors. Currently, we are concentrating to expand our banking facilities in each district of the country and also set our focus on branchless banking. <br />
	<br />
	<br />
	<strong>You are planning to tie up with a foreign joint venture in several other sectors beyond banking and remittance services. Can you please share the developments? <br />
	</strong><br />
	To begin with, we first need to have a strong networking in order to tie up with foreign joint ventures. Our merger has reinforced the networking mechanism we had and it will certainly help us expand our business with the foreign companies in the days ahead. With the increased financial structures and widened networking, we look forward to collaborate with foreign companies in the near future. The process of Global IME Bank’s tie up with a possible foreign joint venture is in the pipeline right now. <br />
	<br />
	<br />
	<strong>You are also involved in the automobile business. How has been your auto venture doing? <br />
	</strong><br />
	We made a foray into this evergrowing sector in 2009 representing some of the renowned international automotive manufacturers as an authorized 3S distributor. Currently, our products from Asian Motor Works (AMW) – an Indian automobile company which produces trucks and trippers – is doing quite good. We have been associated with the company as it manufactures quality automobile products. Initially, the business did not go as well as we had anticipated because the crusher industries were on the verge of shutting down. Therefore, the trucks and trippers were difficult to be sold. However, in view of the improved situation, the products of AMW are gradually finding feet in the Nepali market. <br />
	<br />
	<br />
	<strong>You were planning to develop a fun park. What has been the progress so far? <br />
	</strong><br />
	We have reached almost to the final phase of planning to develop the said fun park which will be set up in the Chandragiri hills in the south west of Kathmandu. As part of our plan, we are working towards setting up a cable car route from Thankot in Kathmandu to the Chandragiri summit. We are consulting with various developers as well as considering different theme parks to make our fun park a complete recreation destination. Given the busy city life of Kathmandu, there is no place for the inhabitants of the capital to spend some quality time with their family and friends. Although, we are working on a new concept, we want to explore new areas of business as part of our expansion plans. We intend to start our project at the soonest possible and develop an affordable fun park for all. <br />
	<br />
	<br />
	 </p>',
			'published' => true,
			'created' => '2012-08-16',
			'modified' => '2012-10-10',
			'keywords' => '',
			'description' => 'Chandra Prasad Dhakal is the Chairman of Global IME Bank. He is also the President of International Money Express (IME). Born in a middle class family of Baglung district of Nepal, he has by now established himself as a leading entrepreneur of the country in a relatively short span of time. Dhakal is a member of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Executive Committee and the Co-ordinator at Investment Development Forum of FNCCI',
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			'id' => '649',
			'article_category_id' => '46',
			'title' => 'Salman Lafit Rawn',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<span style="font-size: 14px;"><strong><br />
	</strong></span></p>
<p>
	<span style="font-size:14px;"><strong>We Have To Work According To Consumer Psychology’</strong></span></p>
<p>
	<span style="font-size:14px;"><strong><br />
	<br />
	<br />
	</strong></span></p>
<p>
	<img alt="rawn" border="1" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/rawn-interview(1).jpg" style="width: 230px; height: 350px;" vspace="5" /><br />
	<br />
	<strong>Salman Latif Rawn <br />
	Country Manager, Nepal <br />
	Coca-Cola Sabco <br />
	</strong><br />
	<br />
	<br />
	Salman Lafit Rawn is the country manager of Coca-Cola franchise in Nepal since January 2012. Prior to joining Coca - Cola, he had worked in the capacity of the General Manager at Pepsi Cola franchise Iran. He has also worked as the Country Manager at Alokozay Group of Companies in Dubai – UAE . From 2005 to 2007 he was with coca-cola company managing its franchise in Afganistan in the capacity of Country General Manager. An MBA Graduate from the institute of Business Administration in Lahore, Rawn has more than 25 years of extensive and successful experience in the Fast Moving Consumer Goods (FMCG) industry. In an Interview with New Business Age Rawn shared the expansion and investment plans of his company for Nepal and also shed light on the existing challenges. Excerpts: <br />
	<br />
	<strong><br />
	We have heard about the massive expansion plan of Coca-Cola in Nepal. Would you like to shed light on it? <br />
	<br />
	</strong><br />
	The Coca-Cola Group has been working on the expansion of the available categories of its beverage. Right now, we are only doing the Returnable Glass (RGB) and PET business categories. We are investing 23 million USD in a new plant in Terai this year which will be the group’s largest single-time investment in Nepal so far. Internationally, we have many areas where we work in, for example, juice, water and energy drinks. Taking into account the uniqueness and demand of this market, we are planning to introduce some of those products here in the coming years. <br />
	<br />
	<br />
	It’s tough bringing investment in Nepal or convincing people for funding, especially when the political and business environment is not very constructive. However, we have managed to bring investment this time and we are hopeful that if we could use it well, we could bring in more money for this country. <br />
	<br />
	<strong><br />
	What can be the positive outlook for this investment? <br />
	</strong><br />
	<br />
	If we are making profit from this country, we also have to return something to it. There will be new expansions in terms of investing in the plant and machines and it will create new employment opportunities for people. Besides, we will be contributing more to the government exchequer. Nepal is a landlocked country where we need to import most of the raw materials which means that more money will go to the government coffer in the form of Customs Duty or Value Added Tax (VAT) <br />
	<br />
	<strong><br />
	I believe that Coca-Cola has not introduced a wide range of products that are available in many other countries. What are you doing in this regard? <br />
	</strong><br />
	<br />
	Coca-Cola has a wide range of products. Unfortunately, the size of the market is too small to produce all of those products in Nepal. Putting up a manufacturing facility for everything produced by the group will be highly capital intensive. However, we are trying to bring machines which can produce multiple products. Another constraint for this is the per capita income of the Nepali people which is very low. An ordinary Nepali citizen would not spend much on beverages. We are more dependent on tourists and their consumption trend. But this does not mean that we will not introduce any new products in Nepal; we will first import a new product range in Nepal from our plants in the neighbouring country. If we see demand for those products in the market, we will then accordingly set up the manufacturing plant here. We can introduce juice, water and energy drinks and add more flavours to the existing products in the future. <br />
	<br />
	<br />
	<strong>Though the per capita income of the Nepalis is still low, the distribution system for products like beverages has expanded in Nepal in recent years due massive expansion in road network. Has not this development in infrastructure helped in increasing the business prospects? <br />
	</strong><br />
	<br />
	These aspects are not enough because we have to work according to consumer psychology. It has been discovered through our consumer researches and direct discussion with the consumers that people living in European countries and Western territories don’t limit their beverage consumption only to events or family gatherings. It is part of their regular life as well whereas in Nepal, there is still a trend to consume beverage during particular events and festivals or in the presence of guests. The per capita soft drink consumption of the Nepalis is less than eight bottles a year in comparison to other South Asian countries where it is anywhere from 24 to 48 bottles a year. It will certainly be safe for us to introduce new range of products as and when Coca-Cola becomes a part of the Nepali people’s everyday lives. <br />
	<br />
	<br />
	<strong>Coca Cola enjoyed 70-80 percent of market share in Nepal till a few years ago. That figure is now reduced to 66 per cent due to aggressive marketing from the competitor. What are you doing to regain the lost market share? <br />
	</strong><br />
	<br />
	I have worked in markets where we had as much as 92 per cent market share. But these percentages are not attainable when there are two competitive companies operating in the same market. The reality is that when two companies are working competitively, market shares settle down somewhere between 60 and 40. I have worked both with Pepsi and Coke and I know where the market share of Coke is higher than Pepsi or vice-versa and what are the reasons behind it. Our objective behind expansion and investment is to have greater market share and product availability during the peak season. If my production capacity does not allow me to reach everyone during the peak season when they want to consume my product, people will not consume my products in the future. It’s because that opportunity will be grabbed by someone else. So we are trying to regain that lost opportunity which someone else has grabbed. And the moment we have that, the lost market share will automatically come back to us. <br />
	<br />
	<br />
	<strong>What are Coca-Cola’s marketing strategies in Nepal that has helped the brand to maintain its market leader position? <br />
	<br />
	</strong><br />
	Multinational companies implement different marketing strategies at different locations. Despite having a vast range of products in their portfolio, they do consider various aspects for example, which market to go, when to go, what amount of market maturity to seek etc before launching their products. You might find some products in Nepal that are imported in the quantity of thousands or hundreds. However, when it comes to manufacture those products here, it is imperative to justify the required investment. It is the same with us so we are waiting for the right time to introduce additional products. <br />
	<br />
	<br />
	<strong>Bottlers Nepal – the Nepali bottler of Coke – had won the Country of the Year Award in 2010. When next can we expect a similar feat from Coca- Cola’s Nepal operation? <br />
	</strong><br />
	<br />
	We bagged the ‘Country of the Year Award’ continuously for two years in 2009 and 2010. There are nine countries in the group now and all of them compete for this award. Surely, there are countries that have advanced technologies such as South Africa. There is Sri Lanka, Uganda, Ethiopia and we are competing with all of them. But even this year, we won two awards— Employee Engagement Award and Best Water Usage Award. We are competing again and hope to get the Country of the Year Award in the coming years. <br />
	<br />
	<br />
	<strong>How has the ongoing financial crisis affected the soft drinks market in Nepal? <br />
	<br />
	</strong><br />
	We, or for that matter, any other FMCG companies have been seriously affected on two counts. First, with all those days of closures, the production has been disturbed. Second, the distribution of the product has become very difficult. Continuous bandhs have affected our transportation system adversely and a weak transportation mechanism impacts our production system as well. We produce less when there isn’t enough transportation facility available. When we produce less, the cost per case goes high and it affects us as producers as well as the consumers. <br />
	<br />
	<br />
	<strong>What kind of challenges do you see in your job in the Nepali market? <br />
	<br />
	</strong><br />
	Electricity is a very big challenge because we are in a business where products are best served when they are chilled. We have distributed refrigerators to the outlets in the market but they cannot sell chilled drinks due to power outage. Another challenge is gasoline or diesel prices which increase every couple of months or so. At the same time, we can’t increase the price of our products to adjust accordingly. The frequent hike in petroleum prices also makes it difficult for us to decide on our annual budget. The third biggest challenge is the dollar rate fluctuation which has been impacting us heavily as we have to import 90 per cent of the raw material that we use. <br />
	<br />
	<br />
	<strong>Is that the reason for you to reduce your advertising budget? <br />
	<br />
	</strong><br />
	We have not reduced our advertising budget as such. We have rather changed the focus of our advertising campaigns. For example, if there is lesser electricity, the people will be watching television for a lesser duration of time. So we thought of diverting our investment from electronic mediums to advertising through hoarding boards that are more visible and do not get impacted by power outage. You can see increased number of such hoarding boards in the Kathmandu Valley when you move around. There is hardly any main road where Coca-Cola is not present so it’s just a shift of focus. <br />
	<br />
	<br />
	<strong>How do you view the present competition in Nepal’s soft drink market? <br />
	</strong><br />
	<br />
	There are two major categories in the Carbonated Soft Drink (CSD) industry —water and flavoured drinks. There is no ‘A’ Class player in water so far in Nepal which is dominated by a few local brands available in the market. However, there is a competition between two players in the flavoured drinks category. Our competitor is trying to build a market for itself and so are we. But the good thing is that our share of the market pie becomes bigger with the growth in the market size. I could see that as an industry, we are less dependent on trying to eat each other’s pie. Instead, we are trying to increase the total size of the market. The fight between the two companies was stringent in the past but it is not the same anymore because a person working for Coca-Cola today can work for Pepsi tomorrow and vice-versa. At present, the fight is more indirect for example; it is for the space in the outlets. The general size of our grocery shops is small so it’s not just the soft drinks producers but the entire FMCG industry that is jostling for space in the outlets. <br />
	<br />
	<br />
	<strong>It is said that one of the major problems in the Nepali market is that of arrears in collection of dues from the distributors. How is your experience? <br />
	<br />
	</strong><br />
	We don’t have such issues. I have also talked with other FMCG companies and even they are not operating on credits. However, I don’t say that we don’t have any arrears at all. There are credits in the market but these are secure credits. Our distributors are working with us for a reasonable period of time so there is a certain level of credibility in our relations. If we realise that a distributor or distributing channel might land us in troubled waters, we prefer not to extend any unsecured business with them. <br />
	<br />
	<br />
	<strong>Bottlers Nepal has increased its spending on CSR activities in recent years. Can you tell us about the new CSR activities that are being planned? <br />
	<br />
	</strong><br />
	I could see a huge chunk of activities this year coming under our CSR initiatives apart from our regular activities. We have been working on water utilisation, plantation and education and we have also been sponsoring certain orphanages. Our new project is to extend support to women entrepreneurs so we have adopted a vision “5 BY 20” which is a commitment to empower 5 million women to turn successful entrepreneurs by the 2020. Nepal has also been selected for the project from the South-West Asia Region. A senior person representing the Director level of the India Division of the Coca- Cola Company will be visiting Nepal next week to explore the details of the campaign. The Senior Vice President of the division will accompany him and together they will be setting different criteria. The criteria will entail aspects like who can qualify, what can be the measures to qualify and what will be an appropriate form of support for women entrepreneurs etc. Another project which we are going to introduce is ‘Support My School’. It is about kids who run away from schools, are not interested in study and do not have access to studies. This big campaign will be looking at ways to help them through uniforms, books, building libraries and classrooms etc. <br />
	<br />
	<br />
	<strong>As a global operator, what are the challenges you face in a country like Nepal? <br />
	<br />
	</strong><br />
	Nepal is among the very few countries in the world which are landlocked. It does not have much of its own revenue generation. To analyse how much people can buy from us and what things they will be interested in, we will have to watch their source of revenue. Like I said earlier, the smaller base of the country, lack of electricity and diesel, and dollar rate fluctuation are the major challenges in bringing big investment to this country. Another problem is that of finding the right people to work because the Nepali industry is small. Had there been multiple industries, there would have been a bigger pool of human resource to choose from. <br />
	<br />
	<br />
	<strong>What kind of government support are you looking for? <br />
	</strong><br />
	<br />
	The government should see the quantum of direct or indirect taxes and exchequers that we are paying. If it increases the excise duty or other duties at a very abnormal rate to industries like us, bringing investment to this country and creating opportunities for employment will be difficult. We are trying to expand our business so we need facilitation in technology and computerisation from the government. We will not be able to bring investment to this country if we have to wait years-on-end for approval on bringing software and technology. At present, we are trying to bring in a software called SAP and it’s already been a year since we applied to the Inland Revenue Department for the approval. Our application is simply gathering dust there. SAP will enable our headquarters to evaluate our work and access our records through our central server. It is easier to operate when this system is installed and therefore, we have been requesting the government to approve our application. We are not the first company in Nepal to use this software as there are some other companies that are already using the same technology. We have explained this to the government authorities but they told us to wait for the permission. We have met the concerned officials and satisfied all their queries but there is no progress so far. How can we bring more technology and investment in this country if the government does not facilitate manufacturing industry with the required technologies? It is our sincere request to the government to do the needful and approve our application on the SAP software. <br />
	<br />
	<br />
	 </p>',
			'published' => true,
			'created' => '2012-08-10',
			'modified' => '2012-09-16',
			'keywords' => '',
			'description' => 'Salman Lafit Rawn is the country manager of Coca-Cola franchise in Nepal since January 2012. Prior to joining Coca - Cola, he had worked in the capacity of the General Manager at Pepsi Cola franchise Iran. He has also worked as the Country Manager at Alokozay Group of Companies in Dubai – UAE',
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		'Article' => array(
			'id' => '586',
			'article_category_id' => '46',
			'title' => 'Anant SIyer',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<strong><br />
	</strong></p>
<p>
	<span style="font-size:14px;"><strong>We Will Continue Providing Brand Delight To Nepali Consumers<br />
	</strong></span></p>
<p>
	 </p>
<p>
	Anant SIyer is the Chief Operating Officer, RPC – East &amp; Nepal at United Spirits Limited (USL), the world’s third largest spirits maker by volume. He has over 27 years of experience in the industry and has earlier handled several key positions since joining the UB group in June 1992. In his current position, he will be responsible for USL’s operations in Eastern India and Nepal. He says, “We would like to participate in the growth that the government envisions for this country and be a part of the evolving Nepal<br />
	growth story.”</p>
<p>
	 </p>
<p>
	<strong><img align="right" alt="interview" border="5" height="193" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/interview2.jpg" vspace="5" width="150" />You, along with your seniors, had created USL's strategy for Nepal close to a decade-and-a-half ago. What is the purpose of your visit to Nepal this time around?</strong></p>
<p>
	It is to get myself reintroduced to our trade partners in the city as well as throughout the country as I have just taken over as the Chief Operating Officer for Nepal apart from my responsibilities in the eastern part of India. The second reason of my being here is that Gautam Mullick, our Country Manager here, is retiring after 14 long years of being in Nepal. You can call his being here as a circle of life because my seniors and I had made the original strategy for Nepal on behalf of UB Group and Nepal Liquors close to 15 years ago. At that point of time, we had selected him to be posted here.</p>
<p>
	From very small beginnings, we have now reached a position of strength. In earlier days, the market was small and so was the industry and globalisation was just coming into the subcontinent. With the kind of boom that has happened over the years, drinking of good spirits has also gone up. The Nepali consumer has been exposed to good blend and excellent tamper proof packaging like guala caps etc over a period of time. We have done very well and haven't looked back over the last oneand- a-half decade.</p>
<p>
	<strong>Do you think, USL with its 15 years presence in Nepal, have accomplished the objectives it had set out to achieve?</strong></p>
<p>
	Objectives in an organisation are set on an annual basis. It all dovetails into the vision we have for the organisation in Nepal. A vision is a long term goal that determines strategy which in turn sets objectives. Our objectives are ever evolving and ever growing so we cannot say that our objectives have been met. Our vision is to continue to grow in Nepal with the industry growth, remain market leaders and continue to provide full product and brand delight to the Nepali consumers.</p>
<p>
	The consumers experience for our brands has to be superlative and truly international so that the Nepali consumer knows he is getting the same kind of quality and product experience which he will receive anywhere else when he travels. It is an integral part of our organisational DNA that we keep on growing therefore, our objectives are not static and they change in accordance with the changing environment. The annual objectives always become better and more challenging but they all telescope into our overall vision for Nepal. We want to continue as the leading spirits marketer in the country and ensure that we give quality and delightful consumer experience. <strong><br />
	</strong></p>
<p>
	<strong>How do you assess USL's performance in India and other emerging markets?</strong></p>
<p>
	If you look at how we have performed in India, you will find that we are very clear about growing. We have close to two-thirds of the market share in India. We are now going to look at emerging markets and do have a huge strategy for markets in South Asia, Africa etc. We intend to grow by providing the consumers with good quality brands which provide delight to the consumers. We do a lot in terms of distribution and schemes to ensure reach and make our products available for every single pocket.</p>
<p>
	<strong>What is your reading of the Nepali market at this point of time?</strong></p>
<p>
	There is a growing middle class coming up in Nepal for so many years now which is very encouraging. When the economy grows, it helps people feel good and they want to enjoy themselves. We believe that socially responsible alcohol consumption is good in its own way, however, people should be aware. They must follow the laws of the land and thatâ€™s what we endeavour. We have a wonderful team of distributors located all over Nepal and they have been with us for many years. We continue to seek their help in ensuring that our products reach our consumers in the pack sizes of their preference which fits their pockets. We are the first company in Nepal to come up with 90 ml, 60 ml, guala caps etc which speaks volume of the fact that we keep on evolving.<strong><br />
	</strong></p>
<p>
	<strong>UB Group's most visible brand Kingfi sher Beer is not available in Nepal</strong>.<strong>What could be the possible reasons behind this glaring exclusion?</strong></p>
<p>
	Kingfisher Beer is actually managed by our sister organisation United Breweries and as far as I know, they had a presence in Nepal at a point of time. However, I am not aware of the latest developments in terms of its strategy for Nepal. Kingfisher is a wonderful and truly international brand and one of the real successes of this subcontinent. You will find it in many countries such as the US, Canada, England, France, Italy, Singapore, Hong Kong, Thailand etc. Kingfisher Beer is available either in restaurants that is on-trade or as off-trade. On my part, I can certainly communicate with my colleagues in the Breweries Division about the huge latent demand for the brand here. I am sure that they would want to look at this possibility again.</p>
<p>
	<strong>How have you fared on your liquor brands in this country?</strong></p>
<p>
	Luckily for us, most of our brands have succeeded pretty vigorously. Our success has been in premium whisky segment like Antiquity and Signature both being brand leaders. McDowellâ's No 1 and McDowell's Platinum have also done well while Blue Ribbon Gin is the sole leader in its category. We have received a setback in the Vodka segment but it's only a matter of time before we bounce back. Even though we are a small player in the Rum category, we have done well for ourselves and we will intend growing as there is definitely a market for Rum here.</p>
<p>
	<strong>Tell us a little about the competition you face from some other renowned brands available in Nepal.</strong></p>
<p>
	Competition has come and some of the competitor brands have been doing well but that's how business is. We don't fear the competition because as an organisation, we evolve with the consumers and step ahead. If you remember, when we launched Signature Whisky, it was Nepalâ€™s best whisky produced at that time. Today, we are right there with our successful brands Antiquity Red and Antiquity Blue. Our Antiquity Blue is as good as any value scotch available in the market and can take them head on. I believe that competition is always healthy, it keeps us on our toes and we respect our competition.</p>
<p>
	The reason for the success of our group is that we are a very humble and straight shooting organisation. We don't allow our domination of any category or market to ever get into our head and don't browbeat or pressurise. Instead, we believe in growing with the market and ensure that our partners in progress the trade partners, retailers etc are conducting their businesses successfully. We keep all our stakeholders internal as well as external happy. In a market scenario, ups and downs always happen and market positions keep changing. Competition has grown over the years just as we did but if you look at the size, we have close to two-thirds of the market share in Nepal. Our objective is that we not only reach two-thirds in terms of volume but also in terms of earnings. In this endeavour, we have ensured that in the premium segment, we have a huge share of the market.</p>
<p>
	As for the prestige segment, it's only a matter of time that we regain the market share which we have lost over the last five years or so. I welcome competition as it does not allow complacency to set in. We would all like to be one step ahead of competition by ensuring product improvement and everything else that we do in the market.</p>
<p>
	<strong>You just mentioned that you would like to reach two-thirds in terms of earnings too. How do you go about achieving that?</strong></p>
<p>
	That is certainly our endeavour but it is not to fufill through the two-thirds market share that we enjoy. We improve our bottom line by ensuring that the products we sell are more premium category which we have succeeded in and will continue to succeed at. We do efficiencies in manufacturing and selling so there are ways and means to ensure that our bottom line gets affected. I am not even suggesting remotely by any means that one side should curb it so that the other side should get it. The intent is that if the consumer gets a product at the right price, the market grows and so does the revenue.</p>
<p>
	<strong>Now that you will be looking after Nepal operations for some time to come, what would be your expectations from the government here?</strong></p>
<p>
	We only hope that the government helps the industries such that it can help the revenue. As you know, the government also gets its last share of revenue from excise and taxes but year-on-year, rising taxes substantially will eventually lead to killing the golden goose. Every government around the world is cash strapped and we understand that Nepal is no exception but our prayer to the government is not to tax indiscriminately. Because the higher you tax, it gives the unscrupulous elements the opportunity to make spurious products. Given the arbitrage of the substantial tax amount, these elements enter into the market. They may not sell their products in the cities where there is better policing and supervision but they definitely sell them in the rural areas where people are neither very literate nor do they have the choice. Normally, these products are sold very cheap but they have unnecessary side effects. It also allows illegal activities to happen and as a result, there is an increase in corruption.</p>
<p>
	A spurious manufacturer takes advantage of this arbitrage and makes a lot of money. In the bargain, everybody loses right from the consumer to the government and us too as an industry. We understand that by all means, there is a proportion which needs to go to the government but it should be reasonable. At the end of the day, the government is also here to work for the welfare of its citizens so it needs money. But as businesses, we cannot keep on hiking prices because it will go over a certain tide. If the inflation is 10 per cent and the prices go up by 20 per cent, people are still not going to stop drinking. But one has to take a very long term view on this rather than a short term fix.</p>
<p>
	As I said a short while ago, the revenue grows when the market grows otherwise the revenue regresses. As prices increase, consumers tend to drink lower category drinks instead of premium ones. Since the excise duty is less in lower categories, the government tends to earn lower per case or bottle than in the higher categories. Hence, the government's revenue regresses eventually. I would also like to add that in this country, VAT is a pure form VAT which is good.</p>
<p>
	When you charge tax on small items of daily use such as biscuits, soaps, toothpastes etc, the tax is small so people don't mind paying. But when the tax amount is higher, people don't like paying which is human tendency anywhere in the world. Our suggestion is: please charge your tax but don't charge multiple times. The sales tax people can collect taxes from say, 100 distributors, instead of collecting them from 47,000 retailers that we have spread across Nepal. It will enable the government collect taxes easier and cleaner and ultimately, it's the same amount.</p>
<p>
	<strong>Being an Indian conglomerate, could you single out the most challenging aspect of doing business in Nepal?</strong></p>
<p>
	First and foremost, we are very multinational in our nature now as we are present in many countries. I would say that our roots are sub continental instead of only being Indian. When this group was born many years ago through acquisitions followed by start up ventures, we had our presence in many markets. For example, we had a small business in Nepal going on that we reactivated 15 years ago. The fruits of that success and strategy are now here after dealing in Nepal over a period of time. There have been lots of challenges but we have weathered them. We have learnt to cope up and adapt to the market and that's a great asset of being from the sub continent. I don't think we are very different from each other in the way we look at life, for example, our beliefs in god, family and value system etc. We follow a similar culture even though we may speak different languages we have so many languages in India too. It is easier to adapt much faster being from the sub continent. We have always maintained healthy relationships with all our stakeholders in Nepal the authorities, trade partners, key opinion leading consumers, associations etc.<strong><br />
	</strong></p>
<p>
	<strong>Do you see yourself making greater inroads into this market? How do you plan to treat this country as a market in the future?</strong></p>
<p>
	We are planning to launch many more brands in the premium range in Nepal since it is a very critical market for us. You must be aware that we also have our own distillery in Biratnagar and we are investing in it on a continued basis. It is important for us to ensure that we continue to remain leaders and grow with the market. We will continue to treat the market in Nepal with respect as we have always done. The market has tremendous potential as always and lot of growth opportunities are available. We will continue to ensure that we invest in brands in this country and that our consumers are happy and satisfied with our brands. In this way, all stakeholders consumers, trade, authorities and the company will remain aligned and satisfied which is very critical for us. We would like to participate in the growth that the government envisions for this country and be a part of the evolving Nepal growth story.&nbsp; <br />
	<br />
	 </p>',
			'published' => true,
			'created' => '2012-02-22',
			'modified' => '2012-11-01',
			'keywords' => '',
			'description' => 'It is to get myself reintroduced to our trade partners in the city as well as throughout the country as I have just taken over as the Chief Operating Officer for Nepal apart from my responsibilities in the eastern part of India',
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			'title' => 'Sunil Kaushal',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<span style="font-size: 14px;"><strong><br />
	</strong></span></p>
<p>
	<span style="font-size:14px;"><strong>We Are Focused On The Basics Of Banking<br />
	</strong></span></p>
<p>
	 </p>
<p>
	<strong><br />
	</strong></p>
<p>
	<strong><img alt="" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/interview(5).jpg" /><br />
	</strong></p>
<p>
	<strong><br />
	</strong></p>
<p>
	<strong>Sunil Kaushal</strong> is the newly appointed Chairman of Standard Chartered Bank Nepal Limited. Kaushal is likely to assume a senior role in the South Asia region, the announcement of which is likely to happen soon. He is currently the President and CEO of Standard Chartered Bank (Taiwan) Limited. He has over 23 years of banking experience and held several senior roles with the bank across different markets including Global Head SME Banking and New Ventures in Singapore. Prior to joining Standard Chartered Bank, he had also worked for Bank of America and HDFC Bank. In an interview with Pinaki Roy of New Business Age, Kaushal shared his views on the global banking scenario and Standard Chartered Bank's presence in the key world markets. Excerpts: <br />
	<br />
	<br />
	<strong>You have been appointed the new Chairman of Standard Chartered Bank in Nepal. What kind of vision do you have in mind for Standard Chartered Bank's operations here in Nepal? <br />
	</strong><br />
	<br />
	First of all, I think you would appreciate that we have created a very solid platform in the last 25 years in Nepal. At our AGM held recently, we declared a solid set of results given the tough market environment that prevails. The vision is to build on a strong platform that we have got here. We are very well positioned for a balance across wholesale as well as consumer banking, in the years to come. <br />
	<br />
	<br />
	<strong>You have been at the helm of affairs in Taiwan for quite some time now. Could you highlight some interesting events during your tenure while heading Taiwan operations? </strong><br />
	<br />
	<br />
	I have been fortunate enough to have worked at many locations outside my home country and Taiwan has been one of the overseas postings for me. Taiwan was particularly interesting for the bank because we had three acquisitions there. What was also quite interesting was the acquisition of a bank Hsinchu International Bank that was much larger than ours. The other two were Asia Trust Bank (for licensing) and American Express Bank (global acquisition). It was about assimilating the culture putting the three acquisitions together, integrating them and then building on the platform. The results of Taiwan have been pretty strong. <br />
	<br />
	<br />
	<strong>How has Standard Chartered differentiated itself as a bank when compared to some other global banking giants in terms of performance and branding? </strong><br />
	<br />
	<br />
	In terms of performance, we have delivered time and again as well as enjoyed great ratings upgrade for as long as one can remember. If you look at our share prices, we are one of the few banks which trade at premium to book value. We are present in the right markets Africa, <br />
	<br />
	Asia and the Middle East which stayed relatively better even during the financial crisis. And when the recovery happened on an absolute basis, these markets did fantastically well. We have a long history in these markets around 150 years presence in most of them so we have the depth and breadth of relationships in these markets. <br />
	<br />
	<br />
	Our strategy has been very clear in terms of focusing on these markets and relying on the basics of banking to deliver our performance. We have been there for our customers by being open for business and that is a very big thing. It is as big today at a time when big institutions globally are undergoing stress, talking about cutting headcount and reducing presence. On the contrary, we are still very much in a growth mode so we stand in a unique and differentiated position. We were the only international bank which consistently delivered record profits even during the financial crisis whereas most banks were struggling to break even. <br />
	<br />
	<br />
	Standard Chartered brand has been created over a period of time and we owe it to the management teams in different markets for taking the right decisions with the depth of the local knowledge that they have. The trust that the bank has created over time is especially evident during financial crises when we always see a flight to quality in terms of the customer deposits coming to us. We have proven that people feel secure while trusting their money with us. The best part is that we don't rest on our laurels and continuously try to keep ahead of the market. These are challenging times globally but we are very well positioned and quite differentiated from the competition. <br />
	<br />
	<strong><br />
	Despite the global economic crisis, Standard Chartered Bank figures among the largest profit earning international banks. How do you view this success? </strong><br />
	<br />
	<br />
	It is about being distinctive in our strategy which has resulted in our differentiated financial performance. In fact, we have delivered eight straight years of record profits, and are the only international bank to have received a ratings upgrade by all the three global rating agencies since the start of the financial crisis. Our performance, as you mentioned, has been very strong in the closing statement that we came out with recently which reiterates our differentiated position further. <br />
	<br />
	<br />
	Among the reasons for this is that we are focused on the basics of banking having a strong capital base, focusing on our clients and customers, having a strong balance sheet in terms of liquidity and being open for business. Besides, we are present in the right markets Asia, Africa and Middle East which are actually experiencing good growth as compared to the west which is facing challenges that all of us are aware of. <br />
	<br />
	<strong><br />
	Of late, the financial world is again embroiled in a crisis of sorts, like the Eurozone debt crisis. How do you analyse this situation and what kind of impact will this have on the banking scenario across different markets? </strong><br />
	<br />
	<br />
	In terms of global impact, we have all been hearing about banks wanting to require potential recapitalisation. The impact is applicable across all markets as some of the European banks pulled back because they had to reduce their risk related assets. These banks had to reduce their exposure so that the capital comes up to the level of 9 per cent that EU has mandated by the middle of next year. It's very difficult for them to go out and raise capital at this price when they are not into utilizing their earnings. <br />
	<br />
	<br />
	There is clearly a stress on liquidity for certain banks because of the fear of the exposure that they have to the European markets. Fortunately, for a bank such as ours which has no exposure to the distressed markets in Europe, it creates opportunities for us given the funding, strong balance sheets and capital position that we have. We are looking at these opportunities in different markets and monitoring them quite closely. <br />
	<strong><br />
	<br />
	Standard Chartered, as I understand, has always propagated organic growth. Do you think there will ever be a shift in this line of thought and probably the bank could look at the issue of mergers and acquisitions more favourably in the foreseeable future? <br />
	</strong><br />
	<br />
	If you look at the last decade or so, our focus is absolutely on organic growth but we have local opportunities which are inorganic as they presented themselves. Therefore, more than being a matter of choice, it is about having the right blend. Though we are focused on organic growth as a bank, we will surely consider if a right opportunity comes up. <br />
	<br />
	<br />
	<strong>Tell us about Standard Chartered Bank's India and South Asia operations which you are tipped to take over in due course? </strong><br />
	<br />
	<br />
	India is huge for us and South Asia is big for us as a region and I am excited about the opportunity. <br />
	<br />
	<br />
	In terms of market situation, it will be obviously different from my posting at Taiwan which was already a developed market. But I also have been through different roles globally which provided me with an opportunity to look at diverse markets from Korea in the east to Nigeria in the west. Therefore, I do have the understanding of managing different markets and challenges are something that I always look forward to. <br />
	<br />
	<strong><br />
	You have also been the Global Head for SMEs and New Ventures in Singapore. What are your plans to this effect for your operations in the South Asia region? </strong><br />
	<br />
	<br />
	The SME sector is already quite large for us in the markets in South Asia. It's about building on the strong track record that we have in the sector. SMEs are the core to any economy typically when they constitute 90-95 per cent of the enterprises and contribute 65-70 per cent of the employment. Even during the financial crisis, we have been out there supporting the SMEs and again that is something which differentiates us. SMEs augur well for South Asia as there is potential growth in the economies because of the sheer confidence of SMEs to the economies in the region. <br />
	<br />
	<br />
	<strong>Talking about India, there are recent reports that suggest the Indian economy may not be growing at the same breakneck speed that it so promised until about a couple of years ago, for a variety of reasons. How big an impact will it have on the fortunes of the banking conglomerates in the country? </strong><br />
	<br />
	<br />
	One has to look at the situation in terms of the overall context. India has had very strong growth in the past many years.There are some signs of moderation but I think it is only a short term phenomenon there is no denying the fundamental strength of the economy and we as an organisation are very bullish about the long term potential of the market. The big story about India remains unchanged in terms of its medium and long term prospects; we should not read too much into a slowdown in the last few quarters. <br />
	<br />
	<br />
	<strong>Standard Chartered Bank's profits in India have come under pressure after five years of accelerated growth. How, do you think, a difference can be made in this context? </strong><br />
	<br />
	<br />
	Standard Chartered in India has had a fantastic growth over the last decade or so and the team there has done an incredible job, with profits growing fivefold in the last five years. As I said, it's a short term blip and clearly, there are immense opportunities in the Indian market. We are well positioned as an institution having been in that market for 150 years, to really capitalise on the growth opportunities the economy presents. <br />
	<br />
	<br />
	<strong>China is the fastest growing economy in the world. How well placed is Standard Chartered Bank in the country given its immense potential? </strong><br />
	<br />
	<br />
	We do have a sizeable presence in China with a fully-owned banking subsidiary which operates over 70 outlets. We will very soon be looking at crossing the 90 mark in terms of the outlets that we have in the country. We have been present in China for around 150 years and it's one of the fastest growing markets for our bank in terms of revenue momentum and growth. <br />
	<br />
	<br />
	So, the Chinese market has immense opportunities for us and a bank such as ourselves, is very well positioned given our long history in that particular market. We can certainly be more aggressive in China but we also have to balance the opportunity with the investment. And I don't think we have held back on any investment in China as it's a market where we see great potential and growth.</p>
<p>
	 </p>',
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			'description' => 'Sunil Kaushal is the newly appointed Chairman of Standard Chartered Bank Nepal Limited. Kaushal is likely to assume a senior role in the South Asia region, the announcement of which is likely to happen soon. He is currently the President and CEO of Standard Chartered Bank (Taiwan) Limited.',
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			'title' => 'Pasi Koistinen',
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			'content' => '<p>
	<span style="font-size: 14px;"><strong><br />
	</strong></span></p>
<p>
	<span style="font-size:14px;"><strong>We Want To Make Mobile Telephony More Affordable</strong></span></p>
<p>
	 </p>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Pasi Koistinen </strong>is the President and CEO of Ncell Private Limited, which became the largest telecomoperator in Nepal some months back overtaking the state-owned Nepal Telecom. The company reached the figure of six million customers recently. Ncell, the first private telecom operator of Nepal was rebranded to its current name in 2010. Nordic telecom giant TeliaSonera has a large stake in the company. Koistinen joined TeliaSonera as a Director in 1998 and took up the position of Ncell CEO in May 2009. He has also served in top managerial level in diverse fields like hospitality business, advertising agencies and telecom service in countries like Finland, Singapore and China. In an interview with Gaurav Aryal of New Business Age, Koistinen shares his views on Ncell's growth, Nepal's telecommunication market and a whole lot of other issues. Excerpts: <img align="right" alt="Ncell" border="2" height="279" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/interview_pic2.jpg" style="margin:10px; padding:10px;" vspace="10" width="180" /></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Ncell's customer base has crossed six million. How sustainable is this rapid growth in the number of customers? </strong><br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">We have reached six million customers but the penetration is still low in Nepal. We are talking probably somewhere in the region of 50 per cent, meaning that only half of the population have mobile phone connectivity. So, there is still a huge potential. We are expecting the same kind of growth in the future as well because we believe that people need mobile phones. We have experienced rapid growth in the last two years and increased the customer base by three million within a year. So, mathematically speaking, we should have nine million customers after a year if everything goes as expected. The growth is sustainable because every customer we get into the system is generating revenue. The most important aspect is that our customers are happy with us. Therefore, we plan to continue investing in our operations. <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>At the time of rebranding, Ncell had only about 2.2 million customers. It has taken a giant leap since, in terms of customer base, coverage and brand name. What is the secret of this huge success? </strong> <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">Rebranding was like a new promise not only for our customers but also for our company and the employees to increase the overall customer service level. So, we decided to invest heavily in the network and subsequently, the rebranding exercise. We doubled the network before the rebranding to make sure that we have something to operate that is good quality network. When we started marketing the new brand, it was an entity of this whole package of services. Service, in our case, is very intangible in the sense that people call each other and there may be 100 million transactions each day. We have to guarantee that these transactions are successful because it's only then that people will come to us. I think this was a major reason for our huge success. Of course, rebranding was another very essential component of our success.<br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>With this tremendous growth, Ncell must be making a huge profi t now. How are you doing on revenue? </strong> <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">Well, it depends what you call a profit. We are not profitable yet if you talk about cash flow which is the main issue when talking about profitability. Revenues are good and we have gained a lot of market share during the last couple of years. But we have invested a lot on infrastructure as well so a big investment takes time to recover. We are spending three to five times more in infrastructure than in other TeliaSonera countries due to difficult terrain and climate. We have to remain humble towards our customers and give them good services and hope that results will follow in due time. <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>What kind of policies do you have to attract more customers especially from rural areas? </strong><br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">As you must have seen, we have had a lot of campaigns in rural areas. We want to support the campaigns knowing well that not everybody in Nepal has the same amount of money. Therefore, we have had a lot of rural campaigns to make mobile telephony more affordable for everybody. <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Though Ncell has sold more than six million SIM cards, it is said that a large number of SIM cards issued are not in operation. What is the actual number of your active mobile phone customers? </strong> <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">Active ratio varies, of course. Out of the over six million sim cards we are talking about, we know that some of them are not currently in operation. There are people who switch on their phones at certain times only for receiving calls because it does not cost anything for the receiver. The active ratio varies between 80 per cent to anywhere close to 100 per cent. For example, it was almost 100 per cent when we had the earthquake on 18 September. <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Tell us about TeliaSonera's Nepal experience in comparison with other countries? </strong></span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">TeliaSonera has been very happy about the investment in Nepal. We are already in number three position among all nine countries in terms of number of users. So, naturally TeliaSonera is very satisfied with what we have done here. </span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>How is the response to your smart phone service like Blackberry? <br />
		</strong></span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">We launched Blackberry because we wanted to make a difference and we are the only operator selling Blackberry in Nepal. We knew from other markets as well that Blackberry will become an essential service for the people who need to be connected while on the move and people who have enough money. In this respect, we are very happy about it. This is an exlusive service targeted at an affluent segment of the market. <br />
		<br />
		We also have Ncell Pro which is a very good approach. In the longer run, we are expecting it to be a great success because we combine the handsets and talk time, sim card, data package and sms package as one set that is easy to buy. But it takes time for people to realise the benefits of it. <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>It is said that Ncell and NTC the two telecom giants have left no space for new telecom operators. Is it really that diffi cult for new comers to penetrate in the telecommunication market now? How many operators do you think this market can sustain? </strong> <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">Well, this is a free market and anybody can invest and operate here. However, we do not have many companies in Nepal who are ready to take the risk by investing first. TeliaSonera has a history of entering emerging markets early. Kazakhstan was among the emerging markets we entered soon after Soviet Union collapsed, in 1994. It takes time to build the kind of massive operations that we have so it's not an easy business. I personally believe that this market can sustain three operators. </span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><img align="left" alt="ncell" border="1" height="426" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/interview_pic1.jpg" style="width: 356px; height: 426px;margin:10px;padding:10px;" vspace="5" width="356" /></strong></span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>What is your take on the practice of squatting on the spectrum license? </strong> <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">We actually have enough spectrum allocated to us and so far we have paid for the spectrum and the license in full. We have also fulfilled all the requirements of the NTA concerning the licenses including the spectrum. On our part, we are clear and it's not for me to analyse about some other companies holding spectrum. NTA too has introduced a fee for companies not using the spectrum effectively enough. It has the provision to penalise them for the so called holding of frequencies. </span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>What are your expectations from the regulatory authority for the improvement in quality of services along with this sectors growth and expansion? </strong><br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">Many things have been clear in the sense that we want to have a level playing field. Especially, when NTC is a government corporation, they do have the advantage of being in the country earlier than us. But the biggest issue is that they are not following NTA regulations. Let me give you an example. There is a rule that the congestion between the operators can be maximum 0.1 per cent meaning that one call out of 1000 can fail. Now, the situation is that for the past two-and-a-half years, I have been here and we have been talking about NTC not being able to give us enough capacity and units so that our subscribers can freely call the NTC network. During the peak hours, the congestion can be up to 60 per cent which is unfair. <br />
		<br />
		We had a very open discussion with NTC and NTA asking them to give us the space because we want to build a good telecom infrastructure company in this country. But, we are compelled to follow what someone else is doing. We don't want to be dependent on our competitors and want them to follow the regulations that are laid out. There is also the issue of cross subsidising, meaning, if you have an NTC mobile phone, you can call the NTC landline without any interconnection charge. However, in our case, we have to pay 52 paisa for every minute when our customers make calls to their network. This means that we cannot be price competitive with NTC on that level and this, of course, is a very wrong practice. <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Some time ago, Ncell had commented that the authority was biased against the private telecom operators and especially Ncell. What was the biased treatment? </strong> <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">We are the biggest foreign investor in Nepal so we are requesting for equal treatment and equal level playing field. For examplem, for permission requirement, foreign exchange permission and license renewal fees should be equal for all operators which has not been the case so far. </span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>WiMAX and 4G spectrum are not issued by the authority yet. Why do you think they are rigid about it? </strong> <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">To tell you the truth, 4G is essential. But it is not urgent because we are totally occupied building the 2G network. We have always seen that people are very keen on using wireless broadband. Our Ncell Connect became the number one ISP in the country within a period of eight or nine months which really proves that people are willing to have wireless internet connection. I don't believe in WiMAX at all as it is a very limited kind of technology with no handsets available and promises to be an expensive proposition. I really intend to request the government to concentrate on GSM because evolution such as the 4G will continue to take place. <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Do you think 4G will be suitable for Nepal?</strong> <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">Sure, because it gives excellent speed for data surfing. Now with HSPA, we can go up to 3.6 mbps and with HSPA plus, we can go up over 7 mbps. For instance, when 4G was launched in Sweden, it brought huge improvement to data speed. <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>How long will your aggressive marketing continue?</strong> <br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">I hope that we continue in the same manner forever. This is a continuous business and we have to give people value for money and time. Marketing is not only about marketing communication, but also about best customer experience. Marketing communication gives promises via billboards and advertisements. But we have to fulfill those promises with other aspects of the infrastructure - network, billing system, call centre, point of sales etc. Our aggressive marketing has reached us this far. So, we are more than happy to continue practicing it and hope that it pays us great dividends in the long run. </span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
		</span></span></p>
	<p>
		<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><br />
		</strong></span></span></p>
</div>',
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			'created' => '2011-10-11',
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			'description' => 'Pasi Koistinen is the President and CEO of Ncell Private Limited, which became the largest telecom
operator in Nepal some months back overtaking the state-owned Nepal Telecom. The company
reached the figure of six million customers recently. Ncell, the first private telecom operator of Nepal
was rebranded to its current name in 2010.',
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	(int) 10 => array(
		'Article' => array(
			'id' => '445',
			'article_category_id' => '46',
			'title' => 'Joseph Silvanus',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<span style="font-size:14px;"><strong>Interview: September 2011 - There Is Much To Gain And Look Forward To</strong></span><br />
	<br />
	 </p>
<div style="text-align: justify;">
	<span style="font-size:12px;"><img align="left" alt="interview" border="1" height="227" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/sep-int.jpg" style="width: 319px; height: 227px;margin:10px;padding:10px;" vspace="10" width="319" />Joseph Silvanus<span style="letter-spacing: 0.05pt;"> joined Standard Chartered Bank Nepal Limited as its new Chief Executive Officer in July 2011. A student of Economics at St Stephen's College, Delhi University, followed by a management degree from Mumbai University, he had a brief stint with established FMCG names such as Voltas Ltd and Pepsi Foods Pvt Ltd before moving over to the banking sector. A banker for over 18 years, Silvanus has worked with ANZ Grindlays Bank followed by Standard Chartered Bank across various geographies. He has vast exposure to consumer banking operations having managed branches, marketing operations, business analytics, services and service quality and project management. In his most recent role as Regional Head of Development Organisations for South Asia, he played a pivotal leadership role in engaging multilateral/bilateral agencies and DFIs for directing specific programme-based support towards Asia. In an interview with </span>Pinaki Roy <span style="letter-spacing: 0.05pt;">of </span><i>New Business Age</i><span style="letter-spacing: 0.05pt;">, Silvanus shared his views on Standard Chartered Bank's phenomenal success over the years and his plans for Nepal operations. Excerpts:</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin: 5.65pt 0in 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><strong>You have just joined in. Do you have new plans in mind for Standard Chartered Bank's operations here in Nepal?<br />
	<br />
	</strong></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">Nepal continues to be very important from a South Asian perspective of Standard Chartered Bank. It is now my turf to be able to grow the relative importance of Nepal in the overall scheme of things. Having consumer banking and wholesale banking as the two basic engines of growth for us does not mean that we will have quantum changes about the way we do our business in this part of the world. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">We will continue to grow the engines albeit with some level of caution because of the underlying situation Nepal is experiencing right now. But I personally see a lot of advantages that can be derived even through this phase of Nepali economics. The changes that I will bring, perhaps, is to leverage the Group businesses, expertise and the best practices. I can be a catalyst for that and we have internally discussed as a team that we will have more of these engagements. The businesses will reap the benefits of these visits and conversations that I had with the rest of the Standard Chartered Group. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin: 5.65pt 0in 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><strong><img align="left" alt="interview" border="1" height="396" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/inter.jpg" style="width: 224px; height: 396px;margin:10px;padding:10px;" vspace="5" width="224" />This must be an encouraging year for Standard Chartered as it is one of the largest profit earning international banks despite the global economic crisis. What do you attribute this success to?<br />
	<br />
	</strong></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">After receiving the Group results just over a couple of weeks ago, it convinced ourselves that we have done exceedingly well. I am absolutely delighted to see the results. We registered ninth consecutive record first half profit and double digits growth both for the top line (11 per cent) and profits (17 per cent). Everyone is delighted including the investors and shareholders and obviously, the businesses know what they are going to do for the rest of the year. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">Looking closer home in Nepal, I think we have achieved much. It's been a tough year with issues of liquidity and governance coming through the financial network. There has also been some amount of uncertainty because of the global businesses impacting Nepal's economy. Nevertheless, I believe that both consumer banking and wholesale banking and the respective support functions have all got together to give value to local Nepali shareholders. There has been good EPS (Earnings per Share) and top line growth as well as effective cost management at a time when we really needed to look inward and reduce expenditures coming through unforeseen circumstances. We have done well as a bank in Nepal on all fronts and have continued to be strong both on capital and liquidity. Therefore, from a group as well as country's standpoint, there is much to gain and look forward to. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin: 5.65pt 0in 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><strong>One of Standard Chartered's unique features is successful lending to SMEs. Do you plan to expand or review the lending policy?<br />
	<br />
	</strong></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">SMEs have always been an engine of growth for the bank. Asia is typically a burgeoning economy for entrepreneurs and Nepal is no exception. If you look around, you can see how entrepreneurs are converting opportunities on a daily basis and the way banks are supporting them. For us, SME is a perfect space between the lower end of consumer banking and the upper end of corporate banking. The segment is very well placed. We have appropriate products that take care of all their requirements such as Working Capital and Term lending, Trade &amp; Guarantee lines and Margin based lending. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">However, we must realise that while SMEs are the global engine of growth for the group, we have to tread with caution when it comes to Nepal. We have to be able to create equitable mortgages as most of our SME lending is based on some form of fixed collateral. Therefore, we have to play as per the rules of the game.&nbsp;We are trying to bring in a few products that are used in the group in the area of margin based lending. It is an important engine of growth not only from the bank's perspective but from a social point of view as well. We are creating a lot of headroom for growth, engagement and employment opportunities. These will have plenty of forward linkages because the entrepreneurs will be able to subsist. Access to finance is a key issue for SME business the world over. We see ourselves as a force that could help meet that latent need. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin: 5.65pt 0in 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><strong>The Nepal Rastra Bank (NRB) has brought several new measures in its monetary policy. How have you viewed this policy?<br />
	<br />
	</strong></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">Policies are well meant so I have given them a balcony view. I clearly think that NRB has tried its level best to meet some of the needs of the current economic state. Reducing CRR (Cash Reserve Ratio), for example, is good as it injects liquidity but it drives up some amount of inflationary tendencies. You have to understand that every action has an equal and opposite reaction. Increasing exposure to the deprived sector is certainly a good measure, especially when we know that farmers and the micro credit side of things require some amount of stability. However, I would like to see well-run, professionally-managed and well-governed micro credit institutions that can use this extra amount of liquidity coming their way. This would help create productive assets in the hands of the farmers so that the entire ethos around farming communities can gain sustainably from micro credit. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">The bottom-line is that while the policies are well meant, they need to be managed and supervised to the end. There are other areas where it has tried to adjust such as the Basel II issues as there has to be better accounting procedures and stress management techniques. The banks have to be prepared for event based risks. Therefore, on the whole, there is a good effort on the central bank's part as far as the monetary policy is concerned. But if it could be combined with great oversight by the concerned stakeholders, you have a winning strategy for the country. I am an optimist as far as Nepal is concerned. It's but natural that when things stack up, people can feel deprived and adopt a pessimistic approach. The people of Nepal are very resilient and it's time their patience got paid back in terms of good governance. The central bank needs to have a good embedded structure on which some of these policies can be grown upon. Policy interventions are great when they get implemented in the right fashion. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin: 5.65pt 0in 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><strong>Standard Chartered in Nepal has remained shy on investing in long-term projects such as hydropower and road infrastructure. What, do you think, are the possible bottlenecks?<br />
	<br />
	</strong></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">We clearly believe that Nepal has been imbued by god by several natural resources. Hydropower is one area where the country can really subsist and actually become a force for growth for the entire region. Underinvestment is due to several counts such as lack of transparency, clear policy directives and long term stability. The FDI which comes in this country is restricted to short-term investments and areas of quick generation of goods and services. However, long term investment in infrastructure, broadly speaking, has been lacking, for sure. We have to create easier barriers to entry, longer trade protocols and cut down on double taxation that exists, perhaps, within certain geographies. We also have to allow the investors vision for at least a longer period of time. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">Bank and multi-lateral finance is always there. We already have done work in the past on hydro electricity in Nepal and are looking at a good pipeline of similar products. As a bank and a brand name, we are `Here for good which means we are here for the medium and the long term. Our commitment to Nepal is unquestionable and therefore, if we have to support the growth of infrastructure, we will certainly exercise our might. The bank is strongly behind these sectors. Hydro and roads etc take time as these are huge projects which are to be governed by several other global rules. We are quite happy to consider them, provided the right investments come along.&nbsp;</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin: 5.65pt 0in 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><strong>You must have faced a lot of pressure to accept more deposits in recent times due to a large number of people withdrawing their money from small institutions. Has there been a substantive change in your deposit patterns owing to this development?<br />
	<br />
	</strong></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">This is true not just for Nepal and this has been happening right through the period of turmoil and uncertainty. Whenever there is uncertainty in any market, there is flight to quality. People like to resort to safer havens in times of uncertainty. We are open to business in Nepal and if people so believe that in the interest of risk mitigation, they wish to move their hard earned money to a safer institution, we will not stand in their way. However, we will go through the normal protocol of good governance by looking at customer details etc and then we would bank for them. It's part of our day-to-day business, we are not in this business of just going and garnering liquidity from the market. But if it comes to us at the price point that we would like to take at, we would certainly accept it. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin: 5.65pt 0in 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><strong>We understand there is serious homework being done on mergers and acquisitions of a number of banks in Nepal. How close are you on this front?<br />
	<br />
	</strong></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">Well, it's public domain knowledge that even the Nepal Bankers Association has written to the central bank asking for tax incentives etc in the event of buying distressed assets or for mergers and acquisitions if there were. Our own view in this matter is very clear. In this part of the world, the economies are growing very productive and organically and there is a load of growth potential. Therefore, banks like ours would be more interested in looking at organic growth. On the other hand, acquisitions come at a cost. It has to do with people, culture, system integration etc and sometimes, it is difficult to get the math right. From a Nepali context, we are very happy right now with our organic engine of growth. We want to believe in primarily using the engine of origination rather than buying out an asset originated institution. We believe in our origination capabilities because we understand credit best in terms of the market that we are in and given the number of years that we are on the ground. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin: 5.65pt 0in 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><strong><img align="right" alt="" border="2" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/inter1.jpg" style="width: 210px; height: 267px;" vspace="10" />How long do you think Nepal's interest rates would be as high as they are? Aren't high interest rates detrimental to the growth of industrial and manufacturing sectors?<br />
	<br />
	</strong></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">This has got to do with some amount of demand and supply economics, cost of capital etc. Nepal is an unrated economy and we have imputed some ratings to the economy given the existing economic and political risks the country is attached to. Today, if you are to benchmark your savings bond for five years at 10 per cent which is an indicative rate, we don't have too many instruments that are longer term which will give you an indication of what the cost of funds or doing business in Nepal is. While I don't have a very firm view on where the interest rates are going to be, I believe they will remain the way they are for a short to medium term. The rate today correctly implies the cost of doing business in this country, part of which is the cost of capital. It is heightened because along with the cost of capital, there is liquidity risk and so many other market and non-market operational credit risks which pour into increasing the total cost of the fund. I believe that this is here to stay for a while unless and until we have a systemic kind of revamping of risk. We have to have central bank and all its adjuncts come out and play a constructive role in rebuilding some of these elements of risk. We will then have cross-border and country risks and the overall risk of the cost of capital come down. It will then reflect in cheaper interest rates. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">No entrepreneur or industry would like a high cost of credit as it mirrors heavily on their balance sheet. It reduces their strength to leverage the balance sheet and there are other cost elements too that are unique to Nepal such as the cost of staff and security, which, is not so large in other neighbouring countries. Therefore, it is to the extent of dampening entrepreneurial streak of modern day manufacturing. I believe that it's not a good story and there must be a different form of intervention where given the inherent risk of doing business in Nepal, the leverage allowed to such institutions should be higher. For example, if there is eight per cent leverage on a non-banking financial intermediary, it can be decided to give a higher leverage to such institutions. It is because resources are at a premium for such people and as long as the business model is good and the shareholders are willing to support the model, it should be allowed by law to higher leverage such institutions. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="margin: 5.65pt 0in 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><strong>Being a reasonable global player, how do you think Nepal can benefit from the ever growing economies of China and India? How do you see Nepal's prospect as an off-shore financial hub being a transit economy between the two giants?<br />
	<br />
	</strong></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;">Nepal is a landlocked country but it has two great neighbours who, I think, are committed to the sovereignty and growth of Nepal. To cite an old idiom, some trade is better than no trade. Nepal would have to use the depth and resources available to it through these two strong economies. These are the future economies of this world and, therefore, Nepal stands to benefit in the long run. There is a lot of work happening already: visiting delegations from both countries, plenty of solidarity and joint ventures. There is a lot of country-to-country donor aided support in some of the more required areas of infrastructure. Nepal has everything to benefit from positively engaging with both its northern and southern partners. Both these countries bring a lot of good and appropriate technology which sometimes may not require power and capital-intensive kind of investments. All in all, if the political ambitions of Nepal are evinced right, there is tremendous opportunity for growth in the economic sector. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size:12px;"><br />
	</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="line-height: 115%;">Nepal has been a part of the silk route for some time now and the people of Nepal are almost like global citizens. Almost every family in Nepal has a member working overseas which brings a lot of globalisation even into the villages. People have seen various cultures and experienced much while living overseas. Therefore, trade is an inevitable benefit to Nepal. You have to look at areas where you have a positive trading account with not just India and China but even with countries like Bangladesh and Pakistan. Nepal has to use its foreign and economic policies all geared in a very integrated and systematic approach to get the right kind of foreign investments and create value added commodities which its neighbours would seek. Besides, tax and double taxation protocols will have to be readdressed so as to meet the regional needs. <br />
	<br />
	<br />
	</span></span></div>',
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			'created' => '2011-10-02',
			'modified' => '2012-09-16',
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			'description' => 'Joseph Silvanus  joined Standard Chartered Bank Nepal Limited as its new Chief Executive Officer in July 2011. A student of Economics at St......',
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		'Article' => array(
			'id' => '416',
			'article_category_id' => '46',
			'title' => 'Joseph Massey',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<span style="font-size:14px;"><strong>Interview : August 2011 - 'Second Phase Of Growth Would Depend On Developed Capital Market'</strong></span></p>
<p>
	<span style="font-size:14px;"><strong><br />
	<br />
	<br />
	</strong></span></p>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><img align="left" alt="" border="1" height="200" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/int1.jpg" style="margin:10px; padding:10px;" vspace="5" width="120" />Joseph Massey is Chairman of South Asian Federation of Exchanges (SAFE), a forum of exchanges with 32 members from South Asian Region, UAE and Mauritius. SAFE works for the development of capital markets in the region and offers itself as a platform to these exchanges for global integration. Massey is also the Managing Director and CEO of MCX-SX, which currently offers currency derivatives trading and is the most recent entrant to India's public-trading exchanges. He has over 18 years of experience in the corporate and financial arena and worked with organisations like Life Insurance Corporation of India, the Reserve Bank of India (RBI), Stock Holding Corporation of India, Multi Commodity Exchange of India Ltd, Interconnected Stock Exchange of India and the Vadodara Stock Exchange. Massey was in Nepal during the executive committee meeting of the SAFE from July 6 to 8. In an interview with Gaurav Aryal of <i>New Business Age</i>, Massey shared his views on capital markets of South Asia and the current status of the Nepali share market. Excerpts:</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>What is the scope for growth of secondary markets in South Asian countries?<br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">I think, post-global crisis, this region is emerging as a high growth region because of the natural demand that it has got and also the governments are very keen to develop each sector so that more employment is created and global investors are willing to come and actually invest. If you look from a capital market perspective, there is demand both from primary and secondary markets. Whichever country you take in the SAARC region, it still has to make tremendously large progress in terms of domestic penetration. That market is huge. Then, we have another opportunity which is in global market. I think all economies have very large opportunity to develop in the secondary market.</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Except India, other countries in South Asia have not been able to develop much in this field. What is the problem you see?<br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">There are couple of prerequisites for the market to develop. Indian market has a history of 130/140 years. Over such a long period, we have developed the culture of investment. Despite that, we have penetrated the market relatively less. Indian market is&nbsp;more developed because we have more instruments, more investors, more companies, good infrastructure, clearing corporations, guaranteed good regulation, and infrastructure which is comparable to the best in the world. However, there are many products that we still don't have and now India is aspiring to create those products. India has progressed but it still has a lot to do. Rest of the countries, based on their position in the cycle of economic development, could have reached some level of development in the exchanges. We expect that to happen over a period of time. When global fund comes to one region or one country, visibility of the entire region gets enhanced. Today, you see a lot of funds coming to India. Soon those companies will come and set up their companies in India. Once they set up their companies and invest there, they will also gradually look for what market opportunities are there in the region. India is gradually opening up and Indian citizens can invest outside. Once we open up the market more, a lot of investment from global market will come to India and from there they will go to the other countries of the region. I think the level of development depends on the scale of economy and how much it has developed. But it need not necessarily take the same length of time for each country to reach the same stage of development. We can cut short the time by learning from other's experience. Highlight</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Foreign institutional investors and foreign direct investors are still hesitant to enter this region whereas they are going to Taiwan, Singapore etc. Why so?<br />
	<br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">These countries have been rapidly growing for a very long time. So, the global communities have already identified those destinations. As a result, in&nbsp;the last 20/30 years, their regulatory system and infrastructure have developed so much that the global investors don't see a difference between these countries and their home markets. In SAARC region, some countries have progressed well while others have not. But we all know the model that we have to implement. We just need a more concentrated effort in finding out what are the gaps; what they have and what we don't have. And, we can put regulation and infrastructure in place. The domestic demand being so large, we will see the same level of capital coming in this region eventually. Today, we are not there but we need not take another 30 years to reach there. We can reach there in next five years.</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>What is the objective of creatig a South Asian network of stock exchanges?<br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">I think we are all determined to do this. We understand each country has its regulatory mechanism and its own capital account laws. But we want to sensitise the countries that economies of scale will be realised if this region can work as one unit. Relatively, hard infrastructures like road, transport and others may take time to be developed. Financial market is soft infrastructure which can happen easily. The secondary and tertiary gains of developing an efficient financial market are very large compared to manufacturing and few primary sectors. So, instead of developing the manufacturing sector first and then going to the financial services, it would be a good idea that in this region we shift focus to financial services and the advantage of financial services trickle down to the rest of the economy. Our cost of fund will reduce and we will be able to raise more funds for developing infrastructure, for economic activity and as a result all benefits will flow such as more jobs, better education and necessary infrastructure. So, more capital gets attracted and suddenly we will get out of the vicious cycle. Today, we are in a vicious cycle of low capital, low infrastructure and therefore, low investment. All countries can't achieve the same level of infrastructure simultaneously, but when some of them achieve a level, the trickle-down benefit will happen to the entire region.</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Protection of small investors in capital markets is taken as a major challenge. How can such network protect the&nbsp;investors?<br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">At SAFE, we have identified the global best practices. Each country has adopted these global best practices which are prescribed by IOSCO (International Organisation of Securities Commissions). What SAFE does is that the good practices of one country are shared with others. We don't wait for those countries to learn these things over a period of time. We are sharing these experiences with each other so, until real business can get done, we can share a lot of knowhow and ensure that the level of knowledge of each one is the same.</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Why are South Asian governments hesitant in opening their markets for international investment?<br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">We are saying that we need to have investor protection. So, should we open the market or not? The first level of investor protection is that you have better infrastructure for trade, better laws, and more capital to protect them. All these things can come if you have a market of significant size. We want the best protection to be given to the domestic investors. But we cannot provide that as our markets are very narrow, we don't have all the products, we don't have large number of investors, our trading volume is small and the number of companies is low. You know that the total income from such market will be naturally very less. So, we need to invest more in increasing the capital, improving law and, giving the investor better safety. If you widen the investor base then obviously it will generate more resources. You will be able to draw more resources into the infrastructure, set up a clearing corporation, depository, have best tools and educate your people better. So, you need the capital market to be very efficient. Today, each country has domestic investors but they are very few. We need institutional investors who can bring in big money and take a deeper and longer view. So, once we complete this, we have to complete the market by getting good quality investors by offering all the products available today in the global markets. Once you create these two, your protection will improve; your market will become safe because your market is aligned to global market. If the investors are investing in the growth of Nepal, you get a diversified base of investors in which some are taking a view with 10 years, some with five years, and some with just one year or less. When you get the mix of all of them, your market will be stable. Some may go out but many others will stay.&nbsp;</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>How do you see the future of capital market in this region?<br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">I think there are three or four facts which indicate that the future of capital market is enormously good. All the countries in this region more or less have the same level of development. They are developing and gradually going up the scale. In the initial phases, all of them are dominated by the public sector enterprises. Public sector enterprises naturally have the challenge of resources. Since the demand of economy is very large, there is a requirement of private capital and private production in order to supply that requirement which the public sector will not be able to deliver. The public sector has reached its level and now the private sector has to come up. It has to come up in infrastructure, education, manufacturing, services and everywhere. For developing all these, the people need risk capital. The risk capital can only come from the capital market. So, I think one is dependent on other. If you have a robust capital market, more people will be able to raise capital and set up an economic enterprise which will create more jobs and more business ventures. It is a cycle. Every economy has realised that we have gone through the stage where the public sector was dominant and&nbsp;banks had a major role to play. Second phase of growth is going to be dependent on developed capital market that should have equity, bond, derivative, service management etc. so that people can raise short term money and long term money. Then, we will see private enterprises start coming in. </span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Experiences have shown that the derivative trade has distorted the natural growth of the market. Can South Asia region avoid such distortion?<br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><img align="right" alt="inteview" border="1" height="287" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/int.jpg" style="margin:5px;padding:5px;" vspace="5" width="400" />SAFE is advocating an exchange traded market where derivatives get traded on the exchanges. They are safe because the counterparty has a guarantee from a clearing corporation. They are better risk-managed, more tightly regulated, and more transparent. As a result, exchange traded market is always a safe market. In 2008 and in the earlier 1998 crisis, what went wrong was outside the exchanges. So, the lesson from the 2008 crisis is that&nbsp;we should get more and more products on the exchanges. Second lesson is we can have laws which are similar all over the world. So, G20 is now advocating that we should have such norms and regulation that are similar in all countries. The advantage SAARC region has is that we don't have to make the same errors some other countries have made. We now already have better regulation on banking system and in the securities market, we have all the institutions developed, most countries have depository, clearing corporations and most countries now trade on electronic system. Having built an infrastructure that is similar to global environment and global rules that are gradually becoming common, I think we are operating on a much safer market.</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Many prominent stock exchanges like those in Europe and Japan have either crashed or remained stagnant for a long&nbsp;time now. Is it so because those economies have reached the point of saturation?<br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">Post-2008, two things have happened. While the exchange traded markets are same, their economy is slowing down and the financial system has observed a very large amount of loss. It will take a long time for them to come out of these losses that they have suffered outside the exchanges. Secondly, those economies are diversifying to come back to high growth phase. In doing so they are investing outside the country. You can't increase the economic growth significantly if the economy is already developed. So, they will only have to look at investing and business opportunities in rest of the world. The good news is while Europe and the US are slowing down, Asia and Africa are&nbsp;growing. If you look at world growth perspective, today there is more demand than it was before. According to a recent news, Boeing is supplying US$ 30 billion worth of planes but all these planes are going outside US. The world economic structure is changing. There is more demand outside Europe and US. And the world community is happy. It does not matter whether I sell my planes in US or outside US. In this process, companies benefit, the society where they work benefits, overall the whole world benefits. So, until the global market continues to be on a growth stage, I think it is a good news and more and more of this will continue to happen. Today, we are living in the era when the world market has more or less started looking similar or at least it has aspirations to look similar. So, we are getting into more openness, more transparency, similar regulation, more international trade. The growth of one will cause growth in other. I think the world economy will continue to grow, especially these emerging economies and developing countries will continue to grow for next 30/40 years and it is good news to the rest of the world.</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Do you see the possibility of instruments and mechanism like regional mutual funds in South Asia to invest in the share market?<br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">One of the discussions that we had both with the SAARC secretariat and the central bank here was in this very line. We should try and create some kind of regional hub in which we could have institutions which are not only taking domestic view but are taking the regional view. It could be regional investors, regional mutual funds and exchanges with cross border trading. It will depend on how much time it will take for each regulator and each country to digest that. But I think in the foreseeable future, in next two to three years time some of these concepts will actually become a reality.</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Now, the commodities future trade is also booming in the region. And they seem to have posed sort of regulatory challenge. In Nepal such market is blamed to have facilitated capital flight. How is your view? <br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">Commodities markets are markets for risk management. Secondly, they are market for giving price signals of what is expected to happen in future so that policy makers can take policy measures three months or six months in advance. Third, the physical market for commodities lack transparency, they are fragmented. To give a common view to the rest of the world on what is happening in this market, whether there is crisis building up or not you need to have an efficient futures market. An efficient futures market also brings an efficient physical market. I don't agree that commodities market cause flight of capital because it is essentially a market for risk management. People will not invest very large amount of money until they invest in the physical market. Futures contract should be for one, two or three months which is not a long-term investment. Typically, flight of capital takes place because of other natural economic indicators like high inflation, low growth of economy and interest rate structure. The domestic capital has to remain here and does not have an option. But if it is global capital, it goes to the most efficient market which has high growth, low interest bearing and good opportunity for growth. Commodities markets are rational markets. These markets will look at the fundamental demand and supply. Based on the fundamental demand and supply, price recovery will take place. </span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">If someone is buying wheat, cotton or gold, that means the price of that commodity in the future can go up. But the price&nbsp;of a commodity futures contract will go up only if the physical commodity goes up. Physical gold is going up because someone is buying physical gold. They are too integrated together. Physical market demand and supply is dependent on actual consumption and actual supply. I don't think we should panic at the price fluctuation in the commodities exchanges. However, if we can have&nbsp;regulatory system, more transparent system, better safeguard on exchange, clearing corporation it will eb better because then some of these worries&nbsp;will go away. </span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></div>
<div style="margin-top: 5.65pt; text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong>Of late, the share market index as well as confidence of investors has remained low in Nepal. How can these be bolstered up ?<br />
	<br />
	</strong></span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);">There are no shortcuts to it. When an economy is going through a low cycle and if you only have domestic market, the entire country has one view. You donâ€™t have a contrary view from anyone else because you only have individual retail investors. Their appetite to take a long term call is very minimal. So, when your market is going through slowdown, the individual investors will be more scared so they will also take a view which is not more than a day. Now, you need someone who can take a view which is for one month, one year or five years. This can only be done by institutional investors. So, it is paramount that Nepal tries and builds up domestic institutional investor community so you can put mutual funds in place. I don't know how your pension industry is, but I can be pretty sure that some of those funds will come and they will invest in the capital market. And insurance industry too can invest in capital market. This is level one. You now have a person who is willing to take a call which is a longer term. But still they are domestic and have a view which is not very diversified. If you can adjust global investors inside, you will have a view which is very different. They are willing to take a call which is much longer, in much larger quantum of money because now the stocks are available very cheap. Their cost of borrowing will be less. They can come and do large borrowing and as a result the market will grow up. So, in a market which goes to such a long term low cycle, the only way to break out of the cycle is by ensuring that institutional money both from domestic and global markets gets attracted to the country and I think you should do that.</span></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	<br />
	</span></span></div>',
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			'description' => 'Joseph Massey is Chairman of South Asian Federation of Exchanges (SAFE), a forum of exchanges with 32 members from South Asian Region, UAE and Mauritius. SAFE works....',
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		'Article' => array(
			'id' => '388',
			'article_category_id' => '46',
			'title' => 'Dr Thomas Gass',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<span style="font-size: 14px;"><strong><br />
	</strong></span></p>
<p>
	<span style="font-size:14px;"><strong>The Taxpayers Of This Country Are The Major Donors To Nepal (july 2011)</strong></span></p>
<p>
	<br />
	 </p>
<div style="text-align: justify;">
	<span style="font-size: 12px;"><strong><img align="left" alt="taxpayers" border="1" height="195" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/interview(4).jpg" style="width: 139px; height: 195px;margin:10px;padding:10px;" vspace="5" width="139" />Dr Thomas Gass</strong> is the first residential Ambassador of Switzerland to Nepal. He was previously Switzerland's ambassador to the United Nations in New York and spent five years there prior to arriving in Nepal. He holds a PhD in biology and began his career with the Swiss Agency for Development and Cooperation (SDC) in 1988. He has held positions in the Swiss civil service and with the United Nations. Gass was the Vice-President of the executive board of the United Nations Development Programme and United Nations Population Fund. He has also lived in Guyana and worked in Africa and the former Soviet Union. In an interview with Pinaki Roy of <i>New Business Age</i>, Gass discussed a diverse range of issues from Swiss cooperation and its impact on the Nepali society to the constitution writing process in Nepal. Excerpts:<br />
	<br />
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<div style="text-align: justify;">
	<span style="font-size: 12px;"><br />
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;"><strong>Switzerland is among the few countries that initiated financial assistance to Nepal since 1959. How do you evaluate Swiss cooperation over the last 52 years?<br />
	<br />
	<br />
	</strong></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">I would say that this has been an extremely fruitful partnership that has encompassed mutual learning and has evolved over the time as any working partnership should. Initially, Switzerland implemented many projects directly and we had up to 100 experts working here at a time in the 1970s. We work differently today as we place more emphasis on the leadership and the coordination of the government and make use of national capacities for our projects here. We work through the ministries, INGOs and the local NGOs among others.<br />
	<br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;"><br />
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 12px;">One of your primary objectives has been to build rural infrastructure, particularly, the suspension bridges. Do you systematically assess the economic impact of these bridges constructed mainly by Swiss support?<br />
	<br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">Yes, we do systematically assess the impact of our projects. But we don't assess these projects only in an economic way; we also look at them from a social and inclusion point of view. Over 1,600 trail bridges have been built and 3,500 maintained in the last 10 years. As a result, over 4.8 million people have better access to services through safer river crossings. On an average, each bridge has reduced walking distance by 2.5 hours and about 4 million person-days of employment have been generated through these bridges. These bridges are turnkey projects constructed by the villagers and the community. In the last four years alone, school attendance has risen by 22-27 per cent and visits to health centres have increased by 20 per cent on an average in places close to the newly built bridges. So, these are the kind of evaluations that we have. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 12px;">Forestry is a major area that you have been contributing to. However, the Swiss government has diverted its attention from forestry to other areas of late. What could be the possible reasons for this?<br />
	<br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">We certainly have invested a great deal of time and resources in forestry and it's true that we have been focusing on some other areas too. However, let me correct you by saying that we are still interested in forestry. We are and will continue to invest in forestry. To give you the figures, we have been supporting the previously-funded forest project since 1991 which will end this year. The project has resulted in reversed deforestation for 185,000 hectares of government-managed forests. It has also improved the condition for 135,000 hectares of community-managed forests in the three districts where SDC [Swiss Development Corporation] has been active. Additionally, increased availability of forest products has contributed to sustainable livelihood of 145,000 families and 16,000 person-days of forest based employment have been generated for the poor. Strong multi-stakeholders mechanism and participation from empowered community groups were crucial while achieving these results.<br />
	<br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;"><br />
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">We are currently planning and preparing a multi-stakeholder forest programme together with DFID and Finland with the Ministry of Forest and Soil Conservation in a supporting and facilitating role. It will build on our respective experiences and extend its impact to a great number of districts spanning over 10 years. The programme will cover about 60-65 districts of the total 75 districts in Nepal. Therefore, I would say that our presence in the forestry sector is probably more than ever.<br />
	<br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;"><br />
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 12px;">You have tried to link Swiss contribution with entrepreneurship, for example, the employment fund. As a drastic departure, you have chosen to work with private companies as trainers. How successful has the idea been?<br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">We have been engaged in vocational skill training since the 1950s with cheese and carpet production. We then moved into more formal vocational training with technical schools such as the one in Balaju.&nbsp;We were also associated with the Technical School in Jiri in the 1980s and the Training Institute for Technical Instruction (TITI) in the 1990s. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;"><br />
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">This cooperation changed over the time because many more national capacities were becoming available in the formal training sector. At the same time, we realised that we were reaching only a small number of trainees through formal training who could perhaps afford on their own. We started partnering with private entities as training providers to reach the poorer segment of the society as well. It is easier to target disadvantaged and marginalised groups through our new approach. The onus is now on the training provider to find the first employment for the trainees. We feel that vocational training responds more directly to the needs of the labour market through this approach. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;"><br />
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<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 12px;"><br />
	The Swiss government was supporting the promotion of good governance. Do you think it has contributed towards transformation of government practices in Nepal?<br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">The money that Switzerland invests into its development cooperation with Nepal comes from the Swiss tax payers. It is therefore absolutely essential that we give adequate attention to good governance and fiduciary management of the projects funded by us. And, we hope that it has a positive influence on the communities and the ministries we work with. Like any other country, Nepal requires good governance across the board from the villages to the central government and from the local associations to the major national parties. Our influence is obviously less at these levels. It is the Nepali people that have to hold their politicians and administration accountable for their respective actions. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;"><br />
	<br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">On our part, we have promoted and tried to practise public hearings and public accountability for our projects at the local and district levels. We have seen that there are concerns to begin with while we practise accountability. However, all parties are satisfied after the entire exercise is over. The local and district administrations also realise that such practices actually strengthen their credibility. At the same time, the population too gains a lot of confidence. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;"><br />
	<br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 12px;">You have been working with the same partner, Pro Public, for over 15 years now. How do you justify this association for such a long period of time?<br />
	<br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">Yes, we have had a very long cooperation for sure. But one has to acknowledge that Pro Public has a great deal of experience. They have been in the field for a long time and have been in many places so we have to give them credit for that. The current phase of the project with Pro Public is coming to an end this year and we haven't yet decided who will be our future partner. We believe that we need support from an independent organisation that helps the public hand to build up its credibility through public hearing. It does not necessarily have to be advocacy or accusing the administration on its weak points. It is more about building the capacity and confidence to face the public by being transparent. There is a niche for these kinds of activities in every district which makes our projects and the work of the local administration so much more effective.</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;"><br />
	<br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 12px;">Some of your projects like Jiri Multi-Purpose Development Project have been completely abandoned. What should Nepal do to make such projects and development sustainable?<br />
	<br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">Well, the question is not about what should Nepal do. It's rather about what should the development partners both Nepali and Foreign do. First, the projects have to respond to a real need in order to be sustainable. They need to respond to the demand by the beneficiaries and these needs may evolve over a period of time because the beneficiaries and their aspirations evolve. Second, the projects also have to be of appropriate size and be constantly adaptive. It is because the counterparts the national entities can take over some of the responsibilities of the projects in a more convincing way. Therefore, these are the two elements that help projects become sustainable. The projects are the tools to deliver certain services that need to continue. </span></div>
<div style="margin-bottom: 0.0001pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;"><br />
	<br />
	</span></div>
<div style="margin-bottom: 0.0001pt; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 12px;">The issue of inclusion is in the forefront of development debate lately. Is this the right approach given that it would further consolidate caste as ethnic identity just to get the&nbsp; </span></strong><strong><span style="font-size: 12px;">desired benefits?<br />
	<br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 12px;"><img align="left" alt="thomas" border="1" height="244" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/img1(2).jpg" style="margin: 10px; padding: 10px;" vspace="5" width="400" /></span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">The benefits of social and economic development frequently do not get distributed equitably in societies that are very diverse and strongly compartmentalised. This leads to frustration and conflict. Invariably, there is an accumulation of wealth and power by those who already have it rather by the ones who don't have it. This has been experienced in many countries and it has been experienced in Nepal too.&nbsp;The other problem is that the potential of the diversity of a nation is not unleashed. Imagine a family, village or a country where all the decisions are taken only by men. For example, I can't imagine not involving my wife in decision making. She may have many skills, knowledge and competencies that I lack. The same is true for a country where a single ethnic or linguistic community is controlling all the decisions. This way, you are invariably reducing the development potential of your country to a fraction of what it could be otherwise.&nbsp;</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;"><br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 12px;">Given the climate change, how do you think issues like bio-diversity can be addressed?<br />
	<br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">The problem with climate change is that we don't really know the end effect especially in a country like Nepal where there are so many ecological zones. Some places might become drier and others wetter so there could be a lot of fluctuation. The diversity in nature is the insurance policy against change. That's why nature has been created the way it is, with a lot of diversity where one plant may die and another may survive. The diversity has to be maintained in order to adapt to the changes that we don't know about. And therefore, natural bio-diversity and agricultural bio-diversity have to be promoted very actively keeping the climate change in mind. Farmers in Nepal who live in very diverse environments can help maintain and cultivate agricultural bio-diversity that would help the country resist and be more resilient to climate change and its effects. But the community and the country as a whole has to recognise that service. It's not just the food production, it goes beyond that. This is a little complicated&nbsp; it means that you have to start thinking about environmental services by getting the farmers some kind of support that is more than just the minimum payment. <br />
	<br />
	<br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;"><br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 12px;">The Swiss government is the major donor towards supporting constitution writing process but it doesn't seem to have yielded any results. What do you think is the problem with constitution writing in Nepal?<br />
	<br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">The taxpayers of this country are the major donors to Nepal. They are the ones who pay the salaries of the parliamentarians and indirectly, the politicians. Therefore, the investment of the international community cannot be compared with the investment of the people of this country in terms of time and resources. Changing the direction and design of a country takes time. It requires a lot of focus and motivation and the need to make compromises. This is in the hands of the Nepali politicians who have to come together for an agreement and then be able to share their findings with the general population at large to achieve a consensus. The current generation of the politicians owe this to the country. The constitution in my country also took a long time. We can be here as friends, nudging and criticising but in a constructive and positive way. We certainly hope that the constitution writing process in Nepal will now move forward. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;"><br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 12px;">Many people think that Swiss federalism model is appropriate for Nepal. How do you view this idea?<br />
	<br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;">I strongly believe that Nepal needs to find its own model. What I can say though is that Swiss federalism is not about autonomy and independence. It is about how our cantons (provinces in your case) can work together building on reciprocal strengths and diversity to work in a united way for a stronger country. That requires a lot of compromises. One can never see one's own problems only. The provinces in my country need each other and I assume that it would be the same in Nepal. The policy makers can have a positive bias towards their own provinces. Previously, anyone who had a vision and was ambitious for Nepal focused on Kathmandu. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;"><br />
	</span></div>
<div style="text-align: justify;">
	<span style="font-size: 12px;"><span style="line-height: 115%;">In the future, the people would like to be identified by their respective regions and will be looking for strengths and resource development of their own provinces. The sense of pride for belonging to a certain province will come into play which was not there earlier. It helps but you can never lose out of perspective that a province is not viable by itself and requires to be complemented by other provinces. Therefore, everyone needs to understand that Nepal, as a single entity, needs to establish credibility at the international level. <br />
	<br />
	<br />
	<br />
	</span></span></div>',
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			'description' => 'Dr Thomas Gass is the first residential Ambassador of Switzerland to Nepal. He was previously Switzerland's ambassador to the United Nations in New York and spent five years there prior to arriving in Nepal.',
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			'title' => 'Dr Supachai Panitchpakdi',
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			'content' => '<p>
	<span style="font-size: 14px;"><strong><br />
	</strong></span></p>
<p>
	<span style="font-size: 14px;"><strong>Trade Should Be Harnessed To Ensure Development</strong></span></p>
<p>
	 </p>
<p>
	<span style="font-size:14px;"><strong><br />
	</strong></span></p>
<div style="text-align: justify;">
	<span style="font-size:12px;"><img align="left" alt="WTO" border="1" height="185" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/interview1(1).jpg" style="width: 266px; height: 185px;margin:10px;padding:10px;" vspace="5" width="266" />Dr Supachai Panitchpakdi is the Secretary-General of the UN Conference on Trade and Development (UNCTAD), a post he first took up in September 2005. Prior to this, he was the Director-General of the World Trade Organisation (WTO). A PhD in Economic Planning and Development from the Netherlands School of Economics (now Erasmus University Rotterdam), he also served as Thailand's Deputy Prime Minister, Minister of Commerce and Deputy Minister of Finance on different times.&nbsp;Dr Supachai was in Kathmandu recently to attend the Regional Workshop on Productive Capacities, Economic Growth and Poverty Reduction in Asian and the Pacific LDCs. In an interview with Gaurav Aryal of <i>New Business Age</i>, he shared his views on economic, trade and development issues of the Least Developed Countries (LDCs).&nbsp;Excerpts:</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><br />
	<br />
	</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><strong>UNCTAD is organising a series of regional workshops to disseminate the findings of its reports such as Least Developed Countries Report, UNCTADâ's Division for Africa, Least Developed Countries and Special Programmes (ALDC) etc. What are the general findings of these reports?<br />
	<br />
	</strong></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;">We are trying to concentrate on the areas of structural adjustments mainly in supporting the work of the states. We are trying to create productive capacity which means jobs creation, investment in infrastructure, investment in power plants and education. Our findings say that economic growth is needed to create social welfare for people. It does not happen automatically. So, there has to be definite development governance that would direct all the gains from growth to areas that would give people the right to participate, have transparency and decision making process as well as in the areas of trade. LDCs are essentially small economies. So, we think an LDC should make efforts to mainstream trade policy into its national development policy. The domestic markets are not enough to maintain basic demand so they need external demand too. For this, they need access in the international market. Special concessions given by the advanced countries for the LDCs will be crucial. It should be the heart of what we call early harvest for Doha negotiation.</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><br />
	<br />
	</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><strong>What can Nepal learn from the experience of other developing countries?<br />
	<br />
	</strong></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;">First of all, development governance is very important. If you look at countries like Malaysia and Korea, these developing countries have actually showed the way for industrialisation process where the government has been taking the lead. They support industrial zones, put up investment policy that attract foreign direct investment (FDI) in technology related areas and create trade infrastructure in terms of ports, transportation facilities and trading firms. For example, they have trading firms that help promote the products in foreign countries. Nepal can also learn from their monetary policy that is customer focal. In the area of tourism, Nepal is doing well but it can certainly do better. More investment is required to attract tourists but it is important at the same time, to keep the negative effect of tourism under control.</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><br />
	<br />
	</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><strong>Despite having ample resources, poor countries have extremely low economic growth. Could you highlight the key issues where LDCs like Nepal fail in formulating trade and economic policies?<br />
	<br />
	</strong></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;">I am not clear about Nepal but many LDCs have remained too dependent on few commodities. They have also failed most of the time to pursue positive development. This is an area in which it needs investment from the government sector for extended service, irrigation projects, water management and to build roads in the rural areas.&nbsp;The government also needs to provide support and subsidies for farmers in rural areas where they do not enjoy enough income to sustain themselves. LDCs also need to sustain in the areas of gender and women. In Africa, for example, women are the most underutilised productive capacity. In Asia, we still need legal reform that would put women rights, wage level, welfare treatment, education etc at par with men.&nbsp;LDCs can also learn from countries that have performed well in domestic resource mobilisation because one has to develop the domestic financial market. The banking system must be solid and it needs prudential supervision by the government so that more savings can be mobilised. You can have more resources here in Nepal itself and you don't have to be totally dependent on foreign aid.</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><br />
	<br />
	</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><strong>You have been part of the Thai Government in the past. What should be the agenda of LDC governments on the level of policy making and implementation, to increase the export trade volume?<br />
	<br />
	</strong></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;">The LDCs will have to invest in capacity to produce, to begin with. For example, if you have some food products, you may need to process food products as well in order to add value. Similarly, if you have some minerals, then you should think of investing in the processing of minerals. In Thailand we invested in canning of tuna fish which has been doing exceedingly well. We used to produce automobile spare parts to begin with but gradually we started producing automobiles on our own. So, you have to start from somewhere and try to move up the ladder all the time. I would recommend that LDCs having niche in certain areas have to keep adding value. Importance of technology is one lesson we have learnt in Thailand. Innovation and technology depends on the quality of education. Education must be guided in a way that would promote research. In Thailand, university professors and academics are encouraged to conduct more research and innovate. Foreign companies are also being attracted to the country to learn technology from. </span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><br />
	<br />
	</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><strong>LDCS are largely dependent on donors and face heavy foreign debt. They also lack fundamental base of stable politics and proper policy implementation. Amid such complexities, how can countries move on the right path of development and poverty reduction?<br />
	<br />
	</strong></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;">Well, I think these are more controversial issues than the development policies. You must have growth to be able to have social investment and welfare but, of course, a loan is not enough. In order to transfer growth into social development, you probably need a policy on socio protection and inclusive development. It means that you would have to try to spread growth throughout the country. You need growth to be well distributed and not concentrated in certain areas only. It means decentralisation. You need to decentralise the authorities of the government and the investment activities. Investment has to be made into rural network of roads and means of transportation. Both skilled and unskilled people need help as well. If you look at the informal sector particularly, there are a lot of people being underpaid. You have to be able to initiate social programmes that would help guarantee employment. The employment guarantee programme in India could be one shining example. I feel that such programmes help support rural families. I also like the Bolsa Familia programme in Brazil where government financial support is given to families on condition that children must attend school until secondary education. These are some of the obvious measures that are needed to produce the impact from economic growth for social welfare. </span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><br />
	<br />
	</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><strong><img align="right" alt="reduction" border="1" height="214" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/interview(1).jpg" style="width: 171px; height: 214px;margin:10px;padding:10px;" vspace="5" width="171" />What should be the role of the development partners in addressing the issues of development and poverty reduction in the LDCs?<br />
	<br />
	</strong></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;">Development partners normally provide financial means. They have a target to meet - a contribution of 0.15 to 0.2 per cent of the GNP - which has to be given to the LDCs. However, they are giving only 0.09 per cent which is too low. I think the target should be met. The development partners should work on transfer of technology. This is not in financial terms but in terms of intellectual property rights. There should be some sort of open software system that can be accessed by the LDCs so that proprietorship could be opened up for people to search. I would say, in the trade areas as per the Doha agenda, they can give concessions to the LDCs as an early harvest. They don't need to wait until the end of the round to give concessions in the form of duty- and quota-free concessions for trade facilitation and in the areas of outsourcing of services. These are some of the areas which, I believe, could be done in terms of green economy. I also expect the green fund for the LDCs or the green development mechanism to be established. Some of these arrangements would pay special attention to the roles of the LDCs and they should be granted special assistance in these funding ranges. </span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><br />
	<br />
	</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><strong>How do you view the current debate on aid for trade?<br />
	<br />
	</strong></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;">Aid for trade is a good programme to mainstream trade into development. For us at UNCTAD, aid for trade means aid for trade for development. So, trade should be harnessed for serving this purpose. We have been talking about the need for more productive investment and investment in trade infrastructure, development training of skill negotiators, the need to setup the right commercial institutions and the right legal framework. You must have the legal people who understand the Trade-Related Aspects of Intellectual Property Rights (TRIPS) issues. You may also need to have the IT court. The aid for trade should also help in the areas of providing capacity to accomplish more work in environment and trade. UNCTAD believes the new areas of green economy would provide for opportunities to invest in renewable and energy products. I think â€˜aid for trade can help pave the way to support transfer of technology and training of scientists and engineers. This would also help in bringing the LDCs to new rounds of opportunities courtesy the green economy.</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><br />
	<br />
	</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><strong>In poor countries, the governments try to tread a middle path between the models of controlled economy and free economy. How do you evaluate Nepal's trade and more specifically, its economic policy?<br />
	<br />
	</strong></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;">To be fair to the government in Nepal, I am not qualified enough to emphasise on what Nepali economy should be doing. But I do see the role of the government being evolved here. I hope it will evolve in a way where there won't be too many controls. It is important for the Nepali government to be balanced in its role along with its evolving policies. The direction we would like to advise is to go into what we call development governance. This will help policies being directed at getting the development strategy right. The government should not look at market reform, competition and pricing policy only. It must have the market work so as to attract new projects that would create employment. Productive investment should be encouraged. Nepal needs a monetary policy that would mobilise more funds and keep interest rates not too high. It would mean the fiscal policy will have to be directed at needs to create the perfect infrastructure. It will also mean that the exchange rate policy needs to be flexible. And you have to have the exchange rate at a level that will be stable and will help make your products competitive.</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><br />
	<br />
	</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><strong>Questions are often raised in poor countries about the value and benefit of being WTO members. Anti-WTO activists accuse that WTO policies are pro-rich and poor countries simply can't afford to abide by WTO policies. What do you have to say?<br />
	<br />
	</strong></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;">Well, being a WTO member is not enough. It won't help a country if it doesn't work on it to make itself strong in competition. So, being a WTO member is like being presented with opportunities to take advantage of the markets around the world. Taking advantage from the market depends on domestic policies. The domestic policies must drive forward to do more work in the areas of trade infrastructure, business improvement, skills training, development of science of the exported products and standard of products that would meet international standards. The technical barriers to trade and technical standards of manufactured products are also important. You also need the right laws to take benefits from the membership of the WTO. Being the member of the WTO is not a free ride, for sure.</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><br />
	<br />
	</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><strong>What's the equation between UNCTAD and WTO in terms of policies?<br />
	<br />
	</strong></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;">UNCTAD and WTO follow similar policies and support and complement each other. For instance, UNCTAD has been doing a lot of work in the area of capacity building while WTO is doing the same in the area of trade. We support the WTO in areas of trade facilitation and negotiation and trade and environment negotiation. We do the work on investment policies that WTO cannot do due to the lack of investment agreement at WTO. Being the focal point for investment policy for the UN system, we have been giving advice on investment policies to developing countries around the world. We advise them on investment agreement, investment promotion, policies etc. So, this actually complements WTO on what it cannot do. Also in the area of competition laws and consumer protection which WTO could not agree, we are providing assistance for countries to establish competition laws and consumer protection. Therefore, I think we do play a complementary role. The pace of trade liberalisation might have been a little too fast for developing countries. They may have not been able to reap benefits because they were not well prepared. The WTO also agrees now that in order to garner benefits from trade liberalisation, well preparedness and trade mainstreaming into the development process are essential. </span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><br />
	<br />
	</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><strong>How would you like Nepal to take advantage from huge and growing markets on both sides of its borders?<br />
	<br />
	</strong></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;">Asia is now the growth port of the world. This is an area where growth is maintained at a very high level and quite stably. I think Nepal is situated in the right place with major countries surrounding it like India and China and South East Asia within close proximity. There should be a definite government policy to direct trade cooperation with all these countries. Such endeavours are supported by Asian Development Bank also. Cooperation is not always easy among neighbouring countries. However, you must concentrate on joint projects like transportation or regional projects taking part in joint programmes like tourism promotion etc. I think you should make use of having a deeper integration with South East Asian and North Asian countries in the region besides China and India. </span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><br />
	<br />
	</span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><strong>Will it be sustainable for LDCs to look for export trade only?<br />
	<br />
	</strong></span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;">No. Sustainability is more than just export trade. It means you must have social equality, look after ecology and environment and invest in forestation to keep forests alive and growing. You have to invest in water management and human resources that will make for sustainable development. Therefore, it's not only export trade that would drive you. You must have a combination of inclusive policies that would shape the benefits of growth and trade equally. </span></div>
<div style="text-align: justify;">
	<span style="font-size:12px;"><br />
	<br />
	</span></div>',
			'published' => true,
			'created' => '2011-05-31',
			'modified' => '2012-09-16',
			'keywords' => '',
			'description' => 'Dr Supachai Panitchpakdi  is the Secretary-General of the UN Conference on Trade and Development (UNCTAD), a post he first took up in September 2005. Prior to this, he was the Director-General of the World Trade Organisation (WTO). A PhD in Economic Planning and.....',
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	(int) 14 => array(
		'Article' => array(
			'id' => '249',
			'article_category_id' => '46',
			'title' => 'Mark E Hansen',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<span style="font-size: 14px;"><strong><br />
	</strong></span></p>
<p>
	<span style="font-size:14px;"><strong>What Gets Measured, Gets Done</strong></span></p>
<p class="ANSWER">
	 </p>
<p class="ANSWER">
	<br />
	<span class="MyriadPro"><span lang="EN-GB"><img align="" alt="" border="1" height="220" hspace="5" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/interview1.jpg" style="width: 224px; height: 220px;margin:10px;padding:10px;" vspace="5" width="224" /><br />
	</span></span></p>
<p class="ANSWER">
	<span class="MyriadPro"><span lang="EN-GB"><br />
	</span></span><span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">Mark E Hansen</span></span></strong><span class="MyriadPro"><span lang="EN-GB">, the Head of Asia Governance and Strategic Initiatives at Standard Chartered Bank, serves on the Bank's Asia <br />
	</span></span></span></span><br />
	<span class="MyriadPro"><span lang="EN-GB">Geographic Management Committee. He has a Masters in Economics from UC Berkeley and a BA with honours from Cornell University. He was previously a partner at strategy consulting firm Booz Allen &amp; Hamilton. In an interview with Pinaki Roy of <i>New Business Age</i> during his recent visit to Kathmandu, Hansen spoke in detail about various aspects of corporate governance. He has over 25 years of experience in strategic transformation and performance improvement programmes and has been involved in the development of Standard Chartered's executive leadership training programme. Hansen also put forth Standard Chartered's take on mergers and acquisitions, in the light of Nepali banking sector's latest merger rhetoric. Excerpts:<br />
	<br />
	<br />
	</span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">How do you look at the overall impact of corporate governance in private sector, specifically banking operations?</span></span></strong></span></span></p>
<p>
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.1pt;">I think it's becoming increasingly important from several perspectives. One is from the investor's perspective. Investors want to invest in institutions that they believe have strong corporate governance, to ensure the security of their investment. It's not just an emerging market issue; it's a developed country issue. The fate of big companies such as Enron, MCI, WorldCom and Lehman Brothers have all raised questions about the appropriateness of corporate governance. As the world continues to evolve, investors as well as customers want to do business with institutions they believe are doing the right thing. In the financial sector, we think it's a point of differentiation for Standard Chartered Bank where we have such strong corporate governance. And it's well appreciated by the regulators in the countries that we operate in. We pride ourselves on having high standards. We are well managed and governed. So, we believe we are at the front end of the trend that will put increasing emphasis on corporate governance. We pride ourselves in Nepal because we are a listed company here. And we make sure that we are on the cutting edge of best practices.&nbsp;</span><span lang="EN-GB"> <br />
	</span></span></span></span></p>
<p>
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">When did Standard Chartered Bank first envision the importance of corporate governance? How has it helped spearhead the system so far?</span></span></strong></span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.1pt;">It's been there for a long time. We have always had in our structure a form of country management with governance as well as the businesses. Sometimes it's more towards the business side and at other, towards the governance side. But it's a bit like a check and balance system that you would see in political systems where you have a legislative, an executive and a judicial branch. In ours, we have our businesses and then we have the governance. They serve as a healthy tension and a check and balance between the two. By design, we have always had our businesses focused on shorter term. It is about making the numbers for the year and the governance function having the more strategic perspective. It predates the governance crisis that happened in the west. It was impacted by certain events in the UK in the 1970s and 1980s and later in the US. But all that did was force us to be more rigorous and more introspective about how we can do this better.<br />
	<br />
	</span></span></span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">How important is the role of institutional investors in increasing the professional diligence of your bank as a corporate entity?</span></span></strong></span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.1pt;">It's quite important. We have large sovereign funds, long term institutional funds, insurance companies as well as a reasonably diversified investor base. We think that diversity is a strength because it helps us work through many different constituents. The institutional investors tend to have a longer term perspective which is important. One of the concerns that I think exists in the academic press today is that they focus too much on the short term, on quarterly profits. We only report our financials semi annually. We would like to look and take a longer term perspective like the investors do. The other point I have always raised is that the investor base is expanding, actually. For example, we are listed in India now so it's not just the western investors in London. We now have Indian investors in Mumbai, Hong Kong investors in Hong Kong and Chinese investors in Shanghai.</span><span lang="EN-GB"> <br />
	</span></span></span></span></p>
<p>
	 </p>
<p>
	 </p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">A board of directors often plays a key role in corporate governance. How do they go about ensuring accountability of the organisation to its owners and authorities?</span></span></strong></span></span></p>
<p class="ANSWER">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.1pt;">If you look at the directors roles, it's important that they understand sharing the responsibilities they take on. What has been happening in the past is that in some institutions they were very lightweight. The practice still exists in a few companies but it is starting to disappear from most of them. Today, the directors have to come prepared, contribute and interface with the regulators. Everyone Capital Markets, Regulators and the Institutions expect the directors to perform. As for our own subsidiaries, we have quite a rigorous process for selecting and then assessing directors on a regular basis. </span></span></span></span></p>
<p>
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">Who are the parties to corporate governance that have an interest, direct or indirect, in the effective performance of an organisation?</span></span></strong></span></span></p>
<p class="ANSWER">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.15pt;">It's a wide group of stakeholders. First, the investors who want to know if the money is put in a well run and governed institution. Second, the banking and capital markets regulators because they want the assurance that the propriety in compliance with regulations is embedded in the organisation that starts with the governance function. And then the customers, increasingly, because they want to know they are doing business with the right organisation. The employees too have an interest. And I say this particularly in Asia because a number of banks and local companies are family-run entities. They have a particular management and governance style. In fact, the part of the problem is that the management and governance aren't separated. So, I think the establishment of appropriate governance and a separation of governance from the management are quite important for the evolution of companies in the Asian markets.</span></span></span></span></p>
<p>
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">Could you tell us about the key elements of good corporate governance principles? </span></span></strong></span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.1pt;">The first one is compliance which focuses on bringing the global best practises. It also recognises that one has to adhere to local regulations. Therefore, it is a binding constraint issue. We try and incorporate the best practices but we also have to accept the local constraints. The second is integrity and transparency. The best way to demonstrate corporate governance is actually the transparency by which you disclose all your financial information as well as other information about the organisation. The third is process which, though boring, is quite important. The discipline around the varying board agendas, getting papers circulated beforehand, having meetings at appropriate times, correctly managing etc are part of this. It's very administrative but critical for the impact on the working style of the board of directors. This way you make sure that the board is focusing on the right thing and getting its work done efficiently. The final one is the measurement of the board's effectiveness. You need a process to self-examine yourself. It's not necessary to bring in outside experts to determine that. The clich what gets measured, gets done is true.</span><span lang="EN-GB"> <br />
	</span></span></span></span></p>
<p>
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">What are the consequences of not having good corporate governance?</span></span></strong></span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.1pt;">As I mentioned earlier in this interview, the many recent corporate scandals MCI WorldCom, Enron, Lehman Brothers to name just a few of the more well-known failures from poor corporate governance evidence some of the consequences. Investors lose money. Employees lose their jobs. Regulation may be increased to the point where it becomes very costly and burdensome. Stakeholders trust in business diminishes.&nbsp; The trust which underpins market economies becomes eroded. I think the latter is a lot of the reason why corporate governance is becoming more important to consumers, investors and the society at large. Increasingly, consumers prefer to buy products and services from, employees prefer to work at, and investors prefer to invest in companies who are well-governed and who exhibit good corporate governance.</span><span lang="EN-GB"> <br />
	</span></span></span></span></p>
<p>
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">The Enron collapse is an example of misleading financial reporting. How crucial is quality financial reporting for the corporate governance system to function effectively? </span></span></strong></span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.1pt;">It's absolutely crucial. Because if you cannot trust the numbers, there is no way you can make an economic or financial assessment. I think the financial crisis did not come as a surprise for many because irregular accounting practices existed in the system. Markets function on information and to a certain extent, on trust. If the information cannot be trusted, they don't have market values.</span><span lang="EN-GB"> <br />
	</span></span></span></span></p>
<p>
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">What are the barriers to good corporate governance and their corrective measures? </span></span></strong></span></span></p>
<p class="ANSWER">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.1pt;">Let me focus on what helps make good corporate governance. First, there must be a clear separation of governance and management responsibilities. Second, the directors should be willing to dedicate time and effort to be effective board members. Third, the independent directors must protect minority shareholders rights.&nbsp; Fourth, a strong audit committee has to be supported by a reputable and capable external auditor and an independent and strong internal audit function. Fifth, there must be clear, accurate and timely management and financial information.&nbsp; Finally, a board effectiveness review process has to be in place to measure individual contributions and the collective effectiveness of the board. This must be supported by effective company law and regulations which clearly define the corporate governance framework in an unambiguous manner. The form <i>per se</i> is less important than the substance, since there are different models of how to structure governance in a company, for example, Anglo-American models Vs continental European models.</span></span></span></span></p>
<p>
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">Can you attribute Standard Chartered Bank's stupendous success to effective functioning of corporate governance?</span></span></strong></span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.05pt;">Yes, we view corporate governance quite importantly. I am in charge of corporate governance for all of Asia. And we have a counterpart for the remainder of the bank in Africa, the Middle East and the western countries. We pride ourselves on following best practices not only with the UK board but also our subsidiary boards. Nepal is a good example because we are not just a subsidiary here. We are a listed company and we pride ourselves not only on the financial results we have. We do believe that the governance of the entity here is part of the reason why we are so successful. Again, it allows us to identify issues early on, with a good board and a good governance process in place. It makes you see the risks down the road and helps you position for them. One of the things that might be of interest to your readers is that we actually changed our process and set up two new sub-committees on our board in London. The first one is called brand and values which focuses on the soft side of the company. We think that it's absolutely important to have values in a new organisation. The next is that we have split risk and audit. The audit committee focuses more on audit results and is backward looking while the risk committee is forward looking and focuses on new things on the horizon.&nbsp;</span><span lang="EN-GB"> <br />
	</span></span></span></span></p>
<p class="questionsforinterview">
	 </p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">Nepal's banking sector is talking mergers of late. What is Standard Chartered's take on this? </span></span></strong></span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.05pt;">In general, we prefer to grow organically and not through acquisitions because it's easier and more within our control. The degree of certainty about outcome is higher. I have worked on a number of acquisitions for the bank in Indonesia, Korea and Taiwan. Acquisitions are hard. A lot of management consultants will tell you that most acquisitions fail. And it's not normally due to financial reasons. They fail because of the difficulties and efforts required to integrate two separate entities. A lot of it surrounds not necessarily the business side but the soft side the people, values etc. In effect, you are taking another institution and marrying it to your institution. The cultures, values and perspectives aren't similar. It's very challenging and runs the risk of a strife in the management in the long term. I will give you a good example. As you know, we bought Grindlays Bank some years ago. The Grindlays deal worked very well for us and it has always been one of our best acquisitions. Not only because it has provided us a wonderful footprint in South Asia but also because the culture of the two merging banks in question, was very similar. Grindlays was a bank with strong local roots and a global perspective. Some of the other acquisitions we have done recently were that of very local banks. We had to adapt the way we worked, to fit in with the Korean and Taiwanese context, for example. It can definitely work like most other things in life it's a trade off. On Nepal specifically, we do think that there is a need for some consolidation. You have too many banks given the size of the financial sector here.&nbsp; </span><span lang="EN-GB"><br />
	</span></span></span></span></p>
<p>
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
	</span></span></p>
<p class="questionsforinterview">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><strong><span class="MyriadPro"><span lang="EN-GB">Does the Standard Chartered Bank have any specific plan in mind? Have you set your sights on any particular brand that you want to acquire?</span></span></strong></span></span></p>
<p class="MsoNormal">
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><span class="MyriadPro"><span lang="EN-GB" style="letter-spacing: 0.1pt;">We will look at opportunities that come our way but our bias will always be towards organic growth. We are quite happy with organic growth and will not pursue acquisition as such. Even if there was anything on the cards, our corporate governance practice does not allow me to disclose any specific information. Nepal is a market that's of interest to us. We will look at the market growth and keep different options in mind. But the organic option will always be our preferred option.&nbsp; </span></span><br />
	</span></span></p>
<p>
	<span style="font-size:12px;"><span style="color: rgb(0, 0, 0);"><br />
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FOREX

Currency	Unit	Buy	Sell
U.S. Dollar	1	121.23	121.83
European Euro	1	131.65	132.31
UK Pound Sterling	1	142.47	143.18
Swiss Franc	1	124.29	124.90
Australian Dollar	1	71.69	72.05
Canadian Dollar	1	83.90	84.32
Japanese Yen	10	10.94	11.00
Chinese Yuan	1	17.17	17.26
Saudi Arabian Riyal	1	32.27	32.43
UAE Dirham	1	33.01	33.17
Malaysian Ringgit	1	27.36	27.50
South Korean Won	100	9.77	9.82

Update: 2020-03-25 | Source: Nepal Rastra Bank (NRB)

Bullion

Fine Gold	1 tola	77000.00
Tejabi Gold	1 tola	76700.00
Silver	1 tola	720.00

Update : 2020-03-25

Source: Federation of Nepal Gold and Silver Dealers' Association

Petroleum

Petrol	1 Liter	106.00
Diesel	1 Liter	95.00
Kerosene	1 Liter	95.00
LP Gas	1 Cylinder	1375.00