From the Editor

Allow Private Sector To Spend Development Budget

Nov 30, -0001 0 3 minutes 50 seconds to read

…

A Matter Of De-Materializing It

Nov 30, -0001 1 3 minutes 37 seconds to read

…

Commendable Contract

Nov 30, -0001 0 3 minutes 25 seconds to read

…

Auto Dream

Nov 30, -0001 0 3 minutes 14 seconds to read

…

Budget 2014/15 Private Sector Neglected

Nov 30, -0001 0 2 minutes 59 seconds to read

…

Unhooking Economic Departure

Nov 30, -0001 0 3 minutes 11 seconds to read

…

Fallen Prey To Politics

Nov 30, -0001 0 3 minutes 23 seconds to read

…

Agenda: Economic Restructuring

Nov 30, -0001 0 3 minutes 50 seconds to read

…

Housing The Business

Nov 30, -0001 0 3 minutes 20 seconds to read

…

When Bulls Run To Bush

Nov 30, -0001 0 3 minutes 30 seconds to read

…

Bitter Taste Of Sugar

Nov 30, -0001 0 3 minutes 31 seconds to read

…

Hope Of Economic Revival

Nov 30, -0001 0 3 minutes 43 seconds to read

…

Unmanifested Political Will

Nov 30, -0001 0 3 minutes 14 seconds to read

…

Doubling The Growth

Nov 30, -0001 0 3 minutes 32 seconds to read

…

Bureaucratic Budget

Nov 30, -0001 0 3 minutes 36 seconds to read

…

< previous123next >

No Laughing Matter

The Sweet Rewards of Power

By Madan Lamsal

. . .
read more »

NEPSE

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			'title' => 'Allow Private Sector To Spend Development Budget',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	The spending capacity of the Government of Nepal is quite poor, to say the least. The government has been routinely allocating capital expenditure, also known as the development budget, every year. But it has routinely failed to spend the money. In the first nine months of the current fiscal year, the government has been able to spend only about 26 percent of the development budget. In the previous fiscal year, such spending was about 29 per cent. Government officials are authorized to make capital expenditure right after the parliament endorses the national budget. But they don&rsquo;t move for months and wait for the final trimester to spend the development budget in a hurry. This has developed as a culture.</div>
<div>
	&nbsp;</div>
<div>
	It&rsquo;s not only the government-funded projects but also the donor-funded ones that are affected by this chronic tendency. The projects funded by the World Bank (WB), Nepal&rsquo;s largest multilateral development partner, could be taken as an example. In the first six months of the current fiscal year, spending by the WB-funded projects has been poor with disbursement standing at 5.3 per cent against a target of 13.2 per cent. According to the WB, disbursement amounted to Rs 38.06 million during the period against the targeted Rs 94.6 billion.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	The ineffectiveness of the government machinery is clearly visible here as almost all of the WB&rsquo;s funding is channelled through the government system. There have been talks about enhancing the government&rsquo;s spending capacity but they are limited to just that &ndash; talks.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	The unspent amount has soared as this year&rsquo;s budget also has a carry-over of Rs 15 billion from last year&rsquo;s unspent budget. It shows that billions of rupees meant for development works have been remaining unspent. &nbsp;</div>
<div>
	&nbsp;</div>
<div>
	For years, we have been fatigued by this bizarre development practice. We have a measurable trend of low expenditure every year for various reasons. Since fiscal year 2011/12, capital expenditure has not crossed 30 percent of the allocated amount during the three trimesters. The delay in spending the budget can lead to multiple problems in the market such as lack of liquidity, no job creation and slow development work. &nbsp;</div>
<div>
	&nbsp;</div>
<div>
	If a major chunk of the budget continues to pile up, there is persistent risk of spending the budget unaccountably at the end of the fiscal year. This has been happening for the last several years. Every year, newspapers are replete with stories of hasty and hurried expenditure of development funds when only a few months are left prior to the end of the fiscal year. The expenditure of development funds expedites a few months before the expiry of the fiscal year. This puts people&#39;s concerns about quality development into question. &nbsp; &nbsp;</div>
<div>
	&nbsp;</div>
<div>
	Laws and guidelines clearly stipulate that development expenditures have to be made within a set deadline, and accountability and transparency must be maintained in the process. But brushing aside such legal and procedural mandates, expenditures are being made in such a way as to produce miserable development output against hefty expenditure. It has become a common sight in and around the cities, towns and villages that construction of new tracks and blacktopping of roads unusually pick up momentum during June and July each year. Nepal&rsquo;s fiscal year ends at mid-July. One can imagine the quality of construction and development works when a major chunk of the national budget is spent in a few months before the expiry of the fiscal year. &nbsp;</div>
<div>
	&nbsp;</div>
<div>
	Procedural delays in approving the project and awarding the contract, a tendency among contractors not to work after receiving the mobilisation fund in advance, frequent transfer of technical and top level staffers at the project and fear of the anti-graft body are some of the reasons for the low spending of the capital expenditure. Whatever the reason might be, the fact is the government hasn&rsquo;t been able to spend the development budget year after year. Therefore the responsibility of spending the development budget should be given to the private sector.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	If we adopt such practice, the private sector, which is far more efficient and capable than the public sector, can take the leadership of our development projects. The government, on its part can create a mechanism to periodically monitor the progress of such projects.</div>',
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			'title' => 'A Matter Of De-Materializing It',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	Nepal&#39;s share market index, Nepse is performing reasonably well since the formation of Nepali Congress led government. It is now hovering between 850 and 900 for sometimes now. Among many welcome developments, the plan to dematerialize (demat) the physical share certificates into the digital ones have boosted the confidence of the investors. But the demat process has been rather very slow. In seven months since it started (coinciding with the Nepali New Year 2071), only about a million scrips of some three dozen companies could be converted to digital format. No doubt, this is a time consuming process, but such a slow pace, though, is absolutely unwarranted for.</div>
<div>
	&nbsp;</div>
<div>
	Be that as it may, demat process would be completed, hopefully, soon. But more worrisome aspect is, other support infrastructure to augment trade in demat system remains far behind the mark. The recent lull in the market is now attributed to the fact that banks were not recognizing the dematerialized shares as security for financing investments. They may have their reasons to do so. But this reflects a clear lack of vision and coordination among the policy makers to simultaneously take forward all related developments of ancillaries so as to prevent the system from becoming lame.</div>
<div>
	&nbsp;</div>
<div>
	Simply, banks&#39; willingness to invest in the digital infrastructure and manpower training to handle these loan transactions doesn&#39;t seem to be forthcoming right away. And, there is no initiation from other relevant authorities like Nepal Rastra Bank and Securities Board of Nepal to facilitate this. &nbsp;It is though not to suggest that everything has to be shouldered by the public institutions, but policy exercises in view of the potential paradigms of such developments is unquestionably their special domain.</div>
<div>
	&nbsp;</div>
<div>
	As things stand now, three immediate tasks must be undertaken to not let the tempo in the share market wane off. First, banks should, may be through their umbrella organization - the Nepal Bankers&#39; Association, make their position clear with regard to their technical capabilities and cost-benefit analyses on facilitating demat transactions. They must also realize the fact that by making a digital transaction platform available, the share trading from all over the country may enhance in due course of time which in turn would help to increase their businesses. &nbsp;In many countries, a separate account for share trading has been a norm and a technical necessity. At the same time, they have adopted the rule of de-hooking the funds from other accounts while market volatility is emotion-racking. This effectively means that a trader can only trade from his trading account even if s/he has other functional accounts in the same bank, until inter-account transfers are made.</div>
<div>
	&nbsp;</div>
<div>
	Second, policy coordination among the policy makers and functional relations among the market makers have been largely a neglected issue. It is also a fact that regulatory authorities have been reticent until it is too late to react. In many cases, they lack the understanding of technical knowhow and degree of urgency seems to be taking a toll. This must be changed.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	Third, Nepal is one of those countries where investment in financial education at any level -from policy makers to retailers - has been close to zero. This has led to great discrepancies, policy confusions and inadequacies in every branch of the financial system, including the capital markets. Recognizing the complementarities of the several sub-branches of the entire system, a comprehensive financial education of a national scale is now an unconditional imperative. Only an institutionalized approach can address this need to its due worth.</div>
<div>
	&nbsp;</div>
<div>
	Of course, there are some unaccomplished, larger issues of capital market reforms. It is high time to interact with the private sector to find convincing and lasting answers to the questions: why the real sector representation in Nepal&#39;s capital market has been so insignificant? Are there ways to improve it? How and when? In nutshell, Nepal&#39;s financial system is looking for a shift not only to change the paper shares to demat form, but to translate the nation&#39;s overall economic thought process from a &#39;brick and mortar&#39; age to the contemporary digital age.</div>',
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			'description' => 'Nepal's share market index, Nepse is performing reasonably well since the formation of Nepali Congress led government. It is now hovering between 850 and 900 for sometimes now. Among many welcome developments, the plan to dematerialize (demat) the physical share certificates into the digital ones have boosted the confidence of the investors.',
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			'title' => 'Commendable Contract',
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			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	Nepal has been successful in initiating important economic reforms, ahead at least of her South Asian peers. The process of economic liberalization began in 1984, eight years before India began its first generation of reforms. The financial sector reform too was undertaken with a reasonable success a decade ago. The latest agreement between the employers and the trade unions of Nepal to execute much awaited labour law reforms is another milestone. While Indian Prime Minister Narendra Modi has just making a case to change their 1949 Labour Law, Nepal&#39;s success can set an example on how highly contentious issue of industrial relations could be amicably resolved through right initiatives, with confidence building arrangements in the background.</div>
<div>
	&nbsp;</div>
<div>
	The creation of the Social Security Fund under the tripartite agreement among the government, the Employers&#39; Council headed by the FNCCI vice-president and all trade unions (there are some eleven at present) four years ago paved the way for the recent understanding. Among others, there were two major issues, one each from the employers and the workers. The employers wanted the hiring-and-firing rights and the employees wanted certainty of financial security. Both of these issues got resolved albeit in rather surprising pace. The employers exhibited a great deal of generosity to agree to contribute to twenty percent equivalent of the wages towards the Fund on top of employees&#39; contribution of eleven percent. This really constitutes a substantial sum that gives confidence to the workers. The employers have also secured the right to hire-and-fire, without seeking prior approval from the Labour Ministry, a legal provision still effective. The agreement to categorize the workers into four groups depending on the nature and necessity of the production process has also eased the labour market risks to the investors and entrepreneurs.</div>
<div>
	&nbsp;</div>
<div>
	The two pending issues to be agreed, namely sectorial bargaining rights and no-work-no-pay should not be as difficult to resolve as other host of issues already agreed. The latter issue partially gets addressed by the hiring and firing rights of the employers. But, the sectorial bargaining norms, when agreed with a sectorial umbrella body deemed applicable to the entire sector (the industry), could be agreed with some exception of new entrants or loss-making businesses. Again, as the fair-market norm, such sectorial umbrella organizations tantamount to cartel and thus employers should also need to rethink their position in the long run.</div>
<div>
	&nbsp;</div>
<div>
	Undoubtedly, the agreement to amend the labour laws to these effects is a welcome step. But, Nepal&#39;s political leadership must first desist to use the trade unions as the political tools. When this agreement actually becomes a law, the scope of using these trade unions as the political instrument drastically reduces. This warrants for a cautious approach that these agreed issues do not become victim of political machinations again. Nepal has also seen several such agreements and enactment of many important laws. But their enforcement and adherence have always been the problem. Therefore, all necessary institutional and logistic arrangement must be in place for desired outcome of these agreements, which in due course become law. A few of such &#39;must&#39; arrangements are: proper database of the workers, automated accounting of the Security Fund given the potential high mobility of labourers, timely deposit of the promised amounts by the employers and updated records of the same, and credible institutional set-up to ensure timely delivery of all these services.</div>
<div>
	&nbsp;</div>
<div>
	It is also not enough just to have these laws in place. If Nepal is expecting enhanced foreign or domestic investment, she should be able to communicate this as an achievement that has put a decades-long problem of industrial relations conclusively to an end. The trade unions affiliated to all political parties have signed this agreement, which adds one more powerful reason to invest in Nepal. Needless to say, to achieve this success in a country, which has one of the cheapest labour costs is indeed in the interest of all potential investors.&nbsp;</div>',
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			'description' => 'Nepal has been successful in initiating important economic reforms, ahead at least of her South Asian peers. The process of economic liberalization began in 1984, eight years before India began its first generation of reforms. The financial sector reform too was undertaken with a reasonable success a decade ago.',
			'sortorder' => '2652',
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			'id' => '2795',
			'article_category_id' => '52',
			'title' => 'Auto Dream',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	&nbsp;</p>
<div>
	Refusing to the demand of the automobile importers to reduce import duties on vehicles, Finance Minister Dr. Ram Sharan Mahat has promised them government support if they start vehicle manufacturing in the country. &nbsp;Given the increasing demand due to expansion in the road network and resultant steady increase in import of all sorts of vehicles, Dr.Mahat&rsquo;s proposition seems plausible on cursory glance. But looking at the technicalities of the industry, automobile manufacturing in Nepal still seems a dream that needs a lot of efforts to realize. &nbsp;</div>
<div>
	&nbsp;</div>
<div>
	One prominent consideration will be that of scale. It may be possible to start assembling certain types of commercial vehicles, such as light goods carriers and farm implements. But the market for such Nepal-made vehicles will be limited within the country and such business will have stiff competition from imports due to quality considerations &ndash; real as well as perceptional. To overcome this barrier, a huge investment has to be made in procuring the technology. Whether that will make commercial sense is a big question. &nbsp;</div>
<div>
	&nbsp;</div>
<div>
	Dr.Mahat&rsquo;s call has come at a time when Nepal&rsquo;s manufacturing sector is in continuous decline and trade deficit is in continuous rise. Any manufacturing activity that may start now will be welcome in such situation. But it has to be realized that the decline in manufacturing is due to many reasons and among them two are distinct. While everyone accepts the problem of power shortage, the other problem related to it, hostile labour, is not accepted by many.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	It is not that efforts are not being made to manufacture vehicles in Nepal. Hulas Motors of Golchha Organisation has been assembling some types of vehicles and its product line up has reached nine including Rickshaw and Jeep. Dr.BaburamBhattarai adopted its Mustang Max jeep as of the Prime Minister&rsquo;s official vehicle when he was in that office. But it is complaining of not only lack of government support but even hurdles posed by government to domestic manufacturers. Two plantsthat assembled Chinese bikes Lifan and Ying Yang were closed down soon after they were set up. These experiences need close studies to find out what exactly is needed before we start efforts to realise the dream of flourishing Nepali automobile industry.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	One reason the government does not support any manufacturing within the country is the revenue it gets from imports. And the growing and big flow of remittance is helping the government in this. The result is growing economy without employment growth. This vicious cycle can be broken only with solution to the power shortage problem. Some recent developments &ndash; the latest being the power trade agreement with India and finalization of project development agreement template for power projects to the satisfaction of investors &ndash; are good indications for the future. But that is not going to be enough for development of automobile industry.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	Nepal already has a good automobile industry in the form of maintenance operations. These can easily upgrade to vehicle reconditioning operations if the policy and infrastructural hurdles are removed. Meanwhile, investment in backward integration can start and that requires expansion of the engineering colleges and setting up vehicle technology development centres.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	These centres should ideally be focused on developing electricity operated vehicles given the country&rsquo;s hydropower potentials.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	However, in the meantime, it would be wiser to reduce the import duty on vehicles, which are now not luxuries, but necessities as they are efficiency enhancing machines. A vehicle that is available across the border at Rs. 200,000 must not cost over one million rupees in Nepal.&nbsp;</div>',
			'published' => true,
			'created' => '2014-10-10',
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			'description' => 'Refusing to the demand of the automobile importers to reduce import duties on vehicles, Finance Minister Dr. Ram Sharan Mahat has promised them government support if they start vehicle manufacturing in the country.',
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	(int) 4 => array(
		'Article' => array(
			'id' => '2791',
			'article_category_id' => '52',
			'title' => 'Budget 2014/15 Private Sector Neglected',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	The budget for FY 2014/15 is grossly disappointing not because it is not better than those of past several fiscals, but it stands far short of expectations from Dr. Ram Saran Mahat, a self-proclaimed reformist and ardent advocate of the free-market economy, at the helm of the FinanceMinistry. There are at least half a dozen problems of grave nature in the economy that are caused mainly due to gradually receding role of the private sector. These six problems could be listed as low rate of economic growth for decades now, ballooning trade deficit year-after-year, diversion of public funds to protect ailing public enterprises, ever-increasing number of outbound migrant workers causing labour market distortions back at home, unproductive use of inflow of these workers&#39; remittances and, continuity of archaic practice of development that is heavily dependent on supply-driven central planning.</div>
<div>
	&nbsp;</div>
<div>
	Without creating a proper business environment for the private sector to function, all these trends are rapidly pushing the economy to the verge of collapse. The growth rate is low because the contribution of manufacturing to GDP has reduced close to five percent, which at one point of time was estimated to have in the double digit. This is caused largely due to closure or down-scaling of many private manufacturing units over the last one decade, the period of worsening industrial relations. Due to lack of investment in commercial agriculture, both agricultural productivity and modernization of this sector, lagged behind. It is also one of the major reasons for huge gap in our exports and imports value, the deficit now crossing six billion rupees mark in a single FY that just ended. We also failed to identify and update the products of our comparative as well as competitive advantages, particularly in the neighbouring markets (for perishable agro-products) and the third country niche market (for high value products like pashmina and woollen carpets). This failure comes as the result of not including the representative private sector in exercises like trade policy formulation.</div>
<div>
	&nbsp;</div>
<div>
	One of the clear departures expected from Mahat was government&rsquo;s decisive withdrawal from the trading and manufacturing business by ways of privatization and divestment. He has made some proposals like unbundling of Nepal Electricity Authority, divestment from Agricultural Development Bank and Nepal Bank Ltd and liquidationof some of already non-existent entities like Orind Magnesite Ltd. These efforts were needed. But more urgent were the privatization of the public companies like Nepal Oil Corporation which is putting heavy burden on country&#39;s exchequer just to fuel the luxury of a few hundred thousand rich populace. The budget failed to strike a right chord on it.</div>
<div>
	&nbsp;</div>
<div>
	The most crucial departure expected from Mahat, for his philosophical leanings as an open-market economist, was to stop &#39;merciful allocation&#39; from centre to the villages and districts without identifying the projects and their viabilities. To add to it, he also succumbed to the demand of the members of parliament by allocating a purse of eleven and half million rupees per head for the programmes and projects that are not yet identified. These pork barrel disbursements neither serve the development objectives nor channel the funds to the private sector as these small funds are spent sparsely, without proper adherence to the public procurement process.</div>
<div>
	&nbsp;</div>
<div>
	By putting the private sector to the back-burner, the economy can never come back on the prosperity track. Finance Minister Mahat did not present &#39;the Mahat budget&#39; this time.</div>
<div>
	&nbsp;</div>',
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			'title' => 'Unhooking Economic Departure',
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			'summary' => null,
			'content' => '<div>
	Finance Minister Dr Ram Saran Mahat, while drawing his point home on the transfer of allocations towards the end of the fiscal year to the indiscriminate projects from the ones mentioned in the FY 2013/14 budget, revealed that there are not &#39;any&#39; ongoing project of substantive size so that funds could be funnelled to them. On the moral grounds, this statement from Mahat is unpalatable. Because he is the only person who has headed the country&#39;s budget and planning for twelve out of twenty four years since restoration of democracy in the country, first as the National Planning Commission vice-chair and then minster for half a dozen times.Thus, he should also be held responsible for not incubating enough projects of national significance that have absorption capacity of virtually any amount of funds that may be diverted in wee circumstances, like in the event of low level of overall capital expenditure in the economy. Equally irresponsible were those who were at the helm of the Ministry of Finance before Mahat&#39;s current term in office.</div>
<div>
	&nbsp;</div>
<div>
	It is indeed a precarious situation -- a clear mismatch between the demand and supply of financial resources on the one hand and similar demand and supply dynamics of the development projects in the country. In absence of institutions like elected local bodies that articulate the demands for development of the common masses, demand for resources have also substantially gone down.</div>
<div>
	&nbsp;</div>
<div>
	There are other unattended areas in the economy that are either causing excessive &#39;bleeding &#39;or/and constricting growth for years. For example, petroleum import that exceeds the amount of our total exports, whopping Rs 250 billion trade deficit in a single year and continuous financing to loss-making State Owned Enterprises (SOEs) from the tax-payer&#39;s money to project the jobs of a few hundred unproductive employees.</div>
<div>
	&nbsp;</div>
<div>
	In addition to all these odds, rapidly eroding institutionalcapacities and, more importantly, rampant imperviousness of the political leadership towards these grave economic maladies are to blame why the relative peace of eight years since 2006 peace accord also couldn&#39;t ameliorate the acuteeconomic hardships of the people.The much expected departure in the economic affairs of the country, particularly after the dawn of peace is yet to happen. As credentials have it, Mahat is perhaps the best finance minister to transpire this much needed departure in terms of policy reforms, resource mobilization, productivity and trade enhancement and employment generation. But Mahat, given his outline of principles of the next budget presented recently in the parliament, seems unprepared to depart from a sluggish, low and sub-five percent growth rate.</div>
<div>
	&nbsp;</div>
<div>
	Not only there is absolute dearth of ongoing publicly financed projects as claimed by Mahat, private investment - both domestic and foreign - is also at its lowest. &nbsp;The contribution of the manufacturing to GDP has gone to worse from bad in recent years. It is one of the major reasons of widening export-import gap. The remittance fuelled consumption would have been a good catalyst for manufacturing growth. But lack of proper ambience for investment caused largely due to political indifference bleakens the manufacturing scenario of the economy. Even the policy of putting the private sector at the driving seat of economic development, incidentally credited &nbsp;as Mahat&#39;s brainchild in 1992, doesn&#39;t seem to be the case now.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	In view of the multifaceted problems, marginal improvements in blatantly failed economic policies, plans and implementing strategies are not likely to fundamentally alter the situation. It needs a real departure and if Mahat alone is unable to take such a risk, the major political parties must act together. Mahat can be the initiator of the consensus process for economic revival.</div>',
			'published' => true,
			'created' => '2014-07-30',
			'modified' => '2014-10-10',
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			'description' => 'Finance Minister Dr Ram Saran Mahat, while drawing his point home on the transfer of allocations towards the end of the fiscal year to the indiscriminate projects from the ones mentioned in the FY 2013/14 budget, revealed that there are not 'any' ongoing project of substantive size so that funds could be funnelled to them. On the moral grounds, this statement from Mahat is unpalatable.',
			'sortorder' => '2635',
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	),
	(int) 6 => array(
		'Article' => array(
			'id' => '2780',
			'article_category_id' => '52',
			'title' => 'Fallen Prey To Politics',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	When Nepal Tourism Board (NTB) was created, it was dubbed as the first truly functional model of public-private partnership (PPP) in Nepal. When it delivered some encouraging results for Nepal&#39;s tourism industry, the model&#39;s replicability potentials formed chapters of many books like of Karna Sakya and provided basis for a large number of business working papers and case studies. But, unfortunately, the same NTB has now become the test case of alleged embezzlement of resources and sit-in protest against the same by the country&#39;s tourism entrepreneurs. Thanks to all-pervasiveness of our albatross politics.</div>
<div>
	&nbsp;</div>
<div>
	While penning these words, it had almost been a month that the protesting entrepreneurswere demanding an impartial probe into financial irregularities by the acting CEO of the Board, Subash Nirola. But nothing was moving ahead primarily because it was a PPP. The Board headed by the secretary in the Ministry of Tourism as the ex-officio Chairman is expressing government&#39;s inability to take unilateral action, as it is the &#39;private&#39; organization while the entrepreneurs too do not have the legal power to oust the CEO.</div>
<div>
	&nbsp;</div>
<div>
	A few months ago, the NTB made a policy decision to organize the tourism fairs in the districts &#39;to promote the domestic tourism&#39;. This has panicked the traditional entrepreneurs that their income would be shared by the district level hospitality and amenities industries. The government sees no flaws in the Board&#39;s decision. &nbsp;The entrepreneurs argue that the money spent for such fairs in domestic markets should instead be spent in international publicity so as to attract the foreign tourists. This is no doubt a valid reason. But, just spending some money for promotion of domestic tourist market can hardly be established as an evidence for corruption.</div>
<div>
	&nbsp;</div>
<div>
	The fuss is beyond these allegations of misappropriation of funds. The fact is, the protesting organizations of the entrepreneurs are affiliated to Deuba faction of the Nepali Congress, Oli faction of CPN-UML and Bhattarai faction of UCPN Maoists while the CEO is considered close to Khanal faction of the UML or, a chameleon, who also sometimes claims to be a Koirala Congress. And, for every political party, it was a matter of great pain that a newly emerged reputable organization like the NTB was functioning independent of political interference for more than a decade. And appointment of CEO is also not based on one&rsquo;s political loyalty. &nbsp;Therefore, every political party perhaps feels that if the current CEO is ousted through a political move, then it can set a trend and every next Tourism Minister can pick a new CEO along with each change in the government.</div>
<div>
	&nbsp;</div>
<div>
	The protest of the entrepreneurs wore a grotesque look when so called senior leaders of all three major parties reached at the sit-in site to &lsquo;express solidarity&rsquo; to the demands, without going into the merits of the allegations. If there are irregularities, there are related legal and quasi-legal institutions to investigate and prosecute the guilty. &nbsp;Why would leaders need to meddle in this process? Only plausible answer is that every party is keen to make the NTB a new political prey, which is deplorable.</div>
<div>
	&nbsp;</div>
<div>
	The problem in the NTB began long ago when the Board failed to pick-up a professional CEO in a transparent and timely manner. The &lsquo;Acting&rsquo; position is always an incentive for the incumbent to look for quick bucks from all possible means including kickbacks. And, as allegations are already labelled to Nirola, he should either make public all the details of procurement as soon as possible proving his integrity or step aside until proven innocent allowing for an independent probe. &nbsp;The prolonged stand-off between the Board and the entrepreneurs is putting the entire Nepal tourism sector in bad light. And, the government must step in to solve it than being a party to a side.</div>',
			'published' => true,
			'created' => '2014-06-08',
			'modified' => '2014-07-30',
			'keywords' => 'new business age  from the editor news & articles, from the editor news & articles from new business age nepal, from the editor headlines from nepal,  current and latest from the editor news from nepal, economic news from nepal, nepali from the editor economic news and events,  ongoing  from the edi',
			'description' => 'When Nepal Tourism Board (NTB) was created, it was dubbed as the first truly functional model of public-private partnership (PPP) in Nepal. When it delivered some encouraging results for Nepal's tourism industry, the model's replicability potentials formed chapters of many books like of Karna Sakya and provided basis for a large number of business working papers and case studies.',
			'sortorder' => '2625',
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	(int) 7 => array(
		'Article' => array(
			'id' => '2771',
			'article_category_id' => '52',
			'title' => 'Agenda: Economic Restructuring',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	Finance Minister Dr. Ram Sharan Mahat created ripples of a sort in mid-March when he pointed to the need of restructuring the economy. No doubt, this is a long pending agenda given the fact that Nepali economy is faced with stagflation-like trap for decades. But, Dr. Mahat&#39;s proposition has come so suddenly that it gives rise to two natural questions. Have we done adequate homework for such a massive restructuring? Is there enough political will to embrace the agenda of restructuring, going beyond barely managing it? And, the direction of such restructuring will equally be crucial as will be the sustainability of the transformed structure.</div>
<div>
	&nbsp;</div>
<div>
	Prioritization of the tasks in such restructuring agenda and garnering political support for the same, are two sets of groundwork that any restructuring agenda cannot perhaps bypass. To both ends, Dr. Mahat as the finance minister has a couple of rare strengths. He understands the Nepali economy thoroughly -- its cracks and crevasses-and has a pro-private sector image. Also, he carries equally strong weaknesses; that he carries a big baggage of self-righteousness, doesn&#39;t have a professional team and hardly trusts anyone and, he is a bad politician, at least at the negotiation table.</div>
<div>
	&nbsp;</div>
<div>
	Needless to reemphasize here, restructuring of a mixed economy that is chronically mismanaged is sure to be a daunting, painstakingly long-term process. If this is not a mere political gimmick that Dr. Mahat has no reason to indulge into, the homework needs to commence at least in two parallel fronts of the economy -- technical and political. On the technical side, there must be a dispassionate assessment of the loss incurred and persistent underperformance of the economy due to over-involvement of the government in planning, production and distribution systems. On the political front, to reduce the state involvement in functional aspects of the economy, a great deal of reorientation is imperative mainly in those political forces who are indoctrinated as communists or ardent socialists.</div>
<div>
	&nbsp;</div>
<div>
	A great amount of misgivings about the &#39;inevitability of state intervention and activism in economy&#39; must be dispelled, both at political or people&#39;s levels. Dr. Mahat himself needs enough courage to declare the institutions like the National Planning Commission obsolete, at least in the present form. In their present form, they act as omniscient of the needs and priorities of the populace at the grassroots. The decision on liquidating about three dozen state-owned enterprises that have acted as hungry sharks for years in the exchequer is long overdue. Only way to create public awareness on the futility to maintain status quo in these public institutions depends largely on the effective factual communication of the maladies and recurrent losses, year after year. One stroke of liquidating or privatizing the Nepal Oil Corporation would be enough to test Dr. Mahat&#39;s sincerity and courage to take-up really meaningful restructuring of Nepal&#39;s public economy.</div>
<div>
	&nbsp;</div>
<div>
	The economy is under stress from more than one quarter. The ballooning imbalance in the country&#39;s foreign trade, dwindling absorption capacity of the financial resources and mass-migration of the working age population for low-earning jobs abroad creating labour-market distortion at home are three prominent areas that warrant top priority in the restructuring agenda.</div>
<div>
	&nbsp;</div>
<div>
	The structural imbalances too are looming large. We spent decades lamenting on the lower-than-demand production of energy, mainly hydropower. But, despite all odds, the energy sector attracted a substantial investment and there are indications that the supply would be doubled in next four to five years. But, we became oblivious of the fact that we needed to develop adequate transmission lines to connect this power to individual houses. There are concerns of this power being wasted for lack of alternative arrangements, for example, replacing LPG cooking stoves with the electric ones to create market for the added power generation, or if possible export to India.</div>
<div>
	&nbsp;</div>
<div>
	There is a sort of political consensus on the need of a tangible restructuring of the state when it hopefully gets federalized. The proposed agenda of economic restructuring must be a complementary process to that larger goal of spatial restructuring of the state. The restructuring of even larger scale is also required in the private sector to transform it from a mere a trade-margin capitalizer, like from gold smuggling, to employment-generator and export-promoter. Therefore, the restructuring agenda must not fizzle out as seasonal political hyperbole. It deserves more nuanced treatment to make it a fruit-bearing proposition.</div>',
			'published' => true,
			'created' => '2014-04-09',
			'modified' => '2014-06-08',
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			'description' => 'Finance Minister Dr. Ram Sharan Mahat created ripples of a sort in mid-March when he pointed to the need of restructuring the economy. No doubt, this is a long pending agenda given the fact that Nepali economy is faced with stagflation-like trap for decades.',
			'sortorder' => '2621',
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	(int) 8 => array(
		'Article' => array(
			'id' => '2766',
			'article_category_id' => '52',
			'title' => 'Housing The Business',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	The housing and the real estate business (HREB) has a double-sword positive effect on the economy. It is a global perspective to this business, perhaps barring Nepal. It is a capital intensive business like any other profit making venture and, at the same time, helps to solve a pressing problem of shelter to the populace. But despite the potential, Nepali HREB languishes in absurdities and hangs on to uncertainties. It has been more than one and a half decades since HREB began in an organised fashion led by private sector investment. But the bottlenecks of policy confusions, information asymmetries and public (mis)perceptions remain the same as they used to be a decade ago.</div>
<div>
	&nbsp;</div>
<div>
	According to a rough estimate, Nepali HREB is now worth more than Rs 150 billion, which is a third of the current year&#39;s national budget. There is an estimated annual demand of some forty five thousand units of family apartments, mainly in the urban centres of the country. Half of the demand is only in the Kathmandu valley. But, the total annual cumulative supply of apartment-type living is limited only to sixteen thousand units nation-wide. The demand and supply mis-match is one half of the story and the price and financing mismatch is the other.</div>
<div>
	&nbsp;</div>
<div>
	What&#39;s wrong with Nepali HREB as an investment and growth industry? Perhaps everything! The government doesn&#39;t have a comprehensive policy on it. In addition, the very perspective of the government about HREB is largely bigotry. Some regulations regarding ownership have been issued but implementation has not been as effective as expected. Given the fact that the private sector is doing a national service by providing housing facilities to the people which otherwise is the government&rsquo;s responsibility, it should have acknowledged and treated accordingly. As long as the government considers itself as the vehicle to an egalitarian society, it is indeed the government&rsquo;s responsibility to address problems like this.</div>
<div>
	&nbsp;</div>
<div>
	One emulative recent example could be the British government&rsquo;s initiative of Help-to-Buy (HTB) scheme, introduced by Chancellor George Osborne&rsquo;s last fiscal year budget, targeting the first time home owners. The &pound;25 billion scheme that began in January 2014 plans equity finance of 20 percent of the cost of buying or constructing a new house. The government plans to implement the HTB scheme in a three year time horizon. The objectives are well defined. First, to help revive the ailing HREB and also simultaneously support lower end populace to own a house of their own.</div>
<div>
	&nbsp;</div>
<div>
	But in our case, the government is treating the investors and developers as criminals and crooks, let alone contemplating providing an equity financing. It was true that there was a degree of over-exposure of the finical sector to HREB. But that was a compulsion at a point of time due to utter lack of other sectors for the BFIs to invest. Shouldn&#39;t the government share the blame for failing to create an atmosphere for a diversified business and thus the BFIs&#39; investment? Instead, the government apparatus is at complete loss of direction to address the problems of the sector. On top of that a rung of top public service officials were determined to ruin the entire HREB.</div>
<div>
	&nbsp;</div>
<div>
	Without naming names, there are projects in limbo which would have been completed well if the institutions like the central bank wouldn&#39;t have been vindictive to some chosen promoters of the schemes. It is true that some developers had had multiple business stakes and resorted to some duplicity. But the right approach for the government and central bank strategy should have been to save the projects and investment and penalize and admonish only the wrong-doers. To say the least, the government has not been sensitive to the potential ramifications of its apathy and antipathy to HREB.</div>',
			'published' => true,
			'created' => '2014-03-24',
			'modified' => '2014-04-09',
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			'description' => 'The housing and the real estate business (HREB) has a double-sword positive effect on the economy. It is a global perspective to this business, perhaps barring Nepal. It is a capital intensive business like any other profit making venture and, at the same time, helps to solve a pressing problem of shelter to the populace. But despite the potential, Nepali HREB languishes in absurdities and hangs on to uncertainties. It has been more than one and a half decades since HREB began in an organised fashion led by private sector investment. But the bottlenecks of policy confusions, information asymmetries and public (mis)perceptions remain the same as they used to be a decade ago.',
			'sortorder' => '2612',
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	(int) 9 => array(
		'Article' => array(
			'id' => '2581',
			'article_category_id' => '52',
			'title' => 'When Bulls Run To Bush',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	The index of Nepal Stock Exchange, Nepse, climbed to 800 after five years early January 2014. Since it closed at 963.36 in mid-July (end of the Nepali fiscal year) 2008, it had barely crossed 500 until last June. It had terribly disappointing bearish tumble for all five consecutive years as shown in the side table. The Nepali bourse has often behaved beyond any rational expectations and market analysis. There was no reason for it to fall as low as below 300 in 2011 and even at present the speedy bull run is not fully justifiable. The index has climbed about 50 percent from 529 points in mid-July 2013 and to 780 mark on third week of January 2014.</div>
<div>
	&nbsp;</div>
<div>
	<img alt="Nepal Stock Exchange Index" src="/userfiles/images/editor1%20(Copy).jpg" style="float: right; margin: 0px 0px 0px 10px;width: 200px; height: 154px;" />Interestingly, this rise is witnessed when trading of stocks of a number of new companies, mainly the new commercial banks, began. The situation apparently is of over-supply and there has not been any substantial change in economic fundamentals to push the Index up, except the fact that last CA elections saw the defeat of hard-line communist forces, like Maoists. If the investment were to be made for returns, this political change alone would not perhaps be enough to ensure higher&nbsp;</div>
<div>
	yield. But, investors do not seem to be bothered by this.</div>
<div>
	&nbsp;</div>
<div>
	To some extent, the volatility of the market by its nature is understandable, but the reason d&rsquo;&ecirc;tre of this, generally, is however never beyond comprehension. At least, it should not have been the case given the availability of modern-technology assisted analysis, both fundamental and technical. But that is what exactly happening in Nepal.</div>
<div>
	&nbsp;</div>
<div>
	When markets run amok, bullish or bearish, without any convincing economic explanation, there is no reason to be happy. Nepal&rsquo;s capital markets have some basic characters that make it very risky. It is not only unintegrated to the international market, but also lacks even a few traders who would trade in Nepse and some other international exchange, simultaneously. Therefore, the impact of international market in Nepali secondary market can be completely ruled out. The real sector, for all practical purposes, has no presence in the capital market and it is dominated by the financial service providers, a few hotels and lately some hydropower companies. This means, our capital market trends do not necessarily reflect the degree of fitness of our economy. And, except for some time-trained crooks, there are very few informed or educated investors, causing mismatch between the expectations and returns.</div>
<div>
	&nbsp;</div>
<div>
	The regulator is equally novice and naive. Political appointments of the people to the Stock Exchange Board who lack specific knowledge about the trade have made the situation worse. The most dangerous part is that, no public agency is even contemplating about the possibilities and procedures of listing more real sector, mainly manufacturing, companies into secondary market. It is indeed an uphill task since it requires much higher level of willingness of the private sector to register in the bourse. It in turn requires transparency at every step of the transaction of the companies from, imports, customs evaluation, VAT and excise, sales, and ultimate balance sheet and auditing. Nobody seems prepared for this mammoth task that has not only economic cost but also demands a high degree of business integrity and honesty.</div>
<div>
	&nbsp;</div>
<div>
	But, without bringing the real sectored on the trading screen, the rationale of the secondary market could hardly be justified. The result, it will continue to be victim of irrational volatility. The new government that will be formed soon should take three major steps: first appoint knowledgeable persons of the sector in the regulatory board, second create a joint platform of Nepal Rastra Bank, the Board, Ministry of Finance and the private sector to promote financial education about the secondary market and begin brain storming to identify the causes that are hindering real sector to enlist in Nepse and resolve them. Only this will create a credible stock market in Nepal.</div>
<div>
	&nbsp;</div>',
			'published' => true,
			'created' => '2014-02-10',
			'modified' => '2014-02-18',
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			'description' => 'The index of Nepal Stock Exchange, Nepse, climbed to 800 after five years early January 2014. Since it closed at 963.36 in mid-July (end of the Nepali fiscal year) 2008, it had barely crossed 500 until last June. It had terribly disappointing bearish tumble for all five consecutive years as shown in the side table.',
			'sortorder' => '2434',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
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	(int) 10 => array(
		'Article' => array(
			'id' => '2441',
			'article_category_id' => '52',
			'title' => 'Bitter Taste Of Sugar',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	The price dispute between the sugar mill owners and the sugarcane-producing farmers, like in the past years, has resurfaced, again. The farmers are arguing that the price offered by the sugar mills is far below their cost; and demanding a higher rate. The mill owners have their take: as the sugar price volatility is high, it would be unfeasible for them to meet the farmers&rsquo; demands. Both arguments have valid underpinnings.</div>
<div>
	&nbsp;</div>
<div>
	The reference price for both buyers and sellers of sugarcane in Nepal has been the neighbouring Indian states of Utter Pradesh and Bihar. &nbsp;Buyers here offer the price at par to their Indian counterparts. But, this price hardly attracts the Nepali farmers as their production cost is much higher than their Indian friends. India has massive farm and input subsidies effective. In desperate situations, government ventures to buy the product. They have better mass-scale cold storage facilities to wait for off-season high price sells. On the contrary, the energy and labour prices here are higher, electricity supply and irrigation facilities are unstable, thus costly. Other infrastructures like warehousing are in acute short supply. The farmers are forced to sell their sugarcane at the price offered by the mills as they have no alternatives. Besides, the sugarcane has a huge transportation cost to explore market in greater distances. In Nepal, the government support to the farmers is almost nil.</div>
<div>
	&nbsp;</div>
<div>
	On the buyer side, the special feature of seasonality in sugar production is a challenge. They must employ all their resources in this season. High demand of workers adds cost of production and the practice of hedging the base price throughout the year is not even contemplated in our context. Nepal&rsquo;s sugar pricing is largely affected by the Indian price trends. Therefore, Nepali producers&rsquo; may be sandwiched between the high prices of sugarcane here and over production and supply of sugar in India.</div>
<div>
	&nbsp;</div>
<div>
	The situation is indeed dire and warrants a lasting solution to this annually recurrent problem. In the open market economy, it is not advisable to invite an outright, continuous and equally effective government intervention. But, as long as government continues to subsidise in inputs and facilities, there is no harm that it does the same for the sugarcane as well. But, more lasting solutions should be explored from the market mechanism itself. And, there is ample scope for it.</div>
<div>
	&nbsp;</div>
<div>
	One of the bones of contention of the price rigidity of the sugarcane is ever impending sugar price volatility. This can be best addressed by price hedging of both sugarcane and sugar, at least in the yearly range. The newly developed commodities futures market of Nepal can be instrumental in it. Or, it can be made so. Implementing the already enacted Secured Transaction Registry Act and validation of warehouse receipts for bank financing can be highly supportive to this initiative. If the government can&rsquo;t afford to invest to set-up sufficient warehouses, it must work to create the environment for private investment for the same.</div>
<div>
	&nbsp;</div>
<div>
	The second strategy could be market-scoping of sugar, and price-difference support. We have almost convincing data that Nepali sugar produce can only meet about forty percent of the Nepali demand. And, sixty percent of imported sugar invariably has a higher market price for obvious reasons. In such a scenario, government can easily figure out how much the country annually spends on sugar, and what price per unit for. On this basis, government can set a reference price for both sugarcane and sugar. In the year end, instead of indiscriminately subsidising on inputs or incentivizing the producers, government can choose to subsidise only the price difference between the base and market prices. This can work both ways. Even if the producers charge much higher rate than the base price and earn larger profits, it can be arranged such that some portion of it goes to the farmers.</div>
<div>
	&nbsp;</div>
<div>
	Since sugarcane is a special kind of seasonal crop, it needs special policy attention.&nbsp;</div>',
			'published' => true,
			'created' => '2014-01-10',
			'modified' => '2014-01-21',
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			'description' => 'The price dispute between the sugar mill owners and the sugarcane-producing farmers, like in the past years, has resurfaced, again. The farmers are arguing that the price offered by the sugar mills is far below their cost; and demanding a higher rate. The mill owners have their take: as the sugar price volatility is high, it would be unfeasible for them to meet the farmers’ demands. Both arguments have valid underpinnings.',
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	(int) 11 => array(
		'Article' => array(
			'id' => '2266',
			'article_category_id' => '52',
			'title' => 'Hope Of Economic Revival',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	The elections for the Constituent Assembly (CA)-II are now over. Results have been announced. Successful completion of the CA polls themselves is good news for the economy. Rise of the liberal economic forces from it has made it a harbinger of prosperity and development. After long gloomy years, the new CA comes with the renewed promise to draft and promulgate the new constitution within a year and pave way for the nation to head towards peace,stability and prosperity. The last CA too had that hope, but unfortunately that didn&rsquo;t materialize.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	In retrospect, it appears that the poll process, the constitution and the functions of earlier edition of the CA (2008) were largely marred by political naivety and immaturity. If one looks at the manifestoes of the 2008 CA election, it is not difficult to discern that the political forces were just flabbergasted by the pace of change and couldn&rsquo;t structure proper frame to guide the nation forward. The then New Forces, Maoists and Madheshis, &nbsp;had overtly ambitious agenda, whereas the Old Forces like Nepali Congress and the CPN-UML had &nbsp;a sense of compulsion to bow down &nbsp;to the agenda of those New Forces.</div>
<div>
	&nbsp;</div>
<div>
	But things changed drastically by the time the country arrived at the threshold of the second CA elections in 2013. As evidenced by their recent manifestos, major political forces had become more mature, rationality had prevailed over emotions. Traders of mere selfish, divisive or opportunistic agenda were badly fragmented and most importantly, a sincere realisation to move along the changing paradigms of the world was across the board. There was a race to promise to shun violence and acts of business disruption by calling on bandhs and strikes. Though achieved at a great cost, monetary and opportunity, these achievements are not trivial.</div>
<div>
	&nbsp;</div>
<div>
	It is a bare fact that Nepal suffered almost two decades of virtually zero development. Since the Maoists launched armed rebellion in February 1996, the resources and focus of the state concentrated to counter it. &nbsp;Hardly any power project, new stretch of road or other significant infrastructure was added during the decade long conflict. The Comprehensive Peace Agreement of 2006 ended the conflict, but fears of the investors could hardly be allayed, mainly due to destructive high-handedness of the Maoist-affiliated trade unions, among other uncertainties surrounding the drafting of the constitution. One may argue that we never had a zero or negative nominal GDP growth rate, but the inflation-adjusted real growth rate had never been positive for all those years.</div>
<div>
	&nbsp;</div>
<div>
	But the approaches, stances and philosophies have transformed for good in recent years, which was reflected in the run-up to the second CA elections. These are the very reasons that led to the successful completion of the election process with as high as whopping 78 percent turn out of the voters. The half battle is won.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	On top of it, the electorates gave a very emphatic support to the parties -- Nepali Congress and CPN-UML that exhibited understanding of the global economic order and trend vis-&agrave;-vis Nepal&rsquo;s development priorities and needs. It was the Nepali Congress that had initiated the economic reform and liberalization after restoration of democracy in 1990 and the fruits of it is still reaped by the economy. The then UML government began grassroots level connectivity and infrastructure projects in 1995 that gradually provided market access to the remote hinterlands of the country. These two facets of development helped the Nepali economy to withstand the decade-long conflict and almost equally-long political mayhem after that. The people trusted back to both of these parties, once again giving them almost equal, jointly more than sixty percent of strength in the new CA. People experimented the Maoists once in the last election by making them the largest party in the last CA, but it failed the test. &nbsp;Now condemned to humiliating defeat.</div>
<div>
	&nbsp;</div>
<div>
	The conclusion of CA election against the widespread suspicion about its success, victory of the parties that believe in democracy and free-market and, rationalization of the forces that were erstwhile destructive ones, indeed raises hope on reigniting the growth process. &nbsp;The stage is all set and, now actors should play the right role before the curtain falls.</div>',
			'published' => true,
			'created' => '2013-12-13',
			'modified' => '2013-12-16',
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			'description' => 'The elections for the Constituent Assembly (CA)-II are now over. Results have been announced. Successful completion of the CA polls themselves is good news for the economy. Rise of the liberal economic forces from it has made it a harbinger of prosperity and development. After long gloomy years, the new CA comes with the renewed promise to draft and promulgate the new constitution within a year and pave way for the nation to head towards peace,stability and prosperity. The last CA too had that hope, but unfortunately that didn’t materialize.',
			'sortorder' => '2113',
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	(int) 12 => array(
		'Article' => array(
			'id' => '2183',
			'article_category_id' => '52',
			'title' => 'Unmanifested Political Will',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	A<span style="font-size: 12px;">ll major political parties have made their manifesto for the November 19th Constituent Assembly (CA) polls public. Most of the parties including the big &#39;gang of four&#39;- UCPN (Maoist), Nepali Congress, CPN-UML and the Madhesi Morcha have made a long list of promises to accelerate the economic growth of Nepal. The promises are tall and details read like a government&#39;s annual &#39;policies and programmes&#39; to &nbsp;be unveiled in a parliamentary session. Many of the propositions are just populist and not based on the grounds of resource availability and pragmatic possibility of implementation. However, unquestionably, the Nepali economy was for long in dire need of real policy boost and political commitment from the highest possible level. One positive thing, perhaps the only one, is that the country&#39;s political parties have, rather uniformly, shown concern towards the economic growth and development of the country.</span></div>
<div>
	&nbsp;</div>
<div>
	But, one must remember here, it is the elections for the CA and not for a tenured parliament. In a sense it is more important opportunity to give a direction to the country&#39;s economic future. However, it is surely not the moment to make populist commitments enumerating number of &nbsp;projects and programmes. Therefore, these party manifestoes should better provide the basis for the economic system that the country would adopt for reasonably longer period of time. The focus of all these manifestoes were naturally expected to make the constitutional position of every political party about elements that would finally constitute &nbsp;the provisions for &#39;Directive Principles&#39; and &#39;Economic Rights&#39; in the new constitution. But, unfortunately, all the parties have spent a huge resource and time in listing what they would do programmatically, not constitutionally, to develop the country. This is to say that their prime focus is on &#39;what&#39; of they want to do, but completely devoid of the &#39;how&#39; of it.</div>
<div>
	&nbsp;</div>
<div>
	These manifestos have, almost uniformly, failed to address the issues that have constrained the growth prospects of Nepal for long. These constraints have come in three categorical forms -- the philosophical stand and identity of the powerful parties, the model of the economy the country would adopt in the longer run and rights of the citizen to own and generate legal wealth including their enforcement. But all these three issues are hardly addressed by the parties through their manifestoes.</div>
<div>
	&nbsp;</div>
<div>
	Needless to say, Nepali politics is dominated my the communist outfits of various degrees of radicalism. It is a doctrine that advocates and works against the private ownership of the property and firms. Even if these outfits claim that they are not opposed to private capital, the suspicion of their motives remain intact as long as they are identified as devout communists. The manifestoes were perhaps the best tools to assure the people that these parties unconditionally would adhere to the norms of uninfringed property rights of the people. They could have even made the extent of change in their philosophical stand public. But nothing of the sort happened. In fact, manifestoes of communist parties have deliberately skipped this crucial part of clarification. Even Congress continues to cling to &#39;socialism&#39;.</div>
<div>
	&nbsp;</div>
<div>
	The model of the economy to be adopted is also equally important. Parties are saying many confusing things like developing national capitalism, socialism and self-sustained economy. They appear unwilling to open their cards. They have chosen an easy term &#39;mixed&#39;, without identifying the elements to be mixed together.</div>
<div>
	&nbsp;</div>
<div>
	The most important is, whether the new constitution can ensure the private property rights and economic democracy or not. No manifesto has clearly mentioned that it was for the absolute property rights and rights for intellectual properties that encourages innovation.</div>',
			'published' => true,
			'created' => '2013-12-01',
			'modified' => '2013-12-01',
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			'description' => 'All major political parties have made their manifesto for the November 19th Constituent Assembly (CA) polls public. Most of the parties including the big 'gang of four'- UCPN (Maoist), Nepali Congress, CPN-UML and the Madhesi Morcha have made a long list of promises to accelerate the economic growth of Nepal.',
			'sortorder' => '2029',
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	(int) 13 => array(
		'Article' => array(
			'id' => '1966',
			'article_category_id' => '52',
			'title' => 'Doubling The Growth',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	The economic growth of any country is neither achieved by chance nor is it a thunder-struck miracle. In fact it&rsquo;s a combination of many contributing factors-both economic and socio-political. In a country like Nepal, where political uncertainty is nagging for decades, institutional set ups responsible for overall development are gradually being rendered dysfunctional. When government legitimacy comes under serious interrogation mark, economic growth hardly becomes a national agenda.</div>
<div>
	&nbsp;</div>
<div>
	The current state of Nepali economy fits into exact definition of stagflation -- the stagnated growth and uncontained inflation. Average year-on-year growth rate of the economy for the last whole decade beginning 2002 (when growth rate, computed as Gross Domestic Product (GDP) had dipped to negative territory) has hardly crossed 3.5 percent mark.</div>
<div>
	&nbsp;</div>
<div>
	Poor growth rate is not the only worst part of it, but even the lack of meaningful debate on the constraints and remedies is making the situation worst. But the inflation even in official figures is invariably in double digits.</div>
<div>
	&nbsp;</div>
<div>
	If not from the government, tangible initiatives to this end had to come from the private sector. But nothing of that sort happened in the recent past. To fill this gap, the New Business Age (NBA) Pvt. Ltd from this year on, in partnership with some leading business entities of the nation, has taken a maiden initiative to take the growth debate to the centre stage of national economic policy parlance.</div>
<div>
	&nbsp;</div>
<div>
	Nepal in the past did witness some debate over her growth concerns, but most of them were rather slanted or impractical. In different chapters of history, we were made to hear high-pitched rhetoric of double-digit growth, Swiss or Singaporean pace of growth, leap-frogging growth or a growth taking Nepal to a developing from an underdeveloped country status. These all were tall, very tall asks, to say the least.</div>
<div>
	&nbsp;</div>
<div>
	The double digit growth or upliftment of the country&rsquo;s status to a developing one are essentially the same concepts. For this, Nepal needs at least some Rs. 400 billion of capital expenditure annually, or at least 8.5 percent growth rate, for ten consecutive years. This indeed is unimaginable for several years to come. Other claims were bare political stunts, so had no scope of realizing them at all.</div>
<div>
	&nbsp;</div>
<div>
	In view of these dogmatic misadventures of the past, the NBA wanted a meaningful debate to take off that is based on feasible goals against the existing ground realities. This led to the conclave on the theme &#39;Doubling of Growth of the Nepali Economy to 7 per cent GDP: The Roadmap Ahead.&#39; Based on the 3.5 percent of growth rate of the past fiscal year, the idea of doubling was born, which looked fairly achievable if we could religiously pursue it.</div>
<div>
	&nbsp;</div>
<div>
	Needless to say, growth in national GDP is a multi-sector endeavour. Among them too, it is important to identify and focus on key sectors that can either serve as prerequisite to long-run sustainable growth like hydropower or yield immediate growth results like agricultural productivity and tourism.</div>
<div>
	&nbsp;</div>
<div>
	But, most important of all is quintessentially lead role of the private sector in investment, production and distribution of all goods and services. Of course, support of the state from the background is needed as security or ground for fair-play. Guided by this philosophy, the NBA coincided the conclave of growth debate, organized in Kathmandu on 24th August, with the opportunity to recognize the contribution of business sector to growth. This recognition came in the form of the 10 categories of business awards.</div>
<div>
	&nbsp;</div>
<div>
	For the sustained prosperity of the nation, we should be able to make the growth not a flip-flop show but a habit. We need to start modest and all big dreams will fall in line with accomplishment of the starting ones. If we achieve 7 per cent growth first, then the double-digit can be followed soon. More important here: we needed a right beginning. And, with this successful conclave, we in NBA feel, the beginning has indeed been right.</div>
<div>
	&nbsp;</div>',
			'published' => true,
			'created' => '2013-10-09',
			'modified' => '2013-10-09',
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			'description' => 'The economic growth of any country is neither achieved by chance nor is it a thunder-struck miracle. In fact it’s a combination of many contributing factors-both economic and socio-political. In a country like Nepal, where political uncertainty is nagging for decades, institutional set ups responsible for overall development are gradually being rendered dysfunctional.',
			'sortorder' => '1818',
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	(int) 14 => array(
		'Article' => array(
			'id' => '1675',
			'article_category_id' => '52',
			'title' => 'Bureaucratic Budget',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	The most positive development of the ordinance budget for FY 2013/14, presented on 14th July by Finance Minister Shankar Koirala, is that it proposes the income and expenditure estimates for the entire fiscal year. The budgets for the last four fiscal years had come in the form of quarterly or half-yearly estimates due to incessant political squabbles among the political parties at play. The government employees enjoyed the pay rise of some 20 per cent and private sector seemed largely contended with some liberal approaches adopted by the budget speech. The criticisms of the &#39;too large a size&#39; and &#39;implementation nightmare&#39; were routine and expected.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	But, the saddest part is that this budget in a bid to please everyone with some instant toffees, fails to address the most pressing economic problems faced by Nepal at present. The Nepali economy now faces three very worrisome problems. First, the GDP growth plummets to 3.6 percent, the lowest in the decade. Second, the export-import ratio is at whopping 1:10 and the recorded trade deficit is of the last fiscal year is estimated to be well above Rs 500 billion. If service imports like Nepali students studying abroad, holiday and healthcare trips Nepalis are making abroad are also added it would cross the Rs 600 billon mark. And, the third, the authorities have failed to tame the galloping inflation, that effectively stands between 14 to 16 per cent and the CPI-based one has never gone below 10 percent for several years now.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	The deficit budget by more than 25 percent of proposed expenditure even fails to acknowledge the fact that the economy is in grave crisis. It is unable figure out where the growth propellants would come about. The first three priorities of the budget are hydropower development, agriculture and infrastructure development--in that order. But, beyond rhetoric, it fails to enlist true problems and bottlenecks in respective sectors. It says many things about hydropower but fails to make any commitment on what would happen to large joint venture projects like West Seti and Arun III that are pending for years largely for unspecified reasons. Any development of hydropower projects in commercial scale will no meaning unless Nepal and India enter into power trade agreement. Bilaterally beneficial transmission lines and above all a climate of mutuality in investment and power trade are crucial, which could only go ahead if Indian investment is not discouraged. This however doesn&#39;t mean Nepal should sacrifice her interest. For any hydropower project, it would take long to be able to contribute to GDP growth.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	Even if agriculture is deemed to be a growth engine, it is time that the sector came out of platitudes like &#39;modernization, commercialization and marketization&#39; of agriculture. The strategies of government subsidies on seeds and fertilizers adopted for years have never worked for several reasons. The sector now faces new problems like acute shortage of farm labours and sustainable pricing mechanism and value addition of products. If Nepali products were to be promoted regressive customs and other duties should be revised accordingly. But this budget doesn&#39;t even touch upon these newer challenges.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	Growth by infrastructure development is highly indirect proposition. The GDP can grow with only very massive investment, not of pork-barrel nature but only in the form output targeted creation of transportation and communication linkages. In view of these realities, it can be easily concluded that the budget doesn&#39;t make any sensible effort to fill the growth gap.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	It is surprising to see that out of eight, the reducing the trade deficit is listed as the seventh objective. In fact, it should have been the first and the programmes like hydropower development should have been part of export promotion strategy in the long- run. Similarly, inflation control has been an outcome of a perverse nature foreign trade than the domestic trade factors.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	To see recent, unconventional trends in economy, both in terms of problems and prospects, we needed a clear departure from traditional bureaucratic verbose in national budget. But, this particular budget has indulged more in this outdated practice. This is truly a year of opportunity missed.</div>
<div>
	&nbsp;</div>',
			'published' => true,
			'created' => '2013-08-22',
			'modified' => '2013-08-22',
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			'description' => 'The most positive development of the ordinance budget for FY 2013/14, presented on 14th July by Finance Minister Shankar Koirala, is that it proposes the income and expenditure estimates for the entire fiscal year.',
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			'id' => '2812',
			'article_category_id' => '52',
			'title' => 'Allow Private Sector To Spend Development Budget',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	The spending capacity of the Government of Nepal is quite poor, to say the least. The government has been routinely allocating capital expenditure, also known as the development budget, every year. But it has routinely failed to spend the money. In the first nine months of the current fiscal year, the government has been able to spend only about 26 percent of the development budget. In the previous fiscal year, such spending was about 29 per cent. Government officials are authorized to make capital expenditure right after the parliament endorses the national budget. But they don&rsquo;t move for months and wait for the final trimester to spend the development budget in a hurry. This has developed as a culture.</div>
<div>
	&nbsp;</div>
<div>
	It&rsquo;s not only the government-funded projects but also the donor-funded ones that are affected by this chronic tendency. The projects funded by the World Bank (WB), Nepal&rsquo;s largest multilateral development partner, could be taken as an example. In the first six months of the current fiscal year, spending by the WB-funded projects has been poor with disbursement standing at 5.3 per cent against a target of 13.2 per cent. According to the WB, disbursement amounted to Rs 38.06 million during the period against the targeted Rs 94.6 billion.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	The ineffectiveness of the government machinery is clearly visible here as almost all of the WB&rsquo;s funding is channelled through the government system. There have been talks about enhancing the government&rsquo;s spending capacity but they are limited to just that &ndash; talks.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	The unspent amount has soared as this year&rsquo;s budget also has a carry-over of Rs 15 billion from last year&rsquo;s unspent budget. It shows that billions of rupees meant for development works have been remaining unspent. &nbsp;</div>
<div>
	&nbsp;</div>
<div>
	For years, we have been fatigued by this bizarre development practice. We have a measurable trend of low expenditure every year for various reasons. Since fiscal year 2011/12, capital expenditure has not crossed 30 percent of the allocated amount during the three trimesters. The delay in spending the budget can lead to multiple problems in the market such as lack of liquidity, no job creation and slow development work. &nbsp;</div>
<div>
	&nbsp;</div>
<div>
	If a major chunk of the budget continues to pile up, there is persistent risk of spending the budget unaccountably at the end of the fiscal year. This has been happening for the last several years. Every year, newspapers are replete with stories of hasty and hurried expenditure of development funds when only a few months are left prior to the end of the fiscal year. The expenditure of development funds expedites a few months before the expiry of the fiscal year. This puts people&#39;s concerns about quality development into question. &nbsp; &nbsp;</div>
<div>
	&nbsp;</div>
<div>
	Laws and guidelines clearly stipulate that development expenditures have to be made within a set deadline, and accountability and transparency must be maintained in the process. But brushing aside such legal and procedural mandates, expenditures are being made in such a way as to produce miserable development output against hefty expenditure. It has become a common sight in and around the cities, towns and villages that construction of new tracks and blacktopping of roads unusually pick up momentum during June and July each year. Nepal&rsquo;s fiscal year ends at mid-July. One can imagine the quality of construction and development works when a major chunk of the national budget is spent in a few months before the expiry of the fiscal year. &nbsp;</div>
<div>
	&nbsp;</div>
<div>
	Procedural delays in approving the project and awarding the contract, a tendency among contractors not to work after receiving the mobilisation fund in advance, frequent transfer of technical and top level staffers at the project and fear of the anti-graft body are some of the reasons for the low spending of the capital expenditure. Whatever the reason might be, the fact is the government hasn&rsquo;t been able to spend the development budget year after year. Therefore the responsibility of spending the development budget should be given to the private sector.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	If we adopt such practice, the private sector, which is far more efficient and capable than the public sector, can take the leadership of our development projects. The government, on its part can create a mechanism to periodically monitor the progress of such projects.</div>',
			'published' => true,
			'created' => '2015-06-01',
			'modified' => '2015-06-08',
			'keywords' => '',
			'description' => 'The spending capacity of the Government of Nepal is quite poor, to say the least. The government has been routinely allocating capital expenditure, also known as the development budget, every year. But it has routinely failed to spend the money.',
			'sortorder' => '2663',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 1 => array(
		'Article' => array(
			'id' => '2807',
			'article_category_id' => '52',
			'title' => 'A Matter Of De-Materializing It',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	Nepal&#39;s share market index, Nepse is performing reasonably well since the formation of Nepali Congress led government. It is now hovering between 850 and 900 for sometimes now. Among many welcome developments, the plan to dematerialize (demat) the physical share certificates into the digital ones have boosted the confidence of the investors. But the demat process has been rather very slow. In seven months since it started (coinciding with the Nepali New Year 2071), only about a million scrips of some three dozen companies could be converted to digital format. No doubt, this is a time consuming process, but such a slow pace, though, is absolutely unwarranted for.</div>
<div>
	&nbsp;</div>
<div>
	Be that as it may, demat process would be completed, hopefully, soon. But more worrisome aspect is, other support infrastructure to augment trade in demat system remains far behind the mark. The recent lull in the market is now attributed to the fact that banks were not recognizing the dematerialized shares as security for financing investments. They may have their reasons to do so. But this reflects a clear lack of vision and coordination among the policy makers to simultaneously take forward all related developments of ancillaries so as to prevent the system from becoming lame.</div>
<div>
	&nbsp;</div>
<div>
	Simply, banks&#39; willingness to invest in the digital infrastructure and manpower training to handle these loan transactions doesn&#39;t seem to be forthcoming right away. And, there is no initiation from other relevant authorities like Nepal Rastra Bank and Securities Board of Nepal to facilitate this. &nbsp;It is though not to suggest that everything has to be shouldered by the public institutions, but policy exercises in view of the potential paradigms of such developments is unquestionably their special domain.</div>
<div>
	&nbsp;</div>
<div>
	As things stand now, three immediate tasks must be undertaken to not let the tempo in the share market wane off. First, banks should, may be through their umbrella organization - the Nepal Bankers&#39; Association, make their position clear with regard to their technical capabilities and cost-benefit analyses on facilitating demat transactions. They must also realize the fact that by making a digital transaction platform available, the share trading from all over the country may enhance in due course of time which in turn would help to increase their businesses. &nbsp;In many countries, a separate account for share trading has been a norm and a technical necessity. At the same time, they have adopted the rule of de-hooking the funds from other accounts while market volatility is emotion-racking. This effectively means that a trader can only trade from his trading account even if s/he has other functional accounts in the same bank, until inter-account transfers are made.</div>
<div>
	&nbsp;</div>
<div>
	Second, policy coordination among the policy makers and functional relations among the market makers have been largely a neglected issue. It is also a fact that regulatory authorities have been reticent until it is too late to react. In many cases, they lack the understanding of technical knowhow and degree of urgency seems to be taking a toll. This must be changed.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	Third, Nepal is one of those countries where investment in financial education at any level -from policy makers to retailers - has been close to zero. This has led to great discrepancies, policy confusions and inadequacies in every branch of the financial system, including the capital markets. Recognizing the complementarities of the several sub-branches of the entire system, a comprehensive financial education of a national scale is now an unconditional imperative. Only an institutionalized approach can address this need to its due worth.</div>
<div>
	&nbsp;</div>
<div>
	Of course, there are some unaccomplished, larger issues of capital market reforms. It is high time to interact with the private sector to find convincing and lasting answers to the questions: why the real sector representation in Nepal&#39;s capital market has been so insignificant? Are there ways to improve it? How and when? In nutshell, Nepal&#39;s financial system is looking for a shift not only to change the paper shares to demat form, but to translate the nation&#39;s overall economic thought process from a &#39;brick and mortar&#39; age to the contemporary digital age.</div>',
			'published' => true,
			'created' => '2014-12-23',
			'modified' => '2015-06-01',
			'keywords' => 'new business age  from the editor news & articles, from the editor news & articles from new business age nepal, from the editor headlines from nepal,  current and latest from the editor news from nepal, economic news from nepal, nepali from the editor economic news and events,  ongoing  from the edi',
			'description' => 'Nepal's share market index, Nepse is performing reasonably well since the formation of Nepali Congress led government. It is now hovering between 850 and 900 for sometimes now. Among many welcome developments, the plan to dematerialize (demat) the physical share certificates into the digital ones have boosted the confidence of the investors.',
			'sortorder' => '2657',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 2 => array(
		'Article' => array(
			'id' => '2801',
			'article_category_id' => '52',
			'title' => 'Commendable Contract',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	Nepal has been successful in initiating important economic reforms, ahead at least of her South Asian peers. The process of economic liberalization began in 1984, eight years before India began its first generation of reforms. The financial sector reform too was undertaken with a reasonable success a decade ago. The latest agreement between the employers and the trade unions of Nepal to execute much awaited labour law reforms is another milestone. While Indian Prime Minister Narendra Modi has just making a case to change their 1949 Labour Law, Nepal&#39;s success can set an example on how highly contentious issue of industrial relations could be amicably resolved through right initiatives, with confidence building arrangements in the background.</div>
<div>
	&nbsp;</div>
<div>
	The creation of the Social Security Fund under the tripartite agreement among the government, the Employers&#39; Council headed by the FNCCI vice-president and all trade unions (there are some eleven at present) four years ago paved the way for the recent understanding. Among others, there were two major issues, one each from the employers and the workers. The employers wanted the hiring-and-firing rights and the employees wanted certainty of financial security. Both of these issues got resolved albeit in rather surprising pace. The employers exhibited a great deal of generosity to agree to contribute to twenty percent equivalent of the wages towards the Fund on top of employees&#39; contribution of eleven percent. This really constitutes a substantial sum that gives confidence to the workers. The employers have also secured the right to hire-and-fire, without seeking prior approval from the Labour Ministry, a legal provision still effective. The agreement to categorize the workers into four groups depending on the nature and necessity of the production process has also eased the labour market risks to the investors and entrepreneurs.</div>
<div>
	&nbsp;</div>
<div>
	The two pending issues to be agreed, namely sectorial bargaining rights and no-work-no-pay should not be as difficult to resolve as other host of issues already agreed. The latter issue partially gets addressed by the hiring and firing rights of the employers. But, the sectorial bargaining norms, when agreed with a sectorial umbrella body deemed applicable to the entire sector (the industry), could be agreed with some exception of new entrants or loss-making businesses. Again, as the fair-market norm, such sectorial umbrella organizations tantamount to cartel and thus employers should also need to rethink their position in the long run.</div>
<div>
	&nbsp;</div>
<div>
	Undoubtedly, the agreement to amend the labour laws to these effects is a welcome step. But, Nepal&#39;s political leadership must first desist to use the trade unions as the political tools. When this agreement actually becomes a law, the scope of using these trade unions as the political instrument drastically reduces. This warrants for a cautious approach that these agreed issues do not become victim of political machinations again. Nepal has also seen several such agreements and enactment of many important laws. But their enforcement and adherence have always been the problem. Therefore, all necessary institutional and logistic arrangement must be in place for desired outcome of these agreements, which in due course become law. A few of such &#39;must&#39; arrangements are: proper database of the workers, automated accounting of the Security Fund given the potential high mobility of labourers, timely deposit of the promised amounts by the employers and updated records of the same, and credible institutional set-up to ensure timely delivery of all these services.</div>
<div>
	&nbsp;</div>
<div>
	It is also not enough just to have these laws in place. If Nepal is expecting enhanced foreign or domestic investment, she should be able to communicate this as an achievement that has put a decades-long problem of industrial relations conclusively to an end. The trade unions affiliated to all political parties have signed this agreement, which adds one more powerful reason to invest in Nepal. Needless to say, to achieve this success in a country, which has one of the cheapest labour costs is indeed in the interest of all potential investors.&nbsp;</div>',
			'published' => true,
			'created' => '2014-11-21',
			'modified' => '2015-06-01',
			'keywords' => 'new business age  from the editor news & articles, from the editor news & articles from new business age nepal, from the editor headlines from nepal,  current and latest from the editor news from nepal, economic news from nepal, nepali from the editor economic news and events,  ongoing  from the edi',
			'description' => 'Nepal has been successful in initiating important economic reforms, ahead at least of her South Asian peers. The process of economic liberalization began in 1984, eight years before India began its first generation of reforms. The financial sector reform too was undertaken with a reasonable success a decade ago.',
			'sortorder' => '2652',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 3 => array(
		'Article' => array(
			'id' => '2795',
			'article_category_id' => '52',
			'title' => 'Auto Dream',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	&nbsp;</p>
<div>
	Refusing to the demand of the automobile importers to reduce import duties on vehicles, Finance Minister Dr. Ram Sharan Mahat has promised them government support if they start vehicle manufacturing in the country. &nbsp;Given the increasing demand due to expansion in the road network and resultant steady increase in import of all sorts of vehicles, Dr.Mahat&rsquo;s proposition seems plausible on cursory glance. But looking at the technicalities of the industry, automobile manufacturing in Nepal still seems a dream that needs a lot of efforts to realize. &nbsp;</div>
<div>
	&nbsp;</div>
<div>
	One prominent consideration will be that of scale. It may be possible to start assembling certain types of commercial vehicles, such as light goods carriers and farm implements. But the market for such Nepal-made vehicles will be limited within the country and such business will have stiff competition from imports due to quality considerations &ndash; real as well as perceptional. To overcome this barrier, a huge investment has to be made in procuring the technology. Whether that will make commercial sense is a big question. &nbsp;</div>
<div>
	&nbsp;</div>
<div>
	Dr.Mahat&rsquo;s call has come at a time when Nepal&rsquo;s manufacturing sector is in continuous decline and trade deficit is in continuous rise. Any manufacturing activity that may start now will be welcome in such situation. But it has to be realized that the decline in manufacturing is due to many reasons and among them two are distinct. While everyone accepts the problem of power shortage, the other problem related to it, hostile labour, is not accepted by many.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	It is not that efforts are not being made to manufacture vehicles in Nepal. Hulas Motors of Golchha Organisation has been assembling some types of vehicles and its product line up has reached nine including Rickshaw and Jeep. Dr.BaburamBhattarai adopted its Mustang Max jeep as of the Prime Minister&rsquo;s official vehicle when he was in that office. But it is complaining of not only lack of government support but even hurdles posed by government to domestic manufacturers. Two plantsthat assembled Chinese bikes Lifan and Ying Yang were closed down soon after they were set up. These experiences need close studies to find out what exactly is needed before we start efforts to realise the dream of flourishing Nepali automobile industry.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	One reason the government does not support any manufacturing within the country is the revenue it gets from imports. And the growing and big flow of remittance is helping the government in this. The result is growing economy without employment growth. This vicious cycle can be broken only with solution to the power shortage problem. Some recent developments &ndash; the latest being the power trade agreement with India and finalization of project development agreement template for power projects to the satisfaction of investors &ndash; are good indications for the future. But that is not going to be enough for development of automobile industry.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	Nepal already has a good automobile industry in the form of maintenance operations. These can easily upgrade to vehicle reconditioning operations if the policy and infrastructural hurdles are removed. Meanwhile, investment in backward integration can start and that requires expansion of the engineering colleges and setting up vehicle technology development centres.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	These centres should ideally be focused on developing electricity operated vehicles given the country&rsquo;s hydropower potentials.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	However, in the meantime, it would be wiser to reduce the import duty on vehicles, which are now not luxuries, but necessities as they are efficiency enhancing machines. A vehicle that is available across the border at Rs. 200,000 must not cost over one million rupees in Nepal.&nbsp;</div>',
			'published' => true,
			'created' => '2014-10-10',
			'modified' => '2014-12-23',
			'keywords' => 'new business age  from the editor news & articles, from the editor news & articles from new business age nepal, from the editor headlines from nepal,  current and latest from the editor news from nepal, economic news from nepal, nepali from the editor economic news and events,  ongoing  from the edi',
			'description' => 'Refusing to the demand of the automobile importers to reduce import duties on vehicles, Finance Minister Dr. Ram Sharan Mahat has promised them government support if they start vehicle manufacturing in the country.',
			'sortorder' => '2646',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 4 => array(
		'Article' => array(
			'id' => '2791',
			'article_category_id' => '52',
			'title' => 'Budget 2014/15 Private Sector Neglected',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	The budget for FY 2014/15 is grossly disappointing not because it is not better than those of past several fiscals, but it stands far short of expectations from Dr. Ram Saran Mahat, a self-proclaimed reformist and ardent advocate of the free-market economy, at the helm of the FinanceMinistry. There are at least half a dozen problems of grave nature in the economy that are caused mainly due to gradually receding role of the private sector. These six problems could be listed as low rate of economic growth for decades now, ballooning trade deficit year-after-year, diversion of public funds to protect ailing public enterprises, ever-increasing number of outbound migrant workers causing labour market distortions back at home, unproductive use of inflow of these workers&#39; remittances and, continuity of archaic practice of development that is heavily dependent on supply-driven central planning.</div>
<div>
	&nbsp;</div>
<div>
	Without creating a proper business environment for the private sector to function, all these trends are rapidly pushing the economy to the verge of collapse. The growth rate is low because the contribution of manufacturing to GDP has reduced close to five percent, which at one point of time was estimated to have in the double digit. This is caused largely due to closure or down-scaling of many private manufacturing units over the last one decade, the period of worsening industrial relations. Due to lack of investment in commercial agriculture, both agricultural productivity and modernization of this sector, lagged behind. It is also one of the major reasons for huge gap in our exports and imports value, the deficit now crossing six billion rupees mark in a single FY that just ended. We also failed to identify and update the products of our comparative as well as competitive advantages, particularly in the neighbouring markets (for perishable agro-products) and the third country niche market (for high value products like pashmina and woollen carpets). This failure comes as the result of not including the representative private sector in exercises like trade policy formulation.</div>
<div>
	&nbsp;</div>
<div>
	One of the clear departures expected from Mahat was government&rsquo;s decisive withdrawal from the trading and manufacturing business by ways of privatization and divestment. He has made some proposals like unbundling of Nepal Electricity Authority, divestment from Agricultural Development Bank and Nepal Bank Ltd and liquidationof some of already non-existent entities like Orind Magnesite Ltd. These efforts were needed. But more urgent were the privatization of the public companies like Nepal Oil Corporation which is putting heavy burden on country&#39;s exchequer just to fuel the luxury of a few hundred thousand rich populace. The budget failed to strike a right chord on it.</div>
<div>
	&nbsp;</div>
<div>
	The most crucial departure expected from Mahat, for his philosophical leanings as an open-market economist, was to stop &#39;merciful allocation&#39; from centre to the villages and districts without identifying the projects and their viabilities. To add to it, he also succumbed to the demand of the members of parliament by allocating a purse of eleven and half million rupees per head for the programmes and projects that are not yet identified. These pork barrel disbursements neither serve the development objectives nor channel the funds to the private sector as these small funds are spent sparsely, without proper adherence to the public procurement process.</div>
<div>
	&nbsp;</div>
<div>
	By putting the private sector to the back-burner, the economy can never come back on the prosperity track. Finance Minister Mahat did not present &#39;the Mahat budget&#39; this time.</div>
<div>
	&nbsp;</div>',
			'published' => true,
			'created' => '2014-09-08',
			'modified' => '2014-11-09',
			'keywords' => 'new business age  from the editor news & articles, from the editor news & articles from new business age nepal, from the editor headlines from nepal,  current and latest from the editor news from nepal, economic news from nepal, nepali from the editor economic news and events,  ongoing  from the edi',
			'description' => 'The budget for FY 2014/15 is grossly disappointing not because it is not better than those of past several fiscals, but it stands far short of expectations from Dr. Ram Saran Mahat, a self-proclaimed reformist and ardent advocate of the free-market economy, at the helm of the FinanceMinistry.',
			'sortorder' => '2640',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 5 => array(
		'Article' => array(
			'id' => '2785',
			'article_category_id' => '52',
			'title' => 'Unhooking Economic Departure',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	Finance Minister Dr Ram Saran Mahat, while drawing his point home on the transfer of allocations towards the end of the fiscal year to the indiscriminate projects from the ones mentioned in the FY 2013/14 budget, revealed that there are not &#39;any&#39; ongoing project of substantive size so that funds could be funnelled to them. On the moral grounds, this statement from Mahat is unpalatable. Because he is the only person who has headed the country&#39;s budget and planning for twelve out of twenty four years since restoration of democracy in the country, first as the National Planning Commission vice-chair and then minster for half a dozen times.Thus, he should also be held responsible for not incubating enough projects of national significance that have absorption capacity of virtually any amount of funds that may be diverted in wee circumstances, like in the event of low level of overall capital expenditure in the economy. Equally irresponsible were those who were at the helm of the Ministry of Finance before Mahat&#39;s current term in office.</div>
<div>
	&nbsp;</div>
<div>
	It is indeed a precarious situation -- a clear mismatch between the demand and supply of financial resources on the one hand and similar demand and supply dynamics of the development projects in the country. In absence of institutions like elected local bodies that articulate the demands for development of the common masses, demand for resources have also substantially gone down.</div>
<div>
	&nbsp;</div>
<div>
	There are other unattended areas in the economy that are either causing excessive &#39;bleeding &#39;or/and constricting growth for years. For example, petroleum import that exceeds the amount of our total exports, whopping Rs 250 billion trade deficit in a single year and continuous financing to loss-making State Owned Enterprises (SOEs) from the tax-payer&#39;s money to project the jobs of a few hundred unproductive employees.</div>
<div>
	&nbsp;</div>
<div>
	In addition to all these odds, rapidly eroding institutionalcapacities and, more importantly, rampant imperviousness of the political leadership towards these grave economic maladies are to blame why the relative peace of eight years since 2006 peace accord also couldn&#39;t ameliorate the acuteeconomic hardships of the people.The much expected departure in the economic affairs of the country, particularly after the dawn of peace is yet to happen. As credentials have it, Mahat is perhaps the best finance minister to transpire this much needed departure in terms of policy reforms, resource mobilization, productivity and trade enhancement and employment generation. But Mahat, given his outline of principles of the next budget presented recently in the parliament, seems unprepared to depart from a sluggish, low and sub-five percent growth rate.</div>
<div>
	&nbsp;</div>
<div>
	Not only there is absolute dearth of ongoing publicly financed projects as claimed by Mahat, private investment - both domestic and foreign - is also at its lowest. &nbsp;The contribution of the manufacturing to GDP has gone to worse from bad in recent years. It is one of the major reasons of widening export-import gap. The remittance fuelled consumption would have been a good catalyst for manufacturing growth. But lack of proper ambience for investment caused largely due to political indifference bleakens the manufacturing scenario of the economy. Even the policy of putting the private sector at the driving seat of economic development, incidentally credited &nbsp;as Mahat&#39;s brainchild in 1992, doesn&#39;t seem to be the case now.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	In view of the multifaceted problems, marginal improvements in blatantly failed economic policies, plans and implementing strategies are not likely to fundamentally alter the situation. It needs a real departure and if Mahat alone is unable to take such a risk, the major political parties must act together. Mahat can be the initiator of the consensus process for economic revival.</div>',
			'published' => true,
			'created' => '2014-07-30',
			'modified' => '2014-10-10',
			'keywords' => 'new business age  from the editor news & articles, from the editor news & articles from new business age nepal, from the editor headlines from nepal,  current and latest from the editor news from nepal, economic news from nepal, nepali from the editor economic news and events,  ongoing  from the edi',
			'description' => 'Finance Minister Dr Ram Saran Mahat, while drawing his point home on the transfer of allocations towards the end of the fiscal year to the indiscriminate projects from the ones mentioned in the FY 2013/14 budget, revealed that there are not 'any' ongoing project of substantive size so that funds could be funnelled to them. On the moral grounds, this statement from Mahat is unpalatable.',
			'sortorder' => '2635',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 6 => array(
		'Article' => array(
			'id' => '2780',
			'article_category_id' => '52',
			'title' => 'Fallen Prey To Politics',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	When Nepal Tourism Board (NTB) was created, it was dubbed as the first truly functional model of public-private partnership (PPP) in Nepal. When it delivered some encouraging results for Nepal&#39;s tourism industry, the model&#39;s replicability potentials formed chapters of many books like of Karna Sakya and provided basis for a large number of business working papers and case studies. But, unfortunately, the same NTB has now become the test case of alleged embezzlement of resources and sit-in protest against the same by the country&#39;s tourism entrepreneurs. Thanks to all-pervasiveness of our albatross politics.</div>
<div>
	&nbsp;</div>
<div>
	While penning these words, it had almost been a month that the protesting entrepreneurswere demanding an impartial probe into financial irregularities by the acting CEO of the Board, Subash Nirola. But nothing was moving ahead primarily because it was a PPP. The Board headed by the secretary in the Ministry of Tourism as the ex-officio Chairman is expressing government&#39;s inability to take unilateral action, as it is the &#39;private&#39; organization while the entrepreneurs too do not have the legal power to oust the CEO.</div>
<div>
	&nbsp;</div>
<div>
	A few months ago, the NTB made a policy decision to organize the tourism fairs in the districts &#39;to promote the domestic tourism&#39;. This has panicked the traditional entrepreneurs that their income would be shared by the district level hospitality and amenities industries. The government sees no flaws in the Board&#39;s decision. &nbsp;The entrepreneurs argue that the money spent for such fairs in domestic markets should instead be spent in international publicity so as to attract the foreign tourists. This is no doubt a valid reason. But, just spending some money for promotion of domestic tourist market can hardly be established as an evidence for corruption.</div>
<div>
	&nbsp;</div>
<div>
	The fuss is beyond these allegations of misappropriation of funds. The fact is, the protesting organizations of the entrepreneurs are affiliated to Deuba faction of the Nepali Congress, Oli faction of CPN-UML and Bhattarai faction of UCPN Maoists while the CEO is considered close to Khanal faction of the UML or, a chameleon, who also sometimes claims to be a Koirala Congress. And, for every political party, it was a matter of great pain that a newly emerged reputable organization like the NTB was functioning independent of political interference for more than a decade. And appointment of CEO is also not based on one&rsquo;s political loyalty. &nbsp;Therefore, every political party perhaps feels that if the current CEO is ousted through a political move, then it can set a trend and every next Tourism Minister can pick a new CEO along with each change in the government.</div>
<div>
	&nbsp;</div>
<div>
	The protest of the entrepreneurs wore a grotesque look when so called senior leaders of all three major parties reached at the sit-in site to &lsquo;express solidarity&rsquo; to the demands, without going into the merits of the allegations. If there are irregularities, there are related legal and quasi-legal institutions to investigate and prosecute the guilty. &nbsp;Why would leaders need to meddle in this process? Only plausible answer is that every party is keen to make the NTB a new political prey, which is deplorable.</div>
<div>
	&nbsp;</div>
<div>
	The problem in the NTB began long ago when the Board failed to pick-up a professional CEO in a transparent and timely manner. The &lsquo;Acting&rsquo; position is always an incentive for the incumbent to look for quick bucks from all possible means including kickbacks. And, as allegations are already labelled to Nirola, he should either make public all the details of procurement as soon as possible proving his integrity or step aside until proven innocent allowing for an independent probe. &nbsp;The prolonged stand-off between the Board and the entrepreneurs is putting the entire Nepal tourism sector in bad light. And, the government must step in to solve it than being a party to a side.</div>',
			'published' => true,
			'created' => '2014-06-08',
			'modified' => '2014-07-30',
			'keywords' => 'new business age  from the editor news & articles, from the editor news & articles from new business age nepal, from the editor headlines from nepal,  current and latest from the editor news from nepal, economic news from nepal, nepali from the editor economic news and events,  ongoing  from the edi',
			'description' => 'When Nepal Tourism Board (NTB) was created, it was dubbed as the first truly functional model of public-private partnership (PPP) in Nepal. When it delivered some encouraging results for Nepal's tourism industry, the model's replicability potentials formed chapters of many books like of Karna Sakya and provided basis for a large number of business working papers and case studies.',
			'sortorder' => '2625',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
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	),
	(int) 7 => array(
		'Article' => array(
			'id' => '2771',
			'article_category_id' => '52',
			'title' => 'Agenda: Economic Restructuring',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	Finance Minister Dr. Ram Sharan Mahat created ripples of a sort in mid-March when he pointed to the need of restructuring the economy. No doubt, this is a long pending agenda given the fact that Nepali economy is faced with stagflation-like trap for decades. But, Dr. Mahat&#39;s proposition has come so suddenly that it gives rise to two natural questions. Have we done adequate homework for such a massive restructuring? Is there enough political will to embrace the agenda of restructuring, going beyond barely managing it? And, the direction of such restructuring will equally be crucial as will be the sustainability of the transformed structure.</div>
<div>
	&nbsp;</div>
<div>
	Prioritization of the tasks in such restructuring agenda and garnering political support for the same, are two sets of groundwork that any restructuring agenda cannot perhaps bypass. To both ends, Dr. Mahat as the finance minister has a couple of rare strengths. He understands the Nepali economy thoroughly -- its cracks and crevasses-and has a pro-private sector image. Also, he carries equally strong weaknesses; that he carries a big baggage of self-righteousness, doesn&#39;t have a professional team and hardly trusts anyone and, he is a bad politician, at least at the negotiation table.</div>
<div>
	&nbsp;</div>
<div>
	Needless to reemphasize here, restructuring of a mixed economy that is chronically mismanaged is sure to be a daunting, painstakingly long-term process. If this is not a mere political gimmick that Dr. Mahat has no reason to indulge into, the homework needs to commence at least in two parallel fronts of the economy -- technical and political. On the technical side, there must be a dispassionate assessment of the loss incurred and persistent underperformance of the economy due to over-involvement of the government in planning, production and distribution systems. On the political front, to reduce the state involvement in functional aspects of the economy, a great deal of reorientation is imperative mainly in those political forces who are indoctrinated as communists or ardent socialists.</div>
<div>
	&nbsp;</div>
<div>
	A great amount of misgivings about the &#39;inevitability of state intervention and activism in economy&#39; must be dispelled, both at political or people&#39;s levels. Dr. Mahat himself needs enough courage to declare the institutions like the National Planning Commission obsolete, at least in the present form. In their present form, they act as omniscient of the needs and priorities of the populace at the grassroots. The decision on liquidating about three dozen state-owned enterprises that have acted as hungry sharks for years in the exchequer is long overdue. Only way to create public awareness on the futility to maintain status quo in these public institutions depends largely on the effective factual communication of the maladies and recurrent losses, year after year. One stroke of liquidating or privatizing the Nepal Oil Corporation would be enough to test Dr. Mahat&#39;s sincerity and courage to take-up really meaningful restructuring of Nepal&#39;s public economy.</div>
<div>
	&nbsp;</div>
<div>
	The economy is under stress from more than one quarter. The ballooning imbalance in the country&#39;s foreign trade, dwindling absorption capacity of the financial resources and mass-migration of the working age population for low-earning jobs abroad creating labour-market distortion at home are three prominent areas that warrant top priority in the restructuring agenda.</div>
<div>
	&nbsp;</div>
<div>
	The structural imbalances too are looming large. We spent decades lamenting on the lower-than-demand production of energy, mainly hydropower. But, despite all odds, the energy sector attracted a substantial investment and there are indications that the supply would be doubled in next four to five years. But, we became oblivious of the fact that we needed to develop adequate transmission lines to connect this power to individual houses. There are concerns of this power being wasted for lack of alternative arrangements, for example, replacing LPG cooking stoves with the electric ones to create market for the added power generation, or if possible export to India.</div>
<div>
	&nbsp;</div>
<div>
	There is a sort of political consensus on the need of a tangible restructuring of the state when it hopefully gets federalized. The proposed agenda of economic restructuring must be a complementary process to that larger goal of spatial restructuring of the state. The restructuring of even larger scale is also required in the private sector to transform it from a mere a trade-margin capitalizer, like from gold smuggling, to employment-generator and export-promoter. Therefore, the restructuring agenda must not fizzle out as seasonal political hyperbole. It deserves more nuanced treatment to make it a fruit-bearing proposition.</div>',
			'published' => true,
			'created' => '2014-04-09',
			'modified' => '2014-06-08',
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			'description' => 'Finance Minister Dr. Ram Sharan Mahat created ripples of a sort in mid-March when he pointed to the need of restructuring the economy. No doubt, this is a long pending agenda given the fact that Nepali economy is faced with stagflation-like trap for decades.',
			'sortorder' => '2621',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
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			'user_id' => '0'
		)
	),
	(int) 8 => array(
		'Article' => array(
			'id' => '2766',
			'article_category_id' => '52',
			'title' => 'Housing The Business',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	The housing and the real estate business (HREB) has a double-sword positive effect on the economy. It is a global perspective to this business, perhaps barring Nepal. It is a capital intensive business like any other profit making venture and, at the same time, helps to solve a pressing problem of shelter to the populace. But despite the potential, Nepali HREB languishes in absurdities and hangs on to uncertainties. It has been more than one and a half decades since HREB began in an organised fashion led by private sector investment. But the bottlenecks of policy confusions, information asymmetries and public (mis)perceptions remain the same as they used to be a decade ago.</div>
<div>
	&nbsp;</div>
<div>
	According to a rough estimate, Nepali HREB is now worth more than Rs 150 billion, which is a third of the current year&#39;s national budget. There is an estimated annual demand of some forty five thousand units of family apartments, mainly in the urban centres of the country. Half of the demand is only in the Kathmandu valley. But, the total annual cumulative supply of apartment-type living is limited only to sixteen thousand units nation-wide. The demand and supply mis-match is one half of the story and the price and financing mismatch is the other.</div>
<div>
	&nbsp;</div>
<div>
	What&#39;s wrong with Nepali HREB as an investment and growth industry? Perhaps everything! The government doesn&#39;t have a comprehensive policy on it. In addition, the very perspective of the government about HREB is largely bigotry. Some regulations regarding ownership have been issued but implementation has not been as effective as expected. Given the fact that the private sector is doing a national service by providing housing facilities to the people which otherwise is the government&rsquo;s responsibility, it should have acknowledged and treated accordingly. As long as the government considers itself as the vehicle to an egalitarian society, it is indeed the government&rsquo;s responsibility to address problems like this.</div>
<div>
	&nbsp;</div>
<div>
	One emulative recent example could be the British government&rsquo;s initiative of Help-to-Buy (HTB) scheme, introduced by Chancellor George Osborne&rsquo;s last fiscal year budget, targeting the first time home owners. The &pound;25 billion scheme that began in January 2014 plans equity finance of 20 percent of the cost of buying or constructing a new house. The government plans to implement the HTB scheme in a three year time horizon. The objectives are well defined. First, to help revive the ailing HREB and also simultaneously support lower end populace to own a house of their own.</div>
<div>
	&nbsp;</div>
<div>
	But in our case, the government is treating the investors and developers as criminals and crooks, let alone contemplating providing an equity financing. It was true that there was a degree of over-exposure of the finical sector to HREB. But that was a compulsion at a point of time due to utter lack of other sectors for the BFIs to invest. Shouldn&#39;t the government share the blame for failing to create an atmosphere for a diversified business and thus the BFIs&#39; investment? Instead, the government apparatus is at complete loss of direction to address the problems of the sector. On top of that a rung of top public service officials were determined to ruin the entire HREB.</div>
<div>
	&nbsp;</div>
<div>
	Without naming names, there are projects in limbo which would have been completed well if the institutions like the central bank wouldn&#39;t have been vindictive to some chosen promoters of the schemes. It is true that some developers had had multiple business stakes and resorted to some duplicity. But the right approach for the government and central bank strategy should have been to save the projects and investment and penalize and admonish only the wrong-doers. To say the least, the government has not been sensitive to the potential ramifications of its apathy and antipathy to HREB.</div>',
			'published' => true,
			'created' => '2014-03-24',
			'modified' => '2014-04-09',
			'keywords' => 'new business age  from the editor news & articles, from the editor news & articles from new business age nepal, from the editor headlines from nepal,  current and latest from the editor news from nepal, economic news from nepal, nepali from the editor economic news and events,  ongoing  from the edi',
			'description' => 'The housing and the real estate business (HREB) has a double-sword positive effect on the economy. It is a global perspective to this business, perhaps barring Nepal. It is a capital intensive business like any other profit making venture and, at the same time, helps to solve a pressing problem of shelter to the populace. But despite the potential, Nepali HREB languishes in absurdities and hangs on to uncertainties. It has been more than one and a half decades since HREB began in an organised fashion led by private sector investment. But the bottlenecks of policy confusions, information asymmetries and public (mis)perceptions remain the same as they used to be a decade ago.',
			'sortorder' => '2612',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
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	(int) 9 => array(
		'Article' => array(
			'id' => '2581',
			'article_category_id' => '52',
			'title' => 'When Bulls Run To Bush',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	The index of Nepal Stock Exchange, Nepse, climbed to 800 after five years early January 2014. Since it closed at 963.36 in mid-July (end of the Nepali fiscal year) 2008, it had barely crossed 500 until last June. It had terribly disappointing bearish tumble for all five consecutive years as shown in the side table. The Nepali bourse has often behaved beyond any rational expectations and market analysis. There was no reason for it to fall as low as below 300 in 2011 and even at present the speedy bull run is not fully justifiable. The index has climbed about 50 percent from 529 points in mid-July 2013 and to 780 mark on third week of January 2014.</div>
<div>
	&nbsp;</div>
<div>
	<img alt="Nepal Stock Exchange Index" src="/userfiles/images/editor1%20(Copy).jpg" style="float: right; margin: 0px 0px 0px 10px;width: 200px; height: 154px;" />Interestingly, this rise is witnessed when trading of stocks of a number of new companies, mainly the new commercial banks, began. The situation apparently is of over-supply and there has not been any substantial change in economic fundamentals to push the Index up, except the fact that last CA elections saw the defeat of hard-line communist forces, like Maoists. If the investment were to be made for returns, this political change alone would not perhaps be enough to ensure higher&nbsp;</div>
<div>
	yield. But, investors do not seem to be bothered by this.</div>
<div>
	&nbsp;</div>
<div>
	To some extent, the volatility of the market by its nature is understandable, but the reason d&rsquo;&ecirc;tre of this, generally, is however never beyond comprehension. At least, it should not have been the case given the availability of modern-technology assisted analysis, both fundamental and technical. But that is what exactly happening in Nepal.</div>
<div>
	&nbsp;</div>
<div>
	When markets run amok, bullish or bearish, without any convincing economic explanation, there is no reason to be happy. Nepal&rsquo;s capital markets have some basic characters that make it very risky. It is not only unintegrated to the international market, but also lacks even a few traders who would trade in Nepse and some other international exchange, simultaneously. Therefore, the impact of international market in Nepali secondary market can be completely ruled out. The real sector, for all practical purposes, has no presence in the capital market and it is dominated by the financial service providers, a few hotels and lately some hydropower companies. This means, our capital market trends do not necessarily reflect the degree of fitness of our economy. And, except for some time-trained crooks, there are very few informed or educated investors, causing mismatch between the expectations and returns.</div>
<div>
	&nbsp;</div>
<div>
	The regulator is equally novice and naive. Political appointments of the people to the Stock Exchange Board who lack specific knowledge about the trade have made the situation worse. The most dangerous part is that, no public agency is even contemplating about the possibilities and procedures of listing more real sector, mainly manufacturing, companies into secondary market. It is indeed an uphill task since it requires much higher level of willingness of the private sector to register in the bourse. It in turn requires transparency at every step of the transaction of the companies from, imports, customs evaluation, VAT and excise, sales, and ultimate balance sheet and auditing. Nobody seems prepared for this mammoth task that has not only economic cost but also demands a high degree of business integrity and honesty.</div>
<div>
	&nbsp;</div>
<div>
	But, without bringing the real sectored on the trading screen, the rationale of the secondary market could hardly be justified. The result, it will continue to be victim of irrational volatility. The new government that will be formed soon should take three major steps: first appoint knowledgeable persons of the sector in the regulatory board, second create a joint platform of Nepal Rastra Bank, the Board, Ministry of Finance and the private sector to promote financial education about the secondary market and begin brain storming to identify the causes that are hindering real sector to enlist in Nepse and resolve them. Only this will create a credible stock market in Nepal.</div>
<div>
	&nbsp;</div>',
			'published' => true,
			'created' => '2014-02-10',
			'modified' => '2014-02-18',
			'keywords' => 'new business age  from the editor news & articles, from the editor news & articles from new business age nepal, from the editor headlines from nepal,  current and latest from the editor news from nepal, economic news from nepal, nepali from the editor economic news and events,  ongoing  from the edi',
			'description' => 'The index of Nepal Stock Exchange, Nepse, climbed to 800 after five years early January 2014. Since it closed at 963.36 in mid-July (end of the Nepali fiscal year) 2008, it had barely crossed 500 until last June. It had terribly disappointing bearish tumble for all five consecutive years as shown in the side table.',
			'sortorder' => '2434',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
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	(int) 10 => array(
		'Article' => array(
			'id' => '2441',
			'article_category_id' => '52',
			'title' => 'Bitter Taste Of Sugar',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	The price dispute between the sugar mill owners and the sugarcane-producing farmers, like in the past years, has resurfaced, again. The farmers are arguing that the price offered by the sugar mills is far below their cost; and demanding a higher rate. The mill owners have their take: as the sugar price volatility is high, it would be unfeasible for them to meet the farmers&rsquo; demands. Both arguments have valid underpinnings.</div>
<div>
	&nbsp;</div>
<div>
	The reference price for both buyers and sellers of sugarcane in Nepal has been the neighbouring Indian states of Utter Pradesh and Bihar. &nbsp;Buyers here offer the price at par to their Indian counterparts. But, this price hardly attracts the Nepali farmers as their production cost is much higher than their Indian friends. India has massive farm and input subsidies effective. In desperate situations, government ventures to buy the product. They have better mass-scale cold storage facilities to wait for off-season high price sells. On the contrary, the energy and labour prices here are higher, electricity supply and irrigation facilities are unstable, thus costly. Other infrastructures like warehousing are in acute short supply. The farmers are forced to sell their sugarcane at the price offered by the mills as they have no alternatives. Besides, the sugarcane has a huge transportation cost to explore market in greater distances. In Nepal, the government support to the farmers is almost nil.</div>
<div>
	&nbsp;</div>
<div>
	On the buyer side, the special feature of seasonality in sugar production is a challenge. They must employ all their resources in this season. High demand of workers adds cost of production and the practice of hedging the base price throughout the year is not even contemplated in our context. Nepal&rsquo;s sugar pricing is largely affected by the Indian price trends. Therefore, Nepali producers&rsquo; may be sandwiched between the high prices of sugarcane here and over production and supply of sugar in India.</div>
<div>
	&nbsp;</div>
<div>
	The situation is indeed dire and warrants a lasting solution to this annually recurrent problem. In the open market economy, it is not advisable to invite an outright, continuous and equally effective government intervention. But, as long as government continues to subsidise in inputs and facilities, there is no harm that it does the same for the sugarcane as well. But, more lasting solutions should be explored from the market mechanism itself. And, there is ample scope for it.</div>
<div>
	&nbsp;</div>
<div>
	One of the bones of contention of the price rigidity of the sugarcane is ever impending sugar price volatility. This can be best addressed by price hedging of both sugarcane and sugar, at least in the yearly range. The newly developed commodities futures market of Nepal can be instrumental in it. Or, it can be made so. Implementing the already enacted Secured Transaction Registry Act and validation of warehouse receipts for bank financing can be highly supportive to this initiative. If the government can&rsquo;t afford to invest to set-up sufficient warehouses, it must work to create the environment for private investment for the same.</div>
<div>
	&nbsp;</div>
<div>
	The second strategy could be market-scoping of sugar, and price-difference support. We have almost convincing data that Nepali sugar produce can only meet about forty percent of the Nepali demand. And, sixty percent of imported sugar invariably has a higher market price for obvious reasons. In such a scenario, government can easily figure out how much the country annually spends on sugar, and what price per unit for. On this basis, government can set a reference price for both sugarcane and sugar. In the year end, instead of indiscriminately subsidising on inputs or incentivizing the producers, government can choose to subsidise only the price difference between the base and market prices. This can work both ways. Even if the producers charge much higher rate than the base price and earn larger profits, it can be arranged such that some portion of it goes to the farmers.</div>
<div>
	&nbsp;</div>
<div>
	Since sugarcane is a special kind of seasonal crop, it needs special policy attention.&nbsp;</div>',
			'published' => true,
			'created' => '2014-01-10',
			'modified' => '2014-01-21',
			'keywords' => 'new business age  from the editor news & articles, from the editor news & articles from new business age nepal, from the editor headlines from nepal,  current and latest from the editor news from nepal, economic news from nepal, nepali from the editor economic news and events,  ongoing  from the edi',
			'description' => 'The price dispute between the sugar mill owners and the sugarcane-producing farmers, like in the past years, has resurfaced, again. The farmers are arguing that the price offered by the sugar mills is far below their cost; and demanding a higher rate. The mill owners have their take: as the sugar price volatility is high, it would be unfeasible for them to meet the farmers’ demands. Both arguments have valid underpinnings.',
			'sortorder' => '2320',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
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			'user_id' => '0'
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	(int) 11 => array(
		'Article' => array(
			'id' => '2266',
			'article_category_id' => '52',
			'title' => 'Hope Of Economic Revival',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	The elections for the Constituent Assembly (CA)-II are now over. Results have been announced. Successful completion of the CA polls themselves is good news for the economy. Rise of the liberal economic forces from it has made it a harbinger of prosperity and development. After long gloomy years, the new CA comes with the renewed promise to draft and promulgate the new constitution within a year and pave way for the nation to head towards peace,stability and prosperity. The last CA too had that hope, but unfortunately that didn&rsquo;t materialize.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	In retrospect, it appears that the poll process, the constitution and the functions of earlier edition of the CA (2008) were largely marred by political naivety and immaturity. If one looks at the manifestoes of the 2008 CA election, it is not difficult to discern that the political forces were just flabbergasted by the pace of change and couldn&rsquo;t structure proper frame to guide the nation forward. The then New Forces, Maoists and Madheshis, &nbsp;had overtly ambitious agenda, whereas the Old Forces like Nepali Congress and the CPN-UML had &nbsp;a sense of compulsion to bow down &nbsp;to the agenda of those New Forces.</div>
<div>
	&nbsp;</div>
<div>
	But things changed drastically by the time the country arrived at the threshold of the second CA elections in 2013. As evidenced by their recent manifestos, major political forces had become more mature, rationality had prevailed over emotions. Traders of mere selfish, divisive or opportunistic agenda were badly fragmented and most importantly, a sincere realisation to move along the changing paradigms of the world was across the board. There was a race to promise to shun violence and acts of business disruption by calling on bandhs and strikes. Though achieved at a great cost, monetary and opportunity, these achievements are not trivial.</div>
<div>
	&nbsp;</div>
<div>
	It is a bare fact that Nepal suffered almost two decades of virtually zero development. Since the Maoists launched armed rebellion in February 1996, the resources and focus of the state concentrated to counter it. &nbsp;Hardly any power project, new stretch of road or other significant infrastructure was added during the decade long conflict. The Comprehensive Peace Agreement of 2006 ended the conflict, but fears of the investors could hardly be allayed, mainly due to destructive high-handedness of the Maoist-affiliated trade unions, among other uncertainties surrounding the drafting of the constitution. One may argue that we never had a zero or negative nominal GDP growth rate, but the inflation-adjusted real growth rate had never been positive for all those years.</div>
<div>
	&nbsp;</div>
<div>
	But the approaches, stances and philosophies have transformed for good in recent years, which was reflected in the run-up to the second CA elections. These are the very reasons that led to the successful completion of the election process with as high as whopping 78 percent turn out of the voters. The half battle is won.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	On top of it, the electorates gave a very emphatic support to the parties -- Nepali Congress and CPN-UML that exhibited understanding of the global economic order and trend vis-&agrave;-vis Nepal&rsquo;s development priorities and needs. It was the Nepali Congress that had initiated the economic reform and liberalization after restoration of democracy in 1990 and the fruits of it is still reaped by the economy. The then UML government began grassroots level connectivity and infrastructure projects in 1995 that gradually provided market access to the remote hinterlands of the country. These two facets of development helped the Nepali economy to withstand the decade-long conflict and almost equally-long political mayhem after that. The people trusted back to both of these parties, once again giving them almost equal, jointly more than sixty percent of strength in the new CA. People experimented the Maoists once in the last election by making them the largest party in the last CA, but it failed the test. &nbsp;Now condemned to humiliating defeat.</div>
<div>
	&nbsp;</div>
<div>
	The conclusion of CA election against the widespread suspicion about its success, victory of the parties that believe in democracy and free-market and, rationalization of the forces that were erstwhile destructive ones, indeed raises hope on reigniting the growth process. &nbsp;The stage is all set and, now actors should play the right role before the curtain falls.</div>',
			'published' => true,
			'created' => '2013-12-13',
			'modified' => '2013-12-16',
			'keywords' => 'new business age  from the editor news & articles, from the editor news & articles from new business age nepal, from the editor headlines from nepal,  current and latest from the editor news from nepal, economic news from nepal, nepali from the editor economic news and events,  ongoing  from the edi',
			'description' => 'The elections for the Constituent Assembly (CA)-II are now over. Results have been announced. Successful completion of the CA polls themselves is good news for the economy. Rise of the liberal economic forces from it has made it a harbinger of prosperity and development. After long gloomy years, the new CA comes with the renewed promise to draft and promulgate the new constitution within a year and pave way for the nation to head towards peace,stability and prosperity. The last CA too had that hope, but unfortunately that didn’t materialize.',
			'sortorder' => '2113',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
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			'user_id' => '0'
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	(int) 12 => array(
		'Article' => array(
			'id' => '2183',
			'article_category_id' => '52',
			'title' => 'Unmanifested Political Will',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	A<span style="font-size: 12px;">ll major political parties have made their manifesto for the November 19th Constituent Assembly (CA) polls public. Most of the parties including the big &#39;gang of four&#39;- UCPN (Maoist), Nepali Congress, CPN-UML and the Madhesi Morcha have made a long list of promises to accelerate the economic growth of Nepal. The promises are tall and details read like a government&#39;s annual &#39;policies and programmes&#39; to &nbsp;be unveiled in a parliamentary session. Many of the propositions are just populist and not based on the grounds of resource availability and pragmatic possibility of implementation. However, unquestionably, the Nepali economy was for long in dire need of real policy boost and political commitment from the highest possible level. One positive thing, perhaps the only one, is that the country&#39;s political parties have, rather uniformly, shown concern towards the economic growth and development of the country.</span></div>
<div>
	&nbsp;</div>
<div>
	But, one must remember here, it is the elections for the CA and not for a tenured parliament. In a sense it is more important opportunity to give a direction to the country&#39;s economic future. However, it is surely not the moment to make populist commitments enumerating number of &nbsp;projects and programmes. Therefore, these party manifestoes should better provide the basis for the economic system that the country would adopt for reasonably longer period of time. The focus of all these manifestoes were naturally expected to make the constitutional position of every political party about elements that would finally constitute &nbsp;the provisions for &#39;Directive Principles&#39; and &#39;Economic Rights&#39; in the new constitution. But, unfortunately, all the parties have spent a huge resource and time in listing what they would do programmatically, not constitutionally, to develop the country. This is to say that their prime focus is on &#39;what&#39; of they want to do, but completely devoid of the &#39;how&#39; of it.</div>
<div>
	&nbsp;</div>
<div>
	These manifestos have, almost uniformly, failed to address the issues that have constrained the growth prospects of Nepal for long. These constraints have come in three categorical forms -- the philosophical stand and identity of the powerful parties, the model of the economy the country would adopt in the longer run and rights of the citizen to own and generate legal wealth including their enforcement. But all these three issues are hardly addressed by the parties through their manifestoes.</div>
<div>
	&nbsp;</div>
<div>
	Needless to say, Nepali politics is dominated my the communist outfits of various degrees of radicalism. It is a doctrine that advocates and works against the private ownership of the property and firms. Even if these outfits claim that they are not opposed to private capital, the suspicion of their motives remain intact as long as they are identified as devout communists. The manifestoes were perhaps the best tools to assure the people that these parties unconditionally would adhere to the norms of uninfringed property rights of the people. They could have even made the extent of change in their philosophical stand public. But nothing of the sort happened. In fact, manifestoes of communist parties have deliberately skipped this crucial part of clarification. Even Congress continues to cling to &#39;socialism&#39;.</div>
<div>
	&nbsp;</div>
<div>
	The model of the economy to be adopted is also equally important. Parties are saying many confusing things like developing national capitalism, socialism and self-sustained economy. They appear unwilling to open their cards. They have chosen an easy term &#39;mixed&#39;, without identifying the elements to be mixed together.</div>
<div>
	&nbsp;</div>
<div>
	The most important is, whether the new constitution can ensure the private property rights and economic democracy or not. No manifesto has clearly mentioned that it was for the absolute property rights and rights for intellectual properties that encourages innovation.</div>',
			'published' => true,
			'created' => '2013-12-01',
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			'description' => 'All major political parties have made their manifesto for the November 19th Constituent Assembly (CA) polls public. Most of the parties including the big 'gang of four'- UCPN (Maoist), Nepali Congress, CPN-UML and the Madhesi Morcha have made a long list of promises to accelerate the economic growth of Nepal.',
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	(int) 13 => array(
		'Article' => array(
			'id' => '1966',
			'article_category_id' => '52',
			'title' => 'Doubling The Growth',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	The economic growth of any country is neither achieved by chance nor is it a thunder-struck miracle. In fact it&rsquo;s a combination of many contributing factors-both economic and socio-political. In a country like Nepal, where political uncertainty is nagging for decades, institutional set ups responsible for overall development are gradually being rendered dysfunctional. When government legitimacy comes under serious interrogation mark, economic growth hardly becomes a national agenda.</div>
<div>
	&nbsp;</div>
<div>
	The current state of Nepali economy fits into exact definition of stagflation -- the stagnated growth and uncontained inflation. Average year-on-year growth rate of the economy for the last whole decade beginning 2002 (when growth rate, computed as Gross Domestic Product (GDP) had dipped to negative territory) has hardly crossed 3.5 percent mark.</div>
<div>
	&nbsp;</div>
<div>
	Poor growth rate is not the only worst part of it, but even the lack of meaningful debate on the constraints and remedies is making the situation worst. But the inflation even in official figures is invariably in double digits.</div>
<div>
	&nbsp;</div>
<div>
	If not from the government, tangible initiatives to this end had to come from the private sector. But nothing of that sort happened in the recent past. To fill this gap, the New Business Age (NBA) Pvt. Ltd from this year on, in partnership with some leading business entities of the nation, has taken a maiden initiative to take the growth debate to the centre stage of national economic policy parlance.</div>
<div>
	&nbsp;</div>
<div>
	Nepal in the past did witness some debate over her growth concerns, but most of them were rather slanted or impractical. In different chapters of history, we were made to hear high-pitched rhetoric of double-digit growth, Swiss or Singaporean pace of growth, leap-frogging growth or a growth taking Nepal to a developing from an underdeveloped country status. These all were tall, very tall asks, to say the least.</div>
<div>
	&nbsp;</div>
<div>
	The double digit growth or upliftment of the country&rsquo;s status to a developing one are essentially the same concepts. For this, Nepal needs at least some Rs. 400 billion of capital expenditure annually, or at least 8.5 percent growth rate, for ten consecutive years. This indeed is unimaginable for several years to come. Other claims were bare political stunts, so had no scope of realizing them at all.</div>
<div>
	&nbsp;</div>
<div>
	In view of these dogmatic misadventures of the past, the NBA wanted a meaningful debate to take off that is based on feasible goals against the existing ground realities. This led to the conclave on the theme &#39;Doubling of Growth of the Nepali Economy to 7 per cent GDP: The Roadmap Ahead.&#39; Based on the 3.5 percent of growth rate of the past fiscal year, the idea of doubling was born, which looked fairly achievable if we could religiously pursue it.</div>
<div>
	&nbsp;</div>
<div>
	Needless to say, growth in national GDP is a multi-sector endeavour. Among them too, it is important to identify and focus on key sectors that can either serve as prerequisite to long-run sustainable growth like hydropower or yield immediate growth results like agricultural productivity and tourism.</div>
<div>
	&nbsp;</div>
<div>
	But, most important of all is quintessentially lead role of the private sector in investment, production and distribution of all goods and services. Of course, support of the state from the background is needed as security or ground for fair-play. Guided by this philosophy, the NBA coincided the conclave of growth debate, organized in Kathmandu on 24th August, with the opportunity to recognize the contribution of business sector to growth. This recognition came in the form of the 10 categories of business awards.</div>
<div>
	&nbsp;</div>
<div>
	For the sustained prosperity of the nation, we should be able to make the growth not a flip-flop show but a habit. We need to start modest and all big dreams will fall in line with accomplishment of the starting ones. If we achieve 7 per cent growth first, then the double-digit can be followed soon. More important here: we needed a right beginning. And, with this successful conclave, we in NBA feel, the beginning has indeed been right.</div>
<div>
	&nbsp;</div>',
			'published' => true,
			'created' => '2013-10-09',
			'modified' => '2013-10-09',
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			'description' => 'The economic growth of any country is neither achieved by chance nor is it a thunder-struck miracle. In fact it’s a combination of many contributing factors-both economic and socio-political. In a country like Nepal, where political uncertainty is nagging for decades, institutional set ups responsible for overall development are gradually being rendered dysfunctional.',
			'sortorder' => '1818',
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	(int) 14 => array(
		'Article' => array(
			'id' => '1675',
			'article_category_id' => '52',
			'title' => 'Bureaucratic Budget',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	The most positive development of the ordinance budget for FY 2013/14, presented on 14th July by Finance Minister Shankar Koirala, is that it proposes the income and expenditure estimates for the entire fiscal year. The budgets for the last four fiscal years had come in the form of quarterly or half-yearly estimates due to incessant political squabbles among the political parties at play. The government employees enjoyed the pay rise of some 20 per cent and private sector seemed largely contended with some liberal approaches adopted by the budget speech. The criticisms of the &#39;too large a size&#39; and &#39;implementation nightmare&#39; were routine and expected.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	But, the saddest part is that this budget in a bid to please everyone with some instant toffees, fails to address the most pressing economic problems faced by Nepal at present. The Nepali economy now faces three very worrisome problems. First, the GDP growth plummets to 3.6 percent, the lowest in the decade. Second, the export-import ratio is at whopping 1:10 and the recorded trade deficit is of the last fiscal year is estimated to be well above Rs 500 billion. If service imports like Nepali students studying abroad, holiday and healthcare trips Nepalis are making abroad are also added it would cross the Rs 600 billon mark. And, the third, the authorities have failed to tame the galloping inflation, that effectively stands between 14 to 16 per cent and the CPI-based one has never gone below 10 percent for several years now.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	The deficit budget by more than 25 percent of proposed expenditure even fails to acknowledge the fact that the economy is in grave crisis. It is unable figure out where the growth propellants would come about. The first three priorities of the budget are hydropower development, agriculture and infrastructure development--in that order. But, beyond rhetoric, it fails to enlist true problems and bottlenecks in respective sectors. It says many things about hydropower but fails to make any commitment on what would happen to large joint venture projects like West Seti and Arun III that are pending for years largely for unspecified reasons. Any development of hydropower projects in commercial scale will no meaning unless Nepal and India enter into power trade agreement. Bilaterally beneficial transmission lines and above all a climate of mutuality in investment and power trade are crucial, which could only go ahead if Indian investment is not discouraged. This however doesn&#39;t mean Nepal should sacrifice her interest. For any hydropower project, it would take long to be able to contribute to GDP growth.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	Even if agriculture is deemed to be a growth engine, it is time that the sector came out of platitudes like &#39;modernization, commercialization and marketization&#39; of agriculture. The strategies of government subsidies on seeds and fertilizers adopted for years have never worked for several reasons. The sector now faces new problems like acute shortage of farm labours and sustainable pricing mechanism and value addition of products. If Nepali products were to be promoted regressive customs and other duties should be revised accordingly. But this budget doesn&#39;t even touch upon these newer challenges.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	Growth by infrastructure development is highly indirect proposition. The GDP can grow with only very massive investment, not of pork-barrel nature but only in the form output targeted creation of transportation and communication linkages. In view of these realities, it can be easily concluded that the budget doesn&#39;t make any sensible effort to fill the growth gap.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	It is surprising to see that out of eight, the reducing the trade deficit is listed as the seventh objective. In fact, it should have been the first and the programmes like hydropower development should have been part of export promotion strategy in the long- run. Similarly, inflation control has been an outcome of a perverse nature foreign trade than the domestic trade factors.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	To see recent, unconventional trends in economy, both in terms of problems and prospects, we needed a clear departure from traditional bureaucratic verbose in national budget. But, this particular budget has indulged more in this outdated practice. This is truly a year of opportunity missed.</div>
<div>
	&nbsp;</div>',
			'published' => true,
			'created' => '2013-08-22',
			'modified' => '2013-08-22',
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			'description' => 'The most positive development of the ordinance budget for FY 2013/14, presented on 14th July by Finance Minister Shankar Koirala, is that it proposes the income and expenditure estimates for the entire fiscal year.',
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		'Article' => array(
			'id' => '2812',
			'article_category_id' => '52',
			'title' => 'Allow Private Sector To Spend Development Budget',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	The spending capacity of the Government of Nepal is quite poor, to say the least. The government has been routinely allocating capital expenditure, also known as the development budget, every year. But it has routinely failed to spend the money. In the first nine months of the current fiscal year, the government has been able to spend only about 26 percent of the development budget. In the previous fiscal year, such spending was about 29 per cent. Government officials are authorized to make capital expenditure right after the parliament endorses the national budget. But they don&rsquo;t move for months and wait for the final trimester to spend the development budget in a hurry. This has developed as a culture.</div>
<div>
	&nbsp;</div>
<div>
	It&rsquo;s not only the government-funded projects but also the donor-funded ones that are affected by this chronic tendency. The projects funded by the World Bank (WB), Nepal&rsquo;s largest multilateral development partner, could be taken as an example. In the first six months of the current fiscal year, spending by the WB-funded projects has been poor with disbursement standing at 5.3 per cent against a target of 13.2 per cent. According to the WB, disbursement amounted to Rs 38.06 million during the period against the targeted Rs 94.6 billion.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	The ineffectiveness of the government machinery is clearly visible here as almost all of the WB&rsquo;s funding is channelled through the government system. There have been talks about enhancing the government&rsquo;s spending capacity but they are limited to just that &ndash; talks.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	The unspent amount has soared as this year&rsquo;s budget also has a carry-over of Rs 15 billion from last year&rsquo;s unspent budget. It shows that billions of rupees meant for development works have been remaining unspent. &nbsp;</div>
<div>
	&nbsp;</div>
<div>
	For years, we have been fatigued by this bizarre development practice. We have a measurable trend of low expenditure every year for various reasons. Since fiscal year 2011/12, capital expenditure has not crossed 30 percent of the allocated amount during the three trimesters. The delay in spending the budget can lead to multiple problems in the market such as lack of liquidity, no job creation and slow development work. &nbsp;</div>
<div>
	&nbsp;</div>
<div>
	If a major chunk of the budget continues to pile up, there is persistent risk of spending the budget unaccountably at the end of the fiscal year. This has been happening for the last several years. Every year, newspapers are replete with stories of hasty and hurried expenditure of development funds when only a few months are left prior to the end of the fiscal year. The expenditure of development funds expedites a few months before the expiry of the fiscal year. This puts people&#39;s concerns about quality development into question. &nbsp; &nbsp;</div>
<div>
	&nbsp;</div>
<div>
	Laws and guidelines clearly stipulate that development expenditures have to be made within a set deadline, and accountability and transparency must be maintained in the process. But brushing aside such legal and procedural mandates, expenditures are being made in such a way as to produce miserable development output against hefty expenditure. It has become a common sight in and around the cities, towns and villages that construction of new tracks and blacktopping of roads unusually pick up momentum during June and July each year. Nepal&rsquo;s fiscal year ends at mid-July. One can imagine the quality of construction and development works when a major chunk of the national budget is spent in a few months before the expiry of the fiscal year. &nbsp;</div>
<div>
	&nbsp;</div>
<div>
	Procedural delays in approving the project and awarding the contract, a tendency among contractors not to work after receiving the mobilisation fund in advance, frequent transfer of technical and top level staffers at the project and fear of the anti-graft body are some of the reasons for the low spending of the capital expenditure. Whatever the reason might be, the fact is the government hasn&rsquo;t been able to spend the development budget year after year. Therefore the responsibility of spending the development budget should be given to the private sector.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	If we adopt such practice, the private sector, which is far more efficient and capable than the public sector, can take the leadership of our development projects. The government, on its part can create a mechanism to periodically monitor the progress of such projects.</div>',
			'published' => true,
			'created' => '2015-06-01',
			'modified' => '2015-06-08',
			'keywords' => '',
			'description' => 'The spending capacity of the Government of Nepal is quite poor, to say the least. The government has been routinely allocating capital expenditure, also known as the development budget, every year. But it has routinely failed to spend the money.',
			'sortorder' => '2663',
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		'Article' => array(
			'id' => '2807',
			'article_category_id' => '52',
			'title' => 'A Matter Of De-Materializing It',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	Nepal&#39;s share market index, Nepse is performing reasonably well since the formation of Nepali Congress led government. It is now hovering between 850 and 900 for sometimes now. Among many welcome developments, the plan to dematerialize (demat) the physical share certificates into the digital ones have boosted the confidence of the investors. But the demat process has been rather very slow. In seven months since it started (coinciding with the Nepali New Year 2071), only about a million scrips of some three dozen companies could be converted to digital format. No doubt, this is a time consuming process, but such a slow pace, though, is absolutely unwarranted for.</div>
<div>
	&nbsp;</div>
<div>
	Be that as it may, demat process would be completed, hopefully, soon. But more worrisome aspect is, other support infrastructure to augment trade in demat system remains far behind the mark. The recent lull in the market is now attributed to the fact that banks were not recognizing the dematerialized shares as security for financing investments. They may have their reasons to do so. But this reflects a clear lack of vision and coordination among the policy makers to simultaneously take forward all related developments of ancillaries so as to prevent the system from becoming lame.</div>
<div>
	&nbsp;</div>
<div>
	Simply, banks&#39; willingness to invest in the digital infrastructure and manpower training to handle these loan transactions doesn&#39;t seem to be forthcoming right away. And, there is no initiation from other relevant authorities like Nepal Rastra Bank and Securities Board of Nepal to facilitate this. &nbsp;It is though not to suggest that everything has to be shouldered by the public institutions, but policy exercises in view of the potential paradigms of such developments is unquestionably their special domain.</div>
<div>
	&nbsp;</div>
<div>
	As things stand now, three immediate tasks must be undertaken to not let the tempo in the share market wane off. First, banks should, may be through their umbrella organization - the Nepal Bankers&#39; Association, make their position clear with regard to their technical capabilities and cost-benefit analyses on facilitating demat transactions. They must also realize the fact that by making a digital transaction platform available, the share trading from all over the country may enhance in due course of time which in turn would help to increase their businesses. &nbsp;In many countries, a separate account for share trading has been a norm and a technical necessity. At the same time, they have adopted the rule of de-hooking the funds from other accounts while market volatility is emotion-racking. This effectively means that a trader can only trade from his trading account even if s/he has other functional accounts in the same bank, until inter-account transfers are made.</div>
<div>
	&nbsp;</div>
<div>
	Second, policy coordination among the policy makers and functional relations among the market makers have been largely a neglected issue. It is also a fact that regulatory authorities have been reticent until it is too late to react. In many cases, they lack the understanding of technical knowhow and degree of urgency seems to be taking a toll. This must be changed.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	Third, Nepal is one of those countries where investment in financial education at any level -from policy makers to retailers - has been close to zero. This has led to great discrepancies, policy confusions and inadequacies in every branch of the financial system, including the capital markets. Recognizing the complementarities of the several sub-branches of the entire system, a comprehensive financial education of a national scale is now an unconditional imperative. Only an institutionalized approach can address this need to its due worth.</div>
<div>
	&nbsp;</div>
<div>
	Of course, there are some unaccomplished, larger issues of capital market reforms. It is high time to interact with the private sector to find convincing and lasting answers to the questions: why the real sector representation in Nepal&#39;s capital market has been so insignificant? Are there ways to improve it? How and when? In nutshell, Nepal&#39;s financial system is looking for a shift not only to change the paper shares to demat form, but to translate the nation&#39;s overall economic thought process from a &#39;brick and mortar&#39; age to the contemporary digital age.</div>',
			'published' => true,
			'created' => '2014-12-23',
			'modified' => '2015-06-01',
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			'description' => 'Nepal's share market index, Nepse is performing reasonably well since the formation of Nepali Congress led government. It is now hovering between 850 and 900 for sometimes now. Among many welcome developments, the plan to dematerialize (demat) the physical share certificates into the digital ones have boosted the confidence of the investors.',
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		'Article' => array(
			'id' => '2801',
			'article_category_id' => '52',
			'title' => 'Commendable Contract',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	Nepal has been successful in initiating important economic reforms, ahead at least of her South Asian peers. The process of economic liberalization began in 1984, eight years before India began its first generation of reforms. The financial sector reform too was undertaken with a reasonable success a decade ago. The latest agreement between the employers and the trade unions of Nepal to execute much awaited labour law reforms is another milestone. While Indian Prime Minister Narendra Modi has just making a case to change their 1949 Labour Law, Nepal&#39;s success can set an example on how highly contentious issue of industrial relations could be amicably resolved through right initiatives, with confidence building arrangements in the background.</div>
<div>
	&nbsp;</div>
<div>
	The creation of the Social Security Fund under the tripartite agreement among the government, the Employers&#39; Council headed by the FNCCI vice-president and all trade unions (there are some eleven at present) four years ago paved the way for the recent understanding. Among others, there were two major issues, one each from the employers and the workers. The employers wanted the hiring-and-firing rights and the employees wanted certainty of financial security. Both of these issues got resolved albeit in rather surprising pace. The employers exhibited a great deal of generosity to agree to contribute to twenty percent equivalent of the wages towards the Fund on top of employees&#39; contribution of eleven percent. This really constitutes a substantial sum that gives confidence to the workers. The employers have also secured the right to hire-and-fire, without seeking prior approval from the Labour Ministry, a legal provision still effective. The agreement to categorize the workers into four groups depending on the nature and necessity of the production process has also eased the labour market risks to the investors and entrepreneurs.</div>
<div>
	&nbsp;</div>
<div>
	The two pending issues to be agreed, namely sectorial bargaining rights and no-work-no-pay should not be as difficult to resolve as other host of issues already agreed. The latter issue partially gets addressed by the hiring and firing rights of the employers. But, the sectorial bargaining norms, when agreed with a sectorial umbrella body deemed applicable to the entire sector (the industry), could be agreed with some exception of new entrants or loss-making businesses. Again, as the fair-market norm, such sectorial umbrella organizations tantamount to cartel and thus employers should also need to rethink their position in the long run.</div>
<div>
	&nbsp;</div>
<div>
	Undoubtedly, the agreement to amend the labour laws to these effects is a welcome step. But, Nepal&#39;s political leadership must first desist to use the trade unions as the political tools. When this agreement actually becomes a law, the scope of using these trade unions as the political instrument drastically reduces. This warrants for a cautious approach that these agreed issues do not become victim of political machinations again. Nepal has also seen several such agreements and enactment of many important laws. But their enforcement and adherence have always been the problem. Therefore, all necessary institutional and logistic arrangement must be in place for desired outcome of these agreements, which in due course become law. A few of such &#39;must&#39; arrangements are: proper database of the workers, automated accounting of the Security Fund given the potential high mobility of labourers, timely deposit of the promised amounts by the employers and updated records of the same, and credible institutional set-up to ensure timely delivery of all these services.</div>
<div>
	&nbsp;</div>
<div>
	It is also not enough just to have these laws in place. If Nepal is expecting enhanced foreign or domestic investment, she should be able to communicate this as an achievement that has put a decades-long problem of industrial relations conclusively to an end. The trade unions affiliated to all political parties have signed this agreement, which adds one more powerful reason to invest in Nepal. Needless to say, to achieve this success in a country, which has one of the cheapest labour costs is indeed in the interest of all potential investors.&nbsp;</div>',
			'published' => true,
			'created' => '2014-11-21',
			'modified' => '2015-06-01',
			'keywords' => 'new business age  from the editor news & articles, from the editor news & articles from new business age nepal, from the editor headlines from nepal,  current and latest from the editor news from nepal, economic news from nepal, nepali from the editor economic news and events,  ongoing  from the edi',
			'description' => 'Nepal has been successful in initiating important economic reforms, ahead at least of her South Asian peers. The process of economic liberalization began in 1984, eight years before India began its first generation of reforms. The financial sector reform too was undertaken with a reasonable success a decade ago.',
			'sortorder' => '2652',
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			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
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	),
	(int) 3 => array(
		'Article' => array(
			'id' => '2795',
			'article_category_id' => '52',
			'title' => 'Auto Dream',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	&nbsp;</p>
<div>
	Refusing to the demand of the automobile importers to reduce import duties on vehicles, Finance Minister Dr. Ram Sharan Mahat has promised them government support if they start vehicle manufacturing in the country. &nbsp;Given the increasing demand due to expansion in the road network and resultant steady increase in import of all sorts of vehicles, Dr.Mahat&rsquo;s proposition seems plausible on cursory glance. But looking at the technicalities of the industry, automobile manufacturing in Nepal still seems a dream that needs a lot of efforts to realize. &nbsp;</div>
<div>
	&nbsp;</div>
<div>
	One prominent consideration will be that of scale. It may be possible to start assembling certain types of commercial vehicles, such as light goods carriers and farm implements. But the market for such Nepal-made vehicles will be limited within the country and such business will have stiff competition from imports due to quality considerations &ndash; real as well as perceptional. To overcome this barrier, a huge investment has to be made in procuring the technology. Whether that will make commercial sense is a big question. &nbsp;</div>
<div>
	&nbsp;</div>
<div>
	Dr.Mahat&rsquo;s call has come at a time when Nepal&rsquo;s manufacturing sector is in continuous decline and trade deficit is in continuous rise. Any manufacturing activity that may start now will be welcome in such situation. But it has to be realized that the decline in manufacturing is due to many reasons and among them two are distinct. While everyone accepts the problem of power shortage, the other problem related to it, hostile labour, is not accepted by many.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	It is not that efforts are not being made to manufacture vehicles in Nepal. Hulas Motors of Golchha Organisation has been assembling some types of vehicles and its product line up has reached nine including Rickshaw and Jeep. Dr.BaburamBhattarai adopted its Mustang Max jeep as of the Prime Minister&rsquo;s official vehicle when he was in that office. But it is complaining of not only lack of government support but even hurdles posed by government to domestic manufacturers. Two plantsthat assembled Chinese bikes Lifan and Ying Yang were closed down soon after they were set up. These experiences need close studies to find out what exactly is needed before we start efforts to realise the dream of flourishing Nepali automobile industry.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	One reason the government does not support any manufacturing within the country is the revenue it gets from imports. And the growing and big flow of remittance is helping the government in this. The result is growing economy without employment growth. This vicious cycle can be broken only with solution to the power shortage problem. Some recent developments &ndash; the latest being the power trade agreement with India and finalization of project development agreement template for power projects to the satisfaction of investors &ndash; are good indications for the future. But that is not going to be enough for development of automobile industry.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	Nepal already has a good automobile industry in the form of maintenance operations. These can easily upgrade to vehicle reconditioning operations if the policy and infrastructural hurdles are removed. Meanwhile, investment in backward integration can start and that requires expansion of the engineering colleges and setting up vehicle technology development centres.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	These centres should ideally be focused on developing electricity operated vehicles given the country&rsquo;s hydropower potentials.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	However, in the meantime, it would be wiser to reduce the import duty on vehicles, which are now not luxuries, but necessities as they are efficiency enhancing machines. A vehicle that is available across the border at Rs. 200,000 must not cost over one million rupees in Nepal.&nbsp;</div>',
			'published' => true,
			'created' => '2014-10-10',
			'modified' => '2014-12-23',
			'keywords' => 'new business age  from the editor news & articles, from the editor news & articles from new business age nepal, from the editor headlines from nepal,  current and latest from the editor news from nepal, economic news from nepal, nepali from the editor economic news and events,  ongoing  from the edi',
			'description' => 'Refusing to the demand of the automobile importers to reduce import duties on vehicles, Finance Minister Dr. Ram Sharan Mahat has promised them government support if they start vehicle manufacturing in the country.',
			'sortorder' => '2646',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
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		)
	),
	(int) 4 => array(
		'Article' => array(
			'id' => '2791',
			'article_category_id' => '52',
			'title' => 'Budget 2014/15 Private Sector Neglected',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	The budget for FY 2014/15 is grossly disappointing not because it is not better than those of past several fiscals, but it stands far short of expectations from Dr. Ram Saran Mahat, a self-proclaimed reformist and ardent advocate of the free-market economy, at the helm of the FinanceMinistry. There are at least half a dozen problems of grave nature in the economy that are caused mainly due to gradually receding role of the private sector. These six problems could be listed as low rate of economic growth for decades now, ballooning trade deficit year-after-year, diversion of public funds to protect ailing public enterprises, ever-increasing number of outbound migrant workers causing labour market distortions back at home, unproductive use of inflow of these workers&#39; remittances and, continuity of archaic practice of development that is heavily dependent on supply-driven central planning.</div>
<div>
	&nbsp;</div>
<div>
	Without creating a proper business environment for the private sector to function, all these trends are rapidly pushing the economy to the verge of collapse. The growth rate is low because the contribution of manufacturing to GDP has reduced close to five percent, which at one point of time was estimated to have in the double digit. This is caused largely due to closure or down-scaling of many private manufacturing units over the last one decade, the period of worsening industrial relations. Due to lack of investment in commercial agriculture, both agricultural productivity and modernization of this sector, lagged behind. It is also one of the major reasons for huge gap in our exports and imports value, the deficit now crossing six billion rupees mark in a single FY that just ended. We also failed to identify and update the products of our comparative as well as competitive advantages, particularly in the neighbouring markets (for perishable agro-products) and the third country niche market (for high value products like pashmina and woollen carpets). This failure comes as the result of not including the representative private sector in exercises like trade policy formulation.</div>
<div>
	&nbsp;</div>
<div>
	One of the clear departures expected from Mahat was government&rsquo;s decisive withdrawal from the trading and manufacturing business by ways of privatization and divestment. He has made some proposals like unbundling of Nepal Electricity Authority, divestment from Agricultural Development Bank and Nepal Bank Ltd and liquidationof some of already non-existent entities like Orind Magnesite Ltd. These efforts were needed. But more urgent were the privatization of the public companies like Nepal Oil Corporation which is putting heavy burden on country&#39;s exchequer just to fuel the luxury of a few hundred thousand rich populace. The budget failed to strike a right chord on it.</div>
<div>
	&nbsp;</div>
<div>
	The most crucial departure expected from Mahat, for his philosophical leanings as an open-market economist, was to stop &#39;merciful allocation&#39; from centre to the villages and districts without identifying the projects and their viabilities. To add to it, he also succumbed to the demand of the members of parliament by allocating a purse of eleven and half million rupees per head for the programmes and projects that are not yet identified. These pork barrel disbursements neither serve the development objectives nor channel the funds to the private sector as these small funds are spent sparsely, without proper adherence to the public procurement process.</div>
<div>
	&nbsp;</div>
<div>
	By putting the private sector to the back-burner, the economy can never come back on the prosperity track. Finance Minister Mahat did not present &#39;the Mahat budget&#39; this time.</div>
<div>
	&nbsp;</div>',
			'published' => true,
			'created' => '2014-09-08',
			'modified' => '2014-11-09',
			'keywords' => 'new business age  from the editor news & articles, from the editor news & articles from new business age nepal, from the editor headlines from nepal,  current and latest from the editor news from nepal, economic news from nepal, nepali from the editor economic news and events,  ongoing  from the edi',
			'description' => 'The budget for FY 2014/15 is grossly disappointing not because it is not better than those of past several fiscals, but it stands far short of expectations from Dr. Ram Saran Mahat, a self-proclaimed reformist and ardent advocate of the free-market economy, at the helm of the FinanceMinistry.',
			'sortorder' => '2640',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
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			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 5 => array(
		'Article' => array(
			'id' => '2785',
			'article_category_id' => '52',
			'title' => 'Unhooking Economic Departure',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	Finance Minister Dr Ram Saran Mahat, while drawing his point home on the transfer of allocations towards the end of the fiscal year to the indiscriminate projects from the ones mentioned in the FY 2013/14 budget, revealed that there are not &#39;any&#39; ongoing project of substantive size so that funds could be funnelled to them. On the moral grounds, this statement from Mahat is unpalatable. Because he is the only person who has headed the country&#39;s budget and planning for twelve out of twenty four years since restoration of democracy in the country, first as the National Planning Commission vice-chair and then minster for half a dozen times.Thus, he should also be held responsible for not incubating enough projects of national significance that have absorption capacity of virtually any amount of funds that may be diverted in wee circumstances, like in the event of low level of overall capital expenditure in the economy. Equally irresponsible were those who were at the helm of the Ministry of Finance before Mahat&#39;s current term in office.</div>
<div>
	&nbsp;</div>
<div>
	It is indeed a precarious situation -- a clear mismatch between the demand and supply of financial resources on the one hand and similar demand and supply dynamics of the development projects in the country. In absence of institutions like elected local bodies that articulate the demands for development of the common masses, demand for resources have also substantially gone down.</div>
<div>
	&nbsp;</div>
<div>
	There are other unattended areas in the economy that are either causing excessive &#39;bleeding &#39;or/and constricting growth for years. For example, petroleum import that exceeds the amount of our total exports, whopping Rs 250 billion trade deficit in a single year and continuous financing to loss-making State Owned Enterprises (SOEs) from the tax-payer&#39;s money to project the jobs of a few hundred unproductive employees.</div>
<div>
	&nbsp;</div>
<div>
	In addition to all these odds, rapidly eroding institutionalcapacities and, more importantly, rampant imperviousness of the political leadership towards these grave economic maladies are to blame why the relative peace of eight years since 2006 peace accord also couldn&#39;t ameliorate the acuteeconomic hardships of the people.The much expected departure in the economic affairs of the country, particularly after the dawn of peace is yet to happen. As credentials have it, Mahat is perhaps the best finance minister to transpire this much needed departure in terms of policy reforms, resource mobilization, productivity and trade enhancement and employment generation. But Mahat, given his outline of principles of the next budget presented recently in the parliament, seems unprepared to depart from a sluggish, low and sub-five percent growth rate.</div>
<div>
	&nbsp;</div>
<div>
	Not only there is absolute dearth of ongoing publicly financed projects as claimed by Mahat, private investment - both domestic and foreign - is also at its lowest. &nbsp;The contribution of the manufacturing to GDP has gone to worse from bad in recent years. It is one of the major reasons of widening export-import gap. The remittance fuelled consumption would have been a good catalyst for manufacturing growth. But lack of proper ambience for investment caused largely due to political indifference bleakens the manufacturing scenario of the economy. Even the policy of putting the private sector at the driving seat of economic development, incidentally credited &nbsp;as Mahat&#39;s brainchild in 1992, doesn&#39;t seem to be the case now.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	In view of the multifaceted problems, marginal improvements in blatantly failed economic policies, plans and implementing strategies are not likely to fundamentally alter the situation. It needs a real departure and if Mahat alone is unable to take such a risk, the major political parties must act together. Mahat can be the initiator of the consensus process for economic revival.</div>',
			'published' => true,
			'created' => '2014-07-30',
			'modified' => '2014-10-10',
			'keywords' => 'new business age  from the editor news & articles, from the editor news & articles from new business age nepal, from the editor headlines from nepal,  current and latest from the editor news from nepal, economic news from nepal, nepali from the editor economic news and events,  ongoing  from the edi',
			'description' => 'Finance Minister Dr Ram Saran Mahat, while drawing his point home on the transfer of allocations towards the end of the fiscal year to the indiscriminate projects from the ones mentioned in the FY 2013/14 budget, revealed that there are not 'any' ongoing project of substantive size so that funds could be funnelled to them. On the moral grounds, this statement from Mahat is unpalatable.',
			'sortorder' => '2635',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
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		)
	),
	(int) 6 => array(
		'Article' => array(
			'id' => '2780',
			'article_category_id' => '52',
			'title' => 'Fallen Prey To Politics',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	When Nepal Tourism Board (NTB) was created, it was dubbed as the first truly functional model of public-private partnership (PPP) in Nepal. When it delivered some encouraging results for Nepal&#39;s tourism industry, the model&#39;s replicability potentials formed chapters of many books like of Karna Sakya and provided basis for a large number of business working papers and case studies. But, unfortunately, the same NTB has now become the test case of alleged embezzlement of resources and sit-in protest against the same by the country&#39;s tourism entrepreneurs. Thanks to all-pervasiveness of our albatross politics.</div>
<div>
	&nbsp;</div>
<div>
	While penning these words, it had almost been a month that the protesting entrepreneurswere demanding an impartial probe into financial irregularities by the acting CEO of the Board, Subash Nirola. But nothing was moving ahead primarily because it was a PPP. The Board headed by the secretary in the Ministry of Tourism as the ex-officio Chairman is expressing government&#39;s inability to take unilateral action, as it is the &#39;private&#39; organization while the entrepreneurs too do not have the legal power to oust the CEO.</div>
<div>
	&nbsp;</div>
<div>
	A few months ago, the NTB made a policy decision to organize the tourism fairs in the districts &#39;to promote the domestic tourism&#39;. This has panicked the traditional entrepreneurs that their income would be shared by the district level hospitality and amenities industries. The government sees no flaws in the Board&#39;s decision. &nbsp;The entrepreneurs argue that the money spent for such fairs in domestic markets should instead be spent in international publicity so as to attract the foreign tourists. This is no doubt a valid reason. But, just spending some money for promotion of domestic tourist market can hardly be established as an evidence for corruption.</div>
<div>
	&nbsp;</div>
<div>
	The fuss is beyond these allegations of misappropriation of funds. The fact is, the protesting organizations of the entrepreneurs are affiliated to Deuba faction of the Nepali Congress, Oli faction of CPN-UML and Bhattarai faction of UCPN Maoists while the CEO is considered close to Khanal faction of the UML or, a chameleon, who also sometimes claims to be a Koirala Congress. And, for every political party, it was a matter of great pain that a newly emerged reputable organization like the NTB was functioning independent of political interference for more than a decade. And appointment of CEO is also not based on one&rsquo;s political loyalty. &nbsp;Therefore, every political party perhaps feels that if the current CEO is ousted through a political move, then it can set a trend and every next Tourism Minister can pick a new CEO along with each change in the government.</div>
<div>
	&nbsp;</div>
<div>
	The protest of the entrepreneurs wore a grotesque look when so called senior leaders of all three major parties reached at the sit-in site to &lsquo;express solidarity&rsquo; to the demands, without going into the merits of the allegations. If there are irregularities, there are related legal and quasi-legal institutions to investigate and prosecute the guilty. &nbsp;Why would leaders need to meddle in this process? Only plausible answer is that every party is keen to make the NTB a new political prey, which is deplorable.</div>
<div>
	&nbsp;</div>
<div>
	The problem in the NTB began long ago when the Board failed to pick-up a professional CEO in a transparent and timely manner. The &lsquo;Acting&rsquo; position is always an incentive for the incumbent to look for quick bucks from all possible means including kickbacks. And, as allegations are already labelled to Nirola, he should either make public all the details of procurement as soon as possible proving his integrity or step aside until proven innocent allowing for an independent probe. &nbsp;The prolonged stand-off between the Board and the entrepreneurs is putting the entire Nepal tourism sector in bad light. And, the government must step in to solve it than being a party to a side.</div>',
			'published' => true,
			'created' => '2014-06-08',
			'modified' => '2014-07-30',
			'keywords' => 'new business age  from the editor news & articles, from the editor news & articles from new business age nepal, from the editor headlines from nepal,  current and latest from the editor news from nepal, economic news from nepal, nepali from the editor economic news and events,  ongoing  from the edi',
			'description' => 'When Nepal Tourism Board (NTB) was created, it was dubbed as the first truly functional model of public-private partnership (PPP) in Nepal. When it delivered some encouraging results for Nepal's tourism industry, the model's replicability potentials formed chapters of many books like of Karna Sakya and provided basis for a large number of business working papers and case studies.',
			'sortorder' => '2625',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
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	(int) 7 => array(
		'Article' => array(
			'id' => '2771',
			'article_category_id' => '52',
			'title' => 'Agenda: Economic Restructuring',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	Finance Minister Dr. Ram Sharan Mahat created ripples of a sort in mid-March when he pointed to the need of restructuring the economy. No doubt, this is a long pending agenda given the fact that Nepali economy is faced with stagflation-like trap for decades. But, Dr. Mahat&#39;s proposition has come so suddenly that it gives rise to two natural questions. Have we done adequate homework for such a massive restructuring? Is there enough political will to embrace the agenda of restructuring, going beyond barely managing it? And, the direction of such restructuring will equally be crucial as will be the sustainability of the transformed structure.</div>
<div>
	&nbsp;</div>
<div>
	Prioritization of the tasks in such restructuring agenda and garnering political support for the same, are two sets of groundwork that any restructuring agenda cannot perhaps bypass. To both ends, Dr. Mahat as the finance minister has a couple of rare strengths. He understands the Nepali economy thoroughly -- its cracks and crevasses-and has a pro-private sector image. Also, he carries equally strong weaknesses; that he carries a big baggage of self-righteousness, doesn&#39;t have a professional team and hardly trusts anyone and, he is a bad politician, at least at the negotiation table.</div>
<div>
	&nbsp;</div>
<div>
	Needless to reemphasize here, restructuring of a mixed economy that is chronically mismanaged is sure to be a daunting, painstakingly long-term process. If this is not a mere political gimmick that Dr. Mahat has no reason to indulge into, the homework needs to commence at least in two parallel fronts of the economy -- technical and political. On the technical side, there must be a dispassionate assessment of the loss incurred and persistent underperformance of the economy due to over-involvement of the government in planning, production and distribution systems. On the political front, to reduce the state involvement in functional aspects of the economy, a great deal of reorientation is imperative mainly in those political forces who are indoctrinated as communists or ardent socialists.</div>
<div>
	&nbsp;</div>
<div>
	A great amount of misgivings about the &#39;inevitability of state intervention and activism in economy&#39; must be dispelled, both at political or people&#39;s levels. Dr. Mahat himself needs enough courage to declare the institutions like the National Planning Commission obsolete, at least in the present form. In their present form, they act as omniscient of the needs and priorities of the populace at the grassroots. The decision on liquidating about three dozen state-owned enterprises that have acted as hungry sharks for years in the exchequer is long overdue. Only way to create public awareness on the futility to maintain status quo in these public institutions depends largely on the effective factual communication of the maladies and recurrent losses, year after year. One stroke of liquidating or privatizing the Nepal Oil Corporation would be enough to test Dr. Mahat&#39;s sincerity and courage to take-up really meaningful restructuring of Nepal&#39;s public economy.</div>
<div>
	&nbsp;</div>
<div>
	The economy is under stress from more than one quarter. The ballooning imbalance in the country&#39;s foreign trade, dwindling absorption capacity of the financial resources and mass-migration of the working age population for low-earning jobs abroad creating labour-market distortion at home are three prominent areas that warrant top priority in the restructuring agenda.</div>
<div>
	&nbsp;</div>
<div>
	The structural imbalances too are looming large. We spent decades lamenting on the lower-than-demand production of energy, mainly hydropower. But, despite all odds, the energy sector attracted a substantial investment and there are indications that the supply would be doubled in next four to five years. But, we became oblivious of the fact that we needed to develop adequate transmission lines to connect this power to individual houses. There are concerns of this power being wasted for lack of alternative arrangements, for example, replacing LPG cooking stoves with the electric ones to create market for the added power generation, or if possible export to India.</div>
<div>
	&nbsp;</div>
<div>
	There is a sort of political consensus on the need of a tangible restructuring of the state when it hopefully gets federalized. The proposed agenda of economic restructuring must be a complementary process to that larger goal of spatial restructuring of the state. The restructuring of even larger scale is also required in the private sector to transform it from a mere a trade-margin capitalizer, like from gold smuggling, to employment-generator and export-promoter. Therefore, the restructuring agenda must not fizzle out as seasonal political hyperbole. It deserves more nuanced treatment to make it a fruit-bearing proposition.</div>',
			'published' => true,
			'created' => '2014-04-09',
			'modified' => '2014-06-08',
			'keywords' => 'new business age  from the editor news & articles, from the editor news & articles from new business age nepal, from the editor headlines from nepal,  current and latest from the editor news from nepal, economic news from nepal, nepali from the editor economic news and events,  ongoing  from the edi',
			'description' => 'Finance Minister Dr. Ram Sharan Mahat created ripples of a sort in mid-March when he pointed to the need of restructuring the economy. No doubt, this is a long pending agenda given the fact that Nepali economy is faced with stagflation-like trap for decades.',
			'sortorder' => '2621',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
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	(int) 8 => array(
		'Article' => array(
			'id' => '2766',
			'article_category_id' => '52',
			'title' => 'Housing The Business',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	The housing and the real estate business (HREB) has a double-sword positive effect on the economy. It is a global perspective to this business, perhaps barring Nepal. It is a capital intensive business like any other profit making venture and, at the same time, helps to solve a pressing problem of shelter to the populace. But despite the potential, Nepali HREB languishes in absurdities and hangs on to uncertainties. It has been more than one and a half decades since HREB began in an organised fashion led by private sector investment. But the bottlenecks of policy confusions, information asymmetries and public (mis)perceptions remain the same as they used to be a decade ago.</div>
<div>
	&nbsp;</div>
<div>
	According to a rough estimate, Nepali HREB is now worth more than Rs 150 billion, which is a third of the current year&#39;s national budget. There is an estimated annual demand of some forty five thousand units of family apartments, mainly in the urban centres of the country. Half of the demand is only in the Kathmandu valley. But, the total annual cumulative supply of apartment-type living is limited only to sixteen thousand units nation-wide. The demand and supply mis-match is one half of the story and the price and financing mismatch is the other.</div>
<div>
	&nbsp;</div>
<div>
	What&#39;s wrong with Nepali HREB as an investment and growth industry? Perhaps everything! The government doesn&#39;t have a comprehensive policy on it. In addition, the very perspective of the government about HREB is largely bigotry. Some regulations regarding ownership have been issued but implementation has not been as effective as expected. Given the fact that the private sector is doing a national service by providing housing facilities to the people which otherwise is the government&rsquo;s responsibility, it should have acknowledged and treated accordingly. As long as the government considers itself as the vehicle to an egalitarian society, it is indeed the government&rsquo;s responsibility to address problems like this.</div>
<div>
	&nbsp;</div>
<div>
	One emulative recent example could be the British government&rsquo;s initiative of Help-to-Buy (HTB) scheme, introduced by Chancellor George Osborne&rsquo;s last fiscal year budget, targeting the first time home owners. The &pound;25 billion scheme that began in January 2014 plans equity finance of 20 percent of the cost of buying or constructing a new house. The government plans to implement the HTB scheme in a three year time horizon. The objectives are well defined. First, to help revive the ailing HREB and also simultaneously support lower end populace to own a house of their own.</div>
<div>
	&nbsp;</div>
<div>
	But in our case, the government is treating the investors and developers as criminals and crooks, let alone contemplating providing an equity financing. It was true that there was a degree of over-exposure of the finical sector to HREB. But that was a compulsion at a point of time due to utter lack of other sectors for the BFIs to invest. Shouldn&#39;t the government share the blame for failing to create an atmosphere for a diversified business and thus the BFIs&#39; investment? Instead, the government apparatus is at complete loss of direction to address the problems of the sector. On top of that a rung of top public service officials were determined to ruin the entire HREB.</div>
<div>
	&nbsp;</div>
<div>
	Without naming names, there are projects in limbo which would have been completed well if the institutions like the central bank wouldn&#39;t have been vindictive to some chosen promoters of the schemes. It is true that some developers had had multiple business stakes and resorted to some duplicity. But the right approach for the government and central bank strategy should have been to save the projects and investment and penalize and admonish only the wrong-doers. To say the least, the government has not been sensitive to the potential ramifications of its apathy and antipathy to HREB.</div>',
			'published' => true,
			'created' => '2014-03-24',
			'modified' => '2014-04-09',
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			'description' => 'The housing and the real estate business (HREB) has a double-sword positive effect on the economy. It is a global perspective to this business, perhaps barring Nepal. It is a capital intensive business like any other profit making venture and, at the same time, helps to solve a pressing problem of shelter to the populace. But despite the potential, Nepali HREB languishes in absurdities and hangs on to uncertainties. It has been more than one and a half decades since HREB began in an organised fashion led by private sector investment. But the bottlenecks of policy confusions, information asymmetries and public (mis)perceptions remain the same as they used to be a decade ago.',
			'sortorder' => '2612',
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	(int) 9 => array(
		'Article' => array(
			'id' => '2581',
			'article_category_id' => '52',
			'title' => 'When Bulls Run To Bush',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	The index of Nepal Stock Exchange, Nepse, climbed to 800 after five years early January 2014. Since it closed at 963.36 in mid-July (end of the Nepali fiscal year) 2008, it had barely crossed 500 until last June. It had terribly disappointing bearish tumble for all five consecutive years as shown in the side table. The Nepali bourse has often behaved beyond any rational expectations and market analysis. There was no reason for it to fall as low as below 300 in 2011 and even at present the speedy bull run is not fully justifiable. The index has climbed about 50 percent from 529 points in mid-July 2013 and to 780 mark on third week of January 2014.</div>
<div>
	&nbsp;</div>
<div>
	<img alt="Nepal Stock Exchange Index" src="/userfiles/images/editor1%20(Copy).jpg" style="float: right; margin: 0px 0px 0px 10px;width: 200px; height: 154px;" />Interestingly, this rise is witnessed when trading of stocks of a number of new companies, mainly the new commercial banks, began. The situation apparently is of over-supply and there has not been any substantial change in economic fundamentals to push the Index up, except the fact that last CA elections saw the defeat of hard-line communist forces, like Maoists. If the investment were to be made for returns, this political change alone would not perhaps be enough to ensure higher&nbsp;</div>
<div>
	yield. But, investors do not seem to be bothered by this.</div>
<div>
	&nbsp;</div>
<div>
	To some extent, the volatility of the market by its nature is understandable, but the reason d&rsquo;&ecirc;tre of this, generally, is however never beyond comprehension. At least, it should not have been the case given the availability of modern-technology assisted analysis, both fundamental and technical. But that is what exactly happening in Nepal.</div>
<div>
	&nbsp;</div>
<div>
	When markets run amok, bullish or bearish, without any convincing economic explanation, there is no reason to be happy. Nepal&rsquo;s capital markets have some basic characters that make it very risky. It is not only unintegrated to the international market, but also lacks even a few traders who would trade in Nepse and some other international exchange, simultaneously. Therefore, the impact of international market in Nepali secondary market can be completely ruled out. The real sector, for all practical purposes, has no presence in the capital market and it is dominated by the financial service providers, a few hotels and lately some hydropower companies. This means, our capital market trends do not necessarily reflect the degree of fitness of our economy. And, except for some time-trained crooks, there are very few informed or educated investors, causing mismatch between the expectations and returns.</div>
<div>
	&nbsp;</div>
<div>
	The regulator is equally novice and naive. Political appointments of the people to the Stock Exchange Board who lack specific knowledge about the trade have made the situation worse. The most dangerous part is that, no public agency is even contemplating about the possibilities and procedures of listing more real sector, mainly manufacturing, companies into secondary market. It is indeed an uphill task since it requires much higher level of willingness of the private sector to register in the bourse. It in turn requires transparency at every step of the transaction of the companies from, imports, customs evaluation, VAT and excise, sales, and ultimate balance sheet and auditing. Nobody seems prepared for this mammoth task that has not only economic cost but also demands a high degree of business integrity and honesty.</div>
<div>
	&nbsp;</div>
<div>
	But, without bringing the real sectored on the trading screen, the rationale of the secondary market could hardly be justified. The result, it will continue to be victim of irrational volatility. The new government that will be formed soon should take three major steps: first appoint knowledgeable persons of the sector in the regulatory board, second create a joint platform of Nepal Rastra Bank, the Board, Ministry of Finance and the private sector to promote financial education about the secondary market and begin brain storming to identify the causes that are hindering real sector to enlist in Nepse and resolve them. Only this will create a credible stock market in Nepal.</div>
<div>
	&nbsp;</div>',
			'published' => true,
			'created' => '2014-02-10',
			'modified' => '2014-02-18',
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			'description' => 'The index of Nepal Stock Exchange, Nepse, climbed to 800 after five years early January 2014. Since it closed at 963.36 in mid-July (end of the Nepali fiscal year) 2008, it had barely crossed 500 until last June. It had terribly disappointing bearish tumble for all five consecutive years as shown in the side table.',
			'sortorder' => '2434',
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	(int) 10 => array(
		'Article' => array(
			'id' => '2441',
			'article_category_id' => '52',
			'title' => 'Bitter Taste Of Sugar',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	The price dispute between the sugar mill owners and the sugarcane-producing farmers, like in the past years, has resurfaced, again. The farmers are arguing that the price offered by the sugar mills is far below their cost; and demanding a higher rate. The mill owners have their take: as the sugar price volatility is high, it would be unfeasible for them to meet the farmers&rsquo; demands. Both arguments have valid underpinnings.</div>
<div>
	&nbsp;</div>
<div>
	The reference price for both buyers and sellers of sugarcane in Nepal has been the neighbouring Indian states of Utter Pradesh and Bihar. &nbsp;Buyers here offer the price at par to their Indian counterparts. But, this price hardly attracts the Nepali farmers as their production cost is much higher than their Indian friends. India has massive farm and input subsidies effective. In desperate situations, government ventures to buy the product. They have better mass-scale cold storage facilities to wait for off-season high price sells. On the contrary, the energy and labour prices here are higher, electricity supply and irrigation facilities are unstable, thus costly. Other infrastructures like warehousing are in acute short supply. The farmers are forced to sell their sugarcane at the price offered by the mills as they have no alternatives. Besides, the sugarcane has a huge transportation cost to explore market in greater distances. In Nepal, the government support to the farmers is almost nil.</div>
<div>
	&nbsp;</div>
<div>
	On the buyer side, the special feature of seasonality in sugar production is a challenge. They must employ all their resources in this season. High demand of workers adds cost of production and the practice of hedging the base price throughout the year is not even contemplated in our context. Nepal&rsquo;s sugar pricing is largely affected by the Indian price trends. Therefore, Nepali producers&rsquo; may be sandwiched between the high prices of sugarcane here and over production and supply of sugar in India.</div>
<div>
	&nbsp;</div>
<div>
	The situation is indeed dire and warrants a lasting solution to this annually recurrent problem. In the open market economy, it is not advisable to invite an outright, continuous and equally effective government intervention. But, as long as government continues to subsidise in inputs and facilities, there is no harm that it does the same for the sugarcane as well. But, more lasting solutions should be explored from the market mechanism itself. And, there is ample scope for it.</div>
<div>
	&nbsp;</div>
<div>
	One of the bones of contention of the price rigidity of the sugarcane is ever impending sugar price volatility. This can be best addressed by price hedging of both sugarcane and sugar, at least in the yearly range. The newly developed commodities futures market of Nepal can be instrumental in it. Or, it can be made so. Implementing the already enacted Secured Transaction Registry Act and validation of warehouse receipts for bank financing can be highly supportive to this initiative. If the government can&rsquo;t afford to invest to set-up sufficient warehouses, it must work to create the environment for private investment for the same.</div>
<div>
	&nbsp;</div>
<div>
	The second strategy could be market-scoping of sugar, and price-difference support. We have almost convincing data that Nepali sugar produce can only meet about forty percent of the Nepali demand. And, sixty percent of imported sugar invariably has a higher market price for obvious reasons. In such a scenario, government can easily figure out how much the country annually spends on sugar, and what price per unit for. On this basis, government can set a reference price for both sugarcane and sugar. In the year end, instead of indiscriminately subsidising on inputs or incentivizing the producers, government can choose to subsidise only the price difference between the base and market prices. This can work both ways. Even if the producers charge much higher rate than the base price and earn larger profits, it can be arranged such that some portion of it goes to the farmers.</div>
<div>
	&nbsp;</div>
<div>
	Since sugarcane is a special kind of seasonal crop, it needs special policy attention.&nbsp;</div>',
			'published' => true,
			'created' => '2014-01-10',
			'modified' => '2014-01-21',
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			'description' => 'The price dispute between the sugar mill owners and the sugarcane-producing farmers, like in the past years, has resurfaced, again. The farmers are arguing that the price offered by the sugar mills is far below their cost; and demanding a higher rate. The mill owners have their take: as the sugar price volatility is high, it would be unfeasible for them to meet the farmers’ demands. Both arguments have valid underpinnings.',
			'sortorder' => '2320',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
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	(int) 11 => array(
		'Article' => array(
			'id' => '2266',
			'article_category_id' => '52',
			'title' => 'Hope Of Economic Revival',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	The elections for the Constituent Assembly (CA)-II are now over. Results have been announced. Successful completion of the CA polls themselves is good news for the economy. Rise of the liberal economic forces from it has made it a harbinger of prosperity and development. After long gloomy years, the new CA comes with the renewed promise to draft and promulgate the new constitution within a year and pave way for the nation to head towards peace,stability and prosperity. The last CA too had that hope, but unfortunately that didn&rsquo;t materialize.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	In retrospect, it appears that the poll process, the constitution and the functions of earlier edition of the CA (2008) were largely marred by political naivety and immaturity. If one looks at the manifestoes of the 2008 CA election, it is not difficult to discern that the political forces were just flabbergasted by the pace of change and couldn&rsquo;t structure proper frame to guide the nation forward. The then New Forces, Maoists and Madheshis, &nbsp;had overtly ambitious agenda, whereas the Old Forces like Nepali Congress and the CPN-UML had &nbsp;a sense of compulsion to bow down &nbsp;to the agenda of those New Forces.</div>
<div>
	&nbsp;</div>
<div>
	But things changed drastically by the time the country arrived at the threshold of the second CA elections in 2013. As evidenced by their recent manifestos, major political forces had become more mature, rationality had prevailed over emotions. Traders of mere selfish, divisive or opportunistic agenda were badly fragmented and most importantly, a sincere realisation to move along the changing paradigms of the world was across the board. There was a race to promise to shun violence and acts of business disruption by calling on bandhs and strikes. Though achieved at a great cost, monetary and opportunity, these achievements are not trivial.</div>
<div>
	&nbsp;</div>
<div>
	It is a bare fact that Nepal suffered almost two decades of virtually zero development. Since the Maoists launched armed rebellion in February 1996, the resources and focus of the state concentrated to counter it. &nbsp;Hardly any power project, new stretch of road or other significant infrastructure was added during the decade long conflict. The Comprehensive Peace Agreement of 2006 ended the conflict, but fears of the investors could hardly be allayed, mainly due to destructive high-handedness of the Maoist-affiliated trade unions, among other uncertainties surrounding the drafting of the constitution. One may argue that we never had a zero or negative nominal GDP growth rate, but the inflation-adjusted real growth rate had never been positive for all those years.</div>
<div>
	&nbsp;</div>
<div>
	But the approaches, stances and philosophies have transformed for good in recent years, which was reflected in the run-up to the second CA elections. These are the very reasons that led to the successful completion of the election process with as high as whopping 78 percent turn out of the voters. The half battle is won.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	On top of it, the electorates gave a very emphatic support to the parties -- Nepali Congress and CPN-UML that exhibited understanding of the global economic order and trend vis-&agrave;-vis Nepal&rsquo;s development priorities and needs. It was the Nepali Congress that had initiated the economic reform and liberalization after restoration of democracy in 1990 and the fruits of it is still reaped by the economy. The then UML government began grassroots level connectivity and infrastructure projects in 1995 that gradually provided market access to the remote hinterlands of the country. These two facets of development helped the Nepali economy to withstand the decade-long conflict and almost equally-long political mayhem after that. The people trusted back to both of these parties, once again giving them almost equal, jointly more than sixty percent of strength in the new CA. People experimented the Maoists once in the last election by making them the largest party in the last CA, but it failed the test. &nbsp;Now condemned to humiliating defeat.</div>
<div>
	&nbsp;</div>
<div>
	The conclusion of CA election against the widespread suspicion about its success, victory of the parties that believe in democracy and free-market and, rationalization of the forces that were erstwhile destructive ones, indeed raises hope on reigniting the growth process. &nbsp;The stage is all set and, now actors should play the right role before the curtain falls.</div>',
			'published' => true,
			'created' => '2013-12-13',
			'modified' => '2013-12-16',
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			'description' => 'The elections for the Constituent Assembly (CA)-II are now over. Results have been announced. Successful completion of the CA polls themselves is good news for the economy. Rise of the liberal economic forces from it has made it a harbinger of prosperity and development. After long gloomy years, the new CA comes with the renewed promise to draft and promulgate the new constitution within a year and pave way for the nation to head towards peace,stability and prosperity. The last CA too had that hope, but unfortunately that didn’t materialize.',
			'sortorder' => '2113',
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	(int) 12 => array(
		'Article' => array(
			'id' => '2183',
			'article_category_id' => '52',
			'title' => 'Unmanifested Political Will',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	A<span style="font-size: 12px;">ll major political parties have made their manifesto for the November 19th Constituent Assembly (CA) polls public. Most of the parties including the big &#39;gang of four&#39;- UCPN (Maoist), Nepali Congress, CPN-UML and the Madhesi Morcha have made a long list of promises to accelerate the economic growth of Nepal. The promises are tall and details read like a government&#39;s annual &#39;policies and programmes&#39; to &nbsp;be unveiled in a parliamentary session. Many of the propositions are just populist and not based on the grounds of resource availability and pragmatic possibility of implementation. However, unquestionably, the Nepali economy was for long in dire need of real policy boost and political commitment from the highest possible level. One positive thing, perhaps the only one, is that the country&#39;s political parties have, rather uniformly, shown concern towards the economic growth and development of the country.</span></div>
<div>
	&nbsp;</div>
<div>
	But, one must remember here, it is the elections for the CA and not for a tenured parliament. In a sense it is more important opportunity to give a direction to the country&#39;s economic future. However, it is surely not the moment to make populist commitments enumerating number of &nbsp;projects and programmes. Therefore, these party manifestoes should better provide the basis for the economic system that the country would adopt for reasonably longer period of time. The focus of all these manifestoes were naturally expected to make the constitutional position of every political party about elements that would finally constitute &nbsp;the provisions for &#39;Directive Principles&#39; and &#39;Economic Rights&#39; in the new constitution. But, unfortunately, all the parties have spent a huge resource and time in listing what they would do programmatically, not constitutionally, to develop the country. This is to say that their prime focus is on &#39;what&#39; of they want to do, but completely devoid of the &#39;how&#39; of it.</div>
<div>
	&nbsp;</div>
<div>
	These manifestos have, almost uniformly, failed to address the issues that have constrained the growth prospects of Nepal for long. These constraints have come in three categorical forms -- the philosophical stand and identity of the powerful parties, the model of the economy the country would adopt in the longer run and rights of the citizen to own and generate legal wealth including their enforcement. But all these three issues are hardly addressed by the parties through their manifestoes.</div>
<div>
	&nbsp;</div>
<div>
	Needless to say, Nepali politics is dominated my the communist outfits of various degrees of radicalism. It is a doctrine that advocates and works against the private ownership of the property and firms. Even if these outfits claim that they are not opposed to private capital, the suspicion of their motives remain intact as long as they are identified as devout communists. The manifestoes were perhaps the best tools to assure the people that these parties unconditionally would adhere to the norms of uninfringed property rights of the people. They could have even made the extent of change in their philosophical stand public. But nothing of the sort happened. In fact, manifestoes of communist parties have deliberately skipped this crucial part of clarification. Even Congress continues to cling to &#39;socialism&#39;.</div>
<div>
	&nbsp;</div>
<div>
	The model of the economy to be adopted is also equally important. Parties are saying many confusing things like developing national capitalism, socialism and self-sustained economy. They appear unwilling to open their cards. They have chosen an easy term &#39;mixed&#39;, without identifying the elements to be mixed together.</div>
<div>
	&nbsp;</div>
<div>
	The most important is, whether the new constitution can ensure the private property rights and economic democracy or not. No manifesto has clearly mentioned that it was for the absolute property rights and rights for intellectual properties that encourages innovation.</div>',
			'published' => true,
			'created' => '2013-12-01',
			'modified' => '2013-12-01',
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			'description' => 'All major political parties have made their manifesto for the November 19th Constituent Assembly (CA) polls public. Most of the parties including the big 'gang of four'- UCPN (Maoist), Nepali Congress, CPN-UML and the Madhesi Morcha have made a long list of promises to accelerate the economic growth of Nepal.',
			'sortorder' => '2029',
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	(int) 13 => array(
		'Article' => array(
			'id' => '1966',
			'article_category_id' => '52',
			'title' => 'Doubling The Growth',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	The economic growth of any country is neither achieved by chance nor is it a thunder-struck miracle. In fact it&rsquo;s a combination of many contributing factors-both economic and socio-political. In a country like Nepal, where political uncertainty is nagging for decades, institutional set ups responsible for overall development are gradually being rendered dysfunctional. When government legitimacy comes under serious interrogation mark, economic growth hardly becomes a national agenda.</div>
<div>
	&nbsp;</div>
<div>
	The current state of Nepali economy fits into exact definition of stagflation -- the stagnated growth and uncontained inflation. Average year-on-year growth rate of the economy for the last whole decade beginning 2002 (when growth rate, computed as Gross Domestic Product (GDP) had dipped to negative territory) has hardly crossed 3.5 percent mark.</div>
<div>
	&nbsp;</div>
<div>
	Poor growth rate is not the only worst part of it, but even the lack of meaningful debate on the constraints and remedies is making the situation worst. But the inflation even in official figures is invariably in double digits.</div>
<div>
	&nbsp;</div>
<div>
	If not from the government, tangible initiatives to this end had to come from the private sector. But nothing of that sort happened in the recent past. To fill this gap, the New Business Age (NBA) Pvt. Ltd from this year on, in partnership with some leading business entities of the nation, has taken a maiden initiative to take the growth debate to the centre stage of national economic policy parlance.</div>
<div>
	&nbsp;</div>
<div>
	Nepal in the past did witness some debate over her growth concerns, but most of them were rather slanted or impractical. In different chapters of history, we were made to hear high-pitched rhetoric of double-digit growth, Swiss or Singaporean pace of growth, leap-frogging growth or a growth taking Nepal to a developing from an underdeveloped country status. These all were tall, very tall asks, to say the least.</div>
<div>
	&nbsp;</div>
<div>
	The double digit growth or upliftment of the country&rsquo;s status to a developing one are essentially the same concepts. For this, Nepal needs at least some Rs. 400 billion of capital expenditure annually, or at least 8.5 percent growth rate, for ten consecutive years. This indeed is unimaginable for several years to come. Other claims were bare political stunts, so had no scope of realizing them at all.</div>
<div>
	&nbsp;</div>
<div>
	In view of these dogmatic misadventures of the past, the NBA wanted a meaningful debate to take off that is based on feasible goals against the existing ground realities. This led to the conclave on the theme &#39;Doubling of Growth of the Nepali Economy to 7 per cent GDP: The Roadmap Ahead.&#39; Based on the 3.5 percent of growth rate of the past fiscal year, the idea of doubling was born, which looked fairly achievable if we could religiously pursue it.</div>
<div>
	&nbsp;</div>
<div>
	Needless to say, growth in national GDP is a multi-sector endeavour. Among them too, it is important to identify and focus on key sectors that can either serve as prerequisite to long-run sustainable growth like hydropower or yield immediate growth results like agricultural productivity and tourism.</div>
<div>
	&nbsp;</div>
<div>
	But, most important of all is quintessentially lead role of the private sector in investment, production and distribution of all goods and services. Of course, support of the state from the background is needed as security or ground for fair-play. Guided by this philosophy, the NBA coincided the conclave of growth debate, organized in Kathmandu on 24th August, with the opportunity to recognize the contribution of business sector to growth. This recognition came in the form of the 10 categories of business awards.</div>
<div>
	&nbsp;</div>
<div>
	For the sustained prosperity of the nation, we should be able to make the growth not a flip-flop show but a habit. We need to start modest and all big dreams will fall in line with accomplishment of the starting ones. If we achieve 7 per cent growth first, then the double-digit can be followed soon. More important here: we needed a right beginning. And, with this successful conclave, we in NBA feel, the beginning has indeed been right.</div>
<div>
	&nbsp;</div>',
			'published' => true,
			'created' => '2013-10-09',
			'modified' => '2013-10-09',
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			'description' => 'The economic growth of any country is neither achieved by chance nor is it a thunder-struck miracle. In fact it’s a combination of many contributing factors-both economic and socio-political. In a country like Nepal, where political uncertainty is nagging for decades, institutional set ups responsible for overall development are gradually being rendered dysfunctional.',
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			'id' => '1675',
			'article_category_id' => '52',
			'title' => 'Bureaucratic Budget',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	The most positive development of the ordinance budget for FY 2013/14, presented on 14th July by Finance Minister Shankar Koirala, is that it proposes the income and expenditure estimates for the entire fiscal year. The budgets for the last four fiscal years had come in the form of quarterly or half-yearly estimates due to incessant political squabbles among the political parties at play. The government employees enjoyed the pay rise of some 20 per cent and private sector seemed largely contended with some liberal approaches adopted by the budget speech. The criticisms of the &#39;too large a size&#39; and &#39;implementation nightmare&#39; were routine and expected.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	But, the saddest part is that this budget in a bid to please everyone with some instant toffees, fails to address the most pressing economic problems faced by Nepal at present. The Nepali economy now faces three very worrisome problems. First, the GDP growth plummets to 3.6 percent, the lowest in the decade. Second, the export-import ratio is at whopping 1:10 and the recorded trade deficit is of the last fiscal year is estimated to be well above Rs 500 billion. If service imports like Nepali students studying abroad, holiday and healthcare trips Nepalis are making abroad are also added it would cross the Rs 600 billon mark. And, the third, the authorities have failed to tame the galloping inflation, that effectively stands between 14 to 16 per cent and the CPI-based one has never gone below 10 percent for several years now.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	The deficit budget by more than 25 percent of proposed expenditure even fails to acknowledge the fact that the economy is in grave crisis. It is unable figure out where the growth propellants would come about. The first three priorities of the budget are hydropower development, agriculture and infrastructure development--in that order. But, beyond rhetoric, it fails to enlist true problems and bottlenecks in respective sectors. It says many things about hydropower but fails to make any commitment on what would happen to large joint venture projects like West Seti and Arun III that are pending for years largely for unspecified reasons. Any development of hydropower projects in commercial scale will no meaning unless Nepal and India enter into power trade agreement. Bilaterally beneficial transmission lines and above all a climate of mutuality in investment and power trade are crucial, which could only go ahead if Indian investment is not discouraged. This however doesn&#39;t mean Nepal should sacrifice her interest. For any hydropower project, it would take long to be able to contribute to GDP growth.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	Even if agriculture is deemed to be a growth engine, it is time that the sector came out of platitudes like &#39;modernization, commercialization and marketization&#39; of agriculture. The strategies of government subsidies on seeds and fertilizers adopted for years have never worked for several reasons. The sector now faces new problems like acute shortage of farm labours and sustainable pricing mechanism and value addition of products. If Nepali products were to be promoted regressive customs and other duties should be revised accordingly. But this budget doesn&#39;t even touch upon these newer challenges.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	Growth by infrastructure development is highly indirect proposition. The GDP can grow with only very massive investment, not of pork-barrel nature but only in the form output targeted creation of transportation and communication linkages. In view of these realities, it can be easily concluded that the budget doesn&#39;t make any sensible effort to fill the growth gap.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	It is surprising to see that out of eight, the reducing the trade deficit is listed as the seventh objective. In fact, it should have been the first and the programmes like hydropower development should have been part of export promotion strategy in the long- run. Similarly, inflation control has been an outcome of a perverse nature foreign trade than the domestic trade factors.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	To see recent, unconventional trends in economy, both in terms of problems and prospects, we needed a clear departure from traditional bureaucratic verbose in national budget. But, this particular budget has indulged more in this outdated practice. This is truly a year of opportunity missed.</div>
<div>
	&nbsp;</div>',
			'published' => true,
			'created' => '2013-08-22',
			'modified' => '2013-08-22',
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			'description' => 'The most positive development of the ordinance budget for FY 2013/14, presented on 14th July by Finance Minister Shankar Koirala, is that it proposes the income and expenditure estimates for the entire fiscal year.',
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		'Article' => array(
			'id' => '2812',
			'article_category_id' => '52',
			'title' => 'Allow Private Sector To Spend Development Budget',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	The spending capacity of the Government of Nepal is quite poor, to say the least. The government has been routinely allocating capital expenditure, also known as the development budget, every year. But it has routinely failed to spend the money. In the first nine months of the current fiscal year, the government has been able to spend only about 26 percent of the development budget. In the previous fiscal year, such spending was about 29 per cent. Government officials are authorized to make capital expenditure right after the parliament endorses the national budget. But they don&rsquo;t move for months and wait for the final trimester to spend the development budget in a hurry. This has developed as a culture.</div>
<div>
	&nbsp;</div>
<div>
	It&rsquo;s not only the government-funded projects but also the donor-funded ones that are affected by this chronic tendency. The projects funded by the World Bank (WB), Nepal&rsquo;s largest multilateral development partner, could be taken as an example. In the first six months of the current fiscal year, spending by the WB-funded projects has been poor with disbursement standing at 5.3 per cent against a target of 13.2 per cent. According to the WB, disbursement amounted to Rs 38.06 million during the period against the targeted Rs 94.6 billion.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	The ineffectiveness of the government machinery is clearly visible here as almost all of the WB&rsquo;s funding is channelled through the government system. There have been talks about enhancing the government&rsquo;s spending capacity but they are limited to just that &ndash; talks.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	The unspent amount has soared as this year&rsquo;s budget also has a carry-over of Rs 15 billion from last year&rsquo;s unspent budget. It shows that billions of rupees meant for development works have been remaining unspent. &nbsp;</div>
<div>
	&nbsp;</div>
<div>
	For years, we have been fatigued by this bizarre development practice. We have a measurable trend of low expenditure every year for various reasons. Since fiscal year 2011/12, capital expenditure has not crossed 30 percent of the allocated amount during the three trimesters. The delay in spending the budget can lead to multiple problems in the market such as lack of liquidity, no job creation and slow development work. &nbsp;</div>
<div>
	&nbsp;</div>
<div>
	If a major chunk of the budget continues to pile up, there is persistent risk of spending the budget unaccountably at the end of the fiscal year. This has been happening for the last several years. Every year, newspapers are replete with stories of hasty and hurried expenditure of development funds when only a few months are left prior to the end of the fiscal year. The expenditure of development funds expedites a few months before the expiry of the fiscal year. This puts people&#39;s concerns about quality development into question. &nbsp; &nbsp;</div>
<div>
	&nbsp;</div>
<div>
	Laws and guidelines clearly stipulate that development expenditures have to be made within a set deadline, and accountability and transparency must be maintained in the process. But brushing aside such legal and procedural mandates, expenditures are being made in such a way as to produce miserable development output against hefty expenditure. It has become a common sight in and around the cities, towns and villages that construction of new tracks and blacktopping of roads unusually pick up momentum during June and July each year. Nepal&rsquo;s fiscal year ends at mid-July. One can imagine the quality of construction and development works when a major chunk of the national budget is spent in a few months before the expiry of the fiscal year. &nbsp;</div>
<div>
	&nbsp;</div>
<div>
	Procedural delays in approving the project and awarding the contract, a tendency among contractors not to work after receiving the mobilisation fund in advance, frequent transfer of technical and top level staffers at the project and fear of the anti-graft body are some of the reasons for the low spending of the capital expenditure. Whatever the reason might be, the fact is the government hasn&rsquo;t been able to spend the development budget year after year. Therefore the responsibility of spending the development budget should be given to the private sector.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	If we adopt such practice, the private sector, which is far more efficient and capable than the public sector, can take the leadership of our development projects. The government, on its part can create a mechanism to periodically monitor the progress of such projects.</div>',
			'published' => true,
			'created' => '2015-06-01',
			'modified' => '2015-06-08',
			'keywords' => '',
			'description' => 'The spending capacity of the Government of Nepal is quite poor, to say the least. The government has been routinely allocating capital expenditure, also known as the development budget, every year. But it has routinely failed to spend the money.',
			'sortorder' => '2663',
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			'id' => '2807',
			'article_category_id' => '52',
			'title' => 'A Matter Of De-Materializing It',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	Nepal&#39;s share market index, Nepse is performing reasonably well since the formation of Nepali Congress led government. It is now hovering between 850 and 900 for sometimes now. Among many welcome developments, the plan to dematerialize (demat) the physical share certificates into the digital ones have boosted the confidence of the investors. But the demat process has been rather very slow. In seven months since it started (coinciding with the Nepali New Year 2071), only about a million scrips of some three dozen companies could be converted to digital format. No doubt, this is a time consuming process, but such a slow pace, though, is absolutely unwarranted for.</div>
<div>
	&nbsp;</div>
<div>
	Be that as it may, demat process would be completed, hopefully, soon. But more worrisome aspect is, other support infrastructure to augment trade in demat system remains far behind the mark. The recent lull in the market is now attributed to the fact that banks were not recognizing the dematerialized shares as security for financing investments. They may have their reasons to do so. But this reflects a clear lack of vision and coordination among the policy makers to simultaneously take forward all related developments of ancillaries so as to prevent the system from becoming lame.</div>
<div>
	&nbsp;</div>
<div>
	Simply, banks&#39; willingness to invest in the digital infrastructure and manpower training to handle these loan transactions doesn&#39;t seem to be forthcoming right away. And, there is no initiation from other relevant authorities like Nepal Rastra Bank and Securities Board of Nepal to facilitate this. &nbsp;It is though not to suggest that everything has to be shouldered by the public institutions, but policy exercises in view of the potential paradigms of such developments is unquestionably their special domain.</div>
<div>
	&nbsp;</div>
<div>
	As things stand now, three immediate tasks must be undertaken to not let the tempo in the share market wane off. First, banks should, may be through their umbrella organization - the Nepal Bankers&#39; Association, make their position clear with regard to their technical capabilities and cost-benefit analyses on facilitating demat transactions. They must also realize the fact that by making a digital transaction platform available, the share trading from all over the country may enhance in due course of time which in turn would help to increase their businesses. &nbsp;In many countries, a separate account for share trading has been a norm and a technical necessity. At the same time, they have adopted the rule of de-hooking the funds from other accounts while market volatility is emotion-racking. This effectively means that a trader can only trade from his trading account even if s/he has other functional accounts in the same bank, until inter-account transfers are made.</div>
<div>
	&nbsp;</div>
<div>
	Second, policy coordination among the policy makers and functional relations among the market makers have been largely a neglected issue. It is also a fact that regulatory authorities have been reticent until it is too late to react. In many cases, they lack the understanding of technical knowhow and degree of urgency seems to be taking a toll. This must be changed.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	Third, Nepal is one of those countries where investment in financial education at any level -from policy makers to retailers - has been close to zero. This has led to great discrepancies, policy confusions and inadequacies in every branch of the financial system, including the capital markets. Recognizing the complementarities of the several sub-branches of the entire system, a comprehensive financial education of a national scale is now an unconditional imperative. Only an institutionalized approach can address this need to its due worth.</div>
<div>
	&nbsp;</div>
<div>
	Of course, there are some unaccomplished, larger issues of capital market reforms. It is high time to interact with the private sector to find convincing and lasting answers to the questions: why the real sector representation in Nepal&#39;s capital market has been so insignificant? Are there ways to improve it? How and when? In nutshell, Nepal&#39;s financial system is looking for a shift not only to change the paper shares to demat form, but to translate the nation&#39;s overall economic thought process from a &#39;brick and mortar&#39; age to the contemporary digital age.</div>',
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			'created' => '2014-12-23',
			'modified' => '2015-06-01',
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			'description' => 'Nepal's share market index, Nepse is performing reasonably well since the formation of Nepali Congress led government. It is now hovering between 850 and 900 for sometimes now. Among many welcome developments, the plan to dematerialize (demat) the physical share certificates into the digital ones have boosted the confidence of the investors.',
			'sortorder' => '2657',
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		'Article' => array(
			'id' => '2801',
			'article_category_id' => '52',
			'title' => 'Commendable Contract',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	Nepal has been successful in initiating important economic reforms, ahead at least of her South Asian peers. The process of economic liberalization began in 1984, eight years before India began its first generation of reforms. The financial sector reform too was undertaken with a reasonable success a decade ago. The latest agreement between the employers and the trade unions of Nepal to execute much awaited labour law reforms is another milestone. While Indian Prime Minister Narendra Modi has just making a case to change their 1949 Labour Law, Nepal&#39;s success can set an example on how highly contentious issue of industrial relations could be amicably resolved through right initiatives, with confidence building arrangements in the background.</div>
<div>
	&nbsp;</div>
<div>
	The creation of the Social Security Fund under the tripartite agreement among the government, the Employers&#39; Council headed by the FNCCI vice-president and all trade unions (there are some eleven at present) four years ago paved the way for the recent understanding. Among others, there were two major issues, one each from the employers and the workers. The employers wanted the hiring-and-firing rights and the employees wanted certainty of financial security. Both of these issues got resolved albeit in rather surprising pace. The employers exhibited a great deal of generosity to agree to contribute to twenty percent equivalent of the wages towards the Fund on top of employees&#39; contribution of eleven percent. This really constitutes a substantial sum that gives confidence to the workers. The employers have also secured the right to hire-and-fire, without seeking prior approval from the Labour Ministry, a legal provision still effective. The agreement to categorize the workers into four groups depending on the nature and necessity of the production process has also eased the labour market risks to the investors and entrepreneurs.</div>
<div>
	&nbsp;</div>
<div>
	The two pending issues to be agreed, namely sectorial bargaining rights and no-work-no-pay should not be as difficult to resolve as other host of issues already agreed. The latter issue partially gets addressed by the hiring and firing rights of the employers. But, the sectorial bargaining norms, when agreed with a sectorial umbrella body deemed applicable to the entire sector (the industry), could be agreed with some exception of new entrants or loss-making businesses. Again, as the fair-market norm, such sectorial umbrella organizations tantamount to cartel and thus employers should also need to rethink their position in the long run.</div>
<div>
	&nbsp;</div>
<div>
	Undoubtedly, the agreement to amend the labour laws to these effects is a welcome step. But, Nepal&#39;s political leadership must first desist to use the trade unions as the political tools. When this agreement actually becomes a law, the scope of using these trade unions as the political instrument drastically reduces. This warrants for a cautious approach that these agreed issues do not become victim of political machinations again. Nepal has also seen several such agreements and enactment of many important laws. But their enforcement and adherence have always been the problem. Therefore, all necessary institutional and logistic arrangement must be in place for desired outcome of these agreements, which in due course become law. A few of such &#39;must&#39; arrangements are: proper database of the workers, automated accounting of the Security Fund given the potential high mobility of labourers, timely deposit of the promised amounts by the employers and updated records of the same, and credible institutional set-up to ensure timely delivery of all these services.</div>
<div>
	&nbsp;</div>
<div>
	It is also not enough just to have these laws in place. If Nepal is expecting enhanced foreign or domestic investment, she should be able to communicate this as an achievement that has put a decades-long problem of industrial relations conclusively to an end. The trade unions affiliated to all political parties have signed this agreement, which adds one more powerful reason to invest in Nepal. Needless to say, to achieve this success in a country, which has one of the cheapest labour costs is indeed in the interest of all potential investors.&nbsp;</div>',
			'published' => true,
			'created' => '2014-11-21',
			'modified' => '2015-06-01',
			'keywords' => 'new business age  from the editor news & articles, from the editor news & articles from new business age nepal, from the editor headlines from nepal,  current and latest from the editor news from nepal, economic news from nepal, nepali from the editor economic news and events,  ongoing  from the edi',
			'description' => 'Nepal has been successful in initiating important economic reforms, ahead at least of her South Asian peers. The process of economic liberalization began in 1984, eight years before India began its first generation of reforms. The financial sector reform too was undertaken with a reasonable success a decade ago.',
			'sortorder' => '2652',
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		'Article' => array(
			'id' => '2795',
			'article_category_id' => '52',
			'title' => 'Auto Dream',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	&nbsp;</p>
<div>
	Refusing to the demand of the automobile importers to reduce import duties on vehicles, Finance Minister Dr. Ram Sharan Mahat has promised them government support if they start vehicle manufacturing in the country. &nbsp;Given the increasing demand due to expansion in the road network and resultant steady increase in import of all sorts of vehicles, Dr.Mahat&rsquo;s proposition seems plausible on cursory glance. But looking at the technicalities of the industry, automobile manufacturing in Nepal still seems a dream that needs a lot of efforts to realize. &nbsp;</div>
<div>
	&nbsp;</div>
<div>
	One prominent consideration will be that of scale. It may be possible to start assembling certain types of commercial vehicles, such as light goods carriers and farm implements. But the market for such Nepal-made vehicles will be limited within the country and such business will have stiff competition from imports due to quality considerations &ndash; real as well as perceptional. To overcome this barrier, a huge investment has to be made in procuring the technology. Whether that will make commercial sense is a big question. &nbsp;</div>
<div>
	&nbsp;</div>
<div>
	Dr.Mahat&rsquo;s call has come at a time when Nepal&rsquo;s manufacturing sector is in continuous decline and trade deficit is in continuous rise. Any manufacturing activity that may start now will be welcome in such situation. But it has to be realized that the decline in manufacturing is due to many reasons and among them two are distinct. While everyone accepts the problem of power shortage, the other problem related to it, hostile labour, is not accepted by many.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	It is not that efforts are not being made to manufacture vehicles in Nepal. Hulas Motors of Golchha Organisation has been assembling some types of vehicles and its product line up has reached nine including Rickshaw and Jeep. Dr.BaburamBhattarai adopted its Mustang Max jeep as of the Prime Minister&rsquo;s official vehicle when he was in that office. But it is complaining of not only lack of government support but even hurdles posed by government to domestic manufacturers. Two plantsthat assembled Chinese bikes Lifan and Ying Yang were closed down soon after they were set up. These experiences need close studies to find out what exactly is needed before we start efforts to realise the dream of flourishing Nepali automobile industry.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	One reason the government does not support any manufacturing within the country is the revenue it gets from imports. And the growing and big flow of remittance is helping the government in this. The result is growing economy without employment growth. This vicious cycle can be broken only with solution to the power shortage problem. Some recent developments &ndash; the latest being the power trade agreement with India and finalization of project development agreement template for power projects to the satisfaction of investors &ndash; are good indications for the future. But that is not going to be enough for development of automobile industry.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	Nepal already has a good automobile industry in the form of maintenance operations. These can easily upgrade to vehicle reconditioning operations if the policy and infrastructural hurdles are removed. Meanwhile, investment in backward integration can start and that requires expansion of the engineering colleges and setting up vehicle technology development centres.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	These centres should ideally be focused on developing electricity operated vehicles given the country&rsquo;s hydropower potentials.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	However, in the meantime, it would be wiser to reduce the import duty on vehicles, which are now not luxuries, but necessities as they are efficiency enhancing machines. A vehicle that is available across the border at Rs. 200,000 must not cost over one million rupees in Nepal.&nbsp;</div>',
			'published' => true,
			'created' => '2014-10-10',
			'modified' => '2014-12-23',
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			'description' => 'Refusing to the demand of the automobile importers to reduce import duties on vehicles, Finance Minister Dr. Ram Sharan Mahat has promised them government support if they start vehicle manufacturing in the country.',
			'sortorder' => '2646',
			'image' => null,
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	(int) 4 => array(
		'Article' => array(
			'id' => '2791',
			'article_category_id' => '52',
			'title' => 'Budget 2014/15 Private Sector Neglected',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	The budget for FY 2014/15 is grossly disappointing not because it is not better than those of past several fiscals, but it stands far short of expectations from Dr. Ram Saran Mahat, a self-proclaimed reformist and ardent advocate of the free-market economy, at the helm of the FinanceMinistry. There are at least half a dozen problems of grave nature in the economy that are caused mainly due to gradually receding role of the private sector. These six problems could be listed as low rate of economic growth for decades now, ballooning trade deficit year-after-year, diversion of public funds to protect ailing public enterprises, ever-increasing number of outbound migrant workers causing labour market distortions back at home, unproductive use of inflow of these workers&#39; remittances and, continuity of archaic practice of development that is heavily dependent on supply-driven central planning.</div>
<div>
	&nbsp;</div>
<div>
	Without creating a proper business environment for the private sector to function, all these trends are rapidly pushing the economy to the verge of collapse. The growth rate is low because the contribution of manufacturing to GDP has reduced close to five percent, which at one point of time was estimated to have in the double digit. This is caused largely due to closure or down-scaling of many private manufacturing units over the last one decade, the period of worsening industrial relations. Due to lack of investment in commercial agriculture, both agricultural productivity and modernization of this sector, lagged behind. It is also one of the major reasons for huge gap in our exports and imports value, the deficit now crossing six billion rupees mark in a single FY that just ended. We also failed to identify and update the products of our comparative as well as competitive advantages, particularly in the neighbouring markets (for perishable agro-products) and the third country niche market (for high value products like pashmina and woollen carpets). This failure comes as the result of not including the representative private sector in exercises like trade policy formulation.</div>
<div>
	&nbsp;</div>
<div>
	One of the clear departures expected from Mahat was government&rsquo;s decisive withdrawal from the trading and manufacturing business by ways of privatization and divestment. He has made some proposals like unbundling of Nepal Electricity Authority, divestment from Agricultural Development Bank and Nepal Bank Ltd and liquidationof some of already non-existent entities like Orind Magnesite Ltd. These efforts were needed. But more urgent were the privatization of the public companies like Nepal Oil Corporation which is putting heavy burden on country&#39;s exchequer just to fuel the luxury of a few hundred thousand rich populace. The budget failed to strike a right chord on it.</div>
<div>
	&nbsp;</div>
<div>
	The most crucial departure expected from Mahat, for his philosophical leanings as an open-market economist, was to stop &#39;merciful allocation&#39; from centre to the villages and districts without identifying the projects and their viabilities. To add to it, he also succumbed to the demand of the members of parliament by allocating a purse of eleven and half million rupees per head for the programmes and projects that are not yet identified. These pork barrel disbursements neither serve the development objectives nor channel the funds to the private sector as these small funds are spent sparsely, without proper adherence to the public procurement process.</div>
<div>
	&nbsp;</div>
<div>
	By putting the private sector to the back-burner, the economy can never come back on the prosperity track. Finance Minister Mahat did not present &#39;the Mahat budget&#39; this time.</div>
<div>
	&nbsp;</div>',
			'published' => true,
			'created' => '2014-09-08',
			'modified' => '2014-11-09',
			'keywords' => 'new business age  from the editor news & articles, from the editor news & articles from new business age nepal, from the editor headlines from nepal,  current and latest from the editor news from nepal, economic news from nepal, nepali from the editor economic news and events,  ongoing  from the edi',
			'description' => 'The budget for FY 2014/15 is grossly disappointing not because it is not better than those of past several fiscals, but it stands far short of expectations from Dr. Ram Saran Mahat, a self-proclaimed reformist and ardent advocate of the free-market economy, at the helm of the FinanceMinistry.',
			'sortorder' => '2640',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
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	),
	(int) 5 => array(
		'Article' => array(
			'id' => '2785',
			'article_category_id' => '52',
			'title' => 'Unhooking Economic Departure',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	Finance Minister Dr Ram Saran Mahat, while drawing his point home on the transfer of allocations towards the end of the fiscal year to the indiscriminate projects from the ones mentioned in the FY 2013/14 budget, revealed that there are not &#39;any&#39; ongoing project of substantive size so that funds could be funnelled to them. On the moral grounds, this statement from Mahat is unpalatable. Because he is the only person who has headed the country&#39;s budget and planning for twelve out of twenty four years since restoration of democracy in the country, first as the National Planning Commission vice-chair and then minster for half a dozen times.Thus, he should also be held responsible for not incubating enough projects of national significance that have absorption capacity of virtually any amount of funds that may be diverted in wee circumstances, like in the event of low level of overall capital expenditure in the economy. Equally irresponsible were those who were at the helm of the Ministry of Finance before Mahat&#39;s current term in office.</div>
<div>
	&nbsp;</div>
<div>
	It is indeed a precarious situation -- a clear mismatch between the demand and supply of financial resources on the one hand and similar demand and supply dynamics of the development projects in the country. In absence of institutions like elected local bodies that articulate the demands for development of the common masses, demand for resources have also substantially gone down.</div>
<div>
	&nbsp;</div>
<div>
	There are other unattended areas in the economy that are either causing excessive &#39;bleeding &#39;or/and constricting growth for years. For example, petroleum import that exceeds the amount of our total exports, whopping Rs 250 billion trade deficit in a single year and continuous financing to loss-making State Owned Enterprises (SOEs) from the tax-payer&#39;s money to project the jobs of a few hundred unproductive employees.</div>
<div>
	&nbsp;</div>
<div>
	In addition to all these odds, rapidly eroding institutionalcapacities and, more importantly, rampant imperviousness of the political leadership towards these grave economic maladies are to blame why the relative peace of eight years since 2006 peace accord also couldn&#39;t ameliorate the acuteeconomic hardships of the people.The much expected departure in the economic affairs of the country, particularly after the dawn of peace is yet to happen. As credentials have it, Mahat is perhaps the best finance minister to transpire this much needed departure in terms of policy reforms, resource mobilization, productivity and trade enhancement and employment generation. But Mahat, given his outline of principles of the next budget presented recently in the parliament, seems unprepared to depart from a sluggish, low and sub-five percent growth rate.</div>
<div>
	&nbsp;</div>
<div>
	Not only there is absolute dearth of ongoing publicly financed projects as claimed by Mahat, private investment - both domestic and foreign - is also at its lowest. &nbsp;The contribution of the manufacturing to GDP has gone to worse from bad in recent years. It is one of the major reasons of widening export-import gap. The remittance fuelled consumption would have been a good catalyst for manufacturing growth. But lack of proper ambience for investment caused largely due to political indifference bleakens the manufacturing scenario of the economy. Even the policy of putting the private sector at the driving seat of economic development, incidentally credited &nbsp;as Mahat&#39;s brainchild in 1992, doesn&#39;t seem to be the case now.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	In view of the multifaceted problems, marginal improvements in blatantly failed economic policies, plans and implementing strategies are not likely to fundamentally alter the situation. It needs a real departure and if Mahat alone is unable to take such a risk, the major political parties must act together. Mahat can be the initiator of the consensus process for economic revival.</div>',
			'published' => true,
			'created' => '2014-07-30',
			'modified' => '2014-10-10',
			'keywords' => 'new business age  from the editor news & articles, from the editor news & articles from new business age nepal, from the editor headlines from nepal,  current and latest from the editor news from nepal, economic news from nepal, nepali from the editor economic news and events,  ongoing  from the edi',
			'description' => 'Finance Minister Dr Ram Saran Mahat, while drawing his point home on the transfer of allocations towards the end of the fiscal year to the indiscriminate projects from the ones mentioned in the FY 2013/14 budget, revealed that there are not 'any' ongoing project of substantive size so that funds could be funnelled to them. On the moral grounds, this statement from Mahat is unpalatable.',
			'sortorder' => '2635',
			'image' => null,
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		)
	),
	(int) 6 => array(
		'Article' => array(
			'id' => '2780',
			'article_category_id' => '52',
			'title' => 'Fallen Prey To Politics',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	When Nepal Tourism Board (NTB) was created, it was dubbed as the first truly functional model of public-private partnership (PPP) in Nepal. When it delivered some encouraging results for Nepal&#39;s tourism industry, the model&#39;s replicability potentials formed chapters of many books like of Karna Sakya and provided basis for a large number of business working papers and case studies. But, unfortunately, the same NTB has now become the test case of alleged embezzlement of resources and sit-in protest against the same by the country&#39;s tourism entrepreneurs. Thanks to all-pervasiveness of our albatross politics.</div>
<div>
	&nbsp;</div>
<div>
	While penning these words, it had almost been a month that the protesting entrepreneurswere demanding an impartial probe into financial irregularities by the acting CEO of the Board, Subash Nirola. But nothing was moving ahead primarily because it was a PPP. The Board headed by the secretary in the Ministry of Tourism as the ex-officio Chairman is expressing government&#39;s inability to take unilateral action, as it is the &#39;private&#39; organization while the entrepreneurs too do not have the legal power to oust the CEO.</div>
<div>
	&nbsp;</div>
<div>
	A few months ago, the NTB made a policy decision to organize the tourism fairs in the districts &#39;to promote the domestic tourism&#39;. This has panicked the traditional entrepreneurs that their income would be shared by the district level hospitality and amenities industries. The government sees no flaws in the Board&#39;s decision. &nbsp;The entrepreneurs argue that the money spent for such fairs in domestic markets should instead be spent in international publicity so as to attract the foreign tourists. This is no doubt a valid reason. But, just spending some money for promotion of domestic tourist market can hardly be established as an evidence for corruption.</div>
<div>
	&nbsp;</div>
<div>
	The fuss is beyond these allegations of misappropriation of funds. The fact is, the protesting organizations of the entrepreneurs are affiliated to Deuba faction of the Nepali Congress, Oli faction of CPN-UML and Bhattarai faction of UCPN Maoists while the CEO is considered close to Khanal faction of the UML or, a chameleon, who also sometimes claims to be a Koirala Congress. And, for every political party, it was a matter of great pain that a newly emerged reputable organization like the NTB was functioning independent of political interference for more than a decade. And appointment of CEO is also not based on one&rsquo;s political loyalty. &nbsp;Therefore, every political party perhaps feels that if the current CEO is ousted through a political move, then it can set a trend and every next Tourism Minister can pick a new CEO along with each change in the government.</div>
<div>
	&nbsp;</div>
<div>
	The protest of the entrepreneurs wore a grotesque look when so called senior leaders of all three major parties reached at the sit-in site to &lsquo;express solidarity&rsquo; to the demands, without going into the merits of the allegations. If there are irregularities, there are related legal and quasi-legal institutions to investigate and prosecute the guilty. &nbsp;Why would leaders need to meddle in this process? Only plausible answer is that every party is keen to make the NTB a new political prey, which is deplorable.</div>
<div>
	&nbsp;</div>
<div>
	The problem in the NTB began long ago when the Board failed to pick-up a professional CEO in a transparent and timely manner. The &lsquo;Acting&rsquo; position is always an incentive for the incumbent to look for quick bucks from all possible means including kickbacks. And, as allegations are already labelled to Nirola, he should either make public all the details of procurement as soon as possible proving his integrity or step aside until proven innocent allowing for an independent probe. &nbsp;The prolonged stand-off between the Board and the entrepreneurs is putting the entire Nepal tourism sector in bad light. And, the government must step in to solve it than being a party to a side.</div>',
			'published' => true,
			'created' => '2014-06-08',
			'modified' => '2014-07-30',
			'keywords' => 'new business age  from the editor news & articles, from the editor news & articles from new business age nepal, from the editor headlines from nepal,  current and latest from the editor news from nepal, economic news from nepal, nepali from the editor economic news and events,  ongoing  from the edi',
			'description' => 'When Nepal Tourism Board (NTB) was created, it was dubbed as the first truly functional model of public-private partnership (PPP) in Nepal. When it delivered some encouraging results for Nepal's tourism industry, the model's replicability potentials formed chapters of many books like of Karna Sakya and provided basis for a large number of business working papers and case studies.',
			'sortorder' => '2625',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
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	(int) 7 => array(
		'Article' => array(
			'id' => '2771',
			'article_category_id' => '52',
			'title' => 'Agenda: Economic Restructuring',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	Finance Minister Dr. Ram Sharan Mahat created ripples of a sort in mid-March when he pointed to the need of restructuring the economy. No doubt, this is a long pending agenda given the fact that Nepali economy is faced with stagflation-like trap for decades. But, Dr. Mahat&#39;s proposition has come so suddenly that it gives rise to two natural questions. Have we done adequate homework for such a massive restructuring? Is there enough political will to embrace the agenda of restructuring, going beyond barely managing it? And, the direction of such restructuring will equally be crucial as will be the sustainability of the transformed structure.</div>
<div>
	&nbsp;</div>
<div>
	Prioritization of the tasks in such restructuring agenda and garnering political support for the same, are two sets of groundwork that any restructuring agenda cannot perhaps bypass. To both ends, Dr. Mahat as the finance minister has a couple of rare strengths. He understands the Nepali economy thoroughly -- its cracks and crevasses-and has a pro-private sector image. Also, he carries equally strong weaknesses; that he carries a big baggage of self-righteousness, doesn&#39;t have a professional team and hardly trusts anyone and, he is a bad politician, at least at the negotiation table.</div>
<div>
	&nbsp;</div>
<div>
	Needless to reemphasize here, restructuring of a mixed economy that is chronically mismanaged is sure to be a daunting, painstakingly long-term process. If this is not a mere political gimmick that Dr. Mahat has no reason to indulge into, the homework needs to commence at least in two parallel fronts of the economy -- technical and political. On the technical side, there must be a dispassionate assessment of the loss incurred and persistent underperformance of the economy due to over-involvement of the government in planning, production and distribution systems. On the political front, to reduce the state involvement in functional aspects of the economy, a great deal of reorientation is imperative mainly in those political forces who are indoctrinated as communists or ardent socialists.</div>
<div>
	&nbsp;</div>
<div>
	A great amount of misgivings about the &#39;inevitability of state intervention and activism in economy&#39; must be dispelled, both at political or people&#39;s levels. Dr. Mahat himself needs enough courage to declare the institutions like the National Planning Commission obsolete, at least in the present form. In their present form, they act as omniscient of the needs and priorities of the populace at the grassroots. The decision on liquidating about three dozen state-owned enterprises that have acted as hungry sharks for years in the exchequer is long overdue. Only way to create public awareness on the futility to maintain status quo in these public institutions depends largely on the effective factual communication of the maladies and recurrent losses, year after year. One stroke of liquidating or privatizing the Nepal Oil Corporation would be enough to test Dr. Mahat&#39;s sincerity and courage to take-up really meaningful restructuring of Nepal&#39;s public economy.</div>
<div>
	&nbsp;</div>
<div>
	The economy is under stress from more than one quarter. The ballooning imbalance in the country&#39;s foreign trade, dwindling absorption capacity of the financial resources and mass-migration of the working age population for low-earning jobs abroad creating labour-market distortion at home are three prominent areas that warrant top priority in the restructuring agenda.</div>
<div>
	&nbsp;</div>
<div>
	The structural imbalances too are looming large. We spent decades lamenting on the lower-than-demand production of energy, mainly hydropower. But, despite all odds, the energy sector attracted a substantial investment and there are indications that the supply would be doubled in next four to five years. But, we became oblivious of the fact that we needed to develop adequate transmission lines to connect this power to individual houses. There are concerns of this power being wasted for lack of alternative arrangements, for example, replacing LPG cooking stoves with the electric ones to create market for the added power generation, or if possible export to India.</div>
<div>
	&nbsp;</div>
<div>
	There is a sort of political consensus on the need of a tangible restructuring of the state when it hopefully gets federalized. The proposed agenda of economic restructuring must be a complementary process to that larger goal of spatial restructuring of the state. The restructuring of even larger scale is also required in the private sector to transform it from a mere a trade-margin capitalizer, like from gold smuggling, to employment-generator and export-promoter. Therefore, the restructuring agenda must not fizzle out as seasonal political hyperbole. It deserves more nuanced treatment to make it a fruit-bearing proposition.</div>',
			'published' => true,
			'created' => '2014-04-09',
			'modified' => '2014-06-08',
			'keywords' => 'new business age  from the editor news & articles, from the editor news & articles from new business age nepal, from the editor headlines from nepal,  current and latest from the editor news from nepal, economic news from nepal, nepali from the editor economic news and events,  ongoing  from the edi',
			'description' => 'Finance Minister Dr. Ram Sharan Mahat created ripples of a sort in mid-March when he pointed to the need of restructuring the economy. No doubt, this is a long pending agenda given the fact that Nepali economy is faced with stagflation-like trap for decades.',
			'sortorder' => '2621',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
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	(int) 8 => array(
		'Article' => array(
			'id' => '2766',
			'article_category_id' => '52',
			'title' => 'Housing The Business',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	The housing and the real estate business (HREB) has a double-sword positive effect on the economy. It is a global perspective to this business, perhaps barring Nepal. It is a capital intensive business like any other profit making venture and, at the same time, helps to solve a pressing problem of shelter to the populace. But despite the potential, Nepali HREB languishes in absurdities and hangs on to uncertainties. It has been more than one and a half decades since HREB began in an organised fashion led by private sector investment. But the bottlenecks of policy confusions, information asymmetries and public (mis)perceptions remain the same as they used to be a decade ago.</div>
<div>
	&nbsp;</div>
<div>
	According to a rough estimate, Nepali HREB is now worth more than Rs 150 billion, which is a third of the current year&#39;s national budget. There is an estimated annual demand of some forty five thousand units of family apartments, mainly in the urban centres of the country. Half of the demand is only in the Kathmandu valley. But, the total annual cumulative supply of apartment-type living is limited only to sixteen thousand units nation-wide. The demand and supply mis-match is one half of the story and the price and financing mismatch is the other.</div>
<div>
	&nbsp;</div>
<div>
	What&#39;s wrong with Nepali HREB as an investment and growth industry? Perhaps everything! The government doesn&#39;t have a comprehensive policy on it. In addition, the very perspective of the government about HREB is largely bigotry. Some regulations regarding ownership have been issued but implementation has not been as effective as expected. Given the fact that the private sector is doing a national service by providing housing facilities to the people which otherwise is the government&rsquo;s responsibility, it should have acknowledged and treated accordingly. As long as the government considers itself as the vehicle to an egalitarian society, it is indeed the government&rsquo;s responsibility to address problems like this.</div>
<div>
	&nbsp;</div>
<div>
	One emulative recent example could be the British government&rsquo;s initiative of Help-to-Buy (HTB) scheme, introduced by Chancellor George Osborne&rsquo;s last fiscal year budget, targeting the first time home owners. The &pound;25 billion scheme that began in January 2014 plans equity finance of 20 percent of the cost of buying or constructing a new house. The government plans to implement the HTB scheme in a three year time horizon. The objectives are well defined. First, to help revive the ailing HREB and also simultaneously support lower end populace to own a house of their own.</div>
<div>
	&nbsp;</div>
<div>
	But in our case, the government is treating the investors and developers as criminals and crooks, let alone contemplating providing an equity financing. It was true that there was a degree of over-exposure of the finical sector to HREB. But that was a compulsion at a point of time due to utter lack of other sectors for the BFIs to invest. Shouldn&#39;t the government share the blame for failing to create an atmosphere for a diversified business and thus the BFIs&#39; investment? Instead, the government apparatus is at complete loss of direction to address the problems of the sector. On top of that a rung of top public service officials were determined to ruin the entire HREB.</div>
<div>
	&nbsp;</div>
<div>
	Without naming names, there are projects in limbo which would have been completed well if the institutions like the central bank wouldn&#39;t have been vindictive to some chosen promoters of the schemes. It is true that some developers had had multiple business stakes and resorted to some duplicity. But the right approach for the government and central bank strategy should have been to save the projects and investment and penalize and admonish only the wrong-doers. To say the least, the government has not been sensitive to the potential ramifications of its apathy and antipathy to HREB.</div>',
			'published' => true,
			'created' => '2014-03-24',
			'modified' => '2014-04-09',
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			'description' => 'The housing and the real estate business (HREB) has a double-sword positive effect on the economy. It is a global perspective to this business, perhaps barring Nepal. It is a capital intensive business like any other profit making venture and, at the same time, helps to solve a pressing problem of shelter to the populace. But despite the potential, Nepali HREB languishes in absurdities and hangs on to uncertainties. It has been more than one and a half decades since HREB began in an organised fashion led by private sector investment. But the bottlenecks of policy confusions, information asymmetries and public (mis)perceptions remain the same as they used to be a decade ago.',
			'sortorder' => '2612',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
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	(int) 9 => array(
		'Article' => array(
			'id' => '2581',
			'article_category_id' => '52',
			'title' => 'When Bulls Run To Bush',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	The index of Nepal Stock Exchange, Nepse, climbed to 800 after five years early January 2014. Since it closed at 963.36 in mid-July (end of the Nepali fiscal year) 2008, it had barely crossed 500 until last June. It had terribly disappointing bearish tumble for all five consecutive years as shown in the side table. The Nepali bourse has often behaved beyond any rational expectations and market analysis. There was no reason for it to fall as low as below 300 in 2011 and even at present the speedy bull run is not fully justifiable. The index has climbed about 50 percent from 529 points in mid-July 2013 and to 780 mark on third week of January 2014.</div>
<div>
	&nbsp;</div>
<div>
	<img alt="Nepal Stock Exchange Index" src="/userfiles/images/editor1%20(Copy).jpg" style="float: right; margin: 0px 0px 0px 10px;width: 200px; height: 154px;" />Interestingly, this rise is witnessed when trading of stocks of a number of new companies, mainly the new commercial banks, began. The situation apparently is of over-supply and there has not been any substantial change in economic fundamentals to push the Index up, except the fact that last CA elections saw the defeat of hard-line communist forces, like Maoists. If the investment were to be made for returns, this political change alone would not perhaps be enough to ensure higher&nbsp;</div>
<div>
	yield. But, investors do not seem to be bothered by this.</div>
<div>
	&nbsp;</div>
<div>
	To some extent, the volatility of the market by its nature is understandable, but the reason d&rsquo;&ecirc;tre of this, generally, is however never beyond comprehension. At least, it should not have been the case given the availability of modern-technology assisted analysis, both fundamental and technical. But that is what exactly happening in Nepal.</div>
<div>
	&nbsp;</div>
<div>
	When markets run amok, bullish or bearish, without any convincing economic explanation, there is no reason to be happy. Nepal&rsquo;s capital markets have some basic characters that make it very risky. It is not only unintegrated to the international market, but also lacks even a few traders who would trade in Nepse and some other international exchange, simultaneously. Therefore, the impact of international market in Nepali secondary market can be completely ruled out. The real sector, for all practical purposes, has no presence in the capital market and it is dominated by the financial service providers, a few hotels and lately some hydropower companies. This means, our capital market trends do not necessarily reflect the degree of fitness of our economy. And, except for some time-trained crooks, there are very few informed or educated investors, causing mismatch between the expectations and returns.</div>
<div>
	&nbsp;</div>
<div>
	The regulator is equally novice and naive. Political appointments of the people to the Stock Exchange Board who lack specific knowledge about the trade have made the situation worse. The most dangerous part is that, no public agency is even contemplating about the possibilities and procedures of listing more real sector, mainly manufacturing, companies into secondary market. It is indeed an uphill task since it requires much higher level of willingness of the private sector to register in the bourse. It in turn requires transparency at every step of the transaction of the companies from, imports, customs evaluation, VAT and excise, sales, and ultimate balance sheet and auditing. Nobody seems prepared for this mammoth task that has not only economic cost but also demands a high degree of business integrity and honesty.</div>
<div>
	&nbsp;</div>
<div>
	But, without bringing the real sectored on the trading screen, the rationale of the secondary market could hardly be justified. The result, it will continue to be victim of irrational volatility. The new government that will be formed soon should take three major steps: first appoint knowledgeable persons of the sector in the regulatory board, second create a joint platform of Nepal Rastra Bank, the Board, Ministry of Finance and the private sector to promote financial education about the secondary market and begin brain storming to identify the causes that are hindering real sector to enlist in Nepse and resolve them. Only this will create a credible stock market in Nepal.</div>
<div>
	&nbsp;</div>',
			'published' => true,
			'created' => '2014-02-10',
			'modified' => '2014-02-18',
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			'description' => 'The index of Nepal Stock Exchange, Nepse, climbed to 800 after five years early January 2014. Since it closed at 963.36 in mid-July (end of the Nepali fiscal year) 2008, it had barely crossed 500 until last June. It had terribly disappointing bearish tumble for all five consecutive years as shown in the side table.',
			'sortorder' => '2434',
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	(int) 10 => array(
		'Article' => array(
			'id' => '2441',
			'article_category_id' => '52',
			'title' => 'Bitter Taste Of Sugar',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	The price dispute between the sugar mill owners and the sugarcane-producing farmers, like in the past years, has resurfaced, again. The farmers are arguing that the price offered by the sugar mills is far below their cost; and demanding a higher rate. The mill owners have their take: as the sugar price volatility is high, it would be unfeasible for them to meet the farmers&rsquo; demands. Both arguments have valid underpinnings.</div>
<div>
	&nbsp;</div>
<div>
	The reference price for both buyers and sellers of sugarcane in Nepal has been the neighbouring Indian states of Utter Pradesh and Bihar. &nbsp;Buyers here offer the price at par to their Indian counterparts. But, this price hardly attracts the Nepali farmers as their production cost is much higher than their Indian friends. India has massive farm and input subsidies effective. In desperate situations, government ventures to buy the product. They have better mass-scale cold storage facilities to wait for off-season high price sells. On the contrary, the energy and labour prices here are higher, electricity supply and irrigation facilities are unstable, thus costly. Other infrastructures like warehousing are in acute short supply. The farmers are forced to sell their sugarcane at the price offered by the mills as they have no alternatives. Besides, the sugarcane has a huge transportation cost to explore market in greater distances. In Nepal, the government support to the farmers is almost nil.</div>
<div>
	&nbsp;</div>
<div>
	On the buyer side, the special feature of seasonality in sugar production is a challenge. They must employ all their resources in this season. High demand of workers adds cost of production and the practice of hedging the base price throughout the year is not even contemplated in our context. Nepal&rsquo;s sugar pricing is largely affected by the Indian price trends. Therefore, Nepali producers&rsquo; may be sandwiched between the high prices of sugarcane here and over production and supply of sugar in India.</div>
<div>
	&nbsp;</div>
<div>
	The situation is indeed dire and warrants a lasting solution to this annually recurrent problem. In the open market economy, it is not advisable to invite an outright, continuous and equally effective government intervention. But, as long as government continues to subsidise in inputs and facilities, there is no harm that it does the same for the sugarcane as well. But, more lasting solutions should be explored from the market mechanism itself. And, there is ample scope for it.</div>
<div>
	&nbsp;</div>
<div>
	One of the bones of contention of the price rigidity of the sugarcane is ever impending sugar price volatility. This can be best addressed by price hedging of both sugarcane and sugar, at least in the yearly range. The newly developed commodities futures market of Nepal can be instrumental in it. Or, it can be made so. Implementing the already enacted Secured Transaction Registry Act and validation of warehouse receipts for bank financing can be highly supportive to this initiative. If the government can&rsquo;t afford to invest to set-up sufficient warehouses, it must work to create the environment for private investment for the same.</div>
<div>
	&nbsp;</div>
<div>
	The second strategy could be market-scoping of sugar, and price-difference support. We have almost convincing data that Nepali sugar produce can only meet about forty percent of the Nepali demand. And, sixty percent of imported sugar invariably has a higher market price for obvious reasons. In such a scenario, government can easily figure out how much the country annually spends on sugar, and what price per unit for. On this basis, government can set a reference price for both sugarcane and sugar. In the year end, instead of indiscriminately subsidising on inputs or incentivizing the producers, government can choose to subsidise only the price difference between the base and market prices. This can work both ways. Even if the producers charge much higher rate than the base price and earn larger profits, it can be arranged such that some portion of it goes to the farmers.</div>
<div>
	&nbsp;</div>
<div>
	Since sugarcane is a special kind of seasonal crop, it needs special policy attention.&nbsp;</div>',
			'published' => true,
			'created' => '2014-01-10',
			'modified' => '2014-01-21',
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			'description' => 'The price dispute between the sugar mill owners and the sugarcane-producing farmers, like in the past years, has resurfaced, again. The farmers are arguing that the price offered by the sugar mills is far below their cost; and demanding a higher rate. The mill owners have their take: as the sugar price volatility is high, it would be unfeasible for them to meet the farmers’ demands. Both arguments have valid underpinnings.',
			'sortorder' => '2320',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
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	(int) 11 => array(
		'Article' => array(
			'id' => '2266',
			'article_category_id' => '52',
			'title' => 'Hope Of Economic Revival',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	The elections for the Constituent Assembly (CA)-II are now over. Results have been announced. Successful completion of the CA polls themselves is good news for the economy. Rise of the liberal economic forces from it has made it a harbinger of prosperity and development. After long gloomy years, the new CA comes with the renewed promise to draft and promulgate the new constitution within a year and pave way for the nation to head towards peace,stability and prosperity. The last CA too had that hope, but unfortunately that didn&rsquo;t materialize.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	In retrospect, it appears that the poll process, the constitution and the functions of earlier edition of the CA (2008) were largely marred by political naivety and immaturity. If one looks at the manifestoes of the 2008 CA election, it is not difficult to discern that the political forces were just flabbergasted by the pace of change and couldn&rsquo;t structure proper frame to guide the nation forward. The then New Forces, Maoists and Madheshis, &nbsp;had overtly ambitious agenda, whereas the Old Forces like Nepali Congress and the CPN-UML had &nbsp;a sense of compulsion to bow down &nbsp;to the agenda of those New Forces.</div>
<div>
	&nbsp;</div>
<div>
	But things changed drastically by the time the country arrived at the threshold of the second CA elections in 2013. As evidenced by their recent manifestos, major political forces had become more mature, rationality had prevailed over emotions. Traders of mere selfish, divisive or opportunistic agenda were badly fragmented and most importantly, a sincere realisation to move along the changing paradigms of the world was across the board. There was a race to promise to shun violence and acts of business disruption by calling on bandhs and strikes. Though achieved at a great cost, monetary and opportunity, these achievements are not trivial.</div>
<div>
	&nbsp;</div>
<div>
	It is a bare fact that Nepal suffered almost two decades of virtually zero development. Since the Maoists launched armed rebellion in February 1996, the resources and focus of the state concentrated to counter it. &nbsp;Hardly any power project, new stretch of road or other significant infrastructure was added during the decade long conflict. The Comprehensive Peace Agreement of 2006 ended the conflict, but fears of the investors could hardly be allayed, mainly due to destructive high-handedness of the Maoist-affiliated trade unions, among other uncertainties surrounding the drafting of the constitution. One may argue that we never had a zero or negative nominal GDP growth rate, but the inflation-adjusted real growth rate had never been positive for all those years.</div>
<div>
	&nbsp;</div>
<div>
	But the approaches, stances and philosophies have transformed for good in recent years, which was reflected in the run-up to the second CA elections. These are the very reasons that led to the successful completion of the election process with as high as whopping 78 percent turn out of the voters. The half battle is won.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	On top of it, the electorates gave a very emphatic support to the parties -- Nepali Congress and CPN-UML that exhibited understanding of the global economic order and trend vis-&agrave;-vis Nepal&rsquo;s development priorities and needs. It was the Nepali Congress that had initiated the economic reform and liberalization after restoration of democracy in 1990 and the fruits of it is still reaped by the economy. The then UML government began grassroots level connectivity and infrastructure projects in 1995 that gradually provided market access to the remote hinterlands of the country. These two facets of development helped the Nepali economy to withstand the decade-long conflict and almost equally-long political mayhem after that. The people trusted back to both of these parties, once again giving them almost equal, jointly more than sixty percent of strength in the new CA. People experimented the Maoists once in the last election by making them the largest party in the last CA, but it failed the test. &nbsp;Now condemned to humiliating defeat.</div>
<div>
	&nbsp;</div>
<div>
	The conclusion of CA election against the widespread suspicion about its success, victory of the parties that believe in democracy and free-market and, rationalization of the forces that were erstwhile destructive ones, indeed raises hope on reigniting the growth process. &nbsp;The stage is all set and, now actors should play the right role before the curtain falls.</div>',
			'published' => true,
			'created' => '2013-12-13',
			'modified' => '2013-12-16',
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			'description' => 'The elections for the Constituent Assembly (CA)-II are now over. Results have been announced. Successful completion of the CA polls themselves is good news for the economy. Rise of the liberal economic forces from it has made it a harbinger of prosperity and development. After long gloomy years, the new CA comes with the renewed promise to draft and promulgate the new constitution within a year and pave way for the nation to head towards peace,stability and prosperity. The last CA too had that hope, but unfortunately that didn’t materialize.',
			'sortorder' => '2113',
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	(int) 12 => array(
		'Article' => array(
			'id' => '2183',
			'article_category_id' => '52',
			'title' => 'Unmanifested Political Will',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	A<span style="font-size: 12px;">ll major political parties have made their manifesto for the November 19th Constituent Assembly (CA) polls public. Most of the parties including the big &#39;gang of four&#39;- UCPN (Maoist), Nepali Congress, CPN-UML and the Madhesi Morcha have made a long list of promises to accelerate the economic growth of Nepal. The promises are tall and details read like a government&#39;s annual &#39;policies and programmes&#39; to &nbsp;be unveiled in a parliamentary session. Many of the propositions are just populist and not based on the grounds of resource availability and pragmatic possibility of implementation. However, unquestionably, the Nepali economy was for long in dire need of real policy boost and political commitment from the highest possible level. One positive thing, perhaps the only one, is that the country&#39;s political parties have, rather uniformly, shown concern towards the economic growth and development of the country.</span></div>
<div>
	&nbsp;</div>
<div>
	But, one must remember here, it is the elections for the CA and not for a tenured parliament. In a sense it is more important opportunity to give a direction to the country&#39;s economic future. However, it is surely not the moment to make populist commitments enumerating number of &nbsp;projects and programmes. Therefore, these party manifestoes should better provide the basis for the economic system that the country would adopt for reasonably longer period of time. The focus of all these manifestoes were naturally expected to make the constitutional position of every political party about elements that would finally constitute &nbsp;the provisions for &#39;Directive Principles&#39; and &#39;Economic Rights&#39; in the new constitution. But, unfortunately, all the parties have spent a huge resource and time in listing what they would do programmatically, not constitutionally, to develop the country. This is to say that their prime focus is on &#39;what&#39; of they want to do, but completely devoid of the &#39;how&#39; of it.</div>
<div>
	&nbsp;</div>
<div>
	These manifestos have, almost uniformly, failed to address the issues that have constrained the growth prospects of Nepal for long. These constraints have come in three categorical forms -- the philosophical stand and identity of the powerful parties, the model of the economy the country would adopt in the longer run and rights of the citizen to own and generate legal wealth including their enforcement. But all these three issues are hardly addressed by the parties through their manifestoes.</div>
<div>
	&nbsp;</div>
<div>
	Needless to say, Nepali politics is dominated my the communist outfits of various degrees of radicalism. It is a doctrine that advocates and works against the private ownership of the property and firms. Even if these outfits claim that they are not opposed to private capital, the suspicion of their motives remain intact as long as they are identified as devout communists. The manifestoes were perhaps the best tools to assure the people that these parties unconditionally would adhere to the norms of uninfringed property rights of the people. They could have even made the extent of change in their philosophical stand public. But nothing of the sort happened. In fact, manifestoes of communist parties have deliberately skipped this crucial part of clarification. Even Congress continues to cling to &#39;socialism&#39;.</div>
<div>
	&nbsp;</div>
<div>
	The model of the economy to be adopted is also equally important. Parties are saying many confusing things like developing national capitalism, socialism and self-sustained economy. They appear unwilling to open their cards. They have chosen an easy term &#39;mixed&#39;, without identifying the elements to be mixed together.</div>
<div>
	&nbsp;</div>
<div>
	The most important is, whether the new constitution can ensure the private property rights and economic democracy or not. No manifesto has clearly mentioned that it was for the absolute property rights and rights for intellectual properties that encourages innovation.</div>',
			'published' => true,
			'created' => '2013-12-01',
			'modified' => '2013-12-01',
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			'description' => 'All major political parties have made their manifesto for the November 19th Constituent Assembly (CA) polls public. Most of the parties including the big 'gang of four'- UCPN (Maoist), Nepali Congress, CPN-UML and the Madhesi Morcha have made a long list of promises to accelerate the economic growth of Nepal.',
			'sortorder' => '2029',
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	(int) 13 => array(
		'Article' => array(
			'id' => '1966',
			'article_category_id' => '52',
			'title' => 'Doubling The Growth',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	The economic growth of any country is neither achieved by chance nor is it a thunder-struck miracle. In fact it&rsquo;s a combination of many contributing factors-both economic and socio-political. In a country like Nepal, where political uncertainty is nagging for decades, institutional set ups responsible for overall development are gradually being rendered dysfunctional. When government legitimacy comes under serious interrogation mark, economic growth hardly becomes a national agenda.</div>
<div>
	&nbsp;</div>
<div>
	The current state of Nepali economy fits into exact definition of stagflation -- the stagnated growth and uncontained inflation. Average year-on-year growth rate of the economy for the last whole decade beginning 2002 (when growth rate, computed as Gross Domestic Product (GDP) had dipped to negative territory) has hardly crossed 3.5 percent mark.</div>
<div>
	&nbsp;</div>
<div>
	Poor growth rate is not the only worst part of it, but even the lack of meaningful debate on the constraints and remedies is making the situation worst. But the inflation even in official figures is invariably in double digits.</div>
<div>
	&nbsp;</div>
<div>
	If not from the government, tangible initiatives to this end had to come from the private sector. But nothing of that sort happened in the recent past. To fill this gap, the New Business Age (NBA) Pvt. Ltd from this year on, in partnership with some leading business entities of the nation, has taken a maiden initiative to take the growth debate to the centre stage of national economic policy parlance.</div>
<div>
	&nbsp;</div>
<div>
	Nepal in the past did witness some debate over her growth concerns, but most of them were rather slanted or impractical. In different chapters of history, we were made to hear high-pitched rhetoric of double-digit growth, Swiss or Singaporean pace of growth, leap-frogging growth or a growth taking Nepal to a developing from an underdeveloped country status. These all were tall, very tall asks, to say the least.</div>
<div>
	&nbsp;</div>
<div>
	The double digit growth or upliftment of the country&rsquo;s status to a developing one are essentially the same concepts. For this, Nepal needs at least some Rs. 400 billion of capital expenditure annually, or at least 8.5 percent growth rate, for ten consecutive years. This indeed is unimaginable for several years to come. Other claims were bare political stunts, so had no scope of realizing them at all.</div>
<div>
	&nbsp;</div>
<div>
	In view of these dogmatic misadventures of the past, the NBA wanted a meaningful debate to take off that is based on feasible goals against the existing ground realities. This led to the conclave on the theme &#39;Doubling of Growth of the Nepali Economy to 7 per cent GDP: The Roadmap Ahead.&#39; Based on the 3.5 percent of growth rate of the past fiscal year, the idea of doubling was born, which looked fairly achievable if we could religiously pursue it.</div>
<div>
	&nbsp;</div>
<div>
	Needless to say, growth in national GDP is a multi-sector endeavour. Among them too, it is important to identify and focus on key sectors that can either serve as prerequisite to long-run sustainable growth like hydropower or yield immediate growth results like agricultural productivity and tourism.</div>
<div>
	&nbsp;</div>
<div>
	But, most important of all is quintessentially lead role of the private sector in investment, production and distribution of all goods and services. Of course, support of the state from the background is needed as security or ground for fair-play. Guided by this philosophy, the NBA coincided the conclave of growth debate, organized in Kathmandu on 24th August, with the opportunity to recognize the contribution of business sector to growth. This recognition came in the form of the 10 categories of business awards.</div>
<div>
	&nbsp;</div>
<div>
	For the sustained prosperity of the nation, we should be able to make the growth not a flip-flop show but a habit. We need to start modest and all big dreams will fall in line with accomplishment of the starting ones. If we achieve 7 per cent growth first, then the double-digit can be followed soon. More important here: we needed a right beginning. And, with this successful conclave, we in NBA feel, the beginning has indeed been right.</div>
<div>
	&nbsp;</div>',
			'published' => true,
			'created' => '2013-10-09',
			'modified' => '2013-10-09',
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			'description' => 'The economic growth of any country is neither achieved by chance nor is it a thunder-struck miracle. In fact it’s a combination of many contributing factors-both economic and socio-political. In a country like Nepal, where political uncertainty is nagging for decades, institutional set ups responsible for overall development are gradually being rendered dysfunctional.',
			'sortorder' => '1818',
			'image' => null,
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	(int) 14 => array(
		'Article' => array(
			'id' => '1675',
			'article_category_id' => '52',
			'title' => 'Bureaucratic Budget',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	&nbsp;</div>
<div>
	The most positive development of the ordinance budget for FY 2013/14, presented on 14th July by Finance Minister Shankar Koirala, is that it proposes the income and expenditure estimates for the entire fiscal year. The budgets for the last four fiscal years had come in the form of quarterly or half-yearly estimates due to incessant political squabbles among the political parties at play. The government employees enjoyed the pay rise of some 20 per cent and private sector seemed largely contended with some liberal approaches adopted by the budget speech. The criticisms of the &#39;too large a size&#39; and &#39;implementation nightmare&#39; were routine and expected.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	But, the saddest part is that this budget in a bid to please everyone with some instant toffees, fails to address the most pressing economic problems faced by Nepal at present. The Nepali economy now faces three very worrisome problems. First, the GDP growth plummets to 3.6 percent, the lowest in the decade. Second, the export-import ratio is at whopping 1:10 and the recorded trade deficit is of the last fiscal year is estimated to be well above Rs 500 billion. If service imports like Nepali students studying abroad, holiday and healthcare trips Nepalis are making abroad are also added it would cross the Rs 600 billon mark. And, the third, the authorities have failed to tame the galloping inflation, that effectively stands between 14 to 16 per cent and the CPI-based one has never gone below 10 percent for several years now.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	The deficit budget by more than 25 percent of proposed expenditure even fails to acknowledge the fact that the economy is in grave crisis. It is unable figure out where the growth propellants would come about. The first three priorities of the budget are hydropower development, agriculture and infrastructure development--in that order. But, beyond rhetoric, it fails to enlist true problems and bottlenecks in respective sectors. It says many things about hydropower but fails to make any commitment on what would happen to large joint venture projects like West Seti and Arun III that are pending for years largely for unspecified reasons. Any development of hydropower projects in commercial scale will no meaning unless Nepal and India enter into power trade agreement. Bilaterally beneficial transmission lines and above all a climate of mutuality in investment and power trade are crucial, which could only go ahead if Indian investment is not discouraged. This however doesn&#39;t mean Nepal should sacrifice her interest. For any hydropower project, it would take long to be able to contribute to GDP growth.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	Even if agriculture is deemed to be a growth engine, it is time that the sector came out of platitudes like &#39;modernization, commercialization and marketization&#39; of agriculture. The strategies of government subsidies on seeds and fertilizers adopted for years have never worked for several reasons. The sector now faces new problems like acute shortage of farm labours and sustainable pricing mechanism and value addition of products. If Nepali products were to be promoted regressive customs and other duties should be revised accordingly. But this budget doesn&#39;t even touch upon these newer challenges.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	Growth by infrastructure development is highly indirect proposition. The GDP can grow with only very massive investment, not of pork-barrel nature but only in the form output targeted creation of transportation and communication linkages. In view of these realities, it can be easily concluded that the budget doesn&#39;t make any sensible effort to fill the growth gap.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	It is surprising to see that out of eight, the reducing the trade deficit is listed as the seventh objective. In fact, it should have been the first and the programmes like hydropower development should have been part of export promotion strategy in the long- run. Similarly, inflation control has been an outcome of a perverse nature foreign trade than the domestic trade factors.&nbsp;</div>
<div>
	&nbsp;</div>
<div>
	To see recent, unconventional trends in economy, both in terms of problems and prospects, we needed a clear departure from traditional bureaucratic verbose in national budget. But, this particular budget has indulged more in this outdated practice. This is truly a year of opportunity missed.</div>
<div>
	&nbsp;</div>',
			'published' => true,
			'created' => '2013-08-22',
			'modified' => '2013-08-22',
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			'description' => 'The most positive development of the ordinance budget for FY 2013/14, presented on 14th July by Finance Minister Shankar Koirala, is that it proposes the income and expenditure estimates for the entire fiscal year.',
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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