…
…
…
…
…
…
…
…
…
…
…
…
…
…
…
…
Notice (8): Undefined variable: file [APP/View/Elements/side_bar.ctp, line 60]Code Context// $file = 'http://aabhiyan:QUVLg8Wzs2F7G9N7@nepalstock.com.np/api/indexdata.xml';if(!$xml = simplexml_load_file($file)){$viewFile = '/var/www/html/newbusinessage.com/app/View/Elements/side_bar.ctp' $dataForView = array( 'articles' => array( (int) 0 => array( 'Article' => array( [maximum depth reached] ) ), (int) 1 => array( 'Article' => array( [maximum depth reached] ) ), (int) 2 => array( 'Article' => array( [maximum depth reached] ) ), (int) 3 => array( 'Article' => array( [maximum depth reached] ) ), (int) 4 => array( 'Article' => array( [maximum depth reached] ) ), (int) 5 => array( 'Article' => array( [maximum depth reached] ) ), (int) 6 => array( 'Article' => array( [maximum depth reached] ) ), (int) 7 => array( 'Article' => array( [maximum depth reached] ) ), (int) 8 => array( 'Article' => array( [maximum depth reached] ) ), (int) 9 => array( 'Article' => array( [maximum depth reached] ) ), (int) 10 => array( 'Article' => array( [maximum depth reached] ) ), (int) 11 => array( 'Article' => array( [maximum depth reached] ) ), (int) 12 => array( 'Article' => array( [maximum depth reached] ) ), (int) 13 => array( 'Article' => array( [maximum depth reached] ) ), (int) 14 => array( 'Article' => array( [maximum depth reached] ) ) ), 'current_user' => null, 'logged_in' => false ) $articles = array( (int) 0 => array( 'Article' => array( 'id' => '2797', 'article_category_id' => '48', 'title' => 'Sexy Settings', 'sub_title' => '', 'summary' => null, 'content' => '<div> </div> <div> <strong>--By Madan Lamsal</strong></div> <div> </div> <div> What is most popular these days in Nepal? You may say, it is betting or netting and dating. You may be right to some extent, but I say the most practiced thing is the setting. Let’s look it into more details.</div> <div> </div> <div> Yes, betting is quite popular in Nepal’s share market. Till recent past, the Nepali casinos were ahead in betting than the share market. But as the setting in the casinos became a bit weak, share market was ahead in the betting game. The retail investors in Nepal’s share market buy or sell the stocks going by the grapevine than reading the balance sheets of the companies. This can be called betting. Therefore, when Dr Baburam Bhattarai became the Finance Minister, he had termed Nepal’s share market as a casino where betting is the mainstay. And he was not wrong. However, even the betting in share market will not yield returns if the setting is not right.</div> <div> </div> <div> Again, it is true that dating after netting, such as checking facebook, is quite popular and it is personal and a most favoured pastime of most Nepalis - be a youth or a senior citizen. They seem to spend most of their productive three to four hours of their day or night in netting and dating. If they don’t spend few hours in netting, they feel they have missed a lot in their lives. Therefore, their eyes may be in one of the social sites. But again setting plays more dominant role also here. Netting and dating are not successful if the setting of the dating is not right. </div> <div> </div> <div> To be successful in Nepal in any field, especially in business and politics, you must know the art of setting. Otherwise you will fail. There is a special class in Nepali society which has become super rich just by the art of setting rather than by making a huge investment or knowledge of business. Therefore, setting is a new management mantra in Nepal. In fact, the management colleges should start teaching the art of setting to their students so that they are successful in their future profession as well as everyday life.</div> <div> </div> <div> Nowadays, there are many news reports in the Nepali media that people, especially government officers, are caught or interrogated by the anti-corruption body, the CIAA. But the fact is that they were caught or interrogated just because they did not know the art of setting. Many who commit bigger wrongs are never caught because they know the art of setting.</div> <div> </div> <div> If you look at it minutely, it is an open secret that nothing moves in Nepal if one doesn’t have proper setting in government offices or in the court, or in the company registrar’s office or the customs offices. Be it for receiving a license or getting a job transfer or promotion in the bureaucracy, the role of setting is paramount. So, more than the educational certificates or anything else, setting is the most important factor. If you don’t know this art, you may have to lose your job or your business also.</div> <div> </div> <div> Nobody seems to have peeped deep to see why the constitution could not be made in the first Constituent Assembly. It was just because the setting among the top gang-of-four leaders of three parties could not happen. Even now, however hard the people or CA members harp on the new constitution string, if the setting among this gang-of-four is not proper, it will not happen again. This gang calls it ‘consensus’, but it is nothing but another word for setting. </div> <div> </div> <div> Therefore, this ‘setting’ is not only omnipresent and omnipotent, but also cool and sexy. Don’t you agree?</div>', 'published' => true, 'created' => '2014-10-10', 'modified' => '2014-12-23', 'keywords' => 'new business age no laughing matter news & articles, no laughing matter news & articles from new business age nepal, no laughing matter headlines from nepal, current and latest no laughing matter news from nepal, economic news from nepal, nepali no laughing matter economic news and events, ongoing', 'description' => 'What is most popular these days in Nepal? You may say, it is betting or netting and dating. You may be right to some extent, but I say the most practiced thing is the setting. Let’s look it into more details.', 'sortorder' => '2647', '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' => '2795', 'article_category_id' => '52', 'title' => 'Auto Dream', 'sub_title' => '', 'summary' => null, 'content' => '<p> </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. Given the increasing demand due to expansion in the road network and resultant steady increase in import of all sorts of vehicles, Dr.Mahat’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. </div> <div> </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 – 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. </div> <div> </div> <div> Dr.Mahat’s call has come at a time when Nepal’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. </div> <div> </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’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. </div> <div> </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 – the latest being the power trade agreement with India and finalization of project development agreement template for power projects to the satisfaction of investors – are good indications for the future. But that is not going to be enough for development of automobile industry. </div> <div> </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. </div> <div> </div> <div> These centres should ideally be focused on developing electricity operated vehicles given the country’s hydropower potentials. </div> <div> </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. </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) 2 => array( 'Article' => array( 'id' => '2800', 'article_category_id' => '40', 'title' => 'Unlocking Nepal's Growth Prospect', 'sub_title' => '', 'summary' => null, 'content' => '<div> </div> <div> </div> <div> <strong> --By Akhilesh Tripathi</strong></div> <div> </div> <div> ‘Nepal does have natural resources. They are of course our growth potentials but not necessarily the key element needed for our future economic growth. The key element is human resource; the brainpower, creativity of the people, entrepreneurship and innovation. If we can unlock our human potential, if we can unlock entrepreneurship and innovation which will make use of the natural resources that Nepal has, then our growth potential will be unlocked; we will become a rich country.”</div> <div> </div> <div> Thus spoke Finance Minister Dr Ram Sharan Mahat, the chief guest of the second edition of the Asian Paints NewBiz Business Conclave & Awards, organized by New Business Age Pvt Ltd at Hotel Soaltee Crowne Plaza on September 11.</div> <div> </div> <div> <img alt="" src="/userfiles/images/cs1(5).jpg" style="width: 550px; height: 234px; margin-left: 10px; margin-right: 10px;" /></div> <div> </div> <div> <strong><img alt="" src="/userfiles/images/cs2(2).JPG" style="float: right; margin: 0px 0px 0px 10px; width: 300px; height: 397px;" />Investing in Human Resource</strong></div> <div> The remarks of Dr Mahat, a six-time finance minister, are a clear departure from the traditional belief that natural resources are a must for the economic growth of any country. The appropriate use of the available natural resources is necessary, the Finance Minister said, adding, however, that the country’s economic development is possible through the use of brainpower, creativity, entrepreneurship and innovation. He cited examples of Japan, Hong Kong, Taiwan and South Korea which have achieved fast economic growth despite having practically very little natural resource.</div> <div> </div> <div> Deependra Bahadur Kshetry, former vice-chairman of the National Planning Commission (NPC), who too attended the Conclave, agrees with the finance minister. “We need more skilled and trained human resource, creativity and innovation in business and entrepreneurship to exploit our abundant natural resource, which gives us a comparative advantage. However, the endowment of natural resource alone is not enough. This is what the finance minister means. And this is true as well,” said Kshetry, while talking to New Business Age after the conclusion of the Conclave.</div> <div> </div> <div> Kshetry says the government should invest more in developing the country’s human resources because it will help build the national capacity. “In simpler terms, it means investing more in education and skill-oriented training. Investment in human resource will help unlock our growth prospects,” he added.</div> <div> </div> <div> To invest in human resource development is to compete with investment in infrastructure and other social sectors. Here, the government has harder choices to make as it cannot choose one sector over the other as almost all sectors in Nepal need investment, and huge ones, for the matter. So, according to economists and development experts, the government will do well to have a well-designed national development plan, which will clearly spell out our national priorities. “It will help attract international support as well. Then it will be easier for the government to decide in which areas to use domestic resources and in which areas external resources,” say Kshetri. </div> <div> </div> <div> Managing Director of Jade Consult, Bkesh Pradhanga, another speaker of the Conclave, echoed similar sentiments. “The government should mobilize our human resource properly. For this, the government should invest in higher education of the country’s workforce and this should be the primary focus,” he opined. </div> <div> </div> <div> <strong><img alt="" src="/userfiles/images/cs3(1).JPG" style="float: right; margin: 0px 0px 0px 10px; width: 300px; height: 604px;" />Focus on Three ‘I’s</strong></div> <div> Our development priorities should not miss the three ‘I’s – infrastructure, investment and inclusion – according to Johannes Zutt, World Bank country director for Nepal and Bangladesh. Zutt, who was also one of the speakers of the Conclave, clearly said that the three ‘I’s should be Nepal’s top priority for now if the country is to achieve fast economic growth.</div> <div> </div> <div> On the investment front, the level of foreign investment has been low. According to the Investment Board, the total amount of foreign investment in 2012 which was declared the Investment Year was USD 62 million. It went up in 2013 to USD 208 million. In 2014 so far, it is USD 130 million. Domestic investment, too, hasn’t been growing at the expected rate. “Nepal is investing below the rate of investment needed to achieve a double digit growth. There is actually money available in Nepal for higher investment, but it isn’t happening. The business community complains about access to finance, regulatory burdens and labour costs. These are the problems existent is South Asia but it is debilitating in Nepal,” observed Zutt.</div> <div> </div> <div> But why has large scale investment not come to Nepal? Pradhananga answers, “It is because of political instability, lack of policy predictability, and industrial disputes that have caused the closure of companies like Surya Nepal in the recent past.” He added that Nepal immediately needs an investment of USD 15 billion for various projects that are ready for implementation.</div> <div> </div> <div> “For private investment to come, we need to create more enabling environment. This is why we have initiated some new incentives to lure private investment from this year’s budget, Dr Mahat said, “In the hydropower sector, for example, we have announced income tax exemption for the next ten years and fifty percent tax rebate for another five years.”</div> <div> </div> <div> Zutt opined that Nepal is caught in a vicious cycle of investment and infrastructure. “Nepal doesn’t have high enough levels of investment in infrastructure that is necessary for businesses to succeed and because it doesn’t have that infrastructure, it is not getting the investment,” he said.</div> <div> </div> <div> Pradhananga suggested to the government to focus on infrastructure development for the next one decade. He also advised to change old laws and policies and introduce new ones to attract private investment. “The Hydropower Policy 2001 and Foreign Investment and Technology Transfer Act 1992, to give a few examples, are quite old. The aim of these laws and policies is to attract FDI in the country. But we haven’t been able to make them timely and updated. This has negatively affected our development efforts,” said Pradhananga. </div> <div> </div> <div> <strong>Hydro Hopes</strong></div> <div> All the speakers of the Conclave agreed that hydropower has great potential in Nepal. “We are rich in water resource. We have huge hydropower potential. We can be the power house of clean energy in South Asia,” said Dr Mahat. </div> <div> </div> <div> But the reality is different from the rhetoric. Nepal has hardly tapped one percent of its total hydropower potential. So far, the country has been able to produce only about 750 MW of hydroelectricity though the total hydropower potential of the country is said to be over 80,000 MW. That means one of the sectors where Nepal’s growth prospects lie is the hydropower sector. Over half a dozen projects that are together expected to produce more than 5,000 MW of hydroelectricity are in advanced stage of development (see box). The government’s claim to do away with load-shedding over the next three-four years is based on these projects.</div> <div> </div> <div> “In Nepal, hydropower is one such sector of investment which can bring about a positive change in the entire econom</div> <div> “If the PDA [project development agreement] with the Upper Karnali hydropower project is signed over the next few days or weeks, then it will be a game changer. It will lead to the signing of PDA with half a dozen other major hydropower projects,” said Dr Mahat.</div> <div> </div> <div> <strong><img alt="" src="/userfiles/images/cs4(4).JPG" style="float: right; margin: 0px 0px 0px 10px; width: 300px; height: 231px;" />Nepal’s Strategic Location</strong></div> <div> The speakers of the Conclave also said that Nepal’s geographic location between China and India, two rapidly growing economies of the world, provides the Himalayan nation a great opportunity for economic growth. “Nepal’s growth prospects also lie in the fact that it is located between China and India, two of the fastest growing economies of the world. If Nepal can establish itself a trading partner between China and India, it will greatly help Nepal’s economic growth,” said Zutt.</div> <div> </div> <div> It is worth mentioning here that the annual trade volume between India and China has already crossed USD 70 billion and the two countries have planned to increase it to USD 100 billion by 2015. If Nepal can build roads, highways and rail links to connect its northern border with southern border, then it can effectively work as a trading partner between the two Asian giants, according to economists and development experts. </div> <div> </div> <div> <strong>‘2015: Nepal’s critical juncture’</strong></div> <div> Addressing the Conclave, Dr Swarnim Wagle, member of National Planning Commission said that the year 2015 will be very crucial for Nepal as the country’s new constitution is expected to be promulgated in 2015. Once, the constitution is ready, Dr Wagle said, Nepal’s political transition would be complete and then the country’s economy can take off. “We are few centuries behind other countries but I think that we can really make the year 2015 our critical juncture and really expedite our path into modernity,” said Wagle.</div>', 'published' => true, 'created' => '2014-11-09', 'modified' => '2014-11-21', 'keywords' => 'new business age cover story news & articles, cover story news & articles from new business age nepal, cover story headlines from nepal, current and latest cover story news from nepal, economic news from nepal, nepali cover story economic news and events, ongoing cover story news of nepal', 'description' => 'Nepal needs to invest in its human resource and exploit its natural resource to the fullest to unlock its growth prospects.', 'sortorder' => '2645', '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' => '2796', 'article_category_id' => '168', 'title' => 'MBA For Working Managers', 'sub_title' => '', 'summary' => null, 'content' => '<div> </div> <div> </div> <div> <strong>--By Upashana Neupane</strong></div> <div> </div> <div> Along with MBA and BBA there were lot of other options available for fresh graduates or regular students who aspired to gain a degree in management studies. But the options were limited for the working entrepreneurs or managers who wanted to sharpen their skills or upgrade their status in their field or start their own enterprise. Now, they too have an option in the form of Executive MBA or EMBA. </div> <div> </div> <div> MBA or EMBA are graduate level business degree especially designed for working professionals of the same field. These are post-experience management education programmes that help managers learn to change and grow in their career. They are lot like a regular MBA programmes only that they are primarily designed to educate working executives, managers, entrepreneurs, and other business leaders. </div> <div> </div> <div> Executive MBA was started in the early 1980s as a response to the need of the post experience education was felt. It was introduced as MBA for working managers, for the people working in managerial sectors who had no MBA backgrounds. It aimed to furbish their managerial performance at their respective institutions. </div> <div> </div> <div> In Nepal, Ace Institute of Management started the EMBA programme in 1999 under the affiliation of Pokhara University, while Kathmandu University School of Management (KUSOM) started its EMBA programme in 2000.</div> <div> </div> <div> <strong>Different from MBA</strong></div> <div> EMBA and MBA programmes generally attract people of different ages and at points in their career lives. These programmes are somehow similar in content but the EMBA classes are of faster paces, which allow students to receive their degree in two years or less while working full time. EMBA Programme emphasises applied learning, leadership and personal skill development, and a global mindset. </div> <div> </div> <div> Subas KC, dean at KUSOM shares that the EMBA is more generalist programme while MBA is more specialised programme. “We’ve designed EMBA focusing more on the things like leadership and skills enhancement which is needed for a working professional to enhance their career,” he says, “We are focusing particularly on those skills which are direct and visibly necessary for them.”</div> <div> </div> <div> Similarly, Kumar Thapa, former Associate Director of EMBA programme at Ace Institute of Management also shares same feeling, “EMBA is more fundamental- general class which is elective not specialized and the course is more focused on what working professionals need in the workplace,” he says, “While MBA is more academic and specialized course.” </div> <div> </div> <div> With that, the cohorts also often turn into a valuable network that students can tap long after they receive their degree. KC shares there have been lot of cases where students from managerial background have switched to start their own enterprises as they develop a strong network from the wider range of opportunities provided by the college.</div> <div> </div> <div> There are various factors people join EMBA. KC shares that “most of the students join the programme to perform better in current job, some to upgrade their current position in their organisation. Basically, all want to develop their ability and skills to choose a better path in their career. Some people want to change their career also, so they join to gain a better perspective and opportunities.”</div> <div> </div> <div> <strong>Growing Trend</strong></div> <div> Executive MBA is a good opportunity that is made available for the working people who want to upgrade their career and the attraction towards it is increasing lately. People from various background: corporate sector, public and development sector, entrepreneurship sector, everyone is now willing to join the programme for various reasons. Mostly, senior level executives join the programme but Thapa believes that lately younger people are joining this programme with relatively short working experience.</div> <div> </div> <div> KC believes that the trend has been good so far and believes that it will remain same for some more years but he said that the course needs should be revised and redesigned after some years.</div>', 'published' => true, 'created' => '2014-10-10', 'modified' => '2014-11-21', 'keywords' => 'new business age business education news & articles, business education news & articles from new business age nepal, business education headlines from nepal, current and latest business education news from nepal, economic news from nepal, nepali business education economic news and events, ongoing', 'description' => 'Along with MBA and BBA there were lot of other options available for fresh graduates or regular students who aspired to gain a degree in management studies. But the options were limited for the working entrepreneurs or managers who wanted to sharpen their skills or upgrade their status in their field or start their own enterprise. Now, they too have an option in the form of Executive MBA or EMBA.', 'sortorder' => '2644', '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' => '2792', 'article_category_id' => '167', 'title' => 'UML's Transformation : Leninism To Panelism', 'sub_title' => '', 'summary' => null, 'content' => '<div> </div> <div> <strong>--By Achyut Wagle</strong></div> <div> </div> <div> The Communist Party of Nepal-United Marxist-Leninist (CPN-UML) passed yet another acid test to vindicate its democratic credentials by electing the entire 159-member Central Committee (CC), including the new chairman through ballots, in the ninth general convention (GC) held in Kathmandu, July 3-10, 2014. In a closely contested bid to chairmanship, KP Sharma Oli defeated Party's former, two-time, general secretary Madhav Kumar Nepal by a narrow margin of forty-four out of two thousand and two hundred votes of the GC delegates.</div> <div> </div> <div> <strong>Democratic Domain </strong></div> <div> There is no dearth of cynics who claim that bitter factionalism that surfaced during the contest for chairmanship would further divide the party that is already mired by groupism. But what must be appreciated here is: UML is the only political party of the country that has developed best internal democratic practices. Unlike many communist outfits who choose to break-away as the separate entity once some differences crop-up within the group, the UML has exhibited tremendous level of resilience to save it from fragmentation; thanks to the democratic space it created to vent the differing views and ideologies. For this reason it has withstood the test of time as the mainstream left force amongst some three dozen odd communist 'parties'. It must not also be forgotten that it is a communist party that has painstakingly and by now convincingly transformed itself to a credible democratic alternative of the country. More importantly, it has set a practical contemporaneous formula for democratic transformation of any communist force that is originally indoctrinated to rise to power of 'people's republic' by using the 'bullets and barrels'to a force that readies itself to multi-party competition through ballots. No doubt, for this party, metamorphosis of greater magnitude is still inevitable to shake-off many dogmas and nostalgia of Soviet era. But, whatever it has achieved and maintained itself is in no way instantly dismissive. The ninth GC too has proved to be a new milestone as it elected mainly new set of younger leaders in CC, who have firmer belief in democracy than the older generation.</div> <div> </div> <div> It is not difficult to see that the Party's polity has now shifted from 'Proletarianism' or 'Leninism' to Panelism, which from a democratic perspective is a welcome dimension of change. The political sportsmanship and democratic spirit was clearly demonstrated by the leaders at the official closing ceremony of the GC on July 17. Both the victor and vanquished, Oli and Nepal respectively, along with other elected central body members vowed to work for the party unity, terming the vertical division during the CC election mere 'democratic exercise'. Not only both the factions won equal number of members as the office-bearers, the representatives seem to have guided to votemore by the quality of the candidate than the factional affiliation, electing a completely mixed panel. Any 'bright' person from both panels got place in the new CC.</div> <div> </div> <div> <strong>Road Ahead</strong></div> <div> If the mood of the Declaration made at the UML headquarters on 17th of July, is any indication, the party would soon enter into an era of a joint-leadership of many influential leaders. The chairman-elect Oli in very clear terms, with tears in his swollen eyes, declared that he did not have many days to live, and extended his arms for unity. It was momentarily a piece of emotional melodrama, unique to political cruelty. He couldn't even complete his short written speech. It is his eighth year running since his kidney transplant and, of late, the infection has now spread to his whole body, with septic deep wounds and swellings. There was a whirling question in the minds of the entire rank and file, why did he at the first place choose to run for chairmanship despite such precarious health condition? There is a strong school of thought which believes, there were mischievous minds like that of Bamdev Gautam who harboured dream of running the party as officiating chief as Oli is already a dilapidated figure. But, this possibility is clearly thwarted by the 'ideologues' belonging mainly to Nepal faction, who changed the party statute such that now there are five second men (vice-chairmen) in the hierarchy after the chairman. This is the very statute the GC ratified, albeit with some resistance. And, incidentally, Gautam ranked second among these five in terms of popular vote, behind Bhim Rawal, a Nepal loyalist. In any event of Oli's absence, there would be moral pressure (as there is no clear statutory provision) to handover charges to Rawal, not Gautam, or Bidya Bhandari, another vice-chair elect and the most trusted aid of Oli.</div> <div> </div> <div> What the UML's change in leadership means for the nation, is another issue widely debated in the political circles after Oli’s victory. Again, effectively it depends on the health of Oli. Should his health permit, he naturally dreams of becoming the next prime minister of the country. If the things move according to agreement between the Nepali Congress and UML to promulgate a new constitution by the end of January 2015, under the turn-key clause of the agreement, the premiership would automatically come to the UML candidate, as things stand now, to Oli as the Party's parliamentary party leader. There are newly emerged political equations within that party such that no single person, except the chairman given his current level of comfortable majority in CC, is likely to hold the sway in any decisions. The ambitions like that of Gautam are dampened as such, once the power gets transferred to lower ranks from the chairman.</div> <div> </div> <div> <strong>Policy Paradigm</strong></div> <div> During the run-up to the ninth convention, there was a sort of euphoria created by a 'club' of party's young 'thinkers' that Party's socio-politico-economic policy paradigm would be redefined and formalized through the GC. But, the entire GC was so much consumed by the fight for the posts that it hardly could undertake much deserved discussions with due seriousness on any policy document. At the end, when it came-out with the thirty-three point Declaration on July 17, many of the same old communist verbose again found the place in it. 'Awarding land-ownership rights to tillers', 'protecting trade union rights', 'deploring of infringements on human rights' in some weird part of the world etc. were repeated, rather artlessly. Some of the hasty conclusions like the 'global economic crisis like that of 2008 justifies the rationale of socialism' were also incorporated.</div> <div> </div> <div> Interestingly though, this Declaration has very carefully avoided over use of redundant communist jargons and jingoisms. Not only it doesn't carry terms like 'Indian expansionism', 'American imperialism', it also cautiously reduces the frequency of the words like 'revolution', 'struggle' or 'class struggle' that are invariably and clumsily thrusted into policy papers of almost all communist formations. The ninth GC Declaration instead proposes interesting separate economic prescriptions for their cadres and the country.</div> <div> </div> <div> 'This GC urges all the local committees of the party, affiliated sister organizations and all members of the party to devise concrete plans for their respective locality to augment economic development, productivity and employment and involve in the production functions so as to establish themselves as the leading-lights of the economicprosperity,' says the point number 23 of the Declaration. The Declaration has also 'appreciated' the 'improving' relations between India and China and has wished to make Nepal beneficiary to the impressive economic growth of both the neighbours.</div> <div> </div> <div> <strong>Opportunities and Challenges</strong></div> <div> Perhaps the biggest opportunity for the CPN-UML is the growing compulsion for all other communist forces to follow its 'janatako bhudaliya janbad' or multiparty democracy route, should they opt to remain relevant in modern day pluralistic politics. It is becoming increasingly difficult for parties with Maoist tags not to follow the exact process the UML did for the last two and half decades. If the party wereto equip itself to harness this opportunity, it could provide a major fillip to its organizational strength. Certainly, its increasing global recognition as trustworthy democratic force is another very powerful factor that helps to retain it as a major player in Nepali politics. Its gradual policy shift from Left to the Centre is crucial to ensure the outfit's long lasting relevance.</div> <div> </div> <div> There are challenges too, mostly emanated from three sources - policy confusions, organizational efficiency and 'class' shifts. The ninth GC also could not change its name by dropping the 'Marxist-Leninist' tag and the term 'Communist' from its official name, despite the fact that there is a widespread realization of this need within the Party. The psychological divide in the mandarins is debilitating -- they often times love to retain communist identity and yet want to change this 'as soon as possible' for public interface. The Party has failed to bring into effect a much-needed departure from three the decade-old nostalgia of 'classless society'. Instead the Party itself has become the 'class' of riches with 'too many, too big' leaders. The only reason the Party substantially increased the number of office bearers from six to fourteen was to accommodate these 'big' names with suitably high-sounding positions. Generally, those who have been prime ministers, deputy prime ministers and ministers in the past have sought those 'elitist' titles. This is resulting into overlaps and duplications on responsibilities and duties, and ego clashes at every decision points. The cumulative effect of all these is sure to have telling effect in organizational efficiency and cadre-leader relations, not in so distant future.</div> <div> </div> <div> Effectively, the UML has graduated from the party of 'proletariats' to 'new riches', not only in terms of policy-base but as the class representation. To borrow a phrase from the communist literature itself, 'the class division' within the party has been strikingly vivid in recent years. In many cases, its leaders have protected criminals just to extract money in return. There is not any binding ideology available in any political literature that can accommodate all these extremes. The task of managing all these paradoxes, the sooner the better, comes on the shoulder of the new leadership. But, unfortunately, the shoulders of the commander are now sick, severely.</div> <div> </div> <div> <em>The writer is former editor of Aarthik Abhiyan National Daily.</em></div>', 'published' => true, 'created' => '2014-09-08', 'modified' => '2014-11-21', 'keywords' => '', 'description' => 'The Communist Party of Nepal-United Marxist-Leninist (CPN-UML) passed yet another acid test to vindicate its democratic credentials by electing the entire 159-member Central Committee (CC), including the new chairman through ballots, in the ninth general convention (GC) held in Kathmandu, July 3-10, 2014. In a closely contested bid to chairmanship, KP Sharma Oli defeated Party's former, two-time, general secretary Madhav Kumar Nepal by a narrow margin of forty-four out of two thousand and two hundred votes of the GC delegates.', 'sortorder' => '2643', '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' => '2783', 'article_category_id' => '166', 'title' => 'Deciphering The Indian Election: Challenges Before Modi & The South Asian Message', 'sub_title' => '', 'summary' => null, 'content' => '<div> <strong>--By Prof Ujjwal K Chowdhury</strong></div> <div> </div> <div> <span style="font-size:14px;"><strong>Queerness of the Results</strong></span></div> <div> Interesting times indeed. Modi-fied BJP’s remarkable election campaign surely was fuelled by unprecedented sums of money, but more interestingly magnified by the rule of the first-past-the-post system. A mere 12 per cent difference in vote-share with the Congress has turned into 600 per cent difference in seats (NDA with 335 seats, including 282 of BJP against UPA with 60 seats, including 44 of Congress). </div> <div> </div> <div> It has two repercussions: Modi’s darker past with regards to poor governance during 2002 riots in Gujarat has been almost banished, and Congress-led UPA’s abysmally poor record of scams-ridden governance has made the party justifiably suffer the worst defeat in its 129-year history. </div> <div> </div> <div> The 'Modi Wave' has touched 40 per cent of voters, and left 60 per cent cold, with not much dent made in those states where regional parties still enjoy a high degree of credibility, like Tamil Nadu, Odisha and West Bengal, though it has wrecked the Congress everywhere. The wave swept through Uttar Pradesh, where it also managed to draw away voters from the BahujanSamaj Party, partially from the Samajwadi Party, and of course in Bihar too.</div> <div> </div> <div> Taken together, MPs from national parties like Congress, the Left and the AamAadmi Party barely add up to 70, and regional parties like the AIADMK, the TRS and the BijuJanata Dal, or the Trinamool Congress, are unlikely to show much interest in, let alone challenge, the Modi government on a large number of crucial areas of policymaking. And this does not bode well for the largest functional democracy of the world.</div> <div> </div> <div> <span style="font-size:14px;"><strong>How did Brand Modi Succeed?</strong></span></div> <div> Modi’s strategy was to turn the elections into a Presidential format by positioning the polls as a referendum on his performance in Gujarat and his India Vision. Rather than just harping on UPA failures, Modi chose, instead, to focus on a positive campaign around his perceived delivery in a mid-sized state, and the promise that he could make this national, telling one and all: ‘Vote for me and I will give you good governance’.He raised people’s high expectations from the party and him by promising ‘Minimum government, but maximum governance.’</div> <div> </div> <div> Modi has won on the promise of ‘fixing’ the economy, combating corruption and inflation, and promising jobs and job security. He show-cased ‘Gujarat Development Model’ through a high-decibel, liberally-funded integrated media campaign, using the social media also to the hilt. Interestingly, by all accounts, Gujarat development story is poorer in content than that of Tamil Nadu or Kerala, but packaged like never ever before. </div> <div> </div> <div> The anti-corruption plank of the Anna Movement and later AamAdmi Party electioneering was usurped by the same high-decibel Modi campaign effectively and the facts that Gujarat has no Lokayukta for the last one decade or that some ministers in Gujarat government are convicted criminals got lost in the din and bustle.</div> <div> </div> <div> Indian youths, numbering more than half the electorate, with more than a hundred million first-time voters, are an impatient lot, and rightly so, with spiralling frustration at the dipping job prospects, lowering growth rates and increasing violence against women, on one side, and with surging expectations of quality life style of the developed nation, which they are exposed due to the easy access of information technology. This youth is bitterly opposed to corruption, and hence Congress or UPA as the fountainhead of corruption. Appreciating the AAP movement against corruption, the youth also wants to dream of a rosy future, and hence the dream-merchants of BJP campaign could create the immense eye-balls among the youth.</div> <div> </div> <div> BJP successfully and steadfastly used information technology, 3D technology, and the like to create the lethal mix of slogans, machines and dreams, all fuelled by an immense investments from sources little known, creating the right surrounding sound ensuring victory even in areas where they hardly have organization on ground, as seen in Bengal or Assam, for example.</div> <div> </div> <div> <span style="font-size:14px;"><strong>Political Leadership Challenges</strong></span></div> <div> The NDA’s emphatic victory in the national election establishes Modi as the BJP’s undisputed leader, who is next expected to overhaul leadership roles within the party by promoting leaders who hold sway over social and regional groups and dilute the upper-caste dominance in decision-making within the party.Modi's focus may be to promote a new set of leaders who would eventually become "faces" of the party in their respective areas. This will be a challenge indeed.</div> <div> </div> <div> Modi’s immediate challenge will be to replicate the national success in the crucial assembly elections that follow in states such as Haryana, Maharashtra and Delhi, where the BJP has performed well. However, the actual performance of the Central government under Modi over the next four months will influence the situation in these states later this year.</div> <div> </div> <div> <span style="font-size:14px;"><strong>The South Asian Message</strong></span></div> <div> Surely Modi-fied India will be a bolder India in the region, firmer on the borders, ruthless with foreign espionage on the Indian soil, intolerant with any form of terrorism or fake currency onslaught and even infiltration of the poor and hapless from across the borders. </div> <div> </div> <div> Electoral rhetoric apart, the new government is expected to pursue the national interests zealously, though the focus will be more on domestic economy and internal security of India. </div> <div> </div> <div> On the neighbourhood front, closer relations with Nepal and Sri Lanka, and a balanced business-like approach to China, Pakistan and Bangladesh are expected. There will be a setback of the radical Islamic forces in Pakistan, Bangladesh and Maldives consequently, and the new Indian government overtly or covertly will do all it can to that end. The centrist and rightist forces in Nepal and the pro peace reconciliatory forces of Sri Lanka may expect to get tacit support of the new Indian government. </div> <div> </div> <div> Due to pressing domestic economic and strategic compulsions, the Modi government will need a working relation of low or no tension with China and Pakistan and focus more on economic cooperation. And, for Nepal, due to historic and geo-political reasons, the flow of capital, people and businesses may see a further surge, coupled with stricter border monitoring to curb cross-border movement of terrorist modules.</div> <div> </div> <div> <span style="font-size:14px;"><strong>Economic Contradictions in the New Disposition</strong></span></div> <div> While the Indian corporate sector and native and foreign investors in the stock market are justified in celebrating the arrival of a "right wing", business-friendly Modigovernment in India, this is not necessarily the side of 'Modinomics' that most BJP voters would like to see. Modi campaigned hard on a platform of economic development, job creation and an efficient administration, and the 40 per cent of voters who backed the BJP-led alliance did so because they believe he will deliver on these promises. But contradictions exist in areas where satisfying the aspirations of a corporate constituency - for example in the area of labour reform - will end up undermining the aspirations of voters for jobs and job security. Another area to watch closely will be Modi government's approach towards law and order, and especially the right of vulnerable citizens - women, minorities, adivasis and dalits - to security, justice and equity.</div> <div> </div> <div> The BJP-led government has filled investors’ hearts with the hope of a turnaround in India’s economic fortunes. The stock market is scaling record highs every day and the rupee has gained considerably against the US dollar. Foreign Direct Investment (FDI) of more than a trillion rupees has already been pledged in the first three days after results were announced. Perhaps the expectation is that Modi’s pro-business stance will help to lift India out of its current economic mire— GDP has grown by less than five per cent year-on-year for the past seven quarters, well below the near eight per cent average of the previous ten years. </div> <div> </div> <div> But given the deep roots of India’s current predicament and the type of reforms that are required, along with dip in investment cycle in the last two years, one may suggest that investors’ optimism about an economic bounce may not be easy. India has, so far, narrowly avoided a downgrade of its sovereign credit rating to junk status. So, the fiscal position will continue to be precarious. Unless it is reversed, the government’s hands, with regards to increasing capital expenditure to boost infrastructure and therefore potential growth, will remain tied down. </div> <div> </div> <div> The health of the private sector has also deteriorated considerably. Companies are highly leveraged, with the debt-to-equity ratio elevated at 83 per cent, highest among all emerging markets, and below only that of Greece and Italy. The levels of bad debt in the financial system are also rapidly on the rise. So, regardless of the party in power, both banks’ ability to lend money to businesses and companies’ propensity to invest are limited. </div> <div> </div> <div> Further, many believe that a stronger government with more capable leadership will be able to restart stalled infrastructure projects, which have been held back so far due to regulatory hurdles. However, according to a recent report by Credit Suisse, only a quarter of the stalled investment projects are stuck with the central government, of which two-thirds are in power and steel - sectors that are already swamped with overcapacity. The other projects need clearance from state governments.</div> <div> </div> <div> In order to achieve the government’s target growth rate exceedingeight per cent a year, as promised by BJP in its manifesto, India requires a major institutional overhaul aimed at reducing crony capitalism (which even the BJP government in Gujarat has been squarely accused of) and improving the business environment. According to the World Bank’s Ease of Doing Business Survey for 2014, out of 185 economies India ranked 134— well below its emerging market counterparts. And India scores just 36 on the World Bank’s Corruption Perceptions Index for 2013, where 100 is the least corrupt.</div> <div> </div> <div> <span style="font-size:14px;"><strong>Economic Challenges before Modi Government</strong></span></div> <div> Modi government’s first credibility test with markets will be when it delivers a budget by July that will need to convince investors that India can realistically contain its fiscal deficit. The subsidies and austerity of the outgoing UPA government would prove hard to sustain, and harder to reverse. Continuing to defer payments to state-run companies that would compensate them for selling fuel, fertiliser and food below market prices can create havoc with their finances and make them rely on borrowing to fund operations; while, on the other hand, tax revenues are unlikely to recover immediately in a weak economy. </div> <div> </div> <div> Further, higher duties and other restrictions almost halved gold imports, but the moves have been deeply unpopular. Gold smuggling surged after the UPA measures, casting doubt on reported data. The BJP promised to review gold import duties within three months of coming to power. That may please gold buyers, but not investors, as concerns about the current account deficit sent the rupee to a record low last August. </div> <div> </div> <div> There are other challenges beyond government control: the El Nino weather pattern, typically associated with weak rains. Citigroup estimates that below-average rainfall in the June-September monsoon could reduce up to one percentof economic growth forecast and lead to a spike in inflation. Surging prices could spark tension with the central bank, which has made containing inflation a priority. </div> <div> </div> <div> Replicating Gujarat at the national level will prove to be a yeomen task due to the variegated development stages across India, high differences in economic basics and social indices among provinces of India, among other things.</div> <div> </div> <div> India is burdened with Rs.6000 billion bad loans in all nationalized banks put together, about 10 percent of all such bank loans. The bulk of these bad loans are related to infrastructure projects, which have made banks circumspect in lending. Also, crony capitalism will come in the way of recovering these loans.</div> <div> </div> <div> Keeping the promise of 10 million jobs a year is the other big hurdle for the new government as the Indian economy has been witnessing almost a jobless growth for a decade now.</div> <div> </div> <div> <span style="font-size:14px;"><strong>A Silent Prayer</strong></span></div> <div> A day after Modi wins India, my prayers: let India remain the synthetic cosmopolitan diverse nation that it is with the co-existence of so many different groups; let the tribal population not continuously suffer in the name of 'development'; let minimum standards of life of all precede maximum profits of some; let not, in the name of equal opportunities, snatch the minimum benefits the system at times gives to those who are born highly unequal; let justice and equity precede the blind search of growth and GDP; let not entrepreneurship gasp for breath under the tutelage of big business; let a thousand flowers bloom in expressions of all kinds - some unkind to those who rule too; let not mobs dictate terms to free souls; let hope replace cynicism and joy amid struggles to take precedence over apathy in abundance. Let my nation remain committed to the lofty ideals of humanity!</div> <div> </div> <div> <em>(Prof Chowdhury is education & media consultant. While the analysis and conclusions are his own, he has drawn on facts, figures and arguments available on Indian media specially The Outlook, The Hindu and The Hindustan Times.)</em></div>', 'published' => true, 'created' => '2014-06-08', 'modified' => '2014-11-21', 'keywords' => 'new business age south asia news & articles, south asia news & articles from new business age nepal, south asia headlines from nepal, current and latest south asia news from nepal, economic news from nepal, nepali south asia economic news and events, ongoing south asia news of nepal', 'description' => 'Interesting times indeed. Modi-fied BJP’s remarkable election campaign surely was fuelled by unprecedented sums of money, but more interestingly magnified by the rule of the first-past-the-post system. A mere 12 per cent difference in vote-share with the Congress has turned into 600 per cent difference in seats (NDA with 335 seats, including 282 of BJP against UPA with 60 seats, including 44 of Congress).', 'sortorder' => '2642', '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' => '2788', 'article_category_id' => '37', 'title' => 'Policy For Inclusive Growth', 'sub_title' => '', 'summary' => null, 'content' => '<div> </div> <div> <strong>--By Hom Nath Gaire</strong></div> <div> </div> <div> The phrase 'Inclusive Growth' is quite popular in recent days not only among academia but also with policy makers, development partners and media as well. It seems that there is paradigm shift in development strategies among the stakeholders. The concept of inclusive growth refers to both the pace and distribution of economic growth. In order for growth to be sustainable and effective in reducing poverty, it needs to be inclusive. </div> <div> </div> <div> Traditionally, poverty (or inequality) and economic growth analyses have been done separately. However, recent works indicate that there may not be a trade-off between equity and efficiency as suggested by Okun (1975) and that it would be a big mistake to separate analyses of growth and income distribution. Inclusive growth has commonly been explained as about raising the pace of growth and enlarging the size of the economy by providing a level playing field for investment and increasing productive employment opportunities. The definition of inclusive growth implies direct links between the macro and micro determinants of the economy and economic growth. The microeconomic dimension captures the importance of structural transformation for economic diversification and competition, while the macro dimension refers to periodic changes in economic aggregates such as the country’s gross national product (GNP) or gross domestic product (GDP). </div> <div> </div> <div> Sustainable economic growth requires inclusive growth. Maintaining this is sometimes difficult because economic growth may give rise to negative externalities, such as a rise in corruption, which is a major problem in developing nations. However, inclusiveness lays emphasis on equality of opportunity in terms of access to markets, resources, and unbiased regulatory environment for businesses and individuals. The inclusive growth approach takes a longer-term perspective, as the focus is on productive employment as a means of increasing the incomes of poor and excluded groups and raising their standards of living. </div> <div> </div> <div> <strong>Determinants of Inclusive Growth</strong></div> <div> Different countries, especially developing countries, may have very different institutional as well as policy arrangements for promoting inclusive growth. Similarly, there may be a number of distortions preventing the allocation of limited resources in such a way that productivity in different sectors is equalized. The shift of resources from one sector to another may have an important effect on the overall level of output and growth. </div> <div> </div> <div> In this context, although growth theories have contributed to our understanding of how growth is determined and how it might be influenced, it has in many ways missed some of the crucial issues for developing countries. It may be possible to model the role of management and organization, the improvement of infrastructure, and sectoral transfer in developing economies to measure real determinants of growth and to the design of policy. </div> <div> </div> <div> They are directly concerned with the long-run growth in the sense of the steady-states as well as important for a medium term of some considerable duration. Government macroeconomic policies--- both fiscal policy and monetary policy--- are considered to be instrumental in promoting inclusive growth in the respective economy. </div> <div> </div> <div> <strong>Fiscal Policy and Inclusive Growth </strong></div> <div> Fiscal policy involves the use of government spending, taxation and borrowing to affect the level and growth of aggregate demand, output and jobs. It is also a means by which a redistribution of income and wealth can be achieved as an instrument of intervention to correct the market failures. Thus fiscal policy is considered more effective in encouraging both pace and size of economic economy. </div> <div> </div> <div> Based on this belief, Asian Development Bank (ADB) has recently urged the Asian governments to use their fiscal policy more adeptly to combat the widening income gaps in the region. “As the inequalities rising almost everywhere in Asia, governments need to urgently expand and improve their public investments in inclusive growth,” President Takehiko Nakao told in seminar titled, Leveraging Fiscal Policy for Inclusive Growth on the occasion of bank's 47th AGM. </div> <div> </div> <div> More than 80 percent of Asia’s population live in countries where inequality is worsening, meaning that many are being left behind even as globalization, technological progress, and market reform have led to strong economic growth. The bank emphasized on a range of issues including taxation to boost social and other spending, existing government programmes to promote equality, and the best balance spending to help the poorest without compromising fiscal sustainability.</div> <div> </div> <div> <strong>Monetary Policy and Inclusive growth</strong></div> <div> It is well accepted that macroeconomic stability and low inflation rates, inter alia, have positive effects on growth and on reducing inequality. In this connection, well-managed monetary policy is critical in achieving stable and inclusive economic growth. Similarly, monetary policy is mandated to achieve and maintain price stability in the interest of inclusive and sustainable economic growth along with maintaining financial stability. </div> <div> </div> <div> Price stability reduces uncertainty in the economy and provides a favourable environment for inclusive growth and cumulative employment creation over the longer term. Low inflation, on the other hand, helps to protect the purchasing power and living standards of all classes of people. Although low inflation may not necessarily in itself reduce income inequality, it does ensure the protection of income, which is particularly important for poor people who generally do not have the means to adjust their nominal incomes to take account of rapid price increases. </div> <div> </div> <div> <strong>PPP and Inclusive Growth </strong></div> <div> The Public Private Partnership (PPP) is a governance tool to bring together resources as well as strengths and share experiences of the public and private sector for the purpose of provisioning of public assets or services for public benefit. In order to achieve inclusive growth, developing countries should create more PPP opportunities to address their infrastructure gap and steer private money and skills into much-needed infrastructure projects. </div> <div> </div> <div> The infrastructure deficit in the developing countries like Nepal is so enormous that we can’t expect either private investors or the public sector to fill up it alone. It needs collaboration between the private and public players to make things work, and to bring critical services to the community. Good infrastructure is critical to inclusive growth, allowing communities to access essential social services, markets, and jobs, and making cities cleaner and easier to navigate. PPPs can help developing countries address critical infrastructure needs, from roads to hospitals to water supply systems. </div> <div> </div> <div> The PPP investment model with various structures is effective in helping centrally planned countries transition to private sector-oriented market economies. PPPs can be promoted through fully assessed and appropriate risk sharing and performance-based arrangements between the parties. The aim is to deliver “value-for-money” projects to provide a full set of benefits for investors, the public, and the economy.</div> <div> </div> <div> <strong>Knowledge Economy and Inclusive Growth</strong></div> <div> The development of the knowledge economy and inclusiveness has been seen as closely related. Global firms have built integrated international production chains, with innovation creating new products with added value in “knowledge” areas such as design and marketing and providing associated services. </div> <div> </div> <div> The growth of the knowledge economy is seen as part of the growth strategy to import jobs from low wage economies such as China and India investing heavily in knowledge. Shifting from low-cost manufacturing to economies based on knowledge, innovation, and high-end services is imperative for developing countries to achieve and sustain broad based inclusive growth. Emerging economies can reach and go beyond middle-income levels by becoming knowledge-based economies like Japan, the Republic of Korea, and Singapore. </div> <div> </div> <div> Similarly, least developed countries like Nepal can upgrade themselves to developing one through systematic investment in new information and communication, manufacturing and other technologies to promote knowledge economy. For this, they have to spend time and resources to move up the value chain by drawing on best practices and latest technologies, for example, shifting to smart energy grids, cloud computing, 3D manufacturing, and mobile rather than fixed-line communications.</div> <div> </div> <div> <strong>Rational </strong></div> <div> According to the World Bank’s Commission on Growth and Development, a persistent, determined focus on inclusive long-term growth by governments is a key ingredient of all successful growth strategies. Policies that encourage inclusive growth tend to emphasize removing constraints to growth, creating opportunity, and creating a level playing field for investment.</div> <div> </div> <div> To that end, developing countries need to increase investment in infrastructures as well as research and development to create knowledge based, innovative and competitive industries. For this, public funding may be needed to help companies start up. Public spending on education and health services improve the well-being of the poor and augment their productive capacity. </div> <div> </div> <div> Targeted subsidies and transfer payments protect the most vulnerable and deprived segments of society while better public infrastructure can make it easier for the entrepreneurs to create more jobs and additional value for the economy. Higher education and training need to be significantly improved to generate the skills and critical thinking processes vital to a modern competitive economy. </div> <div> </div> <div> In addition, governments need to put in place mechanisms and adopt policies that enable innovation and creativity to flourish. This includes protecting intellectual property rights, providing adequate financing options, and nurturing more flexible labour markets.</div> <div> </div> <div> <strong>Finally</strong></div> <div> Policies on both monetary and revenue front such as non-inflationary monetary and progressive taxation can promote inclusive growth. But among policy tools, fiscal policy with productive government expenditure and progressive taxation has a tangible effect on boosting equality and promoting inclusive growth.</div> <div> </div> <div> <div> <em><span style="font-size: 14px;"><strong>What is Inclusive Growth?</strong></span></em></div> <div> An IMF Commission on Growth and Development (2008) notes that inclusiveness—a concept that encompasses equity, equality of opportunity, and protection in market and employment transitions—is an essential ingredient of a successful growth strategy.</div> </div> <div> </div>', 'published' => true, 'created' => '2014-07-30', 'modified' => '2014-11-21', 'keywords' => '', 'description' => 'The phrase 'Inclusive Growth' is quite popular in recent days not only among academia but also with policy makers, development partners and media as well. It seems that there is paradigm shift in development strategies among the stakeholders. The concept of inclusive growth refers to both the pace and distribution of economic growth.', 'sortorder' => '2641', '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) 7 => array( 'Article' => array( 'id' => '2791', 'article_category_id' => '52', 'title' => 'Budget 2014/15 Private Sector Neglected', 'sub_title' => '', 'summary' => null, 'content' => '<div> </div> <div> </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' remittances and, continuity of archaic practice of development that is heavily dependent on supply-driven central planning.</div> <div> </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> </div> <div> One of the clear departures expected from Mahat was government’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'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> </div> <div> The most crucial departure expected from Mahat, for his philosophical leanings as an open-market economist, was to stop 'merciful allocation' 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> </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 'the Mahat budget' this time.</div> <div> </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) 8 => array( 'Article' => array( 'id' => '2794', 'article_category_id' => '40', 'title' => '2nd Newbiz Business Conclave & Awards 2014', 'sub_title' => '', 'summary' => null, 'content' => '<p> </p> <p> <span style="font-size:14px;"><a href="http://www.abhiyan.com.np/article-conclav_27bhadau2071_presentation">Presentations of some speakers in the conclave</a><br /> <br /> <a href="http://www.abhiyan.com.np/article-news_25bhadau2071_award">न्यूबिज बिजनेश कन्क्लेभ एण्ड अवार्ड वितरण शुरु</a><br /> <br /> <a href="http://www.abhiyan.com.np/article-news_26bhadau2071_award">न्यूबिज बिजनेश कन्क्लेभ एण्ड अवार्ड कार्यक्रम शुरु</a><br /> <br /> <a href="http://www.abhiyan.com.np/article-news_26bhadau2071_conclave">न्यूबिज कन्क्लेभ एण्ड अवार्डको दोस्रो संस्करण आज</a><br /> <br /> <a href="http://www.abhiyan.com.np/article-BSchoolAward2014">न्यू विज् विजनेश स्कूल अवार्ड २०१४</a></span></p>', 'published' => true, 'created' => '2014-09-12', 'modified' => '2014-10-10', 'keywords' => '', 'description' => '2nd Newbiz Business Conclave & Awards 2014', 'sortorder' => '2639', '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) 9 => array( 'Article' => array( 'id' => '2790', 'article_category_id' => '40', 'title' => 'Nepal Strives For DC Degree: What Is In Store For Private Sector?', 'sub_title' => '', 'summary' => null, 'content' => '<div> </div> <div> </div> <div> <strong>--By Akhilesh Tripathi</strong></div> <div> </div> <div> If everything goes as planned by the government, Nepal will graduate from the Least Developed Country (LDC) status over the next eight years (i.e. by 2022) to a Developing Country (DC) status. Even if that target is not achieved by the specified time, the process that has been initiated already with the start of the current three-year plan (FY 2014 to FY 2016) has a lot in store for the private sector as opportunities, say analysts. </div> <div> </div> <div> Foremost among such analysts is Dr Govind Raj Pokharel, Vice Chairman of National Planning Commission (NPC). He says, “Graduation from the LDC status is a Herculean task but it is achievable if the government and the private sector work together and there is strong support of the donor community. We have pinned a lot of hope on the private sector.”</div> <div> </div> <div> Dr Pokharel claims that the next eight years over which Nepal will try its best to graduate from the LDC status to DC status will be full of business opportunities for the private sector. “We have expected a huge investment from the private sector. We know that the private sector will not invest without seeing opportunities first. Still, we hope that such investment will come from the private sector because there will indeed be opportunities,” he says. </div> <div> </div> <div> <img alt="" src="/userfiles/images/cs1(1).JPG" style="float: right; margin: 0px 0px 0px 10px; width: 300px; height: 485px;" />According to economists as well as the country’s graduation strategists, there will be business opportunities in all major sectors - agriculture, manufacturing, services, hydropower, tourism, infrastructure development etc. “These are the major areas where the private sector will find ample business opportunities provided that the government creates an enabling environment. But there will be opportunities in other sectors as well if there is an enabling environment,” shares Dr Hemanta Dawadi, Director General of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI).</div> <div> </div> <div> It seems the government is keen about creating those opportunities for the private sector through change in policy in line with the development targets which will have to be achieved over the next eight years for Nepal to become a developing country. The good thing is this has started with the recently announced budget for the new fiscal year. “The budget is also poised to graduate Nepal from a Least Developed Country status as defined by the UN,” said Finance Minister Dr Ram Sharan Mahat while presenting the budget on July 13.</div> <div> </div> <div> In his budget speech, Dr Mahat said that the country needs to invest minimum 30 percent of GDP in fixed capital formation to earn the identity of a developing country in the next eight years. “However, the average investment of past three years has been only 22 percent,” he noted, “To bridge this gap of eight percentage point in fixed capital formation, additional Rs 160.00 billion should be invested in the coming Fiscal Year alone.” </div> <div> </div> <div> The Finance Minister proclaimed that various reform measures will be carried out in this fiscal year in order to increase domestic and external investment and facilitation. He said additional reforms and revisions will be carried out by evaluating the practices and experiences of policies, regulations and laws regarding industry, trade, energy, banking and financial sector that were started back in 1990's decade, adding that the next (14th) Periodic Plan will have a clear roadmap for transforming the country into developing country status within coming eight years. </div> <div> </div> <div> To create the right opportunities for the private sector, the budget has also stated to amend the Companies Act, Competition Promotion and Market Protection Act and Insolvency Act. This will simplify the process of company establishment, renewal and liquidation. Similarly, the budget talks about amending the provisions of existing Debt and Guarantee Act in order to attract foreign investment in mega projects and viable sectors, where the domestic investment is insufficient.</div> <div> </div> <div> “New laws regarding industrial enterprise and foreign investment and technology transfer will be formulated. Foreign Investment Policy and Industrial and Intellectual Property Policy will be formulated. Bill regarding Special Economic Zone will be tabled in Parliament. Procedures regarding the establishment of large industries under foreign investment will be simplified,” said the Finance Minister.</div> <div> </div> <div> <strong><img alt="" src="/userfiles/images/cs2(4).jpg" style="float: left; margin: 0px 10px 0px 0px; width: 300px; height: 468px;" />Opportunities in Energy Sector</strong></div> <div> The government plans to end load-shedding over the next three years. In this period, four major public sector-funded projects namely Upper Tamakoshi, Kulekhani II, Chameliya and Upper Trishuli hydroelectric projects will enter production phase and will together generate 560 MW of electricity. Similarly, 42 private sector-funded hydroelectric projects will generate 628 MW of electricity in this period. Similarly, the government will start the construction of other projects such as Tamakoshi V, Madi Khola, Maiwa Khola hydroelectric projects including Tanahu and Rahughat projects. Similarly, according to the budget, the construction of Kabeli Hydroelectric Project will be started in Public-Private-Partnership model.</div> <div> </div> <div> “The private sector will be invited to carry out various works related to these energy projects. That clearly means business opportunity,” explains Dr Arjun Karki, International Coordinator of LDC Watch, “Several other bigger projects will be initiated over the next eight years which means there will be good business opportunities for the private sector.”</div> <div> </div> <div> In order to complete the projects on time, the budget has announced to provide full exemption on income tax for the first ten years and 50 percent exemption for additional five years to those producers who generate and connect electricity to national grid and export it within FY 2022/23. “I have made an arrangement to provide a lump sum grant of Rs 5 million per MW of electricity to those producers who generate and connect the generated electricity to national grid. I have also made provision of an additional 10 percent of such grant to those producers who generate and connect the generated electricity to national grid within FY 2017/18,” says Dr Mahat. </div> <div> </div> <div> <strong>Opportunities in Agriculture</strong></div> <div> The government plans to modernise, diversify and commercialize the agriculture sector over the next one decade. This is reflected in the newly announced budget as well. The budget targets to keep interest rate on six percent on loans to be provided by the commercial banks for modern farming, livestock and poultry farming, medicinal plants, vegetables and horticulture, dairy business, aquaculture, agro storage, cold storage, slaughter house and meat-related business. This provision, the government thinks, will also help address the problem of unemployment and youth migration from rural areas.</div> <div> </div> <div> Similarly, the budget has provisioned up to 50 percent subsidy in the loan interest taken in order to develop land and mechanize farming for private groups which are involved in the commercialization and mechanization of farming by integrating 10 hectares land in mountain and 20 hectares land in Terai and up to 75 percent interest grant for the cooperatives of marginalized and landless farmers.</div> <div> </div> <div> Similarly, the construction of the main as well as branch canals of major irrigation projects such as Sikta, Babai, Mahakali and Rani Jamara Kulariya etc will be given continuity. It is the private sector that will be awarded contracts to carry out these works which clearly means good business opportunities for the private sector. Similarly, the tunnel construction work of Bheri Babai Multipurpose Diversion Project will also be initiated in this fiscal year. </div> <div> “The government wants significant private sector investment in agriculture. For this it is ready to create the environment,” remarks Dr Pokharel.</div> <div> </div> <div> <strong><img alt="" src="/userfiles/images/cs3(6).jpg" style="float: right; margin: 0px 0px 0px 10px; width: 300px; height: 434px;" />Opportunities in Tourism</strong></div> <div> Tourism is going to be another sector of good business opportunities for the private sector. The government, through the latest national budget, has already announced to provide income tax exemption for five years to the industries established with an investment of more than Rs 2 billion in the tourism sector. Similarly, aviation companies, too, will get such income tax exemption. They will further get 50 percent income tax exemption for subsequent three years, according to the budget.</div> <div> </div> <div> “This income tax exemption is aimed at promoting the establishment of good hotels and resorts at the major tourist destinations and other places of the country. This is a clear opportunity for the private sector,” explains Dr Pokharel.</div> <div> </div> <div> <strong>Opportunities in Infrastructure Development</strong></div> <div> Nepal has to do a lot in infrastructure development so as to increase accessibility, facilitate service delivery and enhance cost effectiveness. For example, the government wants to construct at least one road on multi-year contract basis in each electoral constituency where there is no year-round transportation. Similarly, the construction work of the Kathmandu-Terai Fast Track will be started in this fiscal year. </div> <div> </div> <div> The government plans to open the track of several new roads, black-top and expand several existing roads and build hundreds of bridges across the country. The government has allocated more than Rs 14.3 billion for this purpose in the current fiscal year alone. Similarly, the new budget has allocated Rs 4.5 billion for the maintenance of 16,788 kilometres of strategic and local roads including their regular maintenance, routine maintenance, periodic maintenance, and rehabilitation and urgent maintenance.</div> <div> </div> <div> Similarly, according to the new budget, the government will carry out urban infrastructure development programmes in cities like Biratnagar, Birgunj, Butwal, Dharan, Janakpur and Nepalgunj including the development of 10 Urban Corridors with eight ongoing and two new.</div> <div> </div> <div> “The national budgets to be announced in the fiscal years to come will have to continue such infrastructure development programmes, if Nepal is to achieve the DC status by 2022. So, there is no dearth of business opportunities for the private sector,” says Dr Pokharel. </div> <div> </div> <div> <strong>Investment Requirement</strong></div> <div> According to NPC’s estimates, the government or the public sector will have to invest Rs 3,300 billion and the private sector will have to invest double the amount – a whopping Rs 6,600 billion -by 2022 if Nepal is to achieve the status of a developing country by then. But will such a huge investment really come from the private sector?</div> <div> </div> <div> “We hope it will because the country is now headed towards political stability and legal and economic reforms are in the pipeline. That means the next eight years are going to be a wonderful business opportunity for the private sector,” assures Dr Pokharel.</div> <div> </div> <div> According to NPC’s investment plan, Nepal will need a total investment of Rs 1013.91 billion in the agriculture sector by FY 2021/22 to achieve the graduation target. Two-thirds of this investment, i.e. around Rs 675.94 billion is expected from the private sector. The agriculture sector includes forestry and fishing as its subsectors. </div> <div> </div> <div> “The private sector is expected to invest in the modernization of agriculture and increase productivity, replace agricultural imports and promote exports. The government is expected to make this easier through policy and legal reforms, if necessary,” says Dr Pokharel.</div> <div> </div> <div> Similarly, the industrial sector which includes mining and quarrying, manufacturing; electricity, gas and water, and construction will require a total investment of Rs 1807.87 billion. Of this amount, Rs 1205.24 is expected from the private sector. “So there is a huge opportunity for the private sector in the industrial sector as well,” thinks former NPC Vice Chairman Prithvi Raj Ligal.</div> <div> </div> <div> Likewise, according to the NPC plan, the service sector which comprises wholesale and retail trade; hotels and restaurants; transport, storage and communications; financial intermediation; real estate, renting and business activities; public administration and defence; education; health and social work; and other community, social and personal service activities will require a total investment of Rs 6874.98 billion – Rs 4583.32 billion from the private sector and Rs 2291.66 billion from the public sector.</div> <div> </div> <div> <img alt="" src="/userfiles/images/cs4(4).jpg" style="width: 550px; height: 110px; margin-left: 10px; margin-right: 10px;" /></div> <div> </div> <div> <strong>Criteria for Graduation </strong></div> <div> There are basically three criteria to graduate from the LDC status – Human Assets Index (HAI), Economic Vulnerability Index (EVI) and GNI per capita. HAI is about the stock of the human capital of the country and comprises the nutrition status of the population, mortality rate of children aged five or under, and gross secondary school enrolment ratio and adult literacy rate. EVI reflects the country’s vulnerability to exogenous shocks and comprises of population size; remoteness; merchandise export concentration; share of agriculture, forestry and fisheries in GDP; share of population living in low elevated coastal zones; instability in export of goods and services; victims of natural disasters; and instability in agricultural production. </div> <div> </div> <div> Likewise, GNI per capita is related with the country’s income-generating capacity and is based on a three-year average estimate of the country’s per capita GNI (World Bank Atlas Method). After determining threshold level for each of the criteria every three years, the United Nations Committee for Development Policy (CDP) reviews the progress made by LDCs and if the country has been eligible at two successive triennial reviews, it recommends a country for graduation from the LDC category. At least two of the three criteria or GNI per capita twice higher than the threshold should be met in order to be eligible for graduation.</div> <div> </div> <div> “Among the three criteria for LDC assessment, Nepal has already met the EVI threshold level and is very close to meeting the HAI criteria; however, there is a huge gap between the GNI threshold level and Nepal’s present status. The role of the private sector is going to be very important to meet this criterion,” observes Dr Karki. </div> <div> </div> <div> <strong>Increasing Productive Capacity</strong></div> <div> Karki is of the opinion that Nepal will have to start working seriously to enhance its productive capacity significantly to achieve the GNI per capita threshold. “The country is facing problems like huge trade deficits, high underemployment rate, income inequality and low quality of life,” says Dr Karki, “Factors including subsistence agriculture, deteriorated industrial environment, power shortage etc., have led to a low level of economic growth and development. Therefore, there exists a great challenge to sustain the achievements and narrow down the gaps between GNI threshold level and the current status.” </div> <div> </div> <div> Our GNI per capita has improved over the past few years but we still need to accelerate it, he adds. Karki’s observation points to two important areas where private sector can come forward – commercial agriculture and power generation. Fortunately, these are the two major areas of emphasis in the budget presented at the parliament recently. If the government really implements the policies and budget allocations announced in the budget speech, the privates sector can make good money while contributing to this graduation of the country. </div> <div> </div> <div> Ligal lists more areas where the private sector has such opportunities. “Productive capacity has basically four components – infrastructure; energy; science, technology and innovation; and private sector development,” says Ligal, adding “The role of the private sector is very important in increasing the country’s productive capacity by investing in infrastructure development, energy exploitation and by making technological innovations.”</div> <div> </div> <div> “Although Nepal has already met the EVI criterion, it still has to either increase its GNI per capita by US$ 770 or the HAI score by 6.17 before 2015 to be eligible for consideration for graduation. This is because eligibility conditions should be fulfilled during two successive triennial reviews, and the CDP will now review the progress only in 2015,” Chandan Sapkota, an economist with the Asian Development Bank, Nepal, says, “After the review, Nepal will have to sustain the progress through 2018, the next triennial review, only after which the CDP will recommend for graduation.”</div> <div> </div> <div> This means Nepal has good length of time to fulfil the criteria. But effective intervention from the government is a must. And the NPC has recognised this clearly. “If the past trend is of any guide to future, it will be difficult for Nepal to meet the projected threshold of US$ 1,502 even by 2021, unless effective policy interventions are in place. Vigorous efforts are needed to achieve the projected GNI per capita of US $ 2,094 in 2021 so that the economy is on the way to achieve the estimated threshold by 2021,” reads NPC’s Approach Paper to Graduation from LDC by 2022.</div> <div> </div> <div> According to Ligal, the private sector – both domestic and foreign – will have to invest heavily in sectors like physical infrastructure, hydropower, tourism and agriculture over the next eight years. “But the private sector will not make such a huge investment under the present circumstances. For private sector investment to come, the government will have to create conducive environment through legal, administrative and policy reforms. If this happens, private sector will come forward as the Graduation process would offer lucrative business opportunities,” he says, adding that Nepal needs more aggressive economic reforms in the near future.</div> <div> </div> <div> <img alt="" src="/userfiles/images/cs5.JPG" style="width: 550px; height: 430px; margin-left: 10px; margin-right: 10px;" /></div> <div> </div> <div> <strong>Partnership with Private Sector</strong></div> <div> The Istanbul Programme of Action, which aims to at least halve the number of LDCsby 2020, too, has laid great emphasis on public-private partnership. It says, “Partnerships with the private sector play an important role for promoting entrepreneurship, generating employment and investment, increasing the revenue potential, developing new technologies and enabling high, sustained, inclusive and equitable economic growth in least developed countries.” In the present circumstances, when the private sector is complaining of lack of enough conducive environment for investment, PPP model can be a good alternative so that the private sector can feel secure as the government too will have stake in such projects. </div> <div> </div> <div> Economists say that investment in the industrial sector is a must to increase the economic productivity. “Productivity and job opportunities in the service sector have remained low. And it consists of more informal sectors,” observes Shanker Sharma, former vice-chairman of NPC, “We need more manufacturing industries. If there is political stability, right policies in place and adequate legal reforms, then investment in the manufacturing sector will come.”</div> <div> </div> <div> Karki, too, stresses on the need for public-private partnership (PPP) model of development. “The PPP model is going to be very helpful in those areas of investment where the private sector alone is a bit hesitant to enter,” he says. If the government comes forward to invest in such sectors, the private sector will follow suit, he adds.</div> <div> </div> <div> Dr Dawadi is also of the opinion that the government alone cannot take the country out of the LDC status to the developing country status. “To be successful, the graduation strategy will require a full and uninterrupted understanding, support and cooperation from the private sector,” he opines.</div> <div> </div> <div> True that both economists and development activists are right in their view that this target spelt out in the approach paper to the latest three-year plan (FY 2014 to FY 2016), is highly ambitious. But the government has its own basis for its optimism.</div> <div> </div> <div> The doubt of the economists and activists is based on the fact that the previous three-year plan (FY 2010 to FY 2013) had aimed such graduation by 2030. But the government officials say they pre-poned the target by eight years looking at the rapid progress in the recent years. They particularly cite increase in the country’s per capita gross national income (GNI), decreased poverty level, and significant progress on major social indicators such as mortality rates, school enrolment rates, life expectancy etc. Since the LDC category was brought in practice in the international development parlance in 1970, only four LDCs have graduated to DC status so far – Botswana (1994), Cape Verde (2007), Maldives (2011) and Samoa (January 2014). But the number of LDCs has almost doubled since then. It means graduation from the LDC status is not so easy. But development experts think that the goal is achievable if the public and private sectors of the country work together. </div> <div> </div> <div> When the economy grows and businesses thrive, the sky is the limit for the individual private sector operator. It means a large pool of resources, a larger market and a higher level of operation,” Dr Dabwdi concludes, “The opportunity will be for both new business creation as well as horizontal growth of existing businesses.”</div>', 'published' => true, 'created' => '2014-09-08', 'modified' => '2014-10-10', 'keywords' => '', 'description' => 'The role of the Nepali private sector is going to be very crucial if Nepal is to become a developing country by 2022, as planned by the government. It means large business opportunities await the private sector over the next eight years.', 'sortorder' => '2638', '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) 10 => array( 'Article' => array( 'id' => '2793', 'article_category_id' => '91', 'title' => '2nd NewBiz Business Conclave And Awards 2014', 'sub_title' => '', 'summary' => null, 'content' => '<p> <span style="font-size:16px;">Please visit to <a href="http://www.abhiyan.com.np">http://www.abhiyan.com.np</a> for details.</span></p>', 'published' => true, 'created' => '2014-09-12', 'modified' => '2014-10-10', 'keywords' => '', 'description' => '', 'sortorder' => '2637', '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) 11 => array( 'Article' => array( 'id' => '2787', 'article_category_id' => '167', 'title' => 'UML’s Throb To Democratize', 'sub_title' => '', 'summary' => null, 'content' => '<div> </div> <div> <strong>--By Achyut Wagle</strong></div> <div> </div> <div> The Nepal Communist Party-United Marxist Leninist (CPN-UML) exhaustively braces up for its ninth general convention, July 3-9 that is perhaps likely to see the fiercest battle ever to take the reins of this four decade-old outfit. The good news is, unlike in any archetypical communist organization, the chairman and other major office bearers will be chosen democratically through the ballots of the party cadres.The Party over the last two and half decades, since the successful reinstatement of democracy in 1990, has established itself not only as a quintessential political force of the country but also a relatively credible democratic alternative with left-to-the-centreideologies. It is now the second largest party in the Constituent Assembly (CA), which is also the legislature parliament, and the major coalition partner in the Nepali Congress-led government.</div> <div> </div> <div> This transformation from an out-and-out communist to largely a democratic force has definitely not been a cakewalk and yet far from complete. Thanks to late General Secretary of the Party, Madan Bhandari who coined a transitional lexicon 'janatako bahudaliya janabad (JBJ)' or people's multi-party democracy that facilitated it to become a reckoning force in multi-party polity. In essence, except one seemingly unequivocal commitment to remain in the 'politics of ballots'; forsaking the dogma of the 'power from the bullets', the task of redefining other philosophical foundations of the Party is still pending and currently undergoing a rigorous discourse. This is what going to be one of the characteristic features of the upcoming Convention as well. The pain experienced in the process of refurbishment of a force that carried over the legacy of Jhapa andolan of early 1970s, a naive killing spree of landlords to eliminate the class enemy andwith its cadres indoctrinated to 'establish a proletariat dictatorship' or 'new people's democratic republic' ostensibly through violent over throw of 'old regimes' to a disciplined political party believing in a peaceful process of change is not unnatural. But, the most worrying factor is: it is taking too long a time to accept the changing realities of the world and declare that the party no longer remains 'a communist' one. And, the debate also has been too fluid to shape a convincing new 'doctrine' with a double edged sword which preserves the face of the communist party and, at the same time, adapts itself as a credible democratic force.</div> <div> </div> <div> To borrow the word from communist lingo, the 'class struggle' within the party is at its height, but it is not two directional - between the exploiting and exploited classes as explained by Marx. It is in fact innumerably multi-directional and cover everything by a single 'blanket principle' is requiring it to be too large to manage. There is still a fine dividing line between the factions that accept the JBJ as defined by Bhandari as a complete principle and that takes it only as one of the 'many' components of philosophical evolution of the Party. KP Oli and Madhav Nepal, who are the two contenders for the post of chairman in the ninth convention, now represent these two factions respectively There is yet another traditional school that is not vocal but still considers JBJ hastened the aberration of the Party from a true communist force to operatives of ‘comprador bourgeoisie. 'The current Party Chairman Jhalanath Khanal lost party leadership to Madan Bhandari in the fifth convention in 1993, as he campaigned in this potential aberration plank. By now, Khanal seems to be compelled to change as there is no escape from the vote politics, but the reservation to accept the JBJ as 'only' guiding principle of the party still appears to be a bitter pill for him to swallow.</div> <div> </div> <div> There is also a tangible difference in opinion between the so called ‘old school’ and the ‘new school’. The old school represented by the hawks of pre-panchayat underground era are persistent not to give-up the communist tag. The septuagenarian leader Bharat Mohan Adhikari categorically said, ‘There is no need to change the party name to something that doesn’t carry the word communist and the universal communist standard, hammer-and-sickle flag, should be retained.’ The new school, which calls itself a pragmatic left is keen to change the both, just limiting it to convey a ‘socialistic’ meaning - far more softline approach than being a communist. The confusion has run long. So long that immediately after the UML formed a minority government in 1994, the Party dramatically removed the portraits of Marx and Lenin from the Party HQ meeting hall when the then US ambassador to Nepal visited UML headquarters. The act though was subject to acute mockery then but had a symbolic personification of confusion. First, it signified, the Party leadership had realized the redundancy of these figures but was unable to get rid of their hangovers. Second, from the inner self, it wanted to convey that the party doesn’t want to be identified and viewed as the communist in classic sense of the term. And, the third, it wanted to interact with the world as liberal democratic or a social democratic force.</div> <div> </div> <div> But, over all these years, party has hardly been able to embark on this wishful direction it had then contemplated. All these confusions still persistently gnaw the party and all the policy debates still revolve around the same confusion – whether or not to remain a communist and how to keep-up with the pace of openness the world is now moving with. It is for this reason, different ‘think tanks’ within the party are working to give a functional shape to their ideological basis such that it fits to modern-day political parlance.</div> <div> </div> <div> One of such recent exercises of the party has concluded that Nepali society has essentially become a capitalist one leaving behind the traditional agro related feudal production and productivity relations. This in fact is the theoretical basis to do away with the politics of proletarian supremacy and misery due to mass exploitation. However, the entire ‘philosophical’ discourse suffers from a mindset that party cannot function without such ‘grand narrative’. The party very tactfully removed the anti-Indian and anti American diatribes as soon as it rode to power saddle in 1994, forming the first communist government in the world after the collapse of the Berlin Wall, that too through elections.</div> <div> </div> <div> At present, the issues of the centre-stage debate include the massive criminalization of the party politics by protecting and promoting goons and underworld operators, colloquially known as dons–the word borrowed from taekwondo. This began with when Bamdev Gautam was made Home Minister in 1997 under Rastryia Prajatantra Party-led coalition government. He allegedly opened all smuggling channels and protected them using the security establishment. KP Oli did the same when he was Home Minister and now many noted dons are in party rank and file. Madhav Nepal faction has devised its campaign strategy focusing on the theme of ‘cleaning the party from goons.’ But the weight in the balance gradually appears to be tilting to the kings of the goons. Therefore, it will not be a surprise if Oli wins the race.</div> <div> </div> <div> Perhaps the greatest potential for the party to benefit arises from the fact that UCPN-Maoist is now forced to follow the same path the UML has traversed since its fifth convention. This can give a righteous sense of direction to the UML in making timely policy choices as a communist force that wants to survive in the competitive pluralistic politics. Theoretically speaking, UML should have been able to take great advantage given the vindication of timeliness JBJ. But, internal wrangling and factionalism has marred all its potentials of organizational growth.</div> <div> </div> <div> As the ninth convention inches closer, the campaign becomes nasty. The official manifestos of both Oli and Nepal do not differ much, which is an indication that there is not much differences in principles and policies. But when it comes to practical politics, the competition on mudslinging has crossed all possible decencies. Oli commands very strong organizational support and as an additional advantage Deputy Prime Minister BamdevGautam is in his favour. Oli’s illness is debated in both the camps. Oli has tried to bank on his illness requesting to vote him for the last chance and Nepal faction has asked him to take ‘rest’ on health grounds.</div> <div> </div> <div> It would not be a practical assumption to expect UML to reincarnate by changing its name and revamping all of its communist ideologies . But the throb of need for this change is intensely realized, in more than one spheres – in ideology, organizational orientation, external relations and internal democracy. This certainly gives better hope for overall consolidation of country’s democracy, sometime in near future. </div> <div> </div> <div> <em>The writer is former editor of Aarthik Abhiyan National Daily.</em></div>', 'published' => true, 'created' => '2014-07-30', 'modified' => '2014-10-10', 'keywords' => '', 'description' => 'The Nepal Communist Party-United Marxist Leninist (CPN-UML) exhaustively braces up for its ninth general convention, July 3-9 that is perhaps likely to see the fiercest battle ever to take the reins of this four decade-old outfit. The good news is, unlike in any archetypical communist organization, the chairman and other major office bearers will be chosen democratically through the ballots of the party cadres.', 'sortorder' => '2636', '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) 12 => 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 'any' 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'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's current term in office.</div> <div> </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> </div> <div> There are other unattended areas in the economy that are either causing excessive 'bleeding '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's money to project the jobs of a few hundred unproductive employees.</div> <div> </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'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> </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. 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 as Mahat's brainchild in 1992, doesn't seem to be the case now. </div> <div> </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) 13 => array( 'Article' => array( 'id' => '2786', 'article_category_id' => '40', 'title' => 'Outbound FDI : Can Nepali Businesses Go Global?', 'sub_title' => '', 'summary' => null, 'content' => '<div> </div> <div> <div> </div> <div> <strong>--By Siromani Dhungana</strong></div> <div> </div> <div> <em><span style="font-size: 16px;">A 50-year old law entitled ‘Act Restricting Investment Abroad, 1964’ is still in force in Nepal which stops Nepali citizens from investing in a foreign country. The existing fear is that the country’s economy will suffer if Nepal allows outbound FDI. But many evidences suggest that despite this law, Nepali people are investing in different other countries through one channel or other. And such evidences are becoming more visible. Policymakers are in dilemma while the business community is also largely divided on the issue. However, the debate on legitimatizing outbound FDI is heating up in recent times. What impact will it have on a country like Nepal where the national economy is not strong? Will it create BoP deficit as many fear? What happens if all businessmen start to set up industries in foreign countries which have better policy stability and lesser labour problem? New Business Age tries to analyse some of these major concerns:</span></em></div> <div> </div> <div> It is not surprising that Nepali businessmen, like many around the world, want to be competitive and set their footprint in the global market. But existing policies are keeping their dreams from being materialized. The government remains skeptic and reluctant to allow outward FDI citing probable impact on the national economy.</div> <div> </div> <div> However, zero capital mobility in and out of a country cannot be expected. Many evidences suggest that the investment is going abroad through one channel or the other. Any state should allow aspiring businessmen to invest anywhere globally because this will help the currency get its true value recognized, Dr Chiranjibi Nepal, Economic Advisor to the Prime Minister claims. “Investment is a must to increase the value of the money. The government should open up avenue for outward FDI to acknowledge this fact.”</div> <div> </div> <div> Evidences also show that the flow of money cannot be barricaded by any laws or policies. For instance, Nepal, according to a report of Global Financial Integrity (GFI), lost a total of $ 8.01 billion between 2001 and 2010 due to illicit capital flight. It means that on an average, $ 801.4 million (Rs 70.39 billion) went out of Nepal annually during that period of almost a decade. </div> <div> </div> <div> <img alt="" src="/userfiles/images/cs1(4).jpg" style="width: 550px; height: 163px; margin-left: 10px; margin-right: 10px;" /></div> <div> </div> <div> GFI’s another report entitled ‘Illicit Financial Flows from the Least Developed Countries: 1990-2008’ had put Nepal’s annual capital flight at $ 480.4 million. Based on the amount of capital flight, Nepal has been ranked 58th among 143 countries surveyed and sixth among the Least Developed Countries (LDCs) for exporting funds illegally.</div> <div> </div> <div> The report clearly points to the huge illegal financial flows from Nepal and it is high time that the government addresses this problem without making any further delays, Nepal opined. “The government should legalize outward FDI to keep the record of outflow of financial transaction in the formal system,” he said.</div> <div> </div> <div> <table border="0" cellpadding="10" width="99%"> <tbody> <tr> <td bgcolor="#F6CEF5"> <div> <span style="font-size: 14px;"><strong>Existing Laws Related to FDI</strong></span></div> <div> </div> <div> <strong>Foreign Investment and Technology Transfer Act – 1992</strong></div> <div> Foreign Investment and Technology Transfer Act (FITTA) – 1992 & Industrial Enterprises Act - 1992 are the two most important laws for the promotion of industries in Nepal. These two acts are highly encouraging acts for attracting FDI or Joint venture investments in Nepal. </div> <div> </div> <div> FITTA includes provisions related to facilities and concessions. This Act treats foreign investors as equals to local investors and provides them same incentives and facilities.</div> <div> </div> <div> The Act is also very positive on providing visa to foreign nationals. The Act has ensures 6 months non-tourist visa to a foreign national if he/she want to conduct survey, study or research with the objective of making investment in Nepal. </div> <div> </div> <div> After that if he or she makes investment or establishes an industry, the investor (along with the dependant family members) is granted business visa until the investment is retained. Similarly, residential visa is granted to a foreign investor and his family if s/he makes an investment of one hundred thousand US dollars in one business. All these are highly encouraging statements. However in actual practice, the investors face various problems, time and again. </div> <div> </div> <div> FITTA and IEA also offer some fiscal incentives including income tax relief. But the amended Finance Act and New Income Tax Act have withdrawn all such incentives, which is considered a controversial decision. Several amendments to FITTA through the Finance Act of 2001 and the progress made in this regard helped the nation in its efforts to gain membership of WTO, SAFTA, and BIMSTEC, but these amendments too are not enough, say investors.</div> <div> </div> <div> <strong>Industrial Enterprises Act - 1992</strong></div> <div> The IEA has one-window committee (OWC) provision, which is coordinated by the director general (DG) of Department of Industry (DoI) and has DGs of Customs, Inland Revenue, Value Added Tax (VAT) and Commerce as well as representatives from central bank, Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and the government.</div> </td> </tr> </tbody> </table> </div> <div> </div> <div> <strong style="font-size: 14px;"><img alt="Dr Chiranjivi Nepal" src="/userfiles/images/cs2(1).JPG" style="float: right; margin: 0px 0px 0px 10px; width: 300px; height: 166px;" />Need: A Positive Beginning</strong></div> <div> Nepal's legal system begins from the word restriction, which, according to many, rightly articulates the government’s mind-set. A 50-year old law entitled ‘Act Restricting Investment Abroad, 1964’ is still effective in the country. The law was introduced to restrict Nepalis from investing abroad. </div> <div> </div> <div> We need a fresh and positive beginning, economist and former chief secretary Dr Bimal Koirala told New Business Age. “The government should reform existing laws to facilitate businessmen to invest in foreign countries instead of imposing restriction.” The fear among policymakers is that what happens if businessmen do not bring back money to the country. And, the answer to this fear is to set up effective monitoring bodies that will keep record of every businessman who invests abroad, he suggested. </div> <div> </div> <div> Given the low trade volume of the country and frequent fluctuation in the Balance of Payment (BoP), some experts advise against allowing Nepali businessmen to invest abroad. Koirala slams such opinion claiming it to be an out-dated concept. </div> <div> </div> <div> Times have changed and the government has to realize this fact. The government should understand and accept the new liberalized and globalized world and business scenario, Koirala opines.</div> <div> </div> <div> <table border="0" cellpadding="10" width="99%"> <tbody> <tr> <td bgcolor="#F6CEF5"> <div> <span style="font-size: 14px;"><strong>Act Restricting Investment Abroad, 2021BS (1964)</strong></span></div> <div> </div> <div> Article 3 Restriction on making investment abroad: </div> <div> </div> <div> (1)<span class="Apple-tab-span" style="white-space: pre;"> </span>No one shall make any kind of investment abroad after the commencement of this Act.</div> <div> </div> <div> (2)<span class="Apple-tab-span" style="white-space: pre;"> </span>Notwithstanding anything contained in sub-section (1), in relation to any specific kind of investment, the Government of Nepal may, by a notification in the Nepal Gazette, grant exemption from the restriction set forth in that sub-section, and specify the kind, extent, period of the investment so exempted and other necessary terms pertaining thereto.</div> </td> </tr> </tbody> </table> </div> <div> </div> <div> <span style="font-size: 14px;"><strong>Past Initiatives</strong></span></div> <div> Nepal started systematic initiative of attracting FDI in 1981. The Sixth National Plan (1980/81-1984/85), for the first time, incorporated a policy for utilizing foreign capital and technology as a useful supplement. The Plan mentioned that foreign investment and technology was primarily required in large-scale industries and mineral industries. Since then, the government continued revising policies related to inward FDI. Foreign Investment and Technology Transfer Act was introduced in 1992 and amended in 1996 in line with open and liberal economic policies. But outward FDI-related provisions remained unchanged. </div> <div> </div> <div> Recently, the government has started fresh initiative to review the policy. Foreign Investment Policy 2014 has been prepared and consultations with stakeholders are underway on it, according to Ministry of Industry. However, business community blames the government for not being proactive to introduce new policy. </div> <div> </div> <div> <span style="font-size: 14px;"><strong>Policies that Restrict Outward FDI</strong></span></div> <div> <strong>Act Restricting Investment Abroad, 2021(1964):</strong> This law, as its name suggests, restricts any Nepali citizen from investing outside of Nepal. While this may be an old Act, it is still valid in the country. It defines restricted investments as foreign securities, partnership with foreigners, foreign bank accounts, owning house and land in a foreign country and any foreign investment in cash or kind except as prescribed by the government. This law has severely affected outward FDI as Nepali citizens cannot freely invest outside the country. Despite a provision within the Act that leaves a space for aspirant businessmen to invest abroad by taking approval from the government, nobody has received such approval. </div> <div> </div> <div> <strong>Foreign Exchange Regulation Act: </strong>This act does not allow Nepalis to open bank accounts in foreign countries if the money is earned in Nepal. Nepalis can open bank account abroad only if they earn money outside Nepal. But the account holder should inform Nepal Rastra Bank about the account. </div> <div> </div> <div> <span style="font-size: 14px;"><strong>Changing Times but Unchanged Laws</strong></span></div> <div> The existing laws were formulated at a time when entrepreneurship in Nepal was at a primitive stage and Nepali businessmen did not have sufficient capital and expertise to invest abroad, said Basudev Adhikari, Director of Nepal Rastra Bank. </div> <div> </div> <div> Nepali business community has come a long way since 1964. “For instance, now we have a Forbes-listed billionaire that shows that our businessmen have enough capital to invest in various sectors,” said Adhikari. Competitiveness of Nepali business sector has tremendously increased over the last few years. Lawmakers should reform existing laws considering the changed scenario, he added. The prevailing laws have failed to prevent outflow of capital from Nepal anyway. </div> <div> </div> <div> <span style="font-size: 14px;"><strong><img alt="Anup Bahadur Malla" src="/userfiles/images/cs3(5).jpg" style="float: right; margin: 0px 0px 0px 10px; width: 300px; height: 166px;" />Need for Caution</strong></span></div> <div> Still the policy of allowing Nepalis to invest abroad cannot be introduced without caution. The most challenging job for the government is to set the ceiling for outward FDI, opined Anup Bahadur Malla, executive member of FNCCI. The government should not introduce any law haphazardly, he suggested. Meticulous studies are required even when formulating laws related to inward FDI, he said. </div> <div> </div> <div> There are flaws in inward FDI policies as well which have created some adverse impact on the economy, according to him. Foreigners in Nepal are venturing into small businesses which have nominal contribution to the national economy, he argued. For instance, Chinese nationals, according to him, have been replacing Nepali small entrepreneurs from Thamel and other places but their contribution to the national economy and employment generation is negligible. From this, the government should learn that both inward and outward FDI can be harmful if laws are formulated without rigorous study, he claimed.</div> <div> </div> <div> Along with fixing ceiling, he claims identification of competitive sectors is the most challenging job for the government. It should initiate debate on maximum investment-ceiling limit on outward FDI, and identify the sectors where Nepalis can take competitive advantages, he suggested. </div> <div> </div> <div> <table border="0" cellpadding="10" width="99%"> <tbody> <tr> <td bgcolor="#F6CEF5"> <div> <span style="font-size: 14px;"><strong>Defining FDI</strong></span></div> <div> Foreign direct investment (FDI) is defined as an investment involving a long-term relationship and reflecting a lasting interest and control by a resident entity in one economy (foreign direct investor or parent enterprise) in an enterprise resident in an economy other than that of the foreign direct investor (FDI enterprise or affiliate enterprise or foreign affiliate). FDI implies that the investor exerts a significant degree of influence on the management of the enterprise resident in the other economy. </div> <div> </div> <div> Such investment involves both the initial transaction between the two entities and all subsequent transactions between them and among foreign affiliates, both incorporated and unincorporated. FDI may be undertaken by individuals as well as business entities.</div> <div> </div> <div> Flows of FDI comprise capital provided (either directly or through other related enterprises) by a foreign direct investor to an FDI enterprise, or capital received from an FDI enterprise by a foreign direct investor. FDI has three components: equity capital, reinvested earnings and intra-company loans.</div> <div> •<span class="Apple-tab-span" style="white-space: pre;"> </span>Equity capital is the foreign direct investor’s purchase of shares of an enterprise in a country other than its own.</div> <div> •<span class="Apple-tab-span" style="white-space: pre;"> </span>Reinvested earnings comprise the direct investor’s share (in proportion to direct equity participation) of earnings not distributed as dividends by affiliates, or earnings not remitted to the direct investor. Such retained profits by affiliates are reinvested.</div> <div> •<span class="Apple-tab-span" style="white-space: pre;"> </span>Intra-company loans or intra-company debt transactions refer to short- or long-term borrowing and lending of funds between direct investors (parent enterprises) and affiliate enterprises.</div> <div> (Source: World Investment Report 2012, UNCTAD)</div> <div> </div> </td> </tr> </tbody> </table> </div> <div> </div> <div> <span style="font-size: 14px;"><strong>Outbound FDI: An Open Secret </strong></span></div> <div> Policies on outward investment have been seen as a screening device to restrict the outflow of capital from the country. But it is an open secret that Nepalis have already started investing abroad. </div> <div> </div> <div> Chaudhary Group (CG), a company owned by Forbes-listed billionaire and renowned industrialist Binod Chaudhary who has invested abroad through Cinnovation Group, a multi-dimensional conglomerate established in 1990 headquartered in Singapore. The company was created to take CG’s business interests global. Currently, it is expanding its footprint in global market. </div> <div> </div> <div> Business leaders and government officials hesitate to give opinion regarding outflow of capital from Nepal in public. But they privately confide that there are many instances where the investment is going abroad through one channel or the other. India has been one of the easiest destinations for Nepali investors to invest, one businessman told New Business Age. “Businessmen channel capital to India through their relatives and acquaintances living in India,” he disclosed. More than a dozen of reputed Nepali business houses have invested in India in one or other way and even government officials are aware of this fact, he claimed. So, it is better to legalize outward FDI to control informal outflow of money. </div> <div> </div> <div> <span style="font-size: 14px;"><strong><img alt="Dr Bimal Koirala" src="/userfiles/images/cs4(3).jpg" style="float: right; margin: 0px 0px 0px 10px; width: 300px; height: 169px;" />Drives of Outward FDI</strong></span></div> <div> A question worth asking is: what triggers outward FDI from Nepal? There is not an easy answer. Generally, two major drives can be analysed: market-seeking drive and resource-seeking one. Nepali businessmen want to go outside country for market-seeking purpose, said Pradeep Jung Pandey, president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI). </div> <div> </div> <div> Businessmen eye foreign market when their businesses are saturated in the home country, he said. It can thus be said that the drivers of outward FDI from Nepal are largely determined by market-seeking factors with little role played by policy measures. </div> <div> </div> <div> Political instability, labour unrest and terror created by conflicting parties might have triggered businessmen to invest abroad during a decade-long conflict, he said. But the situation has changed now and businessmen do not want to go global if there is prospect of good business in Nepal. </div> <div> </div> <div> <span style="font-size: 14px;"><strong>Anti Outward FDI Logics</strong></span></div> <div> 1.<span class="Apple-tab-span" style="white-space: pre;"> </span>Positive Financial and Macro Economic Indicators: Experts say that the overall economic indicators including economic growth should be in positive direction and should be stable to allow Nepalis to invest in foreign country. Given Nepal’s volatile economic situation, some economists advise not to allow outflow of the capital. </div> <div> </div> <div> 2.<span class="Apple-tab-span" style="white-space: pre;"> </span>Investment Climate: Why do our businesses want to go outside though market in Nepal has been growing? An easy answer is that there is no investment climate in the country. It is not possible to open up outward FDI without ensuring investment climate in the country. Our own country is in dire need of investment in almost all sectors and it is a matter of concern as to why businessmen are lobbying to open up outward FDI, an economist questioned. Several structural bottlenecks and supply-side constraints are impacting the investment climate in Nepal. Tough reform measures have to be formulated before bringing policies related to outward FDI, he suggested. </div> <div> </div> <div> </div> <div> 3.<span class="Apple-tab-span" style="white-space: pre;"> </span>Trade Deficit: Nepal has been witnessing a whopping trade deficit year after year. Nepal imports essentials goods and services by drawing on its foreign currency reserves, which are primarily contributed by remittances. Many experts fear that foreign currency reserve may deplete if the country allows businessmen to invest aboard. </div> <div> </div> <div> 4.<span class="Apple-tab-span" style="white-space: pre;"> </span>Distrust on Businessmen: Another crucial problem is trust deficit. The government is not certain that businessmen who invest abroad will sincerely send their profit back to the country. “The country that does not trust its own businessmen cannot make progress. The environment of trust should be built between business community and the government that will facilitate the process of bringing policies related to outbound FDI,” opined CNI vice president Haribhakta Sharma.</div> <div> </div> <div> </div> <div> 5.<span class="Apple-tab-span" style="white-space: pre;"> </span>Competitiveness: According to Global Competitiveness Report released by World Economic Forum, Nepal ranked 117 among 144 economies in 2013-14. In order to succeed in the global business, businessmen should be competitive. But, can Nepali businessmen be competitive when they have not been able to show their competitiveness in domestic front, questioned Dr Chiranjibi Nepal. He suggests that the government should provide competitive business environment.</div> <div> </div> <div> 6.<span class="Apple-tab-span" style="white-space: pre;"> </span>Absence of Entrepreneurial Attitude: Entrepreneurship needs innovative ideas and risk taking skills. Given their low entrepreneurial activities in homeland, many argue that the business community in Nepal still lacks entrepreneurial attitude. Most of the businessmen are involved either in hereditary business or in service sector or trade activities. These traits are not sufficient to compete in global market and most of them do not have entrepreneurial bent of mind, claims an expert. “This fact should be kept in mind while formulating policies.”</div> <div> </div> <div> 7.<span class="Apple-tab-span" style="white-space: pre;"> </span>Poor Performance of Manufacturing Sector: Nepal’s manufacturing sector is in weak state. The country cannot create much employment in absence of manufacturing activities. On the other hand, the country relies heavily on imports to meet daily consumer needs. In such circumstance, opening up outward FDI without improving the performance of country’s manufacturing sector might be suicidal, says a FNCCI member requesting anonymity. </div> <div> </div> <div> 8.<span class="Apple-tab-span" style="white-space: pre;"> </span>Fluctuation in BoP: Generally, businessmen prefer to invest in a strong economy where their capital is safe. If allowed to invest abroad, Nepali businessmen may make majority of their investment in the countries which have strong economy. Currently, remittance has helped maintain Nepal’s Balance of Payment (BoP). If in the future, inflows of remittance drops and at the same time businessmen take capital abroad, there will be severe BoP crisis. This is why the government is still reluctant to introduce outward FDI-related policies, an official at Finance Ministry said.</div> <div> </div> <div> <span style="font-size: 14px;"><strong>Rhetorical Logics and Laxity of the Government </strong></span></div> <div> Some experts vocally criticize the government’s laxity in creating business friendly environment and improve overall macroeconomic scenario. For how long can Nepal restrict businessmen from investing abroad, questioned economist Dr Posh Raj Pandey. The government and experts who do not favour the idea of opening outward FDI often repeat the same rhetorical logic but do nothing to improve the scenario, he said. </div> <div> </div> <div> The government is literally idle in terms of bringing any policy to foster an environment favourable for investment. Presently, the government is not taking any risks as the remittance influx has helped maintain economic stability. But the same situation cannot continue forever, according to him. He said that the government should not always repeat same logic to restrict outward FDI. If our government wants to promote economic prosperity, it should be ready to take risks and formulate smart policies, he suggested.</div> <div> </div> <div> <span style="font-size: 14px;"><strong>FDI and Mobility of Money </strong></span></div> <div> Numerous positive aspects of outward FDI are overshadowed by a few negative ones, said Dr Bimal Koirala, economist and former chief secretary. Outflow of capital also helps create more opportunities to lure inward FDI and Nepali businessmen come back to the home country with more expertise and skills which will ultimately contribute to the domestic economy, according to him.</div> <div> </div> <div> The mobility of money in and out of a country does not stop simply by laws. A state should facilitate in the continuity of the mobility of money because if the movement of money slowsdown it will depreciate the value of currency. Investment, regardless of the frontiers, is a must to increase the movement of the money. Acknowledging the fact, the government should open up avenue for outward FDI, said Dr Chiranjibi Nepal.</div> <div> </div> <div> <span style="font-size: 14px;"><strong>Pragmatic Approach</strong></span></div> <div> Some experts suggest the government to allow Nepalis to invest abroad but only in competitive sectors. According to economist and former finance secretary Rameshore Khanal, the government should identify competitive sectors and should allow businessmen to invest only in those sectors. Some of these sectors, according to him, are:</div> <div> 1.<span class="Apple-tab-span" style="white-space: pre;"> </span>Tourism (eco-tourism, home stay)</div> <div> 2.<span class="Apple-tab-span" style="white-space: pre;"> </span>Adventurous sector (climbing, rafting)</div> <div> 3.<span class="Apple-tab-span" style="white-space: pre;"> </span>Hospitality sectors: Hotel and restaurant (antique hotels like Dwarika)</div> <div> 4.<span class="Apple-tab-span" style="white-space: pre;"> </span>Banking/insurance</div> <div> 5.<span class="Apple-tab-span" style="white-space: pre;"> </span>Construction</div> <div> </div> <div> <span style="font-size: 14px;"><strong>Way Forward</strong></span></div> <div> The government should carry out empirical studies on the effect of outward FDI on domestic economic activities. Before formulating laws, the government should assess some aspects of outward FDI including whether it will have a positive and significant impact on economic growth, and potential adverse impacts on various sectors. </div> <div> </div> <div> On the part of the government, it is not appropriate to remain literally idle on the issue of outbound FDI. The government should not see policies as a screening device to restrict the outflow of capital from the country. Rather it should formulate policies that will facilitate it. The Nepali private sector’s long wait to go around the globe to invest should take a positive turn soon.</div> </div> <p> </p>', 'published' => true, 'created' => '2014-07-30', 'modified' => '2014-09-12', 'keywords' => 'new business age cover story news & articles, cover story news & articles from new business age nepal, cover story headlines from nepal, current and latest cover story news from nepal, economic news from nepal, nepali cover story economic news and events, ongoing cover story news of nepal', 'description' => 'It is not surprising that Nepali businessmen, like many around the world, want to be competitive and set their footprint in the global market. But existing policies are keeping their dreams from being materialized. The government remains skeptic and reluctant to allow outward FDI citing probable impact on the national economy.', 'sortorder' => '2634', '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) 14 => array( 'Article' => array( 'id' => '2782', 'article_category_id' => '48', 'title' => 'The Frog Country', 'sub_title' => '', 'summary' => null, 'content' => '<div> <strong>--By Madan Lamsal</strong></div> <div> </div> <div> If I propose to make frog the national animal of new Nepal, I am sure, you will happily agree and also congratulate me for this brilliant idea. Nepal’s every bit of life has been touched by the benevolent frog and its various qualities. One of our revolutionary finance minister a few year ago declared that Nepal’s economy should now grow not in a reptiles’ dragging but in leap-frogging pace. Leap-frogging indeed is a right simile for Nepal. No Nepali believes in being rich taking a long route walk. Inspired by the frog, everybody wants to leap- frog from penury to instant prosperity. We never get tired of emphasizing that Nepal is an agrarian economy. The plantation season begins with the beacons of twaar-twaar-twaar of the frogs in the banks of the river and main fields. For many, frogs provide for a barbequed lunch or snack at the middle of the hard day’s work in the field.</div> <div> </div> <div> If you think of less relevance of iconic frog in the civilized life, you are wrong. The fortunate ones who have got employment must have fine qualities of a frog -- to jump a queue, to jump enter into influential leader’s living rooms jumping off the high fences and learn to find some excuses to jump across the process of meritocracy.</div> <div> </div> <div> If you happen to meet a frog-mouthed personality in the busy city, you can be sure that he must be a high-ranking official in bureaucracy, bank or NGO. If not, he must be a seasoned politician whose skin is gradually transforming into that of rhino from that of a frog. These are the key people for the very existence and functionality of the country. </div> <div> </div> <div> You might ask, how would you recognize these frog-mouthed ones in crowded cities? It is pretty simple. Bring along a dead frog with you and begin to compare the looks of people with it. Protruding eyes, lumped eyelids as the result of over drinking, large potbellies, twisted legs and habit of jumping the queues anywhere possible, be that temple or service station. The growth rate of the country may be low, but these frog-mouthed talents can make it sound great with their hoarse voice. The bank CEOs can ensure great profits regardless of the fact that only twenty percent people have access to the banking services. (How much profit will they earn if every citizen has a bank account in the country?)</div> <div> </div> <div> If you meet a proper frog-mouthed politician, he must be a youth leader of the party as he is aged just 65 years or so. You can argue that frog mouthed ones are spared by nature from entering into the old age. </div> <div> </div> <div> There are other great qualities of the frog we have emulated. The best among them is to live life free of all worries in any degree of precariousness. You must have seen a frog that is being swallowed by a snake that still wants to catch a spider, not being concerned that it will die in next few seconds. The country has long hours of load-shedding, we Nepalis don’t worry. There is no sign of new constitution being written, we rather worry about American visa. We don’t have enough supply of petrol, but it doesn’t stop us from buying a car. We prefer big LED to mount on our living room wall, without counting hours we actually have power supply.</div> <div> </div> <div> Also, you have heard the fable of Nepali frogs exported to the USA in an open basket and all of them reached intact, not even a single one jumping out from the basket as each of them had learnt the leg-pulling skills from our politicians. It is no wonder, our politicians and decision makers also have learnt many skills from the frogs, as mentioned above. Since, Nepalis and frogs have developed such a cordial bond, only suitable thing is to call Nepal a frog country and declare frog as the national animal.</div>', 'published' => true, 'created' => '2014-06-08', 'modified' => '2014-09-08', 'keywords' => 'new business age no laughing matter news & articles, no laughing matter news & articles from new business age nepal, no laughing matter headlines from nepal, current and latest no laughing matter news from nepal, economic news from nepal, nepali no laughing matter economic news and events, ongoing', 'description' => 'If I propose to make frog the national animal of new Nepal, I am sure, you will happily agree and also congratulate me for this brilliant idea. Nepal’s every bit of life has been touched by the benevolent frog and its various qualities. One of our revolutionary finance minister a few year ago declared that Nepal’s economy should now grow not in a reptiles’ dragging but in leap-frogging pace.', 'sortorder' => '2633', 'image' => null, 'article_date' => '0000-00-00 00:00:00', 'homepage' => false, 'breaking_news' => false, 'main_news' => false, 'in_scroller' => false, 'user_id' => '0' ) ) ) $current_user = null $logged_in = falseinclude - APP/View/Elements/side_bar.ctp, line 60 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::_renderElement() - CORE/Cake/View/View.php, line 1224 View::element() - CORE/Cake/View/View.php, line 418 include - APP/View/Articles/index.ctp, line 157 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::render() - CORE/Cake/View/View.php, line 473 Controller::render() - CORE/Cake/Controller/Controller.php, line 968 Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200 Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167 [main] - APP/webroot/index.php, line 117
Warning (2): simplexml_load_file() [<a href='http://php.net/function.simplexml-load-file'>function.simplexml-load-file</a>]: I/O warning : failed to load external entity "" [APP/View/Elements/side_bar.ctp, line 60]file not found!Code Context// $file = 'http://aabhiyan:QUVLg8Wzs2F7G9N7@nepalstock.com.np/api/indexdata.xml';if(!$xml = simplexml_load_file($file)){$viewFile = '/var/www/html/newbusinessage.com/app/View/Elements/side_bar.ctp' $dataForView = array( 'articles' => array( (int) 0 => array( 'Article' => array( [maximum depth reached] ) ), (int) 1 => array( 'Article' => array( [maximum depth reached] ) ), (int) 2 => array( 'Article' => array( [maximum depth reached] ) ), (int) 3 => array( 'Article' => array( [maximum depth reached] ) ), (int) 4 => array( 'Article' => array( [maximum depth reached] ) ), (int) 5 => array( 'Article' => array( [maximum depth reached] ) ), (int) 6 => array( 'Article' => array( [maximum depth reached] ) ), (int) 7 => array( 'Article' => array( [maximum depth reached] ) ), (int) 8 => array( 'Article' => array( [maximum depth reached] ) ), (int) 9 => array( 'Article' => array( [maximum depth reached] ) ), (int) 10 => array( 'Article' => array( [maximum depth reached] ) ), (int) 11 => array( 'Article' => array( [maximum depth reached] ) ), (int) 12 => array( 'Article' => array( [maximum depth reached] ) ), (int) 13 => array( 'Article' => array( [maximum depth reached] ) ), (int) 14 => array( 'Article' => array( [maximum depth reached] ) ) ), 'current_user' => null, 'logged_in' => false ) $articles = array( (int) 0 => array( 'Article' => array( 'id' => '2797', 'article_category_id' => '48', 'title' => 'Sexy Settings', 'sub_title' => '', 'summary' => null, 'content' => '<div> </div> <div> <strong>--By Madan Lamsal</strong></div> <div> </div> <div> What is most popular these days in Nepal? You may say, it is betting or netting and dating. You may be right to some extent, but I say the most practiced thing is the setting. Let’s look it into more details.</div> <div> </div> <div> Yes, betting is quite popular in Nepal’s share market. Till recent past, the Nepali casinos were ahead in betting than the share market. But as the setting in the casinos became a bit weak, share market was ahead in the betting game. The retail investors in Nepal’s share market buy or sell the stocks going by the grapevine than reading the balance sheets of the companies. This can be called betting. Therefore, when Dr Baburam Bhattarai became the Finance Minister, he had termed Nepal’s share market as a casino where betting is the mainstay. And he was not wrong. However, even the betting in share market will not yield returns if the setting is not right.</div> <div> </div> <div> Again, it is true that dating after netting, such as checking facebook, is quite popular and it is personal and a most favoured pastime of most Nepalis - be a youth or a senior citizen. They seem to spend most of their productive three to four hours of their day or night in netting and dating. If they don’t spend few hours in netting, they feel they have missed a lot in their lives. Therefore, their eyes may be in one of the social sites. But again setting plays more dominant role also here. Netting and dating are not successful if the setting of the dating is not right. </div> <div> </div> <div> To be successful in Nepal in any field, especially in business and politics, you must know the art of setting. Otherwise you will fail. There is a special class in Nepali society which has become super rich just by the art of setting rather than by making a huge investment or knowledge of business. Therefore, setting is a new management mantra in Nepal. In fact, the management colleges should start teaching the art of setting to their students so that they are successful in their future profession as well as everyday life.</div> <div> </div> <div> Nowadays, there are many news reports in the Nepali media that people, especially government officers, are caught or interrogated by the anti-corruption body, the CIAA. But the fact is that they were caught or interrogated just because they did not know the art of setting. Many who commit bigger wrongs are never caught because they know the art of setting.</div> <div> </div> <div> If you look at it minutely, it is an open secret that nothing moves in Nepal if one doesn’t have proper setting in government offices or in the court, or in the company registrar’s office or the customs offices. Be it for receiving a license or getting a job transfer or promotion in the bureaucracy, the role of setting is paramount. So, more than the educational certificates or anything else, setting is the most important factor. If you don’t know this art, you may have to lose your job or your business also.</div> <div> </div> <div> Nobody seems to have peeped deep to see why the constitution could not be made in the first Constituent Assembly. It was just because the setting among the top gang-of-four leaders of three parties could not happen. Even now, however hard the people or CA members harp on the new constitution string, if the setting among this gang-of-four is not proper, it will not happen again. This gang calls it ‘consensus’, but it is nothing but another word for setting. </div> <div> </div> <div> Therefore, this ‘setting’ is not only omnipresent and omnipotent, but also cool and sexy. Don’t you agree?</div>', 'published' => true, 'created' => '2014-10-10', 'modified' => '2014-12-23', 'keywords' => 'new business age no laughing matter news & articles, no laughing matter news & articles from new business age nepal, no laughing matter headlines from nepal, current and latest no laughing matter news from nepal, economic news from nepal, nepali no laughing matter economic news and events, ongoing', 'description' => 'What is most popular these days in Nepal? You may say, it is betting or netting and dating. You may be right to some extent, but I say the most practiced thing is the setting. Let’s look it into more details.', 'sortorder' => '2647', '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' => '2795', 'article_category_id' => '52', 'title' => 'Auto Dream', 'sub_title' => '', 'summary' => null, 'content' => '<p> </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. Given the increasing demand due to expansion in the road network and resultant steady increase in import of all sorts of vehicles, Dr.Mahat’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. </div> <div> </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 – 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. </div> <div> </div> <div> Dr.Mahat’s call has come at a time when Nepal’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. </div> <div> </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’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. </div> <div> </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 – the latest being the power trade agreement with India and finalization of project development agreement template for power projects to the satisfaction of investors – are good indications for the future. But that is not going to be enough for development of automobile industry. </div> <div> </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. </div> <div> </div> <div> These centres should ideally be focused on developing electricity operated vehicles given the country’s hydropower potentials. </div> <div> </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. </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) 2 => array( 'Article' => array( 'id' => '2800', 'article_category_id' => '40', 'title' => 'Unlocking Nepal's Growth Prospect', 'sub_title' => '', 'summary' => null, 'content' => '<div> </div> <div> </div> <div> <strong> --By Akhilesh Tripathi</strong></div> <div> </div> <div> ‘Nepal does have natural resources. They are of course our growth potentials but not necessarily the key element needed for our future economic growth. The key element is human resource; the brainpower, creativity of the people, entrepreneurship and innovation. If we can unlock our human potential, if we can unlock entrepreneurship and innovation which will make use of the natural resources that Nepal has, then our growth potential will be unlocked; we will become a rich country.”</div> <div> </div> <div> Thus spoke Finance Minister Dr Ram Sharan Mahat, the chief guest of the second edition of the Asian Paints NewBiz Business Conclave & Awards, organized by New Business Age Pvt Ltd at Hotel Soaltee Crowne Plaza on September 11.</div> <div> </div> <div> <img alt="" src="/userfiles/images/cs1(5).jpg" style="width: 550px; height: 234px; margin-left: 10px; margin-right: 10px;" /></div> <div> </div> <div> <strong><img alt="" src="/userfiles/images/cs2(2).JPG" style="float: right; margin: 0px 0px 0px 10px; width: 300px; height: 397px;" />Investing in Human Resource</strong></div> <div> The remarks of Dr Mahat, a six-time finance minister, are a clear departure from the traditional belief that natural resources are a must for the economic growth of any country. The appropriate use of the available natural resources is necessary, the Finance Minister said, adding, however, that the country’s economic development is possible through the use of brainpower, creativity, entrepreneurship and innovation. He cited examples of Japan, Hong Kong, Taiwan and South Korea which have achieved fast economic growth despite having practically very little natural resource.</div> <div> </div> <div> Deependra Bahadur Kshetry, former vice-chairman of the National Planning Commission (NPC), who too attended the Conclave, agrees with the finance minister. “We need more skilled and trained human resource, creativity and innovation in business and entrepreneurship to exploit our abundant natural resource, which gives us a comparative advantage. However, the endowment of natural resource alone is not enough. This is what the finance minister means. And this is true as well,” said Kshetry, while talking to New Business Age after the conclusion of the Conclave.</div> <div> </div> <div> Kshetry says the government should invest more in developing the country’s human resources because it will help build the national capacity. “In simpler terms, it means investing more in education and skill-oriented training. Investment in human resource will help unlock our growth prospects,” he added.</div> <div> </div> <div> To invest in human resource development is to compete with investment in infrastructure and other social sectors. Here, the government has harder choices to make as it cannot choose one sector over the other as almost all sectors in Nepal need investment, and huge ones, for the matter. So, according to economists and development experts, the government will do well to have a well-designed national development plan, which will clearly spell out our national priorities. “It will help attract international support as well. Then it will be easier for the government to decide in which areas to use domestic resources and in which areas external resources,” say Kshetri. </div> <div> </div> <div> Managing Director of Jade Consult, Bkesh Pradhanga, another speaker of the Conclave, echoed similar sentiments. “The government should mobilize our human resource properly. For this, the government should invest in higher education of the country’s workforce and this should be the primary focus,” he opined. </div> <div> </div> <div> <strong><img alt="" src="/userfiles/images/cs3(1).JPG" style="float: right; margin: 0px 0px 0px 10px; width: 300px; height: 604px;" />Focus on Three ‘I’s</strong></div> <div> Our development priorities should not miss the three ‘I’s – infrastructure, investment and inclusion – according to Johannes Zutt, World Bank country director for Nepal and Bangladesh. Zutt, who was also one of the speakers of the Conclave, clearly said that the three ‘I’s should be Nepal’s top priority for now if the country is to achieve fast economic growth.</div> <div> </div> <div> On the investment front, the level of foreign investment has been low. According to the Investment Board, the total amount of foreign investment in 2012 which was declared the Investment Year was USD 62 million. It went up in 2013 to USD 208 million. In 2014 so far, it is USD 130 million. Domestic investment, too, hasn’t been growing at the expected rate. “Nepal is investing below the rate of investment needed to achieve a double digit growth. There is actually money available in Nepal for higher investment, but it isn’t happening. The business community complains about access to finance, regulatory burdens and labour costs. These are the problems existent is South Asia but it is debilitating in Nepal,” observed Zutt.</div> <div> </div> <div> But why has large scale investment not come to Nepal? Pradhananga answers, “It is because of political instability, lack of policy predictability, and industrial disputes that have caused the closure of companies like Surya Nepal in the recent past.” He added that Nepal immediately needs an investment of USD 15 billion for various projects that are ready for implementation.</div> <div> </div> <div> “For private investment to come, we need to create more enabling environment. This is why we have initiated some new incentives to lure private investment from this year’s budget, Dr Mahat said, “In the hydropower sector, for example, we have announced income tax exemption for the next ten years and fifty percent tax rebate for another five years.”</div> <div> </div> <div> Zutt opined that Nepal is caught in a vicious cycle of investment and infrastructure. “Nepal doesn’t have high enough levels of investment in infrastructure that is necessary for businesses to succeed and because it doesn’t have that infrastructure, it is not getting the investment,” he said.</div> <div> </div> <div> Pradhananga suggested to the government to focus on infrastructure development for the next one decade. He also advised to change old laws and policies and introduce new ones to attract private investment. “The Hydropower Policy 2001 and Foreign Investment and Technology Transfer Act 1992, to give a few examples, are quite old. The aim of these laws and policies is to attract FDI in the country. But we haven’t been able to make them timely and updated. This has negatively affected our development efforts,” said Pradhananga. </div> <div> </div> <div> <strong>Hydro Hopes</strong></div> <div> All the speakers of the Conclave agreed that hydropower has great potential in Nepal. “We are rich in water resource. We have huge hydropower potential. We can be the power house of clean energy in South Asia,” said Dr Mahat. </div> <div> </div> <div> But the reality is different from the rhetoric. Nepal has hardly tapped one percent of its total hydropower potential. So far, the country has been able to produce only about 750 MW of hydroelectricity though the total hydropower potential of the country is said to be over 80,000 MW. That means one of the sectors where Nepal’s growth prospects lie is the hydropower sector. Over half a dozen projects that are together expected to produce more than 5,000 MW of hydroelectricity are in advanced stage of development (see box). The government’s claim to do away with load-shedding over the next three-four years is based on these projects.</div> <div> </div> <div> “In Nepal, hydropower is one such sector of investment which can bring about a positive change in the entire econom</div> <div> “If the PDA [project development agreement] with the Upper Karnali hydropower project is signed over the next few days or weeks, then it will be a game changer. It will lead to the signing of PDA with half a dozen other major hydropower projects,” said Dr Mahat.</div> <div> </div> <div> <strong><img alt="" src="/userfiles/images/cs4(4).JPG" style="float: right; margin: 0px 0px 0px 10px; width: 300px; height: 231px;" />Nepal’s Strategic Location</strong></div> <div> The speakers of the Conclave also said that Nepal’s geographic location between China and India, two rapidly growing economies of the world, provides the Himalayan nation a great opportunity for economic growth. “Nepal’s growth prospects also lie in the fact that it is located between China and India, two of the fastest growing economies of the world. If Nepal can establish itself a trading partner between China and India, it will greatly help Nepal’s economic growth,” said Zutt.</div> <div> </div> <div> It is worth mentioning here that the annual trade volume between India and China has already crossed USD 70 billion and the two countries have planned to increase it to USD 100 billion by 2015. If Nepal can build roads, highways and rail links to connect its northern border with southern border, then it can effectively work as a trading partner between the two Asian giants, according to economists and development experts. </div> <div> </div> <div> <strong>‘2015: Nepal’s critical juncture’</strong></div> <div> Addressing the Conclave, Dr Swarnim Wagle, member of National Planning Commission said that the year 2015 will be very crucial for Nepal as the country’s new constitution is expected to be promulgated in 2015. Once, the constitution is ready, Dr Wagle said, Nepal’s political transition would be complete and then the country’s economy can take off. “We are few centuries behind other countries but I think that we can really make the year 2015 our critical juncture and really expedite our path into modernity,” said Wagle.</div>', 'published' => true, 'created' => '2014-11-09', 'modified' => '2014-11-21', 'keywords' => 'new business age cover story news & articles, cover story news & articles from new business age nepal, cover story headlines from nepal, current and latest cover story news from nepal, economic news from nepal, nepali cover story economic news and events, ongoing cover story news of nepal', 'description' => 'Nepal needs to invest in its human resource and exploit its natural resource to the fullest to unlock its growth prospects.', 'sortorder' => '2645', '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' => '2796', 'article_category_id' => '168', 'title' => 'MBA For Working Managers', 'sub_title' => '', 'summary' => null, 'content' => '<div> </div> <div> </div> <div> <strong>--By Upashana Neupane</strong></div> <div> </div> <div> Along with MBA and BBA there were lot of other options available for fresh graduates or regular students who aspired to gain a degree in management studies. But the options were limited for the working entrepreneurs or managers who wanted to sharpen their skills or upgrade their status in their field or start their own enterprise. Now, they too have an option in the form of Executive MBA or EMBA. </div> <div> </div> <div> MBA or EMBA are graduate level business degree especially designed for working professionals of the same field. These are post-experience management education programmes that help managers learn to change and grow in their career. They are lot like a regular MBA programmes only that they are primarily designed to educate working executives, managers, entrepreneurs, and other business leaders. </div> <div> </div> <div> Executive MBA was started in the early 1980s as a response to the need of the post experience education was felt. It was introduced as MBA for working managers, for the people working in managerial sectors who had no MBA backgrounds. It aimed to furbish their managerial performance at their respective institutions. </div> <div> </div> <div> In Nepal, Ace Institute of Management started the EMBA programme in 1999 under the affiliation of Pokhara University, while Kathmandu University School of Management (KUSOM) started its EMBA programme in 2000.</div> <div> </div> <div> <strong>Different from MBA</strong></div> <div> EMBA and MBA programmes generally attract people of different ages and at points in their career lives. These programmes are somehow similar in content but the EMBA classes are of faster paces, which allow students to receive their degree in two years or less while working full time. EMBA Programme emphasises applied learning, leadership and personal skill development, and a global mindset. </div> <div> </div> <div> Subas KC, dean at KUSOM shares that the EMBA is more generalist programme while MBA is more specialised programme. “We’ve designed EMBA focusing more on the things like leadership and skills enhancement which is needed for a working professional to enhance their career,” he says, “We are focusing particularly on those skills which are direct and visibly necessary for them.”</div> <div> </div> <div> Similarly, Kumar Thapa, former Associate Director of EMBA programme at Ace Institute of Management also shares same feeling, “EMBA is more fundamental- general class which is elective not specialized and the course is more focused on what working professionals need in the workplace,” he says, “While MBA is more academic and specialized course.” </div> <div> </div> <div> With that, the cohorts also often turn into a valuable network that students can tap long after they receive their degree. KC shares there have been lot of cases where students from managerial background have switched to start their own enterprises as they develop a strong network from the wider range of opportunities provided by the college.</div> <div> </div> <div> There are various factors people join EMBA. KC shares that “most of the students join the programme to perform better in current job, some to upgrade their current position in their organisation. Basically, all want to develop their ability and skills to choose a better path in their career. Some people want to change their career also, so they join to gain a better perspective and opportunities.”</div> <div> </div> <div> <strong>Growing Trend</strong></div> <div> Executive MBA is a good opportunity that is made available for the working people who want to upgrade their career and the attraction towards it is increasing lately. People from various background: corporate sector, public and development sector, entrepreneurship sector, everyone is now willing to join the programme for various reasons. Mostly, senior level executives join the programme but Thapa believes that lately younger people are joining this programme with relatively short working experience.</div> <div> </div> <div> KC believes that the trend has been good so far and believes that it will remain same for some more years but he said that the course needs should be revised and redesigned after some years.</div>', 'published' => true, 'created' => '2014-10-10', 'modified' => '2014-11-21', 'keywords' => 'new business age business education news & articles, business education news & articles from new business age nepal, business education headlines from nepal, current and latest business education news from nepal, economic news from nepal, nepali business education economic news and events, ongoing', 'description' => 'Along with MBA and BBA there were lot of other options available for fresh graduates or regular students who aspired to gain a degree in management studies. But the options were limited for the working entrepreneurs or managers who wanted to sharpen their skills or upgrade their status in their field or start their own enterprise. Now, they too have an option in the form of Executive MBA or EMBA.', 'sortorder' => '2644', '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' => '2792', 'article_category_id' => '167', 'title' => 'UML's Transformation : Leninism To Panelism', 'sub_title' => '', 'summary' => null, 'content' => '<div> </div> <div> <strong>--By Achyut Wagle</strong></div> <div> </div> <div> The Communist Party of Nepal-United Marxist-Leninist (CPN-UML) passed yet another acid test to vindicate its democratic credentials by electing the entire 159-member Central Committee (CC), including the new chairman through ballots, in the ninth general convention (GC) held in Kathmandu, July 3-10, 2014. In a closely contested bid to chairmanship, KP Sharma Oli defeated Party's former, two-time, general secretary Madhav Kumar Nepal by a narrow margin of forty-four out of two thousand and two hundred votes of the GC delegates.</div> <div> </div> <div> <strong>Democratic Domain </strong></div> <div> There is no dearth of cynics who claim that bitter factionalism that surfaced during the contest for chairmanship would further divide the party that is already mired by groupism. But what must be appreciated here is: UML is the only political party of the country that has developed best internal democratic practices. Unlike many communist outfits who choose to break-away as the separate entity once some differences crop-up within the group, the UML has exhibited tremendous level of resilience to save it from fragmentation; thanks to the democratic space it created to vent the differing views and ideologies. For this reason it has withstood the test of time as the mainstream left force amongst some three dozen odd communist 'parties'. It must not also be forgotten that it is a communist party that has painstakingly and by now convincingly transformed itself to a credible democratic alternative of the country. More importantly, it has set a practical contemporaneous formula for democratic transformation of any communist force that is originally indoctrinated to rise to power of 'people's republic' by using the 'bullets and barrels'to a force that readies itself to multi-party competition through ballots. No doubt, for this party, metamorphosis of greater magnitude is still inevitable to shake-off many dogmas and nostalgia of Soviet era. But, whatever it has achieved and maintained itself is in no way instantly dismissive. The ninth GC too has proved to be a new milestone as it elected mainly new set of younger leaders in CC, who have firmer belief in democracy than the older generation.</div> <div> </div> <div> It is not difficult to see that the Party's polity has now shifted from 'Proletarianism' or 'Leninism' to Panelism, which from a democratic perspective is a welcome dimension of change. The political sportsmanship and democratic spirit was clearly demonstrated by the leaders at the official closing ceremony of the GC on July 17. Both the victor and vanquished, Oli and Nepal respectively, along with other elected central body members vowed to work for the party unity, terming the vertical division during the CC election mere 'democratic exercise'. Not only both the factions won equal number of members as the office-bearers, the representatives seem to have guided to votemore by the quality of the candidate than the factional affiliation, electing a completely mixed panel. Any 'bright' person from both panels got place in the new CC.</div> <div> </div> <div> <strong>Road Ahead</strong></div> <div> If the mood of the Declaration made at the UML headquarters on 17th of July, is any indication, the party would soon enter into an era of a joint-leadership of many influential leaders. The chairman-elect Oli in very clear terms, with tears in his swollen eyes, declared that he did not have many days to live, and extended his arms for unity. It was momentarily a piece of emotional melodrama, unique to political cruelty. He couldn't even complete his short written speech. It is his eighth year running since his kidney transplant and, of late, the infection has now spread to his whole body, with septic deep wounds and swellings. There was a whirling question in the minds of the entire rank and file, why did he at the first place choose to run for chairmanship despite such precarious health condition? There is a strong school of thought which believes, there were mischievous minds like that of Bamdev Gautam who harboured dream of running the party as officiating chief as Oli is already a dilapidated figure. But, this possibility is clearly thwarted by the 'ideologues' belonging mainly to Nepal faction, who changed the party statute such that now there are five second men (vice-chairmen) in the hierarchy after the chairman. This is the very statute the GC ratified, albeit with some resistance. And, incidentally, Gautam ranked second among these five in terms of popular vote, behind Bhim Rawal, a Nepal loyalist. In any event of Oli's absence, there would be moral pressure (as there is no clear statutory provision) to handover charges to Rawal, not Gautam, or Bidya Bhandari, another vice-chair elect and the most trusted aid of Oli.</div> <div> </div> <div> What the UML's change in leadership means for the nation, is another issue widely debated in the political circles after Oli’s victory. Again, effectively it depends on the health of Oli. Should his health permit, he naturally dreams of becoming the next prime minister of the country. If the things move according to agreement between the Nepali Congress and UML to promulgate a new constitution by the end of January 2015, under the turn-key clause of the agreement, the premiership would automatically come to the UML candidate, as things stand now, to Oli as the Party's parliamentary party leader. There are newly emerged political equations within that party such that no single person, except the chairman given his current level of comfortable majority in CC, is likely to hold the sway in any decisions. The ambitions like that of Gautam are dampened as such, once the power gets transferred to lower ranks from the chairman.</div> <div> </div> <div> <strong>Policy Paradigm</strong></div> <div> During the run-up to the ninth convention, there was a sort of euphoria created by a 'club' of party's young 'thinkers' that Party's socio-politico-economic policy paradigm would be redefined and formalized through the GC. But, the entire GC was so much consumed by the fight for the posts that it hardly could undertake much deserved discussions with due seriousness on any policy document. At the end, when it came-out with the thirty-three point Declaration on July 17, many of the same old communist verbose again found the place in it. 'Awarding land-ownership rights to tillers', 'protecting trade union rights', 'deploring of infringements on human rights' in some weird part of the world etc. were repeated, rather artlessly. Some of the hasty conclusions like the 'global economic crisis like that of 2008 justifies the rationale of socialism' were also incorporated.</div> <div> </div> <div> Interestingly though, this Declaration has very carefully avoided over use of redundant communist jargons and jingoisms. Not only it doesn't carry terms like 'Indian expansionism', 'American imperialism', it also cautiously reduces the frequency of the words like 'revolution', 'struggle' or 'class struggle' that are invariably and clumsily thrusted into policy papers of almost all communist formations. The ninth GC Declaration instead proposes interesting separate economic prescriptions for their cadres and the country.</div> <div> </div> <div> 'This GC urges all the local committees of the party, affiliated sister organizations and all members of the party to devise concrete plans for their respective locality to augment economic development, productivity and employment and involve in the production functions so as to establish themselves as the leading-lights of the economicprosperity,' says the point number 23 of the Declaration. The Declaration has also 'appreciated' the 'improving' relations between India and China and has wished to make Nepal beneficiary to the impressive economic growth of both the neighbours.</div> <div> </div> <div> <strong>Opportunities and Challenges</strong></div> <div> Perhaps the biggest opportunity for the CPN-UML is the growing compulsion for all other communist forces to follow its 'janatako bhudaliya janbad' or multiparty democracy route, should they opt to remain relevant in modern day pluralistic politics. It is becoming increasingly difficult for parties with Maoist tags not to follow the exact process the UML did for the last two and half decades. If the party wereto equip itself to harness this opportunity, it could provide a major fillip to its organizational strength. Certainly, its increasing global recognition as trustworthy democratic force is another very powerful factor that helps to retain it as a major player in Nepali politics. Its gradual policy shift from Left to the Centre is crucial to ensure the outfit's long lasting relevance.</div> <div> </div> <div> There are challenges too, mostly emanated from three sources - policy confusions, organizational efficiency and 'class' shifts. The ninth GC also could not change its name by dropping the 'Marxist-Leninist' tag and the term 'Communist' from its official name, despite the fact that there is a widespread realization of this need within the Party. The psychological divide in the mandarins is debilitating -- they often times love to retain communist identity and yet want to change this 'as soon as possible' for public interface. The Party has failed to bring into effect a much-needed departure from three the decade-old nostalgia of 'classless society'. Instead the Party itself has become the 'class' of riches with 'too many, too big' leaders. The only reason the Party substantially increased the number of office bearers from six to fourteen was to accommodate these 'big' names with suitably high-sounding positions. Generally, those who have been prime ministers, deputy prime ministers and ministers in the past have sought those 'elitist' titles. This is resulting into overlaps and duplications on responsibilities and duties, and ego clashes at every decision points. The cumulative effect of all these is sure to have telling effect in organizational efficiency and cadre-leader relations, not in so distant future.</div> <div> </div> <div> Effectively, the UML has graduated from the party of 'proletariats' to 'new riches', not only in terms of policy-base but as the class representation. To borrow a phrase from the communist literature itself, 'the class division' within the party has been strikingly vivid in recent years. In many cases, its leaders have protected criminals just to extract money in return. There is not any binding ideology available in any political literature that can accommodate all these extremes. The task of managing all these paradoxes, the sooner the better, comes on the shoulder of the new leadership. But, unfortunately, the shoulders of the commander are now sick, severely.</div> <div> </div> <div> <em>The writer is former editor of Aarthik Abhiyan National Daily.</em></div>', 'published' => true, 'created' => '2014-09-08', 'modified' => '2014-11-21', 'keywords' => '', 'description' => 'The Communist Party of Nepal-United Marxist-Leninist (CPN-UML) passed yet another acid test to vindicate its democratic credentials by electing the entire 159-member Central Committee (CC), including the new chairman through ballots, in the ninth general convention (GC) held in Kathmandu, July 3-10, 2014. In a closely contested bid to chairmanship, KP Sharma Oli defeated Party's former, two-time, general secretary Madhav Kumar Nepal by a narrow margin of forty-four out of two thousand and two hundred votes of the GC delegates.', 'sortorder' => '2643', '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' => '2783', 'article_category_id' => '166', 'title' => 'Deciphering The Indian Election: Challenges Before Modi & The South Asian Message', 'sub_title' => '', 'summary' => null, 'content' => '<div> <strong>--By Prof Ujjwal K Chowdhury</strong></div> <div> </div> <div> <span style="font-size:14px;"><strong>Queerness of the Results</strong></span></div> <div> Interesting times indeed. Modi-fied BJP’s remarkable election campaign surely was fuelled by unprecedented sums of money, but more interestingly magnified by the rule of the first-past-the-post system. A mere 12 per cent difference in vote-share with the Congress has turned into 600 per cent difference in seats (NDA with 335 seats, including 282 of BJP against UPA with 60 seats, including 44 of Congress). </div> <div> </div> <div> It has two repercussions: Modi’s darker past with regards to poor governance during 2002 riots in Gujarat has been almost banished, and Congress-led UPA’s abysmally poor record of scams-ridden governance has made the party justifiably suffer the worst defeat in its 129-year history. </div> <div> </div> <div> The 'Modi Wave' has touched 40 per cent of voters, and left 60 per cent cold, with not much dent made in those states where regional parties still enjoy a high degree of credibility, like Tamil Nadu, Odisha and West Bengal, though it has wrecked the Congress everywhere. The wave swept through Uttar Pradesh, where it also managed to draw away voters from the BahujanSamaj Party, partially from the Samajwadi Party, and of course in Bihar too.</div> <div> </div> <div> Taken together, MPs from national parties like Congress, the Left and the AamAadmi Party barely add up to 70, and regional parties like the AIADMK, the TRS and the BijuJanata Dal, or the Trinamool Congress, are unlikely to show much interest in, let alone challenge, the Modi government on a large number of crucial areas of policymaking. And this does not bode well for the largest functional democracy of the world.</div> <div> </div> <div> <span style="font-size:14px;"><strong>How did Brand Modi Succeed?</strong></span></div> <div> Modi’s strategy was to turn the elections into a Presidential format by positioning the polls as a referendum on his performance in Gujarat and his India Vision. Rather than just harping on UPA failures, Modi chose, instead, to focus on a positive campaign around his perceived delivery in a mid-sized state, and the promise that he could make this national, telling one and all: ‘Vote for me and I will give you good governance’.He raised people’s high expectations from the party and him by promising ‘Minimum government, but maximum governance.’</div> <div> </div> <div> Modi has won on the promise of ‘fixing’ the economy, combating corruption and inflation, and promising jobs and job security. He show-cased ‘Gujarat Development Model’ through a high-decibel, liberally-funded integrated media campaign, using the social media also to the hilt. Interestingly, by all accounts, Gujarat development story is poorer in content than that of Tamil Nadu or Kerala, but packaged like never ever before. </div> <div> </div> <div> The anti-corruption plank of the Anna Movement and later AamAdmi Party electioneering was usurped by the same high-decibel Modi campaign effectively and the facts that Gujarat has no Lokayukta for the last one decade or that some ministers in Gujarat government are convicted criminals got lost in the din and bustle.</div> <div> </div> <div> Indian youths, numbering more than half the electorate, with more than a hundred million first-time voters, are an impatient lot, and rightly so, with spiralling frustration at the dipping job prospects, lowering growth rates and increasing violence against women, on one side, and with surging expectations of quality life style of the developed nation, which they are exposed due to the easy access of information technology. This youth is bitterly opposed to corruption, and hence Congress or UPA as the fountainhead of corruption. Appreciating the AAP movement against corruption, the youth also wants to dream of a rosy future, and hence the dream-merchants of BJP campaign could create the immense eye-balls among the youth.</div> <div> </div> <div> BJP successfully and steadfastly used information technology, 3D technology, and the like to create the lethal mix of slogans, machines and dreams, all fuelled by an immense investments from sources little known, creating the right surrounding sound ensuring victory even in areas where they hardly have organization on ground, as seen in Bengal or Assam, for example.</div> <div> </div> <div> <span style="font-size:14px;"><strong>Political Leadership Challenges</strong></span></div> <div> The NDA’s emphatic victory in the national election establishes Modi as the BJP’s undisputed leader, who is next expected to overhaul leadership roles within the party by promoting leaders who hold sway over social and regional groups and dilute the upper-caste dominance in decision-making within the party.Modi's focus may be to promote a new set of leaders who would eventually become "faces" of the party in their respective areas. This will be a challenge indeed.</div> <div> </div> <div> Modi’s immediate challenge will be to replicate the national success in the crucial assembly elections that follow in states such as Haryana, Maharashtra and Delhi, where the BJP has performed well. However, the actual performance of the Central government under Modi over the next four months will influence the situation in these states later this year.</div> <div> </div> <div> <span style="font-size:14px;"><strong>The South Asian Message</strong></span></div> <div> Surely Modi-fied India will be a bolder India in the region, firmer on the borders, ruthless with foreign espionage on the Indian soil, intolerant with any form of terrorism or fake currency onslaught and even infiltration of the poor and hapless from across the borders. </div> <div> </div> <div> Electoral rhetoric apart, the new government is expected to pursue the national interests zealously, though the focus will be more on domestic economy and internal security of India. </div> <div> </div> <div> On the neighbourhood front, closer relations with Nepal and Sri Lanka, and a balanced business-like approach to China, Pakistan and Bangladesh are expected. There will be a setback of the radical Islamic forces in Pakistan, Bangladesh and Maldives consequently, and the new Indian government overtly or covertly will do all it can to that end. The centrist and rightist forces in Nepal and the pro peace reconciliatory forces of Sri Lanka may expect to get tacit support of the new Indian government. </div> <div> </div> <div> Due to pressing domestic economic and strategic compulsions, the Modi government will need a working relation of low or no tension with China and Pakistan and focus more on economic cooperation. And, for Nepal, due to historic and geo-political reasons, the flow of capital, people and businesses may see a further surge, coupled with stricter border monitoring to curb cross-border movement of terrorist modules.</div> <div> </div> <div> <span style="font-size:14px;"><strong>Economic Contradictions in the New Disposition</strong></span></div> <div> While the Indian corporate sector and native and foreign investors in the stock market are justified in celebrating the arrival of a "right wing", business-friendly Modigovernment in India, this is not necessarily the side of 'Modinomics' that most BJP voters would like to see. Modi campaigned hard on a platform of economic development, job creation and an efficient administration, and the 40 per cent of voters who backed the BJP-led alliance did so because they believe he will deliver on these promises. But contradictions exist in areas where satisfying the aspirations of a corporate constituency - for example in the area of labour reform - will end up undermining the aspirations of voters for jobs and job security. Another area to watch closely will be Modi government's approach towards law and order, and especially the right of vulnerable citizens - women, minorities, adivasis and dalits - to security, justice and equity.</div> <div> </div> <div> The BJP-led government has filled investors’ hearts with the hope of a turnaround in India’s economic fortunes. The stock market is scaling record highs every day and the rupee has gained considerably against the US dollar. Foreign Direct Investment (FDI) of more than a trillion rupees has already been pledged in the first three days after results were announced. Perhaps the expectation is that Modi’s pro-business stance will help to lift India out of its current economic mire— GDP has grown by less than five per cent year-on-year for the past seven quarters, well below the near eight per cent average of the previous ten years. </div> <div> </div> <div> But given the deep roots of India’s current predicament and the type of reforms that are required, along with dip in investment cycle in the last two years, one may suggest that investors’ optimism about an economic bounce may not be easy. India has, so far, narrowly avoided a downgrade of its sovereign credit rating to junk status. So, the fiscal position will continue to be precarious. Unless it is reversed, the government’s hands, with regards to increasing capital expenditure to boost infrastructure and therefore potential growth, will remain tied down. </div> <div> </div> <div> The health of the private sector has also deteriorated considerably. Companies are highly leveraged, with the debt-to-equity ratio elevated at 83 per cent, highest among all emerging markets, and below only that of Greece and Italy. The levels of bad debt in the financial system are also rapidly on the rise. So, regardless of the party in power, both banks’ ability to lend money to businesses and companies’ propensity to invest are limited. </div> <div> </div> <div> Further, many believe that a stronger government with more capable leadership will be able to restart stalled infrastructure projects, which have been held back so far due to regulatory hurdles. However, according to a recent report by Credit Suisse, only a quarter of the stalled investment projects are stuck with the central government, of which two-thirds are in power and steel - sectors that are already swamped with overcapacity. The other projects need clearance from state governments.</div> <div> </div> <div> In order to achieve the government’s target growth rate exceedingeight per cent a year, as promised by BJP in its manifesto, India requires a major institutional overhaul aimed at reducing crony capitalism (which even the BJP government in Gujarat has been squarely accused of) and improving the business environment. According to the World Bank’s Ease of Doing Business Survey for 2014, out of 185 economies India ranked 134— well below its emerging market counterparts. And India scores just 36 on the World Bank’s Corruption Perceptions Index for 2013, where 100 is the least corrupt.</div> <div> </div> <div> <span style="font-size:14px;"><strong>Economic Challenges before Modi Government</strong></span></div> <div> Modi government’s first credibility test with markets will be when it delivers a budget by July that will need to convince investors that India can realistically contain its fiscal deficit. The subsidies and austerity of the outgoing UPA government would prove hard to sustain, and harder to reverse. Continuing to defer payments to state-run companies that would compensate them for selling fuel, fertiliser and food below market prices can create havoc with their finances and make them rely on borrowing to fund operations; while, on the other hand, tax revenues are unlikely to recover immediately in a weak economy. </div> <div> </div> <div> Further, higher duties and other restrictions almost halved gold imports, but the moves have been deeply unpopular. Gold smuggling surged after the UPA measures, casting doubt on reported data. The BJP promised to review gold import duties within three months of coming to power. That may please gold buyers, but not investors, as concerns about the current account deficit sent the rupee to a record low last August. </div> <div> </div> <div> There are other challenges beyond government control: the El Nino weather pattern, typically associated with weak rains. Citigroup estimates that below-average rainfall in the June-September monsoon could reduce up to one percentof economic growth forecast and lead to a spike in inflation. Surging prices could spark tension with the central bank, which has made containing inflation a priority. </div> <div> </div> <div> Replicating Gujarat at the national level will prove to be a yeomen task due to the variegated development stages across India, high differences in economic basics and social indices among provinces of India, among other things.</div> <div> </div> <div> India is burdened with Rs.6000 billion bad loans in all nationalized banks put together, about 10 percent of all such bank loans. The bulk of these bad loans are related to infrastructure projects, which have made banks circumspect in lending. Also, crony capitalism will come in the way of recovering these loans.</div> <div> </div> <div> Keeping the promise of 10 million jobs a year is the other big hurdle for the new government as the Indian economy has been witnessing almost a jobless growth for a decade now.</div> <div> </div> <div> <span style="font-size:14px;"><strong>A Silent Prayer</strong></span></div> <div> A day after Modi wins India, my prayers: let India remain the synthetic cosmopolitan diverse nation that it is with the co-existence of so many different groups; let the tribal population not continuously suffer in the name of 'development'; let minimum standards of life of all precede maximum profits of some; let not, in the name of equal opportunities, snatch the minimum benefits the system at times gives to those who are born highly unequal; let justice and equity precede the blind search of growth and GDP; let not entrepreneurship gasp for breath under the tutelage of big business; let a thousand flowers bloom in expressions of all kinds - some unkind to those who rule too; let not mobs dictate terms to free souls; let hope replace cynicism and joy amid struggles to take precedence over apathy in abundance. Let my nation remain committed to the lofty ideals of humanity!</div> <div> </div> <div> <em>(Prof Chowdhury is education & media consultant. While the analysis and conclusions are his own, he has drawn on facts, figures and arguments available on Indian media specially The Outlook, The Hindu and The Hindustan Times.)</em></div>', 'published' => true, 'created' => '2014-06-08', 'modified' => '2014-11-21', 'keywords' => 'new business age south asia news & articles, south asia news & articles from new business age nepal, south asia headlines from nepal, current and latest south asia news from nepal, economic news from nepal, nepali south asia economic news and events, ongoing south asia news of nepal', 'description' => 'Interesting times indeed. Modi-fied BJP’s remarkable election campaign surely was fuelled by unprecedented sums of money, but more interestingly magnified by the rule of the first-past-the-post system. A mere 12 per cent difference in vote-share with the Congress has turned into 600 per cent difference in seats (NDA with 335 seats, including 282 of BJP against UPA with 60 seats, including 44 of Congress).', 'sortorder' => '2642', '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' => '2788', 'article_category_id' => '37', 'title' => 'Policy For Inclusive Growth', 'sub_title' => '', 'summary' => null, 'content' => '<div> </div> <div> <strong>--By Hom Nath Gaire</strong></div> <div> </div> <div> The phrase 'Inclusive Growth' is quite popular in recent days not only among academia but also with policy makers, development partners and media as well. It seems that there is paradigm shift in development strategies among the stakeholders. The concept of inclusive growth refers to both the pace and distribution of economic growth. In order for growth to be sustainable and effective in reducing poverty, it needs to be inclusive. </div> <div> </div> <div> Traditionally, poverty (or inequality) and economic growth analyses have been done separately. However, recent works indicate that there may not be a trade-off between equity and efficiency as suggested by Okun (1975) and that it would be a big mistake to separate analyses of growth and income distribution. Inclusive growth has commonly been explained as about raising the pace of growth and enlarging the size of the economy by providing a level playing field for investment and increasing productive employment opportunities. The definition of inclusive growth implies direct links between the macro and micro determinants of the economy and economic growth. The microeconomic dimension captures the importance of structural transformation for economic diversification and competition, while the macro dimension refers to periodic changes in economic aggregates such as the country’s gross national product (GNP) or gross domestic product (GDP). </div> <div> </div> <div> Sustainable economic growth requires inclusive growth. Maintaining this is sometimes difficult because economic growth may give rise to negative externalities, such as a rise in corruption, which is a major problem in developing nations. However, inclusiveness lays emphasis on equality of opportunity in terms of access to markets, resources, and unbiased regulatory environment for businesses and individuals. The inclusive growth approach takes a longer-term perspective, as the focus is on productive employment as a means of increasing the incomes of poor and excluded groups and raising their standards of living. </div> <div> </div> <div> <strong>Determinants of Inclusive Growth</strong></div> <div> Different countries, especially developing countries, may have very different institutional as well as policy arrangements for promoting inclusive growth. Similarly, there may be a number of distortions preventing the allocation of limited resources in such a way that productivity in different sectors is equalized. The shift of resources from one sector to another may have an important effect on the overall level of output and growth. </div> <div> </div> <div> In this context, although growth theories have contributed to our understanding of how growth is determined and how it might be influenced, it has in many ways missed some of the crucial issues for developing countries. It may be possible to model the role of management and organization, the improvement of infrastructure, and sectoral transfer in developing economies to measure real determinants of growth and to the design of policy. </div> <div> </div> <div> They are directly concerned with the long-run growth in the sense of the steady-states as well as important for a medium term of some considerable duration. Government macroeconomic policies--- both fiscal policy and monetary policy--- are considered to be instrumental in promoting inclusive growth in the respective economy. </div> <div> </div> <div> <strong>Fiscal Policy and Inclusive Growth </strong></div> <div> Fiscal policy involves the use of government spending, taxation and borrowing to affect the level and growth of aggregate demand, output and jobs. It is also a means by which a redistribution of income and wealth can be achieved as an instrument of intervention to correct the market failures. Thus fiscal policy is considered more effective in encouraging both pace and size of economic economy. </div> <div> </div> <div> Based on this belief, Asian Development Bank (ADB) has recently urged the Asian governments to use their fiscal policy more adeptly to combat the widening income gaps in the region. “As the inequalities rising almost everywhere in Asia, governments need to urgently expand and improve their public investments in inclusive growth,” President Takehiko Nakao told in seminar titled, Leveraging Fiscal Policy for Inclusive Growth on the occasion of bank's 47th AGM. </div> <div> </div> <div> More than 80 percent of Asia’s population live in countries where inequality is worsening, meaning that many are being left behind even as globalization, technological progress, and market reform have led to strong economic growth. The bank emphasized on a range of issues including taxation to boost social and other spending, existing government programmes to promote equality, and the best balance spending to help the poorest without compromising fiscal sustainability.</div> <div> </div> <div> <strong>Monetary Policy and Inclusive growth</strong></div> <div> It is well accepted that macroeconomic stability and low inflation rates, inter alia, have positive effects on growth and on reducing inequality. In this connection, well-managed monetary policy is critical in achieving stable and inclusive economic growth. Similarly, monetary policy is mandated to achieve and maintain price stability in the interest of inclusive and sustainable economic growth along with maintaining financial stability. </div> <div> </div> <div> Price stability reduces uncertainty in the economy and provides a favourable environment for inclusive growth and cumulative employment creation over the longer term. Low inflation, on the other hand, helps to protect the purchasing power and living standards of all classes of people. Although low inflation may not necessarily in itself reduce income inequality, it does ensure the protection of income, which is particularly important for poor people who generally do not have the means to adjust their nominal incomes to take account of rapid price increases. </div> <div> </div> <div> <strong>PPP and Inclusive Growth </strong></div> <div> The Public Private Partnership (PPP) is a governance tool to bring together resources as well as strengths and share experiences of the public and private sector for the purpose of provisioning of public assets or services for public benefit. In order to achieve inclusive growth, developing countries should create more PPP opportunities to address their infrastructure gap and steer private money and skills into much-needed infrastructure projects. </div> <div> </div> <div> The infrastructure deficit in the developing countries like Nepal is so enormous that we can’t expect either private investors or the public sector to fill up it alone. It needs collaboration between the private and public players to make things work, and to bring critical services to the community. Good infrastructure is critical to inclusive growth, allowing communities to access essential social services, markets, and jobs, and making cities cleaner and easier to navigate. PPPs can help developing countries address critical infrastructure needs, from roads to hospitals to water supply systems. </div> <div> </div> <div> The PPP investment model with various structures is effective in helping centrally planned countries transition to private sector-oriented market economies. PPPs can be promoted through fully assessed and appropriate risk sharing and performance-based arrangements between the parties. The aim is to deliver “value-for-money” projects to provide a full set of benefits for investors, the public, and the economy.</div> <div> </div> <div> <strong>Knowledge Economy and Inclusive Growth</strong></div> <div> The development of the knowledge economy and inclusiveness has been seen as closely related. Global firms have built integrated international production chains, with innovation creating new products with added value in “knowledge” areas such as design and marketing and providing associated services. </div> <div> </div> <div> The growth of the knowledge economy is seen as part of the growth strategy to import jobs from low wage economies such as China and India investing heavily in knowledge. Shifting from low-cost manufacturing to economies based on knowledge, innovation, and high-end services is imperative for developing countries to achieve and sustain broad based inclusive growth. Emerging economies can reach and go beyond middle-income levels by becoming knowledge-based economies like Japan, the Republic of Korea, and Singapore. </div> <div> </div> <div> Similarly, least developed countries like Nepal can upgrade themselves to developing one through systematic investment in new information and communication, manufacturing and other technologies to promote knowledge economy. For this, they have to spend time and resources to move up the value chain by drawing on best practices and latest technologies, for example, shifting to smart energy grids, cloud computing, 3D manufacturing, and mobile rather than fixed-line communications.</div> <div> </div> <div> <strong>Rational </strong></div> <div> According to the World Bank’s Commission on Growth and Development, a persistent, determined focus on inclusive long-term growth by governments is a key ingredient of all successful growth strategies. Policies that encourage inclusive growth tend to emphasize removing constraints to growth, creating opportunity, and creating a level playing field for investment.</div> <div> </div> <div> To that end, developing countries need to increase investment in infrastructures as well as research and development to create knowledge based, innovative and competitive industries. For this, public funding may be needed to help companies start up. Public spending on education and health services improve the well-being of the poor and augment their productive capacity. </div> <div> </div> <div> Targeted subsidies and transfer payments protect the most vulnerable and deprived segments of society while better public infrastructure can make it easier for the entrepreneurs to create more jobs and additional value for the economy. Higher education and training need to be significantly improved to generate the skills and critical thinking processes vital to a modern competitive economy. </div> <div> </div> <div> In addition, governments need to put in place mechanisms and adopt policies that enable innovation and creativity to flourish. This includes protecting intellectual property rights, providing adequate financing options, and nurturing more flexible labour markets.</div> <div> </div> <div> <strong>Finally</strong></div> <div> Policies on both monetary and revenue front such as non-inflationary monetary and progressive taxation can promote inclusive growth. But among policy tools, fiscal policy with productive government expenditure and progressive taxation has a tangible effect on boosting equality and promoting inclusive growth.</div> <div> </div> <div> <div> <em><span style="font-size: 14px;"><strong>What is Inclusive Growth?</strong></span></em></div> <div> An IMF Commission on Growth and Development (2008) notes that inclusiveness—a concept that encompasses equity, equality of opportunity, and protection in market and employment transitions—is an essential ingredient of a successful growth strategy.</div> </div> <div> </div>', 'published' => true, 'created' => '2014-07-30', 'modified' => '2014-11-21', 'keywords' => '', 'description' => 'The phrase 'Inclusive Growth' is quite popular in recent days not only among academia but also with policy makers, development partners and media as well. It seems that there is paradigm shift in development strategies among the stakeholders. The concept of inclusive growth refers to both the pace and distribution of economic growth.', 'sortorder' => '2641', '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) 7 => array( 'Article' => array( 'id' => '2791', 'article_category_id' => '52', 'title' => 'Budget 2014/15 Private Sector Neglected', 'sub_title' => '', 'summary' => null, 'content' => '<div> </div> <div> </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' remittances and, continuity of archaic practice of development that is heavily dependent on supply-driven central planning.</div> <div> </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> </div> <div> One of the clear departures expected from Mahat was government’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'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> </div> <div> The most crucial departure expected from Mahat, for his philosophical leanings as an open-market economist, was to stop 'merciful allocation' 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> </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 'the Mahat budget' this time.</div> <div> </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) 8 => array( 'Article' => array( 'id' => '2794', 'article_category_id' => '40', 'title' => '2nd Newbiz Business Conclave & Awards 2014', 'sub_title' => '', 'summary' => null, 'content' => '<p> </p> <p> <span style="font-size:14px;"><a href="http://www.abhiyan.com.np/article-conclav_27bhadau2071_presentation">Presentations of some speakers in the conclave</a><br /> <br /> <a href="http://www.abhiyan.com.np/article-news_25bhadau2071_award">न्यूबिज बिजनेश कन्क्लेभ एण्ड अवार्ड वितरण शुरु</a><br /> <br /> <a href="http://www.abhiyan.com.np/article-news_26bhadau2071_award">न्यूबिज बिजनेश कन्क्लेभ एण्ड अवार्ड कार्यक्रम शुरु</a><br /> <br /> <a href="http://www.abhiyan.com.np/article-news_26bhadau2071_conclave">न्यूबिज कन्क्लेभ एण्ड अवार्डको दोस्रो संस्करण आज</a><br /> <br /> <a href="http://www.abhiyan.com.np/article-BSchoolAward2014">न्यू विज् विजनेश स्कूल अवार्ड २०१४</a></span></p>', 'published' => true, 'created' => '2014-09-12', 'modified' => '2014-10-10', 'keywords' => '', 'description' => '2nd Newbiz Business Conclave & Awards 2014', 'sortorder' => '2639', '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) 9 => array( 'Article' => array( 'id' => '2790', 'article_category_id' => '40', 'title' => 'Nepal Strives For DC Degree: What Is In Store For Private Sector?', 'sub_title' => '', 'summary' => null, 'content' => '<div> </div> <div> </div> <div> <strong>--By Akhilesh Tripathi</strong></div> <div> </div> <div> If everything goes as planned by the government, Nepal will graduate from the Least Developed Country (LDC) status over the next eight years (i.e. by 2022) to a Developing Country (DC) status. Even if that target is not achieved by the specified time, the process that has been initiated already with the start of the current three-year plan (FY 2014 to FY 2016) has a lot in store for the private sector as opportunities, say analysts. </div> <div> </div> <div> Foremost among such analysts is Dr Govind Raj Pokharel, Vice Chairman of National Planning Commission (NPC). He says, “Graduation from the LDC status is a Herculean task but it is achievable if the government and the private sector work together and there is strong support of the donor community. We have pinned a lot of hope on the private sector.”</div> <div> </div> <div> Dr Pokharel claims that the next eight years over which Nepal will try its best to graduate from the LDC status to DC status will be full of business opportunities for the private sector. “We have expected a huge investment from the private sector. We know that the private sector will not invest without seeing opportunities first. Still, we hope that such investment will come from the private sector because there will indeed be opportunities,” he says. </div> <div> </div> <div> <img alt="" src="/userfiles/images/cs1(1).JPG" style="float: right; margin: 0px 0px 0px 10px; width: 300px; height: 485px;" />According to economists as well as the country’s graduation strategists, there will be business opportunities in all major sectors - agriculture, manufacturing, services, hydropower, tourism, infrastructure development etc. “These are the major areas where the private sector will find ample business opportunities provided that the government creates an enabling environment. But there will be opportunities in other sectors as well if there is an enabling environment,” shares Dr Hemanta Dawadi, Director General of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI).</div> <div> </div> <div> It seems the government is keen about creating those opportunities for the private sector through change in policy in line with the development targets which will have to be achieved over the next eight years for Nepal to become a developing country. The good thing is this has started with the recently announced budget for the new fiscal year. “The budget is also poised to graduate Nepal from a Least Developed Country status as defined by the UN,” said Finance Minister Dr Ram Sharan Mahat while presenting the budget on July 13.</div> <div> </div> <div> In his budget speech, Dr Mahat said that the country needs to invest minimum 30 percent of GDP in fixed capital formation to earn the identity of a developing country in the next eight years. “However, the average investment of past three years has been only 22 percent,” he noted, “To bridge this gap of eight percentage point in fixed capital formation, additional Rs 160.00 billion should be invested in the coming Fiscal Year alone.” </div> <div> </div> <div> The Finance Minister proclaimed that various reform measures will be carried out in this fiscal year in order to increase domestic and external investment and facilitation. He said additional reforms and revisions will be carried out by evaluating the practices and experiences of policies, regulations and laws regarding industry, trade, energy, banking and financial sector that were started back in 1990's decade, adding that the next (14th) Periodic Plan will have a clear roadmap for transforming the country into developing country status within coming eight years. </div> <div> </div> <div> To create the right opportunities for the private sector, the budget has also stated to amend the Companies Act, Competition Promotion and Market Protection Act and Insolvency Act. This will simplify the process of company establishment, renewal and liquidation. Similarly, the budget talks about amending the provisions of existing Debt and Guarantee Act in order to attract foreign investment in mega projects and viable sectors, where the domestic investment is insufficient.</div> <div> </div> <div> “New laws regarding industrial enterprise and foreign investment and technology transfer will be formulated. Foreign Investment Policy and Industrial and Intellectual Property Policy will be formulated. Bill regarding Special Economic Zone will be tabled in Parliament. Procedures regarding the establishment of large industries under foreign investment will be simplified,” said the Finance Minister.</div> <div> </div> <div> <strong><img alt="" src="/userfiles/images/cs2(4).jpg" style="float: left; margin: 0px 10px 0px 0px; width: 300px; height: 468px;" />Opportunities in Energy Sector</strong></div> <div> The government plans to end load-shedding over the next three years. In this period, four major public sector-funded projects namely Upper Tamakoshi, Kulekhani II, Chameliya and Upper Trishuli hydroelectric projects will enter production phase and will together generate 560 MW of electricity. Similarly, 42 private sector-funded hydroelectric projects will generate 628 MW of electricity in this period. Similarly, the government will start the construction of other projects such as Tamakoshi V, Madi Khola, Maiwa Khola hydroelectric projects including Tanahu and Rahughat projects. Similarly, according to the budget, the construction of Kabeli Hydroelectric Project will be started in Public-Private-Partnership model.</div> <div> </div> <div> “The private sector will be invited to carry out various works related to these energy projects. That clearly means business opportunity,” explains Dr Arjun Karki, International Coordinator of LDC Watch, “Several other bigger projects will be initiated over the next eight years which means there will be good business opportunities for the private sector.”</div> <div> </div> <div> In order to complete the projects on time, the budget has announced to provide full exemption on income tax for the first ten years and 50 percent exemption for additional five years to those producers who generate and connect electricity to national grid and export it within FY 2022/23. “I have made an arrangement to provide a lump sum grant of Rs 5 million per MW of electricity to those producers who generate and connect the generated electricity to national grid. I have also made provision of an additional 10 percent of such grant to those producers who generate and connect the generated electricity to national grid within FY 2017/18,” says Dr Mahat. </div> <div> </div> <div> <strong>Opportunities in Agriculture</strong></div> <div> The government plans to modernise, diversify and commercialize the agriculture sector over the next one decade. This is reflected in the newly announced budget as well. The budget targets to keep interest rate on six percent on loans to be provided by the commercial banks for modern farming, livestock and poultry farming, medicinal plants, vegetables and horticulture, dairy business, aquaculture, agro storage, cold storage, slaughter house and meat-related business. This provision, the government thinks, will also help address the problem of unemployment and youth migration from rural areas.</div> <div> </div> <div> Similarly, the budget has provisioned up to 50 percent subsidy in the loan interest taken in order to develop land and mechanize farming for private groups which are involved in the commercialization and mechanization of farming by integrating 10 hectares land in mountain and 20 hectares land in Terai and up to 75 percent interest grant for the cooperatives of marginalized and landless farmers.</div> <div> </div> <div> Similarly, the construction of the main as well as branch canals of major irrigation projects such as Sikta, Babai, Mahakali and Rani Jamara Kulariya etc will be given continuity. It is the private sector that will be awarded contracts to carry out these works which clearly means good business opportunities for the private sector. Similarly, the tunnel construction work of Bheri Babai Multipurpose Diversion Project will also be initiated in this fiscal year. </div> <div> “The government wants significant private sector investment in agriculture. For this it is ready to create the environment,” remarks Dr Pokharel.</div> <div> </div> <div> <strong><img alt="" src="/userfiles/images/cs3(6).jpg" style="float: right; margin: 0px 0px 0px 10px; width: 300px; height: 434px;" />Opportunities in Tourism</strong></div> <div> Tourism is going to be another sector of good business opportunities for the private sector. The government, through the latest national budget, has already announced to provide income tax exemption for five years to the industries established with an investment of more than Rs 2 billion in the tourism sector. Similarly, aviation companies, too, will get such income tax exemption. They will further get 50 percent income tax exemption for subsequent three years, according to the budget.</div> <div> </div> <div> “This income tax exemption is aimed at promoting the establishment of good hotels and resorts at the major tourist destinations and other places of the country. This is a clear opportunity for the private sector,” explains Dr Pokharel.</div> <div> </div> <div> <strong>Opportunities in Infrastructure Development</strong></div> <div> Nepal has to do a lot in infrastructure development so as to increase accessibility, facilitate service delivery and enhance cost effectiveness. For example, the government wants to construct at least one road on multi-year contract basis in each electoral constituency where there is no year-round transportation. Similarly, the construction work of the Kathmandu-Terai Fast Track will be started in this fiscal year. </div> <div> </div> <div> The government plans to open the track of several new roads, black-top and expand several existing roads and build hundreds of bridges across the country. The government has allocated more than Rs 14.3 billion for this purpose in the current fiscal year alone. Similarly, the new budget has allocated Rs 4.5 billion for the maintenance of 16,788 kilometres of strategic and local roads including their regular maintenance, routine maintenance, periodic maintenance, and rehabilitation and urgent maintenance.</div> <div> </div> <div> Similarly, according to the new budget, the government will carry out urban infrastructure development programmes in cities like Biratnagar, Birgunj, Butwal, Dharan, Janakpur and Nepalgunj including the development of 10 Urban Corridors with eight ongoing and two new.</div> <div> </div> <div> “The national budgets to be announced in the fiscal years to come will have to continue such infrastructure development programmes, if Nepal is to achieve the DC status by 2022. So, there is no dearth of business opportunities for the private sector,” says Dr Pokharel. </div> <div> </div> <div> <strong>Investment Requirement</strong></div> <div> According to NPC’s estimates, the government or the public sector will have to invest Rs 3,300 billion and the private sector will have to invest double the amount – a whopping Rs 6,600 billion -by 2022 if Nepal is to achieve the status of a developing country by then. But will such a huge investment really come from the private sector?</div> <div> </div> <div> “We hope it will because the country is now headed towards political stability and legal and economic reforms are in the pipeline. That means the next eight years are going to be a wonderful business opportunity for the private sector,” assures Dr Pokharel.</div> <div> </div> <div> According to NPC’s investment plan, Nepal will need a total investment of Rs 1013.91 billion in the agriculture sector by FY 2021/22 to achieve the graduation target. Two-thirds of this investment, i.e. around Rs 675.94 billion is expected from the private sector. The agriculture sector includes forestry and fishing as its subsectors. </div> <div> </div> <div> “The private sector is expected to invest in the modernization of agriculture and increase productivity, replace agricultural imports and promote exports. The government is expected to make this easier through policy and legal reforms, if necessary,” says Dr Pokharel.</div> <div> </div> <div> Similarly, the industrial sector which includes mining and quarrying, manufacturing; electricity, gas and water, and construction will require a total investment of Rs 1807.87 billion. Of this amount, Rs 1205.24 is expected from the private sector. “So there is a huge opportunity for the private sector in the industrial sector as well,” thinks former NPC Vice Chairman Prithvi Raj Ligal.</div> <div> </div> <div> Likewise, according to the NPC plan, the service sector which comprises wholesale and retail trade; hotels and restaurants; transport, storage and communications; financial intermediation; real estate, renting and business activities; public administration and defence; education; health and social work; and other community, social and personal service activities will require a total investment of Rs 6874.98 billion – Rs 4583.32 billion from the private sector and Rs 2291.66 billion from the public sector.</div> <div> </div> <div> <img alt="" src="/userfiles/images/cs4(4).jpg" style="width: 550px; height: 110px; margin-left: 10px; margin-right: 10px;" /></div> <div> </div> <div> <strong>Criteria for Graduation </strong></div> <div> There are basically three criteria to graduate from the LDC status – Human Assets Index (HAI), Economic Vulnerability Index (EVI) and GNI per capita. HAI is about the stock of the human capital of the country and comprises the nutrition status of the population, mortality rate of children aged five or under, and gross secondary school enrolment ratio and adult literacy rate. EVI reflects the country’s vulnerability to exogenous shocks and comprises of population size; remoteness; merchandise export concentration; share of agriculture, forestry and fisheries in GDP; share of population living in low elevated coastal zones; instability in export of goods and services; victims of natural disasters; and instability in agricultural production. </div> <div> </div> <div> Likewise, GNI per capita is related with the country’s income-generating capacity and is based on a three-year average estimate of the country’s per capita GNI (World Bank Atlas Method). After determining threshold level for each of the criteria every three years, the United Nations Committee for Development Policy (CDP) reviews the progress made by LDCs and if the country has been eligible at two successive triennial reviews, it recommends a country for graduation from the LDC category. At least two of the three criteria or GNI per capita twice higher than the threshold should be met in order to be eligible for graduation.</div> <div> </div> <div> “Among the three criteria for LDC assessment, Nepal has already met the EVI threshold level and is very close to meeting the HAI criteria; however, there is a huge gap between the GNI threshold level and Nepal’s present status. The role of the private sector is going to be very important to meet this criterion,” observes Dr Karki. </div> <div> </div> <div> <strong>Increasing Productive Capacity</strong></div> <div> Karki is of the opinion that Nepal will have to start working seriously to enhance its productive capacity significantly to achieve the GNI per capita threshold. “The country is facing problems like huge trade deficits, high underemployment rate, income inequality and low quality of life,” says Dr Karki, “Factors including subsistence agriculture, deteriorated industrial environment, power shortage etc., have led to a low level of economic growth and development. Therefore, there exists a great challenge to sustain the achievements and narrow down the gaps between GNI threshold level and the current status.” </div> <div> </div> <div> Our GNI per capita has improved over the past few years but we still need to accelerate it, he adds. Karki’s observation points to two important areas where private sector can come forward – commercial agriculture and power generation. Fortunately, these are the two major areas of emphasis in the budget presented at the parliament recently. If the government really implements the policies and budget allocations announced in the budget speech, the privates sector can make good money while contributing to this graduation of the country. </div> <div> </div> <div> Ligal lists more areas where the private sector has such opportunities. “Productive capacity has basically four components – infrastructure; energy; science, technology and innovation; and private sector development,” says Ligal, adding “The role of the private sector is very important in increasing the country’s productive capacity by investing in infrastructure development, energy exploitation and by making technological innovations.”</div> <div> </div> <div> “Although Nepal has already met the EVI criterion, it still has to either increase its GNI per capita by US$ 770 or the HAI score by 6.17 before 2015 to be eligible for consideration for graduation. This is because eligibility conditions should be fulfilled during two successive triennial reviews, and the CDP will now review the progress only in 2015,” Chandan Sapkota, an economist with the Asian Development Bank, Nepal, says, “After the review, Nepal will have to sustain the progress through 2018, the next triennial review, only after which the CDP will recommend for graduation.”</div> <div> </div> <div> This means Nepal has good length of time to fulfil the criteria. But effective intervention from the government is a must. And the NPC has recognised this clearly. “If the past trend is of any guide to future, it will be difficult for Nepal to meet the projected threshold of US$ 1,502 even by 2021, unless effective policy interventions are in place. Vigorous efforts are needed to achieve the projected GNI per capita of US $ 2,094 in 2021 so that the economy is on the way to achieve the estimated threshold by 2021,” reads NPC’s Approach Paper to Graduation from LDC by 2022.</div> <div> </div> <div> According to Ligal, the private sector – both domestic and foreign – will have to invest heavily in sectors like physical infrastructure, hydropower, tourism and agriculture over the next eight years. “But the private sector will not make such a huge investment under the present circumstances. For private sector investment to come, the government will have to create conducive environment through legal, administrative and policy reforms. If this happens, private sector will come forward as the Graduation process would offer lucrative business opportunities,” he says, adding that Nepal needs more aggressive economic reforms in the near future.</div> <div> </div> <div> <img alt="" src="/userfiles/images/cs5.JPG" style="width: 550px; height: 430px; margin-left: 10px; margin-right: 10px;" /></div> <div> </div> <div> <strong>Partnership with Private Sector</strong></div> <div> The Istanbul Programme of Action, which aims to at least halve the number of LDCsby 2020, too, has laid great emphasis on public-private partnership. It says, “Partnerships with the private sector play an important role for promoting entrepreneurship, generating employment and investment, increasing the revenue potential, developing new technologies and enabling high, sustained, inclusive and equitable economic growth in least developed countries.” In the present circumstances, when the private sector is complaining of lack of enough conducive environment for investment, PPP model can be a good alternative so that the private sector can feel secure as the government too will have stake in such projects. </div> <div> </div> <div> Economists say that investment in the industrial sector is a must to increase the economic productivity. “Productivity and job opportunities in the service sector have remained low. And it consists of more informal sectors,” observes Shanker Sharma, former vice-chairman of NPC, “We need more manufacturing industries. If there is political stability, right policies in place and adequate legal reforms, then investment in the manufacturing sector will come.”</div> <div> </div> <div> Karki, too, stresses on the need for public-private partnership (PPP) model of development. “The PPP model is going to be very helpful in those areas of investment where the private sector alone is a bit hesitant to enter,” he says. If the government comes forward to invest in such sectors, the private sector will follow suit, he adds.</div> <div> </div> <div> Dr Dawadi is also of the opinion that the government alone cannot take the country out of the LDC status to the developing country status. “To be successful, the graduation strategy will require a full and uninterrupted understanding, support and cooperation from the private sector,” he opines.</div> <div> </div> <div> True that both economists and development activists are right in their view that this target spelt out in the approach paper to the latest three-year plan (FY 2014 to FY 2016), is highly ambitious. But the government has its own basis for its optimism.</div> <div> </div> <div> The doubt of the economists and activists is based on the fact that the previous three-year plan (FY 2010 to FY 2013) had aimed such graduation by 2030. But the government officials say they pre-poned the target by eight years looking at the rapid progress in the recent years. They particularly cite increase in the country’s per capita gross national income (GNI), decreased poverty level, and significant progress on major social indicators such as mortality rates, school enrolment rates, life expectancy etc. Since the LDC category was brought in practice in the international development parlance in 1970, only four LDCs have graduated to DC status so far – Botswana (1994), Cape Verde (2007), Maldives (2011) and Samoa (January 2014). But the number of LDCs has almost doubled since then. It means graduation from the LDC status is not so easy. But development experts think that the goal is achievable if the public and private sectors of the country work together. </div> <div> </div> <div> When the economy grows and businesses thrive, the sky is the limit for the individual private sector operator. It means a large pool of resources, a larger market and a higher level of operation,” Dr Dabwdi concludes, “The opportunity will be for both new business creation as well as horizontal growth of existing businesses.”</div>', 'published' => true, 'created' => '2014-09-08', 'modified' => '2014-10-10', 'keywords' => '', 'description' => 'The role of the Nepali private sector is going to be very crucial if Nepal is to become a developing country by 2022, as planned by the government. It means large business opportunities await the private sector over the next eight years.', 'sortorder' => '2638', '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) 10 => array( 'Article' => array( 'id' => '2793', 'article_category_id' => '91', 'title' => '2nd NewBiz Business Conclave And Awards 2014', 'sub_title' => '', 'summary' => null, 'content' => '<p> <span style="font-size:16px;">Please visit to <a href="http://www.abhiyan.com.np">http://www.abhiyan.com.np</a> for details.</span></p>', 'published' => true, 'created' => '2014-09-12', 'modified' => '2014-10-10', 'keywords' => '', 'description' => '', 'sortorder' => '2637', '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) 11 => array( 'Article' => array( 'id' => '2787', 'article_category_id' => '167', 'title' => 'UML’s Throb To Democratize', 'sub_title' => '', 'summary' => null, 'content' => '<div> </div> <div> <strong>--By Achyut Wagle</strong></div> <div> </div> <div> The Nepal Communist Party-United Marxist Leninist (CPN-UML) exhaustively braces up for its ninth general convention, July 3-9 that is perhaps likely to see the fiercest battle ever to take the reins of this four decade-old outfit. The good news is, unlike in any archetypical communist organization, the chairman and other major office bearers will be chosen democratically through the ballots of the party cadres.The Party over the last two and half decades, since the successful reinstatement of democracy in 1990, has established itself not only as a quintessential political force of the country but also a relatively credible democratic alternative with left-to-the-centreideologies. It is now the second largest party in the Constituent Assembly (CA), which is also the legislature parliament, and the major coalition partner in the Nepali Congress-led government.</div> <div> </div> <div> This transformation from an out-and-out communist to largely a democratic force has definitely not been a cakewalk and yet far from complete. Thanks to late General Secretary of the Party, Madan Bhandari who coined a transitional lexicon 'janatako bahudaliya janabad (JBJ)' or people's multi-party democracy that facilitated it to become a reckoning force in multi-party polity. In essence, except one seemingly unequivocal commitment to remain in the 'politics of ballots'; forsaking the dogma of the 'power from the bullets', the task of redefining other philosophical foundations of the Party is still pending and currently undergoing a rigorous discourse. This is what going to be one of the characteristic features of the upcoming Convention as well. The pain experienced in the process of refurbishment of a force that carried over the legacy of Jhapa andolan of early 1970s, a naive killing spree of landlords to eliminate the class enemy andwith its cadres indoctrinated to 'establish a proletariat dictatorship' or 'new people's democratic republic' ostensibly through violent over throw of 'old regimes' to a disciplined political party believing in a peaceful process of change is not unnatural. But, the most worrying factor is: it is taking too long a time to accept the changing realities of the world and declare that the party no longer remains 'a communist' one. And, the debate also has been too fluid to shape a convincing new 'doctrine' with a double edged sword which preserves the face of the communist party and, at the same time, adapts itself as a credible democratic force.</div> <div> </div> <div> To borrow the word from communist lingo, the 'class struggle' within the party is at its height, but it is not two directional - between the exploiting and exploited classes as explained by Marx. It is in fact innumerably multi-directional and cover everything by a single 'blanket principle' is requiring it to be too large to manage. There is still a fine dividing line between the factions that accept the JBJ as defined by Bhandari as a complete principle and that takes it only as one of the 'many' components of philosophical evolution of the Party. KP Oli and Madhav Nepal, who are the two contenders for the post of chairman in the ninth convention, now represent these two factions respectively There is yet another traditional school that is not vocal but still considers JBJ hastened the aberration of the Party from a true communist force to operatives of ‘comprador bourgeoisie. 'The current Party Chairman Jhalanath Khanal lost party leadership to Madan Bhandari in the fifth convention in 1993, as he campaigned in this potential aberration plank. By now, Khanal seems to be compelled to change as there is no escape from the vote politics, but the reservation to accept the JBJ as 'only' guiding principle of the party still appears to be a bitter pill for him to swallow.</div> <div> </div> <div> There is also a tangible difference in opinion between the so called ‘old school’ and the ‘new school’. The old school represented by the hawks of pre-panchayat underground era are persistent not to give-up the communist tag. The septuagenarian leader Bharat Mohan Adhikari categorically said, ‘There is no need to change the party name to something that doesn’t carry the word communist and the universal communist standard, hammer-and-sickle flag, should be retained.’ The new school, which calls itself a pragmatic left is keen to change the both, just limiting it to convey a ‘socialistic’ meaning - far more softline approach than being a communist. The confusion has run long. So long that immediately after the UML formed a minority government in 1994, the Party dramatically removed the portraits of Marx and Lenin from the Party HQ meeting hall when the then US ambassador to Nepal visited UML headquarters. The act though was subject to acute mockery then but had a symbolic personification of confusion. First, it signified, the Party leadership had realized the redundancy of these figures but was unable to get rid of their hangovers. Second, from the inner self, it wanted to convey that the party doesn’t want to be identified and viewed as the communist in classic sense of the term. And, the third, it wanted to interact with the world as liberal democratic or a social democratic force.</div> <div> </div> <div> But, over all these years, party has hardly been able to embark on this wishful direction it had then contemplated. All these confusions still persistently gnaw the party and all the policy debates still revolve around the same confusion – whether or not to remain a communist and how to keep-up with the pace of openness the world is now moving with. It is for this reason, different ‘think tanks’ within the party are working to give a functional shape to their ideological basis such that it fits to modern-day political parlance.</div> <div> </div> <div> One of such recent exercises of the party has concluded that Nepali society has essentially become a capitalist one leaving behind the traditional agro related feudal production and productivity relations. This in fact is the theoretical basis to do away with the politics of proletarian supremacy and misery due to mass exploitation. However, the entire ‘philosophical’ discourse suffers from a mindset that party cannot function without such ‘grand narrative’. The party very tactfully removed the anti-Indian and anti American diatribes as soon as it rode to power saddle in 1994, forming the first communist government in the world after the collapse of the Berlin Wall, that too through elections.</div> <div> </div> <div> At present, the issues of the centre-stage debate include the massive criminalization of the party politics by protecting and promoting goons and underworld operators, colloquially known as dons–the word borrowed from taekwondo. This began with when Bamdev Gautam was made Home Minister in 1997 under Rastryia Prajatantra Party-led coalition government. He allegedly opened all smuggling channels and protected them using the security establishment. KP Oli did the same when he was Home Minister and now many noted dons are in party rank and file. Madhav Nepal faction has devised its campaign strategy focusing on the theme of ‘cleaning the party from goons.’ But the weight in the balance gradually appears to be tilting to the kings of the goons. Therefore, it will not be a surprise if Oli wins the race.</div> <div> </div> <div> Perhaps the greatest potential for the party to benefit arises from the fact that UCPN-Maoist is now forced to follow the same path the UML has traversed since its fifth convention. This can give a righteous sense of direction to the UML in making timely policy choices as a communist force that wants to survive in the competitive pluralistic politics. Theoretically speaking, UML should have been able to take great advantage given the vindication of timeliness JBJ. But, internal wrangling and factionalism has marred all its potentials of organizational growth.</div> <div> </div> <div> As the ninth convention inches closer, the campaign becomes nasty. The official manifestos of both Oli and Nepal do not differ much, which is an indication that there is not much differences in principles and policies. But when it comes to practical politics, the competition on mudslinging has crossed all possible decencies. Oli commands very strong organizational support and as an additional advantage Deputy Prime Minister BamdevGautam is in his favour. Oli’s illness is debated in both the camps. Oli has tried to bank on his illness requesting to vote him for the last chance and Nepal faction has asked him to take ‘rest’ on health grounds.</div> <div> </div> <div> It would not be a practical assumption to expect UML to reincarnate by changing its name and revamping all of its communist ideologies . But the throb of need for this change is intensely realized, in more than one spheres – in ideology, organizational orientation, external relations and internal democracy. This certainly gives better hope for overall consolidation of country’s democracy, sometime in near future. </div> <div> </div> <div> <em>The writer is former editor of Aarthik Abhiyan National Daily.</em></div>', 'published' => true, 'created' => '2014-07-30', 'modified' => '2014-10-10', 'keywords' => '', 'description' => 'The Nepal Communist Party-United Marxist Leninist (CPN-UML) exhaustively braces up for its ninth general convention, July 3-9 that is perhaps likely to see the fiercest battle ever to take the reins of this four decade-old outfit. The good news is, unlike in any archetypical communist organization, the chairman and other major office bearers will be chosen democratically through the ballots of the party cadres.', 'sortorder' => '2636', '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) 12 => 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 'any' 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'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's current term in office.</div> <div> </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> </div> <div> There are other unattended areas in the economy that are either causing excessive 'bleeding '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's money to project the jobs of a few hundred unproductive employees.</div> <div> </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'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> </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. 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 as Mahat's brainchild in 1992, doesn't seem to be the case now. </div> <div> </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) 13 => array( 'Article' => array( 'id' => '2786', 'article_category_id' => '40', 'title' => 'Outbound FDI : Can Nepali Businesses Go Global?', 'sub_title' => '', 'summary' => null, 'content' => '<div> </div> <div> <div> </div> <div> <strong>--By Siromani Dhungana</strong></div> <div> </div> <div> <em><span style="font-size: 16px;">A 50-year old law entitled ‘Act Restricting Investment Abroad, 1964’ is still in force in Nepal which stops Nepali citizens from investing in a foreign country. The existing fear is that the country’s economy will suffer if Nepal allows outbound FDI. But many evidences suggest that despite this law, Nepali people are investing in different other countries through one channel or other. And such evidences are becoming more visible. Policymakers are in dilemma while the business community is also largely divided on the issue. However, the debate on legitimatizing outbound FDI is heating up in recent times. What impact will it have on a country like Nepal where the national economy is not strong? Will it create BoP deficit as many fear? What happens if all businessmen start to set up industries in foreign countries which have better policy stability and lesser labour problem? New Business Age tries to analyse some of these major concerns:</span></em></div> <div> </div> <div> It is not surprising that Nepali businessmen, like many around the world, want to be competitive and set their footprint in the global market. But existing policies are keeping their dreams from being materialized. The government remains skeptic and reluctant to allow outward FDI citing probable impact on the national economy.</div> <div> </div> <div> However, zero capital mobility in and out of a country cannot be expected. Many evidences suggest that the investment is going abroad through one channel or the other. Any state should allow aspiring businessmen to invest anywhere globally because this will help the currency get its true value recognized, Dr Chiranjibi Nepal, Economic Advisor to the Prime Minister claims. “Investment is a must to increase the value of the money. The government should open up avenue for outward FDI to acknowledge this fact.”</div> <div> </div> <div> Evidences also show that the flow of money cannot be barricaded by any laws or policies. For instance, Nepal, according to a report of Global Financial Integrity (GFI), lost a total of $ 8.01 billion between 2001 and 2010 due to illicit capital flight. It means that on an average, $ 801.4 million (Rs 70.39 billion) went out of Nepal annually during that period of almost a decade. </div> <div> </div> <div> <img alt="" src="/userfiles/images/cs1(4).jpg" style="width: 550px; height: 163px; margin-left: 10px; margin-right: 10px;" /></div> <div> </div> <div> GFI’s another report entitled ‘Illicit Financial Flows from the Least Developed Countries: 1990-2008’ had put Nepal’s annual capital flight at $ 480.4 million. Based on the amount of capital flight, Nepal has been ranked 58th among 143 countries surveyed and sixth among the Least Developed Countries (LDCs) for exporting funds illegally.</div> <div> </div> <div> The report clearly points to the huge illegal financial flows from Nepal and it is high time that the government addresses this problem without making any further delays, Nepal opined. “The government should legalize outward FDI to keep the record of outflow of financial transaction in the formal system,” he said.</div> <div> </div> <div> <table border="0" cellpadding="10" width="99%"> <tbody> <tr> <td bgcolor="#F6CEF5"> <div> <span style="font-size: 14px;"><strong>Existing Laws Related to FDI</strong></span></div> <div> </div> <div> <strong>Foreign Investment and Technology Transfer Act – 1992</strong></div> <div> Foreign Investment and Technology Transfer Act (FITTA) – 1992 & Industrial Enterprises Act - 1992 are the two most important laws for the promotion of industries in Nepal. These two acts are highly encouraging acts for attracting FDI or Joint venture investments in Nepal. </div> <div> </div> <div> FITTA includes provisions related to facilities and concessions. This Act treats foreign investors as equals to local investors and provides them same incentives and facilities.</div> <div> </div> <div> The Act is also very positive on providing visa to foreign nationals. The Act has ensures 6 months non-tourist visa to a foreign national if he/she want to conduct survey, study or research with the objective of making investment in Nepal. </div> <div> </div> <div> After that if he or she makes investment or establishes an industry, the investor (along with the dependant family members) is granted business visa until the investment is retained. Similarly, residential visa is granted to a foreign investor and his family if s/he makes an investment of one hundred thousand US dollars in one business. All these are highly encouraging statements. However in actual practice, the investors face various problems, time and again. </div> <div> </div> <div> FITTA and IEA also offer some fiscal incentives including income tax relief. But the amended Finance Act and New Income Tax Act have withdrawn all such incentives, which is considered a controversial decision. Several amendments to FITTA through the Finance Act of 2001 and the progress made in this regard helped the nation in its efforts to gain membership of WTO, SAFTA, and BIMSTEC, but these amendments too are not enough, say investors.</div> <div> </div> <div> <strong>Industrial Enterprises Act - 1992</strong></div> <div> The IEA has one-window committee (OWC) provision, which is coordinated by the director general (DG) of Department of Industry (DoI) and has DGs of Customs, Inland Revenue, Value Added Tax (VAT) and Commerce as well as representatives from central bank, Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and the government.</div> </td> </tr> </tbody> </table> </div> <div> </div> <div> <strong style="font-size: 14px;"><img alt="Dr Chiranjivi Nepal" src="/userfiles/images/cs2(1).JPG" style="float: right; margin: 0px 0px 0px 10px; width: 300px; height: 166px;" />Need: A Positive Beginning</strong></div> <div> Nepal's legal system begins from the word restriction, which, according to many, rightly articulates the government’s mind-set. A 50-year old law entitled ‘Act Restricting Investment Abroad, 1964’ is still effective in the country. The law was introduced to restrict Nepalis from investing abroad. </div> <div> </div> <div> We need a fresh and positive beginning, economist and former chief secretary Dr Bimal Koirala told New Business Age. “The government should reform existing laws to facilitate businessmen to invest in foreign countries instead of imposing restriction.” The fear among policymakers is that what happens if businessmen do not bring back money to the country. And, the answer to this fear is to set up effective monitoring bodies that will keep record of every businessman who invests abroad, he suggested. </div> <div> </div> <div> Given the low trade volume of the country and frequent fluctuation in the Balance of Payment (BoP), some experts advise against allowing Nepali businessmen to invest abroad. Koirala slams such opinion claiming it to be an out-dated concept. </div> <div> </div> <div> Times have changed and the government has to realize this fact. The government should understand and accept the new liberalized and globalized world and business scenario, Koirala opines.</div> <div> </div> <div> <table border="0" cellpadding="10" width="99%"> <tbody> <tr> <td bgcolor="#F6CEF5"> <div> <span style="font-size: 14px;"><strong>Act Restricting Investment Abroad, 2021BS (1964)</strong></span></div> <div> </div> <div> Article 3 Restriction on making investment abroad: </div> <div> </div> <div> (1)<span class="Apple-tab-span" style="white-space: pre;"> </span>No one shall make any kind of investment abroad after the commencement of this Act.</div> <div> </div> <div> (2)<span class="Apple-tab-span" style="white-space: pre;"> </span>Notwithstanding anything contained in sub-section (1), in relation to any specific kind of investment, the Government of Nepal may, by a notification in the Nepal Gazette, grant exemption from the restriction set forth in that sub-section, and specify the kind, extent, period of the investment so exempted and other necessary terms pertaining thereto.</div> </td> </tr> </tbody> </table> </div> <div> </div> <div> <span style="font-size: 14px;"><strong>Past Initiatives</strong></span></div> <div> Nepal started systematic initiative of attracting FDI in 1981. The Sixth National Plan (1980/81-1984/85), for the first time, incorporated a policy for utilizing foreign capital and technology as a useful supplement. The Plan mentioned that foreign investment and technology was primarily required in large-scale industries and mineral industries. Since then, the government continued revising policies related to inward FDI. Foreign Investment and Technology Transfer Act was introduced in 1992 and amended in 1996 in line with open and liberal economic policies. But outward FDI-related provisions remained unchanged. </div> <div> </div> <div> Recently, the government has started fresh initiative to review the policy. Foreign Investment Policy 2014 has been prepared and consultations with stakeholders are underway on it, according to Ministry of Industry. However, business community blames the government for not being proactive to introduce new policy. </div> <div> </div> <div> <span style="font-size: 14px;"><strong>Policies that Restrict Outward FDI</strong></span></div> <div> <strong>Act Restricting Investment Abroad, 2021(1964):</strong> This law, as its name suggests, restricts any Nepali citizen from investing outside of Nepal. While this may be an old Act, it is still valid in the country. It defines restricted investments as foreign securities, partnership with foreigners, foreign bank accounts, owning house and land in a foreign country and any foreign investment in cash or kind except as prescribed by the government. This law has severely affected outward FDI as Nepali citizens cannot freely invest outside the country. Despite a provision within the Act that leaves a space for aspirant businessmen to invest abroad by taking approval from the government, nobody has received such approval. </div> <div> </div> <div> <strong>Foreign Exchange Regulation Act: </strong>This act does not allow Nepalis to open bank accounts in foreign countries if the money is earned in Nepal. Nepalis can open bank account abroad only if they earn money outside Nepal. But the account holder should inform Nepal Rastra Bank about the account. </div> <div> </div> <div> <span style="font-size: 14px;"><strong>Changing Times but Unchanged Laws</strong></span></div> <div> The existing laws were formulated at a time when entrepreneurship in Nepal was at a primitive stage and Nepali businessmen did not have sufficient capital and expertise to invest abroad, said Basudev Adhikari, Director of Nepal Rastra Bank. </div> <div> </div> <div> Nepali business community has come a long way since 1964. “For instance, now we have a Forbes-listed billionaire that shows that our businessmen have enough capital to invest in various sectors,” said Adhikari. Competitiveness of Nepali business sector has tremendously increased over the last few years. Lawmakers should reform existing laws considering the changed scenario, he added. The prevailing laws have failed to prevent outflow of capital from Nepal anyway. </div> <div> </div> <div> <span style="font-size: 14px;"><strong><img alt="Anup Bahadur Malla" src="/userfiles/images/cs3(5).jpg" style="float: right; margin: 0px 0px 0px 10px; width: 300px; height: 166px;" />Need for Caution</strong></span></div> <div> Still the policy of allowing Nepalis to invest abroad cannot be introduced without caution. The most challenging job for the government is to set the ceiling for outward FDI, opined Anup Bahadur Malla, executive member of FNCCI. The government should not introduce any law haphazardly, he suggested. Meticulous studies are required even when formulating laws related to inward FDI, he said. </div> <div> </div> <div> There are flaws in inward FDI policies as well which have created some adverse impact on the economy, according to him. Foreigners in Nepal are venturing into small businesses which have nominal contribution to the national economy, he argued. For instance, Chinese nationals, according to him, have been replacing Nepali small entrepreneurs from Thamel and other places but their contribution to the national economy and employment generation is negligible. From this, the government should learn that both inward and outward FDI can be harmful if laws are formulated without rigorous study, he claimed.</div> <div> </div> <div> Along with fixing ceiling, he claims identification of competitive sectors is the most challenging job for the government. It should initiate debate on maximum investment-ceiling limit on outward FDI, and identify the sectors where Nepalis can take competitive advantages, he suggested. </div> <div> </div> <div> <table border="0" cellpadding="10" width="99%"> <tbody> <tr> <td bgcolor="#F6CEF5"> <div> <span style="font-size: 14px;"><strong>Defining FDI</strong></span></div> <div> Foreign direct investment (FDI) is defined as an investment involving a long-term relationship and reflecting a lasting interest and control by a resident entity in one economy (foreign direct investor or parent enterprise) in an enterprise resident in an economy other than that of the foreign direct investor (FDI enterprise or affiliate enterprise or foreign affiliate). FDI implies that the investor exerts a significant degree of influence on the management of the enterprise resident in the other economy. </div> <div> </div> <div> Such investment involves both the initial transaction between the two entities and all subsequent transactions between them and among foreign affiliates, both incorporated and unincorporated. FDI may be undertaken by individuals as well as business entities.</div> <div> </div> <div> Flows of FDI comprise capital provided (either directly or through other related enterprises) by a foreign direct investor to an FDI enterprise, or capital received from an FDI enterprise by a foreign direct investor. FDI has three components: equity capital, reinvested earnings and intra-company loans.</div> <div> •<span class="Apple-tab-span" style="white-space: pre;"> </span>Equity capital is the foreign direct investor’s purchase of shares of an enterprise in a country other than its own.</div> <div> •<span class="Apple-tab-span" style="white-space: pre;"> </span>Reinvested earnings comprise the direct investor’s share (in proportion to direct equity participation) of earnings not distributed as dividends by affiliates, or earnings not remitted to the direct investor. Such retained profits by affiliates are reinvested.</div> <div> •<span class="Apple-tab-span" style="white-space: pre;"> </span>Intra-company loans or intra-company debt transactions refer to short- or long-term borrowing and lending of funds between direct investors (parent enterprises) and affiliate enterprises.</div> <div> (Source: World Investment Report 2012, UNCTAD)</div> <div> </div> </td> </tr> </tbody> </table> </div> <div> </div> <div> <span style="font-size: 14px;"><strong>Outbound FDI: An Open Secret </strong></span></div> <div> Policies on outward investment have been seen as a screening device to restrict the outflow of capital from the country. But it is an open secret that Nepalis have already started investing abroad. </div> <div> </div> <div> Chaudhary Group (CG), a company owned by Forbes-listed billionaire and renowned industrialist Binod Chaudhary who has invested abroad through Cinnovation Group, a multi-dimensional conglomerate established in 1990 headquartered in Singapore. The company was created to take CG’s business interests global. Currently, it is expanding its footprint in global market. </div> <div> </div> <div> Business leaders and government officials hesitate to give opinion regarding outflow of capital from Nepal in public. But they privately confide that there are many instances where the investment is going abroad through one channel or the other. India has been one of the easiest destinations for Nepali investors to invest, one businessman told New Business Age. “Businessmen channel capital to India through their relatives and acquaintances living in India,” he disclosed. More than a dozen of reputed Nepali business houses have invested in India in one or other way and even government officials are aware of this fact, he claimed. So, it is better to legalize outward FDI to control informal outflow of money. </div> <div> </div> <div> <span style="font-size: 14px;"><strong><img alt="Dr Bimal Koirala" src="/userfiles/images/cs4(3).jpg" style="float: right; margin: 0px 0px 0px 10px; width: 300px; height: 169px;" />Drives of Outward FDI</strong></span></div> <div> A question worth asking is: what triggers outward FDI from Nepal? There is not an easy answer. Generally, two major drives can be analysed: market-seeking drive and resource-seeking one. Nepali businessmen want to go outside country for market-seeking purpose, said Pradeep Jung Pandey, president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI). </div> <div> </div> <div> Businessmen eye foreign market when their businesses are saturated in the home country, he said. It can thus be said that the drivers of outward FDI from Nepal are largely determined by market-seeking factors with little role played by policy measures. </div> <div> </div> <div> Political instability, labour unrest and terror created by conflicting parties might have triggered businessmen to invest abroad during a decade-long conflict, he said. But the situation has changed now and businessmen do not want to go global if there is prospect of good business in Nepal. </div> <div> </div> <div> <span style="font-size: 14px;"><strong>Anti Outward FDI Logics</strong></span></div> <div> 1.<span class="Apple-tab-span" style="white-space: pre;"> </span>Positive Financial and Macro Economic Indicators: Experts say that the overall economic indicators including economic growth should be in positive direction and should be stable to allow Nepalis to invest in foreign country. Given Nepal’s volatile economic situation, some economists advise not to allow outflow of the capital. </div> <div> </div> <div> 2.<span class="Apple-tab-span" style="white-space: pre;"> </span>Investment Climate: Why do our businesses want to go outside though market in Nepal has been growing? An easy answer is that there is no investment climate in the country. It is not possible to open up outward FDI without ensuring investment climate in the country. Our own country is in dire need of investment in almost all sectors and it is a matter of concern as to why businessmen are lobbying to open up outward FDI, an economist questioned. Several structural bottlenecks and supply-side constraints are impacting the investment climate in Nepal. Tough reform measures have to be formulated before bringing policies related to outward FDI, he suggested. </div> <div> </div> <div> </div> <div> 3.<span class="Apple-tab-span" style="white-space: pre;"> </span>Trade Deficit: Nepal has been witnessing a whopping trade deficit year after year. Nepal imports essentials goods and services by drawing on its foreign currency reserves, which are primarily contributed by remittances. Many experts fear that foreign currency reserve may deplete if the country allows businessmen to invest aboard. </div> <div> </div> <div> 4.<span class="Apple-tab-span" style="white-space: pre;"> </span>Distrust on Businessmen: Another crucial problem is trust deficit. The government is not certain that businessmen who invest abroad will sincerely send their profit back to the country. “The country that does not trust its own businessmen cannot make progress. The environment of trust should be built between business community and the government that will facilitate the process of bringing policies related to outbound FDI,” opined CNI vice president Haribhakta Sharma.</div> <div> </div> <div> </div> <div> 5.<span class="Apple-tab-span" style="white-space: pre;"> </span>Competitiveness: According to Global Competitiveness Report released by World Economic Forum, Nepal ranked 117 among 144 economies in 2013-14. In order to succeed in the global business, businessmen should be competitive. But, can Nepali businessmen be competitive when they have not been able to show their competitiveness in domestic front, questioned Dr Chiranjibi Nepal. He suggests that the government should provide competitive business environment.</div> <div> </div> <div> 6.<span class="Apple-tab-span" style="white-space: pre;"> </span>Absence of Entrepreneurial Attitude: Entrepreneurship needs innovative ideas and risk taking skills. Given their low entrepreneurial activities in homeland, many argue that the business community in Nepal still lacks entrepreneurial attitude. Most of the businessmen are involved either in hereditary business or in service sector or trade activities. These traits are not sufficient to compete in global market and most of them do not have entrepreneurial bent of mind, claims an expert. “This fact should be kept in mind while formulating policies.”</div> <div> </div> <div> 7.<span class="Apple-tab-span" style="white-space: pre;"> </span>Poor Performance of Manufacturing Sector: Nepal’s manufacturing sector is in weak state. The country cannot create much employment in absence of manufacturing activities. On the other hand, the country relies heavily on imports to meet daily consumer needs. In such circumstance, opening up outward FDI without improving the performance of country’s manufacturing sector might be suicidal, says a FNCCI member requesting anonymity. </div> <div> </div> <div> 8.<span class="Apple-tab-span" style="white-space: pre;"> </span>Fluctuation in BoP: Generally, businessmen prefer to invest in a strong economy where their capital is safe. If allowed to invest abroad, Nepali businessmen may make majority of their investment in the countries which have strong economy. Currently, remittance has helped maintain Nepal’s Balance of Payment (BoP). If in the future, inflows of remittance drops and at the same time businessmen take capital abroad, there will be severe BoP crisis. This is why the government is still reluctant to introduce outward FDI-related policies, an official at Finance Ministry said.</div> <div> </div> <div> <span style="font-size: 14px;"><strong>Rhetorical Logics and Laxity of the Government </strong></span></div> <div> Some experts vocally criticize the government’s laxity in creating business friendly environment and improve overall macroeconomic scenario. For how long can Nepal restrict businessmen from investing abroad, questioned economist Dr Posh Raj Pandey. The government and experts who do not favour the idea of opening outward FDI often repeat the same rhetorical logic but do nothing to improve the scenario, he said. </div> <div> </div> <div> The government is literally idle in terms of bringing any policy to foster an environment favourable for investment. Presently, the government is not taking any risks as the remittance influx has helped maintain economic stability. But the same situation cannot continue forever, according to him. He said that the government should not always repeat same logic to restrict outward FDI. If our government wants to promote economic prosperity, it should be ready to take risks and formulate smart policies, he suggested.</div> <div> </div> <div> <span style="font-size: 14px;"><strong>FDI and Mobility of Money </strong></span></div> <div> Numerous positive aspects of outward FDI are overshadowed by a few negative ones, said Dr Bimal Koirala, economist and former chief secretary. Outflow of capital also helps create more opportunities to lure inward FDI and Nepali businessmen come back to the home country with more expertise and skills which will ultimately contribute to the domestic economy, according to him.</div> <div> </div> <div> The mobility of money in and out of a country does not stop simply by laws. A state should facilitate in the continuity of the mobility of money because if the movement of money slowsdown it will depreciate the value of currency. Investment, regardless of the frontiers, is a must to increase the movement of the money. Acknowledging the fact, the government should open up avenue for outward FDI, said Dr Chiranjibi Nepal.</div> <div> </div> <div> <span style="font-size: 14px;"><strong>Pragmatic Approach</strong></span></div> <div> Some experts suggest the government to allow Nepalis to invest abroad but only in competitive sectors. According to economist and former finance secretary Rameshore Khanal, the government should identify competitive sectors and should allow businessmen to invest only in those sectors. Some of these sectors, according to him, are:</div> <div> 1.<span class="Apple-tab-span" style="white-space: pre;"> </span>Tourism (eco-tourism, home stay)</div> <div> 2.<span class="Apple-tab-span" style="white-space: pre;"> </span>Adventurous sector (climbing, rafting)</div> <div> 3.<span class="Apple-tab-span" style="white-space: pre;"> </span>Hospitality sectors: Hotel and restaurant (antique hotels like Dwarika)</div> <div> 4.<span class="Apple-tab-span" style="white-space: pre;"> </span>Banking/insurance</div> <div> 5.<span class="Apple-tab-span" style="white-space: pre;"> </span>Construction</div> <div> </div> <div> <span style="font-size: 14px;"><strong>Way Forward</strong></span></div> <div> The government should carry out empirical studies on the effect of outward FDI on domestic economic activities. Before formulating laws, the government should assess some aspects of outward FDI including whether it will have a positive and significant impact on economic growth, and potential adverse impacts on various sectors. </div> <div> </div> <div> On the part of the government, it is not appropriate to remain literally idle on the issue of outbound FDI. The government should not see policies as a screening device to restrict the outflow of capital from the country. Rather it should formulate policies that will facilitate it. The Nepali private sector’s long wait to go around the globe to invest should take a positive turn soon.</div> </div> <p> </p>', 'published' => true, 'created' => '2014-07-30', 'modified' => '2014-09-12', 'keywords' => 'new business age cover story news & articles, cover story news & articles from new business age nepal, cover story headlines from nepal, current and latest cover story news from nepal, economic news from nepal, nepali cover story economic news and events, ongoing cover story news of nepal', 'description' => 'It is not surprising that Nepali businessmen, like many around the world, want to be competitive and set their footprint in the global market. But existing policies are keeping their dreams from being materialized. The government remains skeptic and reluctant to allow outward FDI citing probable impact on the national economy.', 'sortorder' => '2634', '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) 14 => array( 'Article' => array( 'id' => '2782', 'article_category_id' => '48', 'title' => 'The Frog Country', 'sub_title' => '', 'summary' => null, 'content' => '<div> <strong>--By Madan Lamsal</strong></div> <div> </div> <div> If I propose to make frog the national animal of new Nepal, I am sure, you will happily agree and also congratulate me for this brilliant idea. Nepal’s every bit of life has been touched by the benevolent frog and its various qualities. One of our revolutionary finance minister a few year ago declared that Nepal’s economy should now grow not in a reptiles’ dragging but in leap-frogging pace. Leap-frogging indeed is a right simile for Nepal. No Nepali believes in being rich taking a long route walk. Inspired by the frog, everybody wants to leap- frog from penury to instant prosperity. We never get tired of emphasizing that Nepal is an agrarian economy. The plantation season begins with the beacons of twaar-twaar-twaar of the frogs in the banks of the river and main fields. For many, frogs provide for a barbequed lunch or snack at the middle of the hard day’s work in the field.</div> <div> </div> <div> If you think of less relevance of iconic frog in the civilized life, you are wrong. The fortunate ones who have got employment must have fine qualities of a frog -- to jump a queue, to jump enter into influential leader’s living rooms jumping off the high fences and learn to find some excuses to jump across the process of meritocracy.</div> <div> </div> <div> If you happen to meet a frog-mouthed personality in the busy city, you can be sure that he must be a high-ranking official in bureaucracy, bank or NGO. If not, he must be a seasoned politician whose skin is gradually transforming into that of rhino from that of a frog. These are the key people for the very existence and functionality of the country. </div> <div> </div> <div> You might ask, how would you recognize these frog-mouthed ones in crowded cities? It is pretty simple. Bring along a dead frog with you and begin to compare the looks of people with it. Protruding eyes, lumped eyelids as the result of over drinking, large potbellies, twisted legs and habit of jumping the queues anywhere possible, be that temple or service station. The growth rate of the country may be low, but these frog-mouthed talents can make it sound great with their hoarse voice. The bank CEOs can ensure great profits regardless of the fact that only twenty percent people have access to the banking services. (How much profit will they earn if every citizen has a bank account in the country?)</div> <div> </div> <div> If you meet a proper frog-mouthed politician, he must be a youth leader of the party as he is aged just 65 years or so. You can argue that frog mouthed ones are spared by nature from entering into the old age. </div> <div> </div> <div> There are other great qualities of the frog we have emulated. The best among them is to live life free of all worries in any degree of precariousness. You must have seen a frog that is being swallowed by a snake that still wants to catch a spider, not being concerned that it will die in next few seconds. The country has long hours of load-shedding, we Nepalis don’t worry. There is no sign of new constitution being written, we rather worry about American visa. We don’t have enough supply of petrol, but it doesn’t stop us from buying a car. We prefer big LED to mount on our living room wall, without counting hours we actually have power supply.</div> <div> </div> <div> Also, you have heard the fable of Nepali frogs exported to the USA in an open basket and all of them reached intact, not even a single one jumping out from the basket as each of them had learnt the leg-pulling skills from our politicians. It is no wonder, our politicians and decision makers also have learnt many skills from the frogs, as mentioned above. Since, Nepalis and frogs have developed such a cordial bond, only suitable thing is to call Nepal a frog country and declare frog as the national animal.</div>', 'published' => true, 'created' => '2014-06-08', 'modified' => '2014-09-08', 'keywords' => 'new business age no laughing matter news & articles, no laughing matter news & articles from new business age nepal, no laughing matter headlines from nepal, current and latest no laughing matter news from nepal, economic news from nepal, nepali no laughing matter economic news and events, ongoing', 'description' => 'If I propose to make frog the national animal of new Nepal, I am sure, you will happily agree and also congratulate me for this brilliant idea. Nepal’s every bit of life has been touched by the benevolent frog and its various qualities. One of our revolutionary finance minister a few year ago declared that Nepal’s economy should now grow not in a reptiles’ dragging but in leap-frogging pace.', 'sortorder' => '2633', 'image' => null, 'article_date' => '0000-00-00 00:00:00', 'homepage' => false, 'breaking_news' => false, 'main_news' => false, 'in_scroller' => false, 'user_id' => '0' ) ) ) $current_user = null $logged_in = falsesimplexml_load_file - [internal], line ?? include - APP/View/Elements/side_bar.ctp, line 60 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::_renderElement() - CORE/Cake/View/View.php, line 1224 View::element() - CORE/Cake/View/View.php, line 418 include - APP/View/Articles/index.ctp, line 157 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::render() - CORE/Cake/View/View.php, line 473 Controller::render() - CORE/Cake/Controller/Controller.php, line 968 Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200 Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167 [main] - APP/webroot/index.php, line 117
Notice (8): Undefined variable: file [APP/View/Elements/side_bar.ctp, line 133]Code Context// $file = 'http://aabhiyan:QUVLg8Wzs2F7G9N7@nepalstock.com.np/api/subindexdata.xml';if(!$xml = simplexml_load_file($file)){$viewFile = '/var/www/html/newbusinessage.com/app/View/Elements/side_bar.ctp' $dataForView = array( 'articles' => array( (int) 0 => array( 'Article' => array( [maximum depth reached] ) ), (int) 1 => array( 'Article' => array( [maximum depth reached] ) ), (int) 2 => array( 'Article' => array( [maximum depth reached] ) ), (int) 3 => array( 'Article' => array( [maximum depth reached] ) ), (int) 4 => array( 'Article' => array( [maximum depth reached] ) ), (int) 5 => array( 'Article' => array( [maximum depth reached] ) ), (int) 6 => array( 'Article' => array( [maximum depth reached] ) ), (int) 7 => array( 'Article' => array( [maximum depth reached] ) ), (int) 8 => array( 'Article' => array( [maximum depth reached] ) ), (int) 9 => array( 'Article' => array( [maximum depth reached] ) ), (int) 10 => array( 'Article' => array( [maximum depth reached] ) ), (int) 11 => array( 'Article' => array( [maximum depth reached] ) ), (int) 12 => array( 'Article' => array( [maximum depth reached] ) ), (int) 13 => array( 'Article' => array( [maximum depth reached] ) ), (int) 14 => array( 'Article' => array( [maximum depth reached] ) ) ), 'current_user' => null, 'logged_in' => false ) $articles = array( (int) 0 => array( 'Article' => array( 'id' => '2797', 'article_category_id' => '48', 'title' => 'Sexy Settings', 'sub_title' => '', 'summary' => null, 'content' => '<div> </div> <div> <strong>--By Madan Lamsal</strong></div> <div> </div> <div> What is most popular these days in Nepal? You may say, it is betting or netting and dating. You may be right to some extent, but I say the most practiced thing is the setting. Let’s look it into more details.</div> <div> </div> <div> Yes, betting is quite popular in Nepal’s share market. Till recent past, the Nepali casinos were ahead in betting than the share market. But as the setting in the casinos became a bit weak, share market was ahead in the betting game. The retail investors in Nepal’s share market buy or sell the stocks going by the grapevine than reading the balance sheets of the companies. This can be called betting. Therefore, when Dr Baburam Bhattarai became the Finance Minister, he had termed Nepal’s share market as a casino where betting is the mainstay. And he was not wrong. However, even the betting in share market will not yield returns if the setting is not right.</div> <div> </div> <div> Again, it is true that dating after netting, such as checking facebook, is quite popular and it is personal and a most favoured pastime of most Nepalis - be a youth or a senior citizen. They seem to spend most of their productive three to four hours of their day or night in netting and dating. If they don’t spend few hours in netting, they feel they have missed a lot in their lives. Therefore, their eyes may be in one of the social sites. But again setting plays more dominant role also here. Netting and dating are not successful if the setting of the dating is not right. </div> <div> </div> <div> To be successful in Nepal in any field, especially in business and politics, you must know the art of setting. Otherwise you will fail. There is a special class in Nepali society which has become super rich just by the art of setting rather than by making a huge investment or knowledge of business. Therefore, setting is a new management mantra in Nepal. In fact, the management colleges should start teaching the art of setting to their students so that they are successful in their future profession as well as everyday life.</div> <div> </div> <div> Nowadays, there are many news reports in the Nepali media that people, especially government officers, are caught or interrogated by the anti-corruption body, the CIAA. But the fact is that they were caught or interrogated just because they did not know the art of setting. Many who commit bigger wrongs are never caught because they know the art of setting.</div> <div> </div> <div> If you look at it minutely, it is an open secret that nothing moves in Nepal if one doesn’t have proper setting in government offices or in the court, or in the company registrar’s office or the customs offices. Be it for receiving a license or getting a job transfer or promotion in the bureaucracy, the role of setting is paramount. So, more than the educational certificates or anything else, setting is the most important factor. If you don’t know this art, you may have to lose your job or your business also.</div> <div> </div> <div> Nobody seems to have peeped deep to see why the constitution could not be made in the first Constituent Assembly. It was just because the setting among the top gang-of-four leaders of three parties could not happen. Even now, however hard the people or CA members harp on the new constitution string, if the setting among this gang-of-four is not proper, it will not happen again. This gang calls it ‘consensus’, but it is nothing but another word for setting. </div> <div> </div> <div> Therefore, this ‘setting’ is not only omnipresent and omnipotent, but also cool and sexy. Don’t you agree?</div>', 'published' => true, 'created' => '2014-10-10', 'modified' => '2014-12-23', 'keywords' => 'new business age no laughing matter news & articles, no laughing matter news & articles from new business age nepal, no laughing matter headlines from nepal, current and latest no laughing matter news from nepal, economic news from nepal, nepali no laughing matter economic news and events, ongoing', 'description' => 'What is most popular these days in Nepal? You may say, it is betting or netting and dating. You may be right to some extent, but I say the most practiced thing is the setting. Let’s look it into more details.', 'sortorder' => '2647', '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' => '2795', 'article_category_id' => '52', 'title' => 'Auto Dream', 'sub_title' => '', 'summary' => null, 'content' => '<p> </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. Given the increasing demand due to expansion in the road network and resultant steady increase in import of all sorts of vehicles, Dr.Mahat’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. </div> <div> </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 – 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. </div> <div> </div> <div> Dr.Mahat’s call has come at a time when Nepal’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. </div> <div> </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’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. </div> <div> </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 – the latest being the power trade agreement with India and finalization of project development agreement template for power projects to the satisfaction of investors – are good indications for the future. But that is not going to be enough for development of automobile industry. </div> <div> </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. </div> <div> </div> <div> These centres should ideally be focused on developing electricity operated vehicles given the country’s hydropower potentials. </div> <div> </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. </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) 2 => array( 'Article' => array( 'id' => '2800', 'article_category_id' => '40', 'title' => 'Unlocking Nepal's Growth Prospect', 'sub_title' => '', 'summary' => null, 'content' => '<div> </div> <div> </div> <div> <strong> --By Akhilesh Tripathi</strong></div> <div> </div> <div> ‘Nepal does have natural resources. They are of course our growth potentials but not necessarily the key element needed for our future economic growth. The key element is human resource; the brainpower, creativity of the people, entrepreneurship and innovation. If we can unlock our human potential, if we can unlock entrepreneurship and innovation which will make use of the natural resources that Nepal has, then our growth potential will be unlocked; we will become a rich country.”</div> <div> </div> <div> Thus spoke Finance Minister Dr Ram Sharan Mahat, the chief guest of the second edition of the Asian Paints NewBiz Business Conclave & Awards, organized by New Business Age Pvt Ltd at Hotel Soaltee Crowne Plaza on September 11.</div> <div> </div> <div> <img alt="" src="/userfiles/images/cs1(5).jpg" style="width: 550px; height: 234px; margin-left: 10px; margin-right: 10px;" /></div> <div> </div> <div> <strong><img alt="" src="/userfiles/images/cs2(2).JPG" style="float: right; margin: 0px 0px 0px 10px; width: 300px; height: 397px;" />Investing in Human Resource</strong></div> <div> The remarks of Dr Mahat, a six-time finance minister, are a clear departure from the traditional belief that natural resources are a must for the economic growth of any country. The appropriate use of the available natural resources is necessary, the Finance Minister said, adding, however, that the country’s economic development is possible through the use of brainpower, creativity, entrepreneurship and innovation. He cited examples of Japan, Hong Kong, Taiwan and South Korea which have achieved fast economic growth despite having practically very little natural resource.</div> <div> </div> <div> Deependra Bahadur Kshetry, former vice-chairman of the National Planning Commission (NPC), who too attended the Conclave, agrees with the finance minister. “We need more skilled and trained human resource, creativity and innovation in business and entrepreneurship to exploit our abundant natural resource, which gives us a comparative advantage. However, the endowment of natural resource alone is not enough. This is what the finance minister means. And this is true as well,” said Kshetry, while talking to New Business Age after the conclusion of the Conclave.</div> <div> </div> <div> Kshetry says the government should invest more in developing the country’s human resources because it will help build the national capacity. “In simpler terms, it means investing more in education and skill-oriented training. Investment in human resource will help unlock our growth prospects,” he added.</div> <div> </div> <div> To invest in human resource development is to compete with investment in infrastructure and other social sectors. Here, the government has harder choices to make as it cannot choose one sector over the other as almost all sectors in Nepal need investment, and huge ones, for the matter. So, according to economists and development experts, the government will do well to have a well-designed national development plan, which will clearly spell out our national priorities. “It will help attract international support as well. Then it will be easier for the government to decide in which areas to use domestic resources and in which areas external resources,” say Kshetri. </div> <div> </div> <div> Managing Director of Jade Consult, Bkesh Pradhanga, another speaker of the Conclave, echoed similar sentiments. “The government should mobilize our human resource properly. For this, the government should invest in higher education of the country’s workforce and this should be the primary focus,” he opined. </div> <div> </div> <div> <strong><img alt="" src="/userfiles/images/cs3(1).JPG" style="float: right; margin: 0px 0px 0px 10px; width: 300px; height: 604px;" />Focus on Three ‘I’s</strong></div> <div> Our development priorities should not miss the three ‘I’s – infrastructure, investment and inclusion – according to Johannes Zutt, World Bank country director for Nepal and Bangladesh. Zutt, who was also one of the speakers of the Conclave, clearly said that the three ‘I’s should be Nepal’s top priority for now if the country is to achieve fast economic growth.</div> <div> </div> <div> On the investment front, the level of foreign investment has been low. According to the Investment Board, the total amount of foreign investment in 2012 which was declared the Investment Year was USD 62 million. It went up in 2013 to USD 208 million. In 2014 so far, it is USD 130 million. Domestic investment, too, hasn’t been growing at the expected rate. “Nepal is investing below the rate of investment needed to achieve a double digit growth. There is actually money available in Nepal for higher investment, but it isn’t happening. The business community complains about access to finance, regulatory burdens and labour costs. These are the problems existent is South Asia but it is debilitating in Nepal,” observed Zutt.</div> <div> </div> <div> But why has large scale investment not come to Nepal? Pradhananga answers, “It is because of political instability, lack of policy predictability, and industrial disputes that have caused the closure of companies like Surya Nepal in the recent past.” He added that Nepal immediately needs an investment of USD 15 billion for various projects that are ready for implementation.</div> <div> </div> <div> “For private investment to come, we need to create more enabling environment. This is why we have initiated some new incentives to lure private investment from this year’s budget, Dr Mahat said, “In the hydropower sector, for example, we have announced income tax exemption for the next ten years and fifty percent tax rebate for another five years.”</div> <div> </div> <div> Zutt opined that Nepal is caught in a vicious cycle of investment and infrastructure. “Nepal doesn’t have high enough levels of investment in infrastructure that is necessary for businesses to succeed and because it doesn’t have that infrastructure, it is not getting the investment,” he said.</div> <div> </div> <div> Pradhananga suggested to the government to focus on infrastructure development for the next one decade. He also advised to change old laws and policies and introduce new ones to attract private investment. “The Hydropower Policy 2001 and Foreign Investment and Technology Transfer Act 1992, to give a few examples, are quite old. The aim of these laws and policies is to attract FDI in the country. But we haven’t been able to make them timely and updated. This has negatively affected our development efforts,” said Pradhananga. </div> <div> </div> <div> <strong>Hydro Hopes</strong></div> <div> All the speakers of the Conclave agreed that hydropower has great potential in Nepal. “We are rich in water resource. We have huge hydropower potential. We can be the power house of clean energy in South Asia,” said Dr Mahat. </div> <div> </div> <div> But the reality is different from the rhetoric. Nepal has hardly tapped one percent of its total hydropower potential. So far, the country has been able to produce only about 750 MW of hydroelectricity though the total hydropower potential of the country is said to be over 80,000 MW. That means one of the sectors where Nepal’s growth prospects lie is the hydropower sector. Over half a dozen projects that are together expected to produce more than 5,000 MW of hydroelectricity are in advanced stage of development (see box). The government’s claim to do away with load-shedding over the next three-four years is based on these projects.</div> <div> </div> <div> “In Nepal, hydropower is one such sector of investment which can bring about a positive change in the entire econom</div> <div> “If the PDA [project development agreement] with the Upper Karnali hydropower project is signed over the next few days or weeks, then it will be a game changer. It will lead to the signing of PDA with half a dozen other major hydropower projects,” said Dr Mahat.</div> <div> </div> <div> <strong><img alt="" src="/userfiles/images/cs4(4).JPG" style="float: right; margin: 0px 0px 0px 10px; width: 300px; height: 231px;" />Nepal’s Strategic Location</strong></div> <div> The speakers of the Conclave also said that Nepal’s geographic location between China and India, two rapidly growing economies of the world, provides the Himalayan nation a great opportunity for economic growth. “Nepal’s growth prospects also lie in the fact that it is located between China and India, two of the fastest growing economies of the world. If Nepal can establish itself a trading partner between China and India, it will greatly help Nepal’s economic growth,” said Zutt.</div> <div> </div> <div> It is worth mentioning here that the annual trade volume between India and China has already crossed USD 70 billion and the two countries have planned to increase it to USD 100 billion by 2015. If Nepal can build roads, highways and rail links to connect its northern border with southern border, then it can effectively work as a trading partner between the two Asian giants, according to economists and development experts. </div> <div> </div> <div> <strong>‘2015: Nepal’s critical juncture’</strong></div> <div> Addressing the Conclave, Dr Swarnim Wagle, member of National Planning Commission said that the year 2015 will be very crucial for Nepal as the country’s new constitution is expected to be promulgated in 2015. Once, the constitution is ready, Dr Wagle said, Nepal’s political transition would be complete and then the country’s economy can take off. “We are few centuries behind other countries but I think that we can really make the year 2015 our critical juncture and really expedite our path into modernity,” said Wagle.</div>', 'published' => true, 'created' => '2014-11-09', 'modified' => '2014-11-21', 'keywords' => 'new business age cover story news & articles, cover story news & articles from new business age nepal, cover story headlines from nepal, current and latest cover story news from nepal, economic news from nepal, nepali cover story economic news and events, ongoing cover story news of nepal', 'description' => 'Nepal needs to invest in its human resource and exploit its natural resource to the fullest to unlock its growth prospects.', 'sortorder' => '2645', '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' => '2796', 'article_category_id' => '168', 'title' => 'MBA For Working Managers', 'sub_title' => '', 'summary' => null, 'content' => '<div> </div> <div> </div> <div> <strong>--By Upashana Neupane</strong></div> <div> </div> <div> Along with MBA and BBA there were lot of other options available for fresh graduates or regular students who aspired to gain a degree in management studies. But the options were limited for the working entrepreneurs or managers who wanted to sharpen their skills or upgrade their status in their field or start their own enterprise. Now, they too have an option in the form of Executive MBA or EMBA. </div> <div> </div> <div> MBA or EMBA are graduate level business degree especially designed for working professionals of the same field. These are post-experience management education programmes that help managers learn to change and grow in their career. They are lot like a regular MBA programmes only that they are primarily designed to educate working executives, managers, entrepreneurs, and other business leaders. </div> <div> </div> <div> Executive MBA was started in the early 1980s as a response to the need of the post experience education was felt. It was introduced as MBA for working managers, for the people working in managerial sectors who had no MBA backgrounds. It aimed to furbish their managerial performance at their respective institutions. </div> <div> </div> <div> In Nepal, Ace Institute of Management started the EMBA programme in 1999 under the affiliation of Pokhara University, while Kathmandu University School of Management (KUSOM) started its EMBA programme in 2000.</div> <div> </div> <div> <strong>Different from MBA</strong></div> <div> EMBA and MBA programmes generally attract people of different ages and at points in their career lives. These programmes are somehow similar in content but the EMBA classes are of faster paces, which allow students to receive their degree in two years or less while working full time. EMBA Programme emphasises applied learning, leadership and personal skill development, and a global mindset. </div> <div> </div> <div> Subas KC, dean at KUSOM shares that the EMBA is more generalist programme while MBA is more specialised programme. “We’ve designed EMBA focusing more on the things like leadership and skills enhancement which is needed for a working professional to enhance their career,” he says, “We are focusing particularly on those skills which are direct and visibly necessary for them.”</div> <div> </div> <div> Similarly, Kumar Thapa, former Associate Director of EMBA programme at Ace Institute of Management also shares same feeling, “EMBA is more fundamental- general class which is elective not specialized and the course is more focused on what working professionals need in the workplace,” he says, “While MBA is more academic and specialized course.” </div> <div> </div> <div> With that, the cohorts also often turn into a valuable network that students can tap long after they receive their degree. KC shares there have been lot of cases where students from managerial background have switched to start their own enterprises as they develop a strong network from the wider range of opportunities provided by the college.</div> <div> </div> <div> There are various factors people join EMBA. KC shares that “most of the students join the programme to perform better in current job, some to upgrade their current position in their organisation. Basically, all want to develop their ability and skills to choose a better path in their career. Some people want to change their career also, so they join to gain a better perspective and opportunities.”</div> <div> </div> <div> <strong>Growing Trend</strong></div> <div> Executive MBA is a good opportunity that is made available for the working people who want to upgrade their career and the attraction towards it is increasing lately. People from various background: corporate sector, public and development sector, entrepreneurship sector, everyone is now willing to join the programme for various reasons. Mostly, senior level executives join the programme but Thapa believes that lately younger people are joining this programme with relatively short working experience.</div> <div> </div> <div> KC believes that the trend has been good so far and believes that it will remain same for some more years but he said that the course needs should be revised and redesigned after some years.</div>', 'published' => true, 'created' => '2014-10-10', 'modified' => '2014-11-21', 'keywords' => 'new business age business education news & articles, business education news & articles from new business age nepal, business education headlines from nepal, current and latest business education news from nepal, economic news from nepal, nepali business education economic news and events, ongoing', 'description' => 'Along with MBA and BBA there were lot of other options available for fresh graduates or regular students who aspired to gain a degree in management studies. But the options were limited for the working entrepreneurs or managers who wanted to sharpen their skills or upgrade their status in their field or start their own enterprise. Now, they too have an option in the form of Executive MBA or EMBA.', 'sortorder' => '2644', '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' => '2792', 'article_category_id' => '167', 'title' => 'UML's Transformation : Leninism To Panelism', 'sub_title' => '', 'summary' => null, 'content' => '<div> </div> <div> <strong>--By Achyut Wagle</strong></div> <div> </div> <div> The Communist Party of Nepal-United Marxist-Leninist (CPN-UML) passed yet another acid test to vindicate its democratic credentials by electing the entire 159-member Central Committee (CC), including the new chairman through ballots, in the ninth general convention (GC) held in Kathmandu, July 3-10, 2014. In a closely contested bid to chairmanship, KP Sharma Oli defeated Party's former, two-time, general secretary Madhav Kumar Nepal by a narrow margin of forty-four out of two thousand and two hundred votes of the GC delegates.</div> <div> </div> <div> <strong>Democratic Domain </strong></div> <div> There is no dearth of cynics who claim that bitter factionalism that surfaced during the contest for chairmanship would further divide the party that is already mired by groupism. But what must be appreciated here is: UML is the only political party of the country that has developed best internal democratic practices. Unlike many communist outfits who choose to break-away as the separate entity once some differences crop-up within the group, the UML has exhibited tremendous level of resilience to save it from fragmentation; thanks to the democratic space it created to vent the differing views and ideologies. For this reason it has withstood the test of time as the mainstream left force amongst some three dozen odd communist 'parties'. It must not also be forgotten that it is a communist party that has painstakingly and by now convincingly transformed itself to a credible democratic alternative of the country. More importantly, it has set a practical contemporaneous formula for democratic transformation of any communist force that is originally indoctrinated to rise to power of 'people's republic' by using the 'bullets and barrels'to a force that readies itself to multi-party competition through ballots. No doubt, for this party, metamorphosis of greater magnitude is still inevitable to shake-off many dogmas and nostalgia of Soviet era. But, whatever it has achieved and maintained itself is in no way instantly dismissive. The ninth GC too has proved to be a new milestone as it elected mainly new set of younger leaders in CC, who have firmer belief in democracy than the older generation.</div> <div> </div> <div> It is not difficult to see that the Party's polity has now shifted from 'Proletarianism' or 'Leninism' to Panelism, which from a democratic perspective is a welcome dimension of change. The political sportsmanship and democratic spirit was clearly demonstrated by the leaders at the official closing ceremony of the GC on July 17. Both the victor and vanquished, Oli and Nepal respectively, along with other elected central body members vowed to work for the party unity, terming the vertical division during the CC election mere 'democratic exercise'. Not only both the factions won equal number of members as the office-bearers, the representatives seem to have guided to votemore by the quality of the candidate than the factional affiliation, electing a completely mixed panel. Any 'bright' person from both panels got place in the new CC.</div> <div> </div> <div> <strong>Road Ahead</strong></div> <div> If the mood of the Declaration made at the UML headquarters on 17th of July, is any indication, the party would soon enter into an era of a joint-leadership of many influential leaders. The chairman-elect Oli in very clear terms, with tears in his swollen eyes, declared that he did not have many days to live, and extended his arms for unity. It was momentarily a piece of emotional melodrama, unique to political cruelty. He couldn't even complete his short written speech. It is his eighth year running since his kidney transplant and, of late, the infection has now spread to his whole body, with septic deep wounds and swellings. There was a whirling question in the minds of the entire rank and file, why did he at the first place choose to run for chairmanship despite such precarious health condition? There is a strong school of thought which believes, there were mischievous minds like that of Bamdev Gautam who harboured dream of running the party as officiating chief as Oli is already a dilapidated figure. But, this possibility is clearly thwarted by the 'ideologues' belonging mainly to Nepal faction, who changed the party statute such that now there are five second men (vice-chairmen) in the hierarchy after the chairman. This is the very statute the GC ratified, albeit with some resistance. And, incidentally, Gautam ranked second among these five in terms of popular vote, behind Bhim Rawal, a Nepal loyalist. In any event of Oli's absence, there would be moral pressure (as there is no clear statutory provision) to handover charges to Rawal, not Gautam, or Bidya Bhandari, another vice-chair elect and the most trusted aid of Oli.</div> <div> </div> <div> What the UML's change in leadership means for the nation, is another issue widely debated in the political circles after Oli’s victory. Again, effectively it depends on the health of Oli. Should his health permit, he naturally dreams of becoming the next prime minister of the country. If the things move according to agreement between the Nepali Congress and UML to promulgate a new constitution by the end of January 2015, under the turn-key clause of the agreement, the premiership would automatically come to the UML candidate, as things stand now, to Oli as the Party's parliamentary party leader. There are newly emerged political equations within that party such that no single person, except the chairman given his current level of comfortable majority in CC, is likely to hold the sway in any decisions. The ambitions like that of Gautam are dampened as such, once the power gets transferred to lower ranks from the chairman.</div> <div> </div> <div> <strong>Policy Paradigm</strong></div> <div> During the run-up to the ninth convention, there was a sort of euphoria created by a 'club' of party's young 'thinkers' that Party's socio-politico-economic policy paradigm would be redefined and formalized through the GC. But, the entire GC was so much consumed by the fight for the posts that it hardly could undertake much deserved discussions with due seriousness on any policy document. At the end, when it came-out with the thirty-three point Declaration on July 17, many of the same old communist verbose again found the place in it. 'Awarding land-ownership rights to tillers', 'protecting trade union rights', 'deploring of infringements on human rights' in some weird part of the world etc. were repeated, rather artlessly. Some of the hasty conclusions like the 'global economic crisis like that of 2008 justifies the rationale of socialism' were also incorporated.</div> <div> </div> <div> Interestingly though, this Declaration has very carefully avoided over use of redundant communist jargons and jingoisms. Not only it doesn't carry terms like 'Indian expansionism', 'American imperialism', it also cautiously reduces the frequency of the words like 'revolution', 'struggle' or 'class struggle' that are invariably and clumsily thrusted into policy papers of almost all communist formations. The ninth GC Declaration instead proposes interesting separate economic prescriptions for their cadres and the country.</div> <div> </div> <div> 'This GC urges all the local committees of the party, affiliated sister organizations and all members of the party to devise concrete plans for their respective locality to augment economic development, productivity and employment and involve in the production functions so as to establish themselves as the leading-lights of the economicprosperity,' says the point number 23 of the Declaration. The Declaration has also 'appreciated' the 'improving' relations between India and China and has wished to make Nepal beneficiary to the impressive economic growth of both the neighbours.</div> <div> </div> <div> <strong>Opportunities and Challenges</strong></div> <div> Perhaps the biggest opportunity for the CPN-UML is the growing compulsion for all other communist forces to follow its 'janatako bhudaliya janbad' or multiparty democracy route, should they opt to remain relevant in modern day pluralistic politics. It is becoming increasingly difficult for parties with Maoist tags not to follow the exact process the UML did for the last two and half decades. If the party wereto equip itself to harness this opportunity, it could provide a major fillip to its organizational strength. Certainly, its increasing global recognition as trustworthy democratic force is another very powerful factor that helps to retain it as a major player in Nepali politics. Its gradual policy shift from Left to the Centre is crucial to ensure the outfit's long lasting relevance.</div> <div> </div> <div> There are challenges too, mostly emanated from three sources - policy confusions, organizational efficiency and 'class' shifts. The ninth GC also could not change its name by dropping the 'Marxist-Leninist' tag and the term 'Communist' from its official name, despite the fact that there is a widespread realization of this need within the Party. The psychological divide in the mandarins is debilitating -- they often times love to retain communist identity and yet want to change this 'as soon as possible' for public interface. The Party has failed to bring into effect a much-needed departure from three the decade-old nostalgia of 'classless society'. Instead the Party itself has become the 'class' of riches with 'too many, too big' leaders. The only reason the Party substantially increased the number of office bearers from six to fourteen was to accommodate these 'big' names with suitably high-sounding positions. Generally, those who have been prime ministers, deputy prime ministers and ministers in the past have sought those 'elitist' titles. This is resulting into overlaps and duplications on responsibilities and duties, and ego clashes at every decision points. The cumulative effect of all these is sure to have telling effect in organizational efficiency and cadre-leader relations, not in so distant future.</div> <div> </div> <div> Effectively, the UML has graduated from the party of 'proletariats' to 'new riches', not only in terms of policy-base but as the class representation. To borrow a phrase from the communist literature itself, 'the class division' within the party has been strikingly vivid in recent years. In many cases, its leaders have protected criminals just to extract money in return. There is not any binding ideology available in any political literature that can accommodate all these extremes. The task of managing all these paradoxes, the sooner the better, comes on the shoulder of the new leadership. But, unfortunately, the shoulders of the commander are now sick, severely.</div> <div> </div> <div> <em>The writer is former editor of Aarthik Abhiyan National Daily.</em></div>', 'published' => true, 'created' => '2014-09-08', 'modified' => '2014-11-21', 'keywords' => '', 'description' => 'The Communist Party of Nepal-United Marxist-Leninist (CPN-UML) passed yet another acid test to vindicate its democratic credentials by electing the entire 159-member Central Committee (CC), including the new chairman through ballots, in the ninth general convention (GC) held in Kathmandu, July 3-10, 2014. In a closely contested bid to chairmanship, KP Sharma Oli defeated Party's former, two-time, general secretary Madhav Kumar Nepal by a narrow margin of forty-four out of two thousand and two hundred votes of the GC delegates.', 'sortorder' => '2643', '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' => '2783', 'article_category_id' => '166', 'title' => 'Deciphering The Indian Election: Challenges Before Modi & The South Asian Message', 'sub_title' => '', 'summary' => null, 'content' => '<div> <strong>--By Prof Ujjwal K Chowdhury</strong></div> <div> </div> <div> <span style="font-size:14px;"><strong>Queerness of the Results</strong></span></div> <div> Interesting times indeed. Modi-fied BJP’s remarkable election campaign surely was fuelled by unprecedented sums of money, but more interestingly magnified by the rule of the first-past-the-post system. A mere 12 per cent difference in vote-share with the Congress has turned into 600 per cent difference in seats (NDA with 335 seats, including 282 of BJP against UPA with 60 seats, including 44 of Congress). </div> <div> </div> <div> It has two repercussions: Modi’s darker past with regards to poor governance during 2002 riots in Gujarat has been almost banished, and Congress-led UPA’s abysmally poor record of scams-ridden governance has made the party justifiably suffer the worst defeat in its 129-year history. </div> <div> </div> <div> The 'Modi Wave' has touched 40 per cent of voters, and left 60 per cent cold, with not much dent made in those states where regional parties still enjoy a high degree of credibility, like Tamil Nadu, Odisha and West Bengal, though it has wrecked the Congress everywhere. The wave swept through Uttar Pradesh, where it also managed to draw away voters from the BahujanSamaj Party, partially from the Samajwadi Party, and of course in Bihar too.</div> <div> </div> <div> Taken together, MPs from national parties like Congress, the Left and the AamAadmi Party barely add up to 70, and regional parties like the AIADMK, the TRS and the BijuJanata Dal, or the Trinamool Congress, are unlikely to show much interest in, let alone challenge, the Modi government on a large number of crucial areas of policymaking. And this does not bode well for the largest functional democracy of the world.</div> <div> </div> <div> <span style="font-size:14px;"><strong>How did Brand Modi Succeed?</strong></span></div> <div> Modi’s strategy was to turn the elections into a Presidential format by positioning the polls as a referendum on his performance in Gujarat and his India Vision. Rather than just harping on UPA failures, Modi chose, instead, to focus on a positive campaign around his perceived delivery in a mid-sized state, and the promise that he could make this national, telling one and all: ‘Vote for me and I will give you good governance’.He raised people’s high expectations from the party and him by promising ‘Minimum government, but maximum governance.’</div> <div> </div> <div> Modi has won on the promise of ‘fixing’ the economy, combating corruption and inflation, and promising jobs and job security. He show-cased ‘Gujarat Development Model’ through a high-decibel, liberally-funded integrated media campaign, using the social media also to the hilt. Interestingly, by all accounts, Gujarat development story is poorer in content than that of Tamil Nadu or Kerala, but packaged like never ever before. </div> <div> </div> <div> The anti-corruption plank of the Anna Movement and later AamAdmi Party electioneering was usurped by the same high-decibel Modi campaign effectively and the facts that Gujarat has no Lokayukta for the last one decade or that some ministers in Gujarat government are convicted criminals got lost in the din and bustle.</div> <div> </div> <div> Indian youths, numbering more than half the electorate, with more than a hundred million first-time voters, are an impatient lot, and rightly so, with spiralling frustration at the dipping job prospects, lowering growth rates and increasing violence against women, on one side, and with surging expectations of quality life style of the developed nation, which they are exposed due to the easy access of information technology. This youth is bitterly opposed to corruption, and hence Congress or UPA as the fountainhead of corruption. Appreciating the AAP movement against corruption, the youth also wants to dream of a rosy future, and hence the dream-merchants of BJP campaign could create the immense eye-balls among the youth.</div> <div> </div> <div> BJP successfully and steadfastly used information technology, 3D technology, and the like to create the lethal mix of slogans, machines and dreams, all fuelled by an immense investments from sources little known, creating the right surrounding sound ensuring victory even in areas where they hardly have organization on ground, as seen in Bengal or Assam, for example.</div> <div> </div> <div> <span style="font-size:14px;"><strong>Political Leadership Challenges</strong></span></div> <div> The NDA’s emphatic victory in the national election establishes Modi as the BJP’s undisputed leader, who is next expected to overhaul leadership roles within the party by promoting leaders who hold sway over social and regional groups and dilute the upper-caste dominance in decision-making within the party.Modi's focus may be to promote a new set of leaders who would eventually become "faces" of the party in their respective areas. This will be a challenge indeed.</div> <div> </div> <div> Modi’s immediate challenge will be to replicate the national success in the crucial assembly elections that follow in states such as Haryana, Maharashtra and Delhi, where the BJP has performed well. However, the actual performance of the Central government under Modi over the next four months will influence the situation in these states later this year.</div> <div> </div> <div> <span style="font-size:14px;"><strong>The South Asian Message</strong></span></div> <div> Surely Modi-fied India will be a bolder India in the region, firmer on the borders, ruthless with foreign espionage on the Indian soil, intolerant with any form of terrorism or fake currency onslaught and even infiltration of the poor and hapless from across the borders. </div> <div> </div> <div> Electoral rhetoric apart, the new government is expected to pursue the national interests zealously, though the focus will be more on domestic economy and internal security of India. </div> <div> </div> <div> On the neighbourhood front, closer relations with Nepal and Sri Lanka, and a balanced business-like approach to China, Pakistan and Bangladesh are expected. There will be a setback of the radical Islamic forces in Pakistan, Bangladesh and Maldives consequently, and the new Indian government overtly or covertly will do all it can to that end. The centrist and rightist forces in Nepal and the pro peace reconciliatory forces of Sri Lanka may expect to get tacit support of the new Indian government. </div> <div> </div> <div> Due to pressing domestic economic and strategic compulsions, the Modi government will need a working relation of low or no tension with China and Pakistan and focus more on economic cooperation. And, for Nepal, due to historic and geo-political reasons, the flow of capital, people and businesses may see a further surge, coupled with stricter border monitoring to curb cross-border movement of terrorist modules.</div> <div> </div> <div> <span style="font-size:14px;"><strong>Economic Contradictions in the New Disposition</strong></span></div> <div> While the Indian corporate sector and native and foreign investors in the stock market are justified in celebrating the arrival of a "right wing", business-friendly Modigovernment in India, this is not necessarily the side of 'Modinomics' that most BJP voters would like to see. Modi campaigned hard on a platform of economic development, job creation and an efficient administration, and the 40 per cent of voters who backed the BJP-led alliance did so because they believe he will deliver on these promises. But contradictions exist in areas where satisfying the aspirations of a corporate constituency - for example in the area of labour reform - will end up undermining the aspirations of voters for jobs and job security. Another area to watch closely will be Modi government's approach towards law and order, and especially the right of vulnerable citizens - women, minorities, adivasis and dalits - to security, justice and equity.</div> <div> </div> <div> The BJP-led government has filled investors’ hearts with the hope of a turnaround in India’s economic fortunes. The stock market is scaling record highs every day and the rupee has gained considerably against the US dollar. Foreign Direct Investment (FDI) of more than a trillion rupees has already been pledged in the first three days after results were announced. Perhaps the expectation is that Modi’s pro-business stance will help to lift India out of its current economic mire— GDP has grown by less than five per cent year-on-year for the past seven quarters, well below the near eight per cent average of the previous ten years. </div> <div> </div> <div> But given the deep roots of India’s current predicament and the type of reforms that are required, along with dip in investment cycle in the last two years, one may suggest that investors’ optimism about an economic bounce may not be easy. India has, so far, narrowly avoided a downgrade of its sovereign credit rating to junk status. So, the fiscal position will continue to be precarious. Unless it is reversed, the government’s hands, with regards to increasing capital expenditure to boost infrastructure and therefore potential growth, will remain tied down. </div> <div> </div> <div> The health of the private sector has also deteriorated considerably. Companies are highly leveraged, with the debt-to-equity ratio elevated at 83 per cent, highest among all emerging markets, and below only that of Greece and Italy. The levels of bad debt in the financial system are also rapidly on the rise. So, regardless of the party in power, both banks’ ability to lend money to businesses and companies’ propensity to invest are limited. </div> <div> </div> <div> Further, many believe that a stronger government with more capable leadership will be able to restart stalled infrastructure projects, which have been held back so far due to regulatory hurdles. However, according to a recent report by Credit Suisse, only a quarter of the stalled investment projects are stuck with the central government, of which two-thirds are in power and steel - sectors that are already swamped with overcapacity. The other projects need clearance from state governments.</div> <div> </div> <div> In order to achieve the government’s target growth rate exceedingeight per cent a year, as promised by BJP in its manifesto, India requires a major institutional overhaul aimed at reducing crony capitalism (which even the BJP government in Gujarat has been squarely accused of) and improving the business environment. According to the World Bank’s Ease of Doing Business Survey for 2014, out of 185 economies India ranked 134— well below its emerging market counterparts. And India scores just 36 on the World Bank’s Corruption Perceptions Index for 2013, where 100 is the least corrupt.</div> <div> </div> <div> <span style="font-size:14px;"><strong>Economic Challenges before Modi Government</strong></span></div> <div> Modi government’s first credibility test with markets will be when it delivers a budget by July that will need to convince investors that India can realistically contain its fiscal deficit. The subsidies and austerity of the outgoing UPA government would prove hard to sustain, and harder to reverse. Continuing to defer payments to state-run companies that would compensate them for selling fuel, fertiliser and food below market prices can create havoc with their finances and make them rely on borrowing to fund operations; while, on the other hand, tax revenues are unlikely to recover immediately in a weak economy. </div> <div> </div> <div> Further, higher duties and other restrictions almost halved gold imports, but the moves have been deeply unpopular. Gold smuggling surged after the UPA measures, casting doubt on reported data. The BJP promised to review gold import duties within three months of coming to power. That may please gold buyers, but not investors, as concerns about the current account deficit sent the rupee to a record low last August. </div> <div> </div> <div> There are other challenges beyond government control: the El Nino weather pattern, typically associated with weak rains. Citigroup estimates that below-average rainfall in the June-September monsoon could reduce up to one percentof economic growth forecast and lead to a spike in inflation. Surging prices could spark tension with the central bank, which has made containing inflation a priority. </div> <div> </div> <div> Replicating Gujarat at the national level will prove to be a yeomen task due to the variegated development stages across India, high differences in economic basics and social indices among provinces of India, among other things.</div> <div> </div> <div> India is burdened with Rs.6000 billion bad loans in all nationalized banks put together, about 10 percent of all such bank loans. The bulk of these bad loans are related to infrastructure projects, which have made banks circumspect in lending. Also, crony capitalism will come in the way of recovering these loans.</div> <div> </div> <div> Keeping the promise of 10 million jobs a year is the other big hurdle for the new government as the Indian economy has been witnessing almost a jobless growth for a decade now.</div> <div> </div> <div> <span style="font-size:14px;"><strong>A Silent Prayer</strong></span></div> <div> A day after Modi wins India, my prayers: let India remain the synthetic cosmopolitan diverse nation that it is with the co-existence of so many different groups; let the tribal population not continuously suffer in the name of 'development'; let minimum standards of life of all precede maximum profits of some; let not, in the name of equal opportunities, snatch the minimum benefits the system at times gives to those who are born highly unequal; let justice and equity precede the blind search of growth and GDP; let not entrepreneurship gasp for breath under the tutelage of big business; let a thousand flowers bloom in expressions of all kinds - some unkind to those who rule too; let not mobs dictate terms to free souls; let hope replace cynicism and joy amid struggles to take precedence over apathy in abundance. Let my nation remain committed to the lofty ideals of humanity!</div> <div> </div> <div> <em>(Prof Chowdhury is education & media consultant. While the analysis and conclusions are his own, he has drawn on facts, figures and arguments available on Indian media specially The Outlook, The Hindu and The Hindustan Times.)</em></div>', 'published' => true, 'created' => '2014-06-08', 'modified' => '2014-11-21', 'keywords' => 'new business age south asia news & articles, south asia news & articles from new business age nepal, south asia headlines from nepal, current and latest south asia news from nepal, economic news from nepal, nepali south asia economic news and events, ongoing south asia news of nepal', 'description' => 'Interesting times indeed. Modi-fied BJP’s remarkable election campaign surely was fuelled by unprecedented sums of money, but more interestingly magnified by the rule of the first-past-the-post system. A mere 12 per cent difference in vote-share with the Congress has turned into 600 per cent difference in seats (NDA with 335 seats, including 282 of BJP against UPA with 60 seats, including 44 of Congress).', 'sortorder' => '2642', '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' => '2788', 'article_category_id' => '37', 'title' => 'Policy For Inclusive Growth', 'sub_title' => '', 'summary' => null, 'content' => '<div> </div> <div> <strong>--By Hom Nath Gaire</strong></div> <div> </div> <div> The phrase 'Inclusive Growth' is quite popular in recent days not only among academia but also with policy makers, development partners and media as well. It seems that there is paradigm shift in development strategies among the stakeholders. The concept of inclusive growth refers to both the pace and distribution of economic growth. In order for growth to be sustainable and effective in reducing poverty, it needs to be inclusive. </div> <div> </div> <div> Traditionally, poverty (or inequality) and economic growth analyses have been done separately. However, recent works indicate that there may not be a trade-off between equity and efficiency as suggested by Okun (1975) and that it would be a big mistake to separate analyses of growth and income distribution. Inclusive growth has commonly been explained as about raising the pace of growth and enlarging the size of the economy by providing a level playing field for investment and increasing productive employment opportunities. The definition of inclusive growth implies direct links between the macro and micro determinants of the economy and economic growth. The microeconomic dimension captures the importance of structural transformation for economic diversification and competition, while the macro dimension refers to periodic changes in economic aggregates such as the country’s gross national product (GNP) or gross domestic product (GDP). </div> <div> </div> <div> Sustainable economic growth requires inclusive growth. Maintaining this is sometimes difficult because economic growth may give rise to negative externalities, such as a rise in corruption, which is a major problem in developing nations. However, inclusiveness lays emphasis on equality of opportunity in terms of access to markets, resources, and unbiased regulatory environment for businesses and individuals. The inclusive growth approach takes a longer-term perspective, as the focus is on productive employment as a means of increasing the incomes of poor and excluded groups and raising their standards of living. </div> <div> </div> <div> <strong>Determinants of Inclusive Growth</strong></div> <div> Different countries, especially developing countries, may have very different institutional as well as policy arrangements for promoting inclusive growth. Similarly, there may be a number of distortions preventing the allocation of limited resources in such a way that productivity in different sectors is equalized. The shift of resources from one sector to another may have an important effect on the overall level of output and growth. </div> <div> </div> <div> In this context, although growth theories have contributed to our understanding of how growth is determined and how it might be influenced, it has in many ways missed some of the crucial issues for developing countries. It may be possible to model the role of management and organization, the improvement of infrastructure, and sectoral transfer in developing economies to measure real determinants of growth and to the design of policy. </div> <div> </div> <div> They are directly concerned with the long-run growth in the sense of the steady-states as well as important for a medium term of some considerable duration. Government macroeconomic policies--- both fiscal policy and monetary policy--- are considered to be instrumental in promoting inclusive growth in the respective economy. </div> <div> </div> <div> <strong>Fiscal Policy and Inclusive Growth </strong></div> <div> Fiscal policy involves the use of government spending, taxation and borrowing to affect the level and growth of aggregate demand, output and jobs. It is also a means by which a redistribution of income and wealth can be achieved as an instrument of intervention to correct the market failures. Thus fiscal policy is considered more effective in encouraging both pace and size of economic economy. </div> <div> </div> <div> Based on this belief, Asian Development Bank (ADB) has recently urged the Asian governments to use their fiscal policy more adeptly to combat the widening income gaps in the region. “As the inequalities rising almost everywhere in Asia, governments need to urgently expand and improve their public investments in inclusive growth,” President Takehiko Nakao told in seminar titled, Leveraging Fiscal Policy for Inclusive Growth on the occasion of bank's 47th AGM. </div> <div> </div> <div> More than 80 percent of Asia’s population live in countries where inequality is worsening, meaning that many are being left behind even as globalization, technological progress, and market reform have led to strong economic growth. The bank emphasized on a range of issues including taxation to boost social and other spending, existing government programmes to promote equality, and the best balance spending to help the poorest without compromising fiscal sustainability.</div> <div> </div> <div> <strong>Monetary Policy and Inclusive growth</strong></div> <div> It is well accepted that macroeconomic stability and low inflation rates, inter alia, have positive effects on growth and on reducing inequality. In this connection, well-managed monetary policy is critical in achieving stable and inclusive economic growth. Similarly, monetary policy is mandated to achieve and maintain price stability in the interest of inclusive and sustainable economic growth along with maintaining financial stability. </div> <div> </div> <div> Price stability reduces uncertainty in the economy and provides a favourable environment for inclusive growth and cumulative employment creation over the longer term. Low inflation, on the other hand, helps to protect the purchasing power and living standards of all classes of people. Although low inflation may not necessarily in itself reduce income inequality, it does ensure the protection of income, which is particularly important for poor people who generally do not have the means to adjust their nominal incomes to take account of rapid price increases. </div> <div> </div> <div> <strong>PPP and Inclusive Growth </strong></div> <div> The Public Private Partnership (PPP) is a governance tool to bring together resources as well as strengths and share experiences of the public and private sector for the purpose of provisioning of public assets or services for public benefit. In order to achieve inclusive growth, developing countries should create more PPP opportunities to address their infrastructure gap and steer private money and skills into much-needed infrastructure projects. </div> <div> </div> <div> The infrastructure deficit in the developing countries like Nepal is so enormous that we can’t expect either private investors or the public sector to fill up it alone. It needs collaboration between the private and public players to make things work, and to bring critical services to the community. Good infrastructure is critical to inclusive growth, allowing communities to access essential social services, markets, and jobs, and making cities cleaner and easier to navigate. PPPs can help developing countries address critical infrastructure needs, from roads to hospitals to water supply systems. </div> <div> </div> <div> The PPP investment model with various structures is effective in helping centrally planned countries transition to private sector-oriented market economies. PPPs can be promoted through fully assessed and appropriate risk sharing and performance-based arrangements between the parties. The aim is to deliver “value-for-money” projects to provide a full set of benefits for investors, the public, and the economy.</div> <div> </div> <div> <strong>Knowledge Economy and Inclusive Growth</strong></div> <div> The development of the knowledge economy and inclusiveness has been seen as closely related. Global firms have built integrated international production chains, with innovation creating new products with added value in “knowledge” areas such as design and marketing and providing associated services. </div> <div> </div> <div> The growth of the knowledge economy is seen as part of the growth strategy to import jobs from low wage economies such as China and India investing heavily in knowledge. Shifting from low-cost manufacturing to economies based on knowledge, innovation, and high-end services is imperative for developing countries to achieve and sustain broad based inclusive growth. Emerging economies can reach and go beyond middle-income levels by becoming knowledge-based economies like Japan, the Republic of Korea, and Singapore. </div> <div> </div> <div> Similarly, least developed countries like Nepal can upgrade themselves to developing one through systematic investment in new information and communication, manufacturing and other technologies to promote knowledge economy. For this, they have to spend time and resources to move up the value chain by drawing on best practices and latest technologies, for example, shifting to smart energy grids, cloud computing, 3D manufacturing, and mobile rather than fixed-line communications.</div> <div> </div> <div> <strong>Rational </strong></div> <div> According to the World Bank’s Commission on Growth and Development, a persistent, determined focus on inclusive long-term growth by governments is a key ingredient of all successful growth strategies. Policies that encourage inclusive growth tend to emphasize removing constraints to growth, creating opportunity, and creating a level playing field for investment.</div> <div> </div> <div> To that end, developing countries need to increase investment in infrastructures as well as research and development to create knowledge based, innovative and competitive industries. For this, public funding may be needed to help companies start up. Public spending on education and health services improve the well-being of the poor and augment their productive capacity. </div> <div> </div> <div> Targeted subsidies and transfer payments protect the most vulnerable and deprived segments of society while better public infrastructure can make it easier for the entrepreneurs to create more jobs and additional value for the economy. Higher education and training need to be significantly improved to generate the skills and critical thinking processes vital to a modern competitive economy. </div> <div> </div> <div> In addition, governments need to put in place mechanisms and adopt policies that enable innovation and creativity to flourish. This includes protecting intellectual property rights, providing adequate financing options, and nurturing more flexible labour markets.</div> <div> </div> <div> <strong>Finally</strong></div> <div> Policies on both monetary and revenue front such as non-inflationary monetary and progressive taxation can promote inclusive growth. But among policy tools, fiscal policy with productive government expenditure and progressive taxation has a tangible effect on boosting equality and promoting inclusive growth.</div> <div> </div> <div> <div> <em><span style="font-size: 14px;"><strong>What is Inclusive Growth?</strong></span></em></div> <div> An IMF Commission on Growth and Development (2008) notes that inclusiveness—a concept that encompasses equity, equality of opportunity, and protection in market and employment transitions—is an essential ingredient of a successful growth strategy.</div> </div> <div> </div>', 'published' => true, 'created' => '2014-07-30', 'modified' => '2014-11-21', 'keywords' => '', 'description' => 'The phrase 'Inclusive Growth' is quite popular in recent days not only among academia but also with policy makers, development partners and media as well. It seems that there is paradigm shift in development strategies among the stakeholders. The concept of inclusive growth refers to both the pace and distribution of economic growth.', 'sortorder' => '2641', '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) 7 => array( 'Article' => array( 'id' => '2791', 'article_category_id' => '52', 'title' => 'Budget 2014/15 Private Sector Neglected', 'sub_title' => '', 'summary' => null, 'content' => '<div> </div> <div> </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' remittances and, continuity of archaic practice of development that is heavily dependent on supply-driven central planning.</div> <div> </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> </div> <div> One of the clear departures expected from Mahat was government’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'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> </div> <div> The most crucial departure expected from Mahat, for his philosophical leanings as an open-market economist, was to stop 'merciful allocation' 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> </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 'the Mahat budget' this time.</div> <div> </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) 8 => array( 'Article' => array( 'id' => '2794', 'article_category_id' => '40', 'title' => '2nd Newbiz Business Conclave & Awards 2014', 'sub_title' => '', 'summary' => null, 'content' => '<p> </p> <p> <span style="font-size:14px;"><a href="http://www.abhiyan.com.np/article-conclav_27bhadau2071_presentation">Presentations of some speakers in the conclave</a><br /> <br /> <a href="http://www.abhiyan.com.np/article-news_25bhadau2071_award">न्यूबिज बिजनेश कन्क्लेभ एण्ड अवार्ड वितरण शुरु</a><br /> <br /> <a href="http://www.abhiyan.com.np/article-news_26bhadau2071_award">न्यूबिज बिजनेश कन्क्लेभ एण्ड अवार्ड कार्यक्रम शुरु</a><br /> <br /> <a href="http://www.abhiyan.com.np/article-news_26bhadau2071_conclave">न्यूबिज कन्क्लेभ एण्ड अवार्डको दोस्रो संस्करण आज</a><br /> <br /> <a href="http://www.abhiyan.com.np/article-BSchoolAward2014">न्यू विज् विजनेश स्कूल अवार्ड २०१४</a></span></p>', 'published' => true, 'created' => '2014-09-12', 'modified' => '2014-10-10', 'keywords' => '', 'description' => '2nd Newbiz Business Conclave & Awards 2014', 'sortorder' => '2639', '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) 9 => array( 'Article' => array( 'id' => '2790', 'article_category_id' => '40', 'title' => 'Nepal Strives For DC Degree: What Is In Store For Private Sector?', 'sub_title' => '', 'summary' => null, 'content' => '<div> </div> <div> </div> <div> <strong>--By Akhilesh Tripathi</strong></div> <div> </div> <div> If everything goes as planned by the government, Nepal will graduate from the Least Developed Country (LDC) status over the next eight years (i.e. by 2022) to a Developing Country (DC) status. Even if that target is not achieved by the specified time, the process that has been initiated already with the start of the current three-year plan (FY 2014 to FY 2016) has a lot in store for the private sector as opportunities, say analysts. </div> <div> </div> <div> Foremost among such analysts is Dr Govind Raj Pokharel, Vice Chairman of National Planning Commission (NPC). He says, “Graduation from the LDC status is a Herculean task but it is achievable if the government and the private sector work together and there is strong support of the donor community. We have pinned a lot of hope on the private sector.”</div> <div> </div> <div> Dr Pokharel claims that the next eight years over which Nepal will try its best to graduate from the LDC status to DC status will be full of business opportunities for the private sector. “We have expected a huge investment from the private sector. We know that the private sector will not invest without seeing opportunities first. Still, we hope that such investment will come from the private sector because there will indeed be opportunities,” he says. </div> <div> </div> <div> <img alt="" src="/userfiles/images/cs1(1).JPG" style="float: right; margin: 0px 0px 0px 10px; width: 300px; height: 485px;" />According to economists as well as the country’s graduation strategists, there will be business opportunities in all major sectors - agriculture, manufacturing, services, hydropower, tourism, infrastructure development etc. “These are the major areas where the private sector will find ample business opportunities provided that the government creates an enabling environment. But there will be opportunities in other sectors as well if there is an enabling environment,” shares Dr Hemanta Dawadi, Director General of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI).</div> <div> </div> <div> It seems the government is keen about creating those opportunities for the private sector through change in policy in line with the development targets which will have to be achieved over the next eight years for Nepal to become a developing country. The good thing is this has started with the recently announced budget for the new fiscal year. “The budget is also poised to graduate Nepal from a Least Developed Country status as defined by the UN,” said Finance Minister Dr Ram Sharan Mahat while presenting the budget on July 13.</div> <div> </div> <div> In his budget speech, Dr Mahat said that the country needs to invest minimum 30 percent of GDP in fixed capital formation to earn the identity of a developing country in the next eight years. “However, the average investment of past three years has been only 22 percent,” he noted, “To bridge this gap of eight percentage point in fixed capital formation, additional Rs 160.00 billion should be invested in the coming Fiscal Year alone.” </div> <div> </div> <div> The Finance Minister proclaimed that various reform measures will be carried out in this fiscal year in order to increase domestic and external investment and facilitation. He said additional reforms and revisions will be carried out by evaluating the practices and experiences of policies, regulations and laws regarding industry, trade, energy, banking and financial sector that were started back in 1990's decade, adding that the next (14th) Periodic Plan will have a clear roadmap for transforming the country into developing country status within coming eight years. </div> <div> </div> <div> To create the right opportunities for the private sector, the budget has also stated to amend the Companies Act, Competition Promotion and Market Protection Act and Insolvency Act. This will simplify the process of company establishment, renewal and liquidation. Similarly, the budget talks about amending the provisions of existing Debt and Guarantee Act in order to attract foreign investment in mega projects and viable sectors, where the domestic investment is insufficient.</div> <div> </div> <div> “New laws regarding industrial enterprise and foreign investment and technology transfer will be formulated. Foreign Investment Policy and Industrial and Intellectual Property Policy will be formulated. Bill regarding Special Economic Zone will be tabled in Parliament. Procedures regarding the establishment of large industries under foreign investment will be simplified,” said the Finance Minister.</div> <div> </div> <div> <strong><img alt="" src="/userfiles/images/cs2(4).jpg" style="float: left; margin: 0px 10px 0px 0px; width: 300px; height: 468px;" />Opportunities in Energy Sector</strong></div> <div> The government plans to end load-shedding over the next three years. In this period, four major public sector-funded projects namely Upper Tamakoshi, Kulekhani II, Chameliya and Upper Trishuli hydroelectric projects will enter production phase and will together generate 560 MW of electricity. Similarly, 42 private sector-funded hydroelectric projects will generate 628 MW of electricity in this period. Similarly, the government will start the construction of other projects such as Tamakoshi V, Madi Khola, Maiwa Khola hydroelectric projects including Tanahu and Rahughat projects. Similarly, according to the budget, the construction of Kabeli Hydroelectric Project will be started in Public-Private-Partnership model.</div> <div> </div> <div> “The private sector will be invited to carry out various works related to these energy projects. That clearly means business opportunity,” explains Dr Arjun Karki, International Coordinator of LDC Watch, “Several other bigger projects will be initiated over the next eight years which means there will be good business opportunities for the private sector.”</div> <div> </div> <div> In order to complete the projects on time, the budget has announced to provide full exemption on income tax for the first ten years and 50 percent exemption for additional five years to those producers who generate and connect electricity to national grid and export it within FY 2022/23. “I have made an arrangement to provide a lump sum grant of Rs 5 million per MW of electricity to those producers who generate and connect the generated electricity to national grid. I have also made provision of an additional 10 percent of such grant to those producers who generate and connect the generated electricity to national grid within FY 2017/18,” says Dr Mahat. </div> <div> </div> <div> <strong>Opportunities in Agriculture</strong></div> <div> The government plans to modernise, diversify and commercialize the agriculture sector over the next one decade. This is reflected in the newly announced budget as well. The budget targets to keep interest rate on six percent on loans to be provided by the commercial banks for modern farming, livestock and poultry farming, medicinal plants, vegetables and horticulture, dairy business, aquaculture, agro storage, cold storage, slaughter house and meat-related business. This provision, the government thinks, will also help address the problem of unemployment and youth migration from rural areas.</div> <div> </div> <div> Similarly, the budget has provisioned up to 50 percent subsidy in the loan interest taken in order to develop land and mechanize farming for private groups which are involved in the commercialization and mechanization of farming by integrating 10 hectares land in mountain and 20 hectares land in Terai and up to 75 percent interest grant for the cooperatives of marginalized and landless farmers.</div> <div> </div> <div> Similarly, the construction of the main as well as branch canals of major irrigation projects such as Sikta, Babai, Mahakali and Rani Jamara Kulariya etc will be given continuity. It is the private sector that will be awarded contracts to carry out these works which clearly means good business opportunities for the private sector. Similarly, the tunnel construction work of Bheri Babai Multipurpose Diversion Project will also be initiated in this fiscal year. </div> <div> “The government wants significant private sector investment in agriculture. For this it is ready to create the environment,” remarks Dr Pokharel.</div> <div> </div> <div> <strong><img alt="" src="/userfiles/images/cs3(6).jpg" style="float: right; margin: 0px 0px 0px 10px; width: 300px; height: 434px;" />Opportunities in Tourism</strong></div> <div> Tourism is going to be another sector of good business opportunities for the private sector. The government, through the latest national budget, has already announced to provide income tax exemption for five years to the industries established with an investment of more than Rs 2 billion in the tourism sector. Similarly, aviation companies, too, will get such income tax exemption. They will further get 50 percent income tax exemption for subsequent three years, according to the budget.</div> <div> </div> <div> “This income tax exemption is aimed at promoting the establishment of good hotels and resorts at the major tourist destinations and other places of the country. This is a clear opportunity for the private sector,” explains Dr Pokharel.</div> <div> </div> <div> <strong>Opportunities in Infrastructure Development</strong></div> <div> Nepal has to do a lot in infrastructure development so as to increase accessibility, facilitate service delivery and enhance cost effectiveness. For example, the government wants to construct at least one road on multi-year contract basis in each electoral constituency where there is no year-round transportation. Similarly, the construction work of the Kathmandu-Terai Fast Track will be started in this fiscal year. </div> <div> </div> <div> The government plans to open the track of several new roads, black-top and expand several existing roads and build hundreds of bridges across the country. The government has allocated more than Rs 14.3 billion for this purpose in the current fiscal year alone. Similarly, the new budget has allocated Rs 4.5 billion for the maintenance of 16,788 kilometres of strategic and local roads including their regular maintenance, routine maintenance, periodic maintenance, and rehabilitation and urgent maintenance.</div> <div> </div> <div> Similarly, according to the new budget, the government will carry out urban infrastructure development programmes in cities like Biratnagar, Birgunj, Butwal, Dharan, Janakpur and Nepalgunj including the development of 10 Urban Corridors with eight ongoing and two new.</div> <div> </div> <div> “The national budgets to be announced in the fiscal years to come will have to continue such infrastructure development programmes, if Nepal is to achieve the DC status by 2022. So, there is no dearth of business opportunities for the private sector,” says Dr Pokharel. </div> <div> </div> <div> <strong>Investment Requirement</strong></div> <div> According to NPC’s estimates, the government or the public sector will have to invest Rs 3,300 billion and the private sector will have to invest double the amount – a whopping Rs 6,600 billion -by 2022 if Nepal is to achieve the status of a developing country by then. But will such a huge investment really come from the private sector?</div> <div> </div> <div> “We hope it will because the country is now headed towards political stability and legal and economic reforms are in the pipeline. That means the next eight years are going to be a wonderful business opportunity for the private sector,” assures Dr Pokharel.</div> <div> </div> <div> According to NPC’s investment plan, Nepal will need a total investment of Rs 1013.91 billion in the agriculture sector by FY 2021/22 to achieve the graduation target. Two-thirds of this investment, i.e. around Rs 675.94 billion is expected from the private sector. The agriculture sector includes forestry and fishing as its subsectors. </div> <div> </div> <div> “The private sector is expected to invest in the modernization of agriculture and increase productivity, replace agricultural imports and promote exports. The government is expected to make this easier through policy and legal reforms, if necessary,” says Dr Pokharel.</div> <div> </div> <div> Similarly, the industrial sector which includes mining and quarrying, manufacturing; electricity, gas and water, and construction will require a total investment of Rs 1807.87 billion. Of this amount, Rs 1205.24 is expected from the private sector. “So there is a huge opportunity for the private sector in the industrial sector as well,” thinks former NPC Vice Chairman Prithvi Raj Ligal.</div> <div> </div> <div> Likewise, according to the NPC plan, the service sector which comprises wholesale and retail trade; hotels and restaurants; transport, storage and communications; financial intermediation; real estate, renting and business activities; public administration and defence; education; health and social work; and other community, social and personal service activities will require a total investment of Rs 6874.98 billion – Rs 4583.32 billion from the private sector and Rs 2291.66 billion from the public sector.</div> <div> </div> <div> <img alt="" src="/userfiles/images/cs4(4).jpg" style="width: 550px; height: 110px; margin-left: 10px; margin-right: 10px;" /></div> <div> </div> <div> <strong>Criteria for Graduation </strong></div> <div> There are basically three criteria to graduate from the LDC status – Human Assets Index (HAI), Economic Vulnerability Index (EVI) and GNI per capita. HAI is about the stock of the human capital of the country and comprises the nutrition status of the population, mortality rate of children aged five or under, and gross secondary school enrolment ratio and adult literacy rate. EVI reflects the country’s vulnerability to exogenous shocks and comprises of population size; remoteness; merchandise export concentration; share of agriculture, forestry and fisheries in GDP; share of population living in low elevated coastal zones; instability in export of goods and services; victims of natural disasters; and instability in agricultural production. </div> <div> </div> <div> Likewise, GNI per capita is related with the country’s income-generating capacity and is based on a three-year average estimate of the country’s per capita GNI (World Bank Atlas Method). After determining threshold level for each of the criteria every three years, the United Nations Committee for Development Policy (CDP) reviews the progress made by LDCs and if the country has been eligible at two successive triennial reviews, it recommends a country for graduation from the LDC category. At least two of the three criteria or GNI per capita twice higher than the threshold should be met in order to be eligible for graduation.</div> <div> </div> <div> “Among the three criteria for LDC assessment, Nepal has already met the EVI threshold level and is very close to meeting the HAI criteria; however, there is a huge gap between the GNI threshold level and Nepal’s present status. The role of the private sector is going to be very important to meet this criterion,” observes Dr Karki. </div> <div> </div> <div> <strong>Increasing Productive Capacity</strong></div> <div> Karki is of the opinion that Nepal will have to start working seriously to enhance its productive capacity significantly to achieve the GNI per capita threshold. “The country is facing problems like huge trade deficits, high underemployment rate, income inequality and low quality of life,” says Dr Karki, “Factors including subsistence agriculture, deteriorated industrial environment, power shortage etc., have led to a low level of economic growth and development. Therefore, there exists a great challenge to sustain the achievements and narrow down the gaps between GNI threshold level and the current status.” </div> <div> </div> <div> Our GNI per capita has improved over the past few years but we still need to accelerate it, he adds. Karki’s observation points to two important areas where private sector can come forward – commercial agriculture and power generation. Fortunately, these are the two major areas of emphasis in the budget presented at the parliament recently. If the government really implements the policies and budget allocations announced in the budget speech, the privates sector can make good money while contributing to this graduation of the country. </div> <div> </div> <div> Ligal lists more areas where the private sector has such opportunities. “Productive capacity has basically four components – infrastructure; energy; science, technology and innovation; and private sector development,” says Ligal, adding “The role of the private sector is very important in increasing the country’s productive capacity by investing in infrastructure development, energy exploitation and by making technological innovations.”</div> <div> </div> <div> “Although Nepal has already met the EVI criterion, it still has to either increase its GNI per capita by US$ 770 or the HAI score by 6.17 before 2015 to be eligible for consideration for graduation. This is because eligibility conditions should be fulfilled during two successive triennial reviews, and the CDP will now review the progress only in 2015,” Chandan Sapkota, an economist with the Asian Development Bank, Nepal, says, “After the review, Nepal will have to sustain the progress through 2018, the next triennial review, only after which the CDP will recommend for graduation.”</div> <div> </div> <div> This means Nepal has good length of time to fulfil the criteria. But effective intervention from the government is a must. And the NPC has recognised this clearly. “If the past trend is of any guide to future, it will be difficult for Nepal to meet the projected threshold of US$ 1,502 even by 2021, unless effective policy interventions are in place. Vigorous efforts are needed to achieve the projected GNI per capita of US $ 2,094 in 2021 so that the economy is on the way to achieve the estimated threshold by 2021,” reads NPC’s Approach Paper to Graduation from LDC by 2022.</div> <div> </div> <div> According to Ligal, the private sector – both domestic and foreign – will have to invest heavily in sectors like physical infrastructure, hydropower, tourism and agriculture over the next eight years. “But the private sector will not make such a huge investment under the present circumstances. For private sector investment to come, the government will have to create conducive environment through legal, administrative and policy reforms. If this happens, private sector will come forward as the Graduation process would offer lucrative business opportunities,” he says, adding that Nepal needs more aggressive economic reforms in the near future.</div> <div> </div> <div> <img alt="" src="/userfiles/images/cs5.JPG" style="width: 550px; height: 430px; margin-left: 10px; margin-right: 10px;" /></div> <div> </div> <div> <strong>Partnership with Private Sector</strong></div> <div> The Istanbul Programme of Action, which aims to at least halve the number of LDCsby 2020, too, has laid great emphasis on public-private partnership. It says, “Partnerships with the private sector play an important role for promoting entrepreneurship, generating employment and investment, increasing the revenue potential, developing new technologies and enabling high, sustained, inclusive and equitable economic growth in least developed countries.” In the present circumstances, when the private sector is complaining of lack of enough conducive environment for investment, PPP model can be a good alternative so that the private sector can feel secure as the government too will have stake in such projects. </div> <div> </div> <div> Economists say that investment in the industrial sector is a must to increase the economic productivity. “Productivity and job opportunities in the service sector have remained low. And it consists of more informal sectors,” observes Shanker Sharma, former vice-chairman of NPC, “We need more manufacturing industries. If there is political stability, right policies in place and adequate legal reforms, then investment in the manufacturing sector will come.”</div> <div> </div> <div> Karki, too, stresses on the need for public-private partnership (PPP) model of development. “The PPP model is going to be very helpful in those areas of investment where the private sector alone is a bit hesitant to enter,” he says. If the government comes forward to invest in such sectors, the private sector will follow suit, he adds.</div> <div> </div> <div> Dr Dawadi is also of the opinion that the government alone cannot take the country out of the LDC status to the developing country status. “To be successful, the graduation strategy will require a full and uninterrupted understanding, support and cooperation from the private sector,” he opines.</div> <div> </div> <div> True that both economists and development activists are right in their view that this target spelt out in the approach paper to the latest three-year plan (FY 2014 to FY 2016), is highly ambitious. But the government has its own basis for its optimism.</div> <div> </div> <div> The doubt of the economists and activists is based on the fact that the previous three-year plan (FY 2010 to FY 2013) had aimed such graduation by 2030. But the government officials say they pre-poned the target by eight years looking at the rapid progress in the recent years. They particularly cite increase in the country’s per capita gross national income (GNI), decreased poverty level, and significant progress on major social indicators such as mortality rates, school enrolment rates, life expectancy etc. Since the LDC category was brought in practice in the international development parlance in 1970, only four LDCs have graduated to DC status so far – Botswana (1994), Cape Verde (2007), Maldives (2011) and Samoa (January 2014). But the number of LDCs has almost doubled since then. It means graduation from the LDC status is not so easy. But development experts think that the goal is achievable if the public and private sectors of the country work together. </div> <div> </div> <div> When the economy grows and businesses thrive, the sky is the limit for the individual private sector operator. It means a large pool of resources, a larger market and a higher level of operation,” Dr Dabwdi concludes, “The opportunity will be for both new business creation as well as horizontal growth of existing businesses.”</div>', 'published' => true, 'created' => '2014-09-08', 'modified' => '2014-10-10', 'keywords' => '', 'description' => 'The role of the Nepali private sector is going to be very crucial if Nepal is to become a developing country by 2022, as planned by the government. It means large business opportunities await the private sector over the next eight years.', 'sortorder' => '2638', '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) 10 => array( 'Article' => array( 'id' => '2793', 'article_category_id' => '91', 'title' => '2nd NewBiz Business Conclave And Awards 2014', 'sub_title' => '', 'summary' => null, 'content' => '<p> <span style="font-size:16px;">Please visit to <a href="http://www.abhiyan.com.np">http://www.abhiyan.com.np</a> for details.</span></p>', 'published' => true, 'created' => '2014-09-12', 'modified' => '2014-10-10', 'keywords' => '', 'description' => '', 'sortorder' => '2637', '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) 11 => array( 'Article' => array( 'id' => '2787', 'article_category_id' => '167', 'title' => 'UML’s Throb To Democratize', 'sub_title' => '', 'summary' => null, 'content' => '<div> </div> <div> <strong>--By Achyut Wagle</strong></div> <div> </div> <div> The Nepal Communist Party-United Marxist Leninist (CPN-UML) exhaustively braces up for its ninth general convention, July 3-9 that is perhaps likely to see the fiercest battle ever to take the reins of this four decade-old outfit. The good news is, unlike in any archetypical communist organization, the chairman and other major office bearers will be chosen democratically through the ballots of the party cadres.The Party over the last two and half decades, since the successful reinstatement of democracy in 1990, has established itself not only as a quintessential political force of the country but also a relatively credible democratic alternative with left-to-the-centreideologies. It is now the second largest party in the Constituent Assembly (CA), which is also the legislature parliament, and the major coalition partner in the Nepali Congress-led government.</div> <div> </div> <div> This transformation from an out-and-out communist to largely a democratic force has definitely not been a cakewalk and yet far from complete. Thanks to late General Secretary of the Party, Madan Bhandari who coined a transitional lexicon 'janatako bahudaliya janabad (JBJ)' or people's multi-party democracy that facilitated it to become a reckoning force in multi-party polity. In essence, except one seemingly unequivocal commitment to remain in the 'politics of ballots'; forsaking the dogma of the 'power from the bullets', the task of redefining other philosophical foundations of the Party is still pending and currently undergoing a rigorous discourse. This is what going to be one of the characteristic features of the upcoming Convention as well. The pain experienced in the process of refurbishment of a force that carried over the legacy of Jhapa andolan of early 1970s, a naive killing spree of landlords to eliminate the class enemy andwith its cadres indoctrinated to 'establish a proletariat dictatorship' or 'new people's democratic republic' ostensibly through violent over throw of 'old regimes' to a disciplined political party believing in a peaceful process of change is not unnatural. But, the most worrying factor is: it is taking too long a time to accept the changing realities of the world and declare that the party no longer remains 'a communist' one. And, the debate also has been too fluid to shape a convincing new 'doctrine' with a double edged sword which preserves the face of the communist party and, at the same time, adapts itself as a credible democratic force.</div> <div> </div> <div> To borrow the word from communist lingo, the 'class struggle' within the party is at its height, but it is not two directional - between the exploiting and exploited classes as explained by Marx. It is in fact innumerably multi-directional and cover everything by a single 'blanket principle' is requiring it to be too large to manage. There is still a fine dividing line between the factions that accept the JBJ as defined by Bhandari as a complete principle and that takes it only as one of the 'many' components of philosophical evolution of the Party. KP Oli and Madhav Nepal, who are the two contenders for the post of chairman in the ninth convention, now represent these two factions respectively There is yet another traditional school that is not vocal but still considers JBJ hastened the aberration of the Party from a true communist force to operatives of ‘comprador bourgeoisie. 'The current Party Chairman Jhalanath Khanal lost party leadership to Madan Bhandari in the fifth convention in 1993, as he campaigned in this potential aberration plank. By now, Khanal seems to be compelled to change as there is no escape from the vote politics, but the reservation to accept the JBJ as 'only' guiding principle of the party still appears to be a bitter pill for him to swallow.</div> <div> </div> <div> There is also a tangible difference in opinion between the so called ‘old school’ and the ‘new school’. The old school represented by the hawks of pre-panchayat underground era are persistent not to give-up the communist tag. The septuagenarian leader Bharat Mohan Adhikari categorically said, ‘There is no need to change the party name to something that doesn’t carry the word communist and the universal communist standard, hammer-and-sickle flag, should be retained.’ The new school, which calls itself a pragmatic left is keen to change the both, just limiting it to convey a ‘socialistic’ meaning - far more softline approach than being a communist. The confusion has run long. So long that immediately after the UML formed a minority government in 1994, the Party dramatically removed the portraits of Marx and Lenin from the Party HQ meeting hall when the then US ambassador to Nepal visited UML headquarters. The act though was subject to acute mockery then but had a symbolic personification of confusion. First, it signified, the Party leadership had realized the redundancy of these figures but was unable to get rid of their hangovers. Second, from the inner self, it wanted to convey that the party doesn’t want to be identified and viewed as the communist in classic sense of the term. And, the third, it wanted to interact with the world as liberal democratic or a social democratic force.</div> <div> </div> <div> But, over all these years, party has hardly been able to embark on this wishful direction it had then contemplated. All these confusions still persistently gnaw the party and all the policy debates still revolve around the same confusion – whether or not to remain a communist and how to keep-up with the pace of openness the world is now moving with. It is for this reason, different ‘think tanks’ within the party are working to give a functional shape to their ideological basis such that it fits to modern-day political parlance.</div> <div> </div> <div> One of such recent exercises of the party has concluded that Nepali society has essentially become a capitalist one leaving behind the traditional agro related feudal production and productivity relations. This in fact is the theoretical basis to do away with the politics of proletarian supremacy and misery due to mass exploitation. However, the entire ‘philosophical’ discourse suffers from a mindset that party cannot function without such ‘grand narrative’. The party very tactfully removed the anti-Indian and anti American diatribes as soon as it rode to power saddle in 1994, forming the first communist government in the world after the collapse of the Berlin Wall, that too through elections.</div> <div> </div> <div> At present, the issues of the centre-stage debate include the massive criminalization of the party politics by protecting and promoting goons and underworld operators, colloquially known as dons–the word borrowed from taekwondo. This began with when Bamdev Gautam was made Home Minister in 1997 under Rastryia Prajatantra Party-led coalition government. He allegedly opened all smuggling channels and protected them using the security establishment. KP Oli did the same when he was Home Minister and now many noted dons are in party rank and file. Madhav Nepal faction has devised its campaign strategy focusing on the theme of ‘cleaning the party from goons.’ But the weight in the balance gradually appears to be tilting to the kings of the goons. Therefore, it will not be a surprise if Oli wins the race.</div> <div> </div> <div> Perhaps the greatest potential for the party to benefit arises from the fact that UCPN-Maoist is now forced to follow the same path the UML has traversed since its fifth convention. This can give a righteous sense of direction to the UML in making timely policy choices as a communist force that wants to survive in the competitive pluralistic politics. Theoretically speaking, UML should have been able to take great advantage given the vindication of timeliness JBJ. But, internal wrangling and factionalism has marred all its potentials of organizational growth.</div> <div> </div> <div> As the ninth convention inches closer, the campaign becomes nasty. The official manifestos of both Oli and Nepal do not differ much, which is an indication that there is not much differences in principles and policies. But when it comes to practical politics, the competition on mudslinging has crossed all possible decencies. Oli commands very strong organizational support and as an additional advantage Deputy Prime Minister BamdevGautam is in his favour. Oli’s illness is debated in both the camps. Oli has tried to bank on his illness requesting to vote him for the last chance and Nepal faction has asked him to take ‘rest’ on health grounds.</div> <div> </div> <div> It would not be a practical assumption to expect UML to reincarnate by changing its name and revamping all of its communist ideologies . But the throb of need for this change is intensely realized, in more than one spheres – in ideology, organizational orientation, external relations and internal democracy. This certainly gives better hope for overall consolidation of country’s democracy, sometime in near future. </div> <div> </div> <div> <em>The writer is former editor of Aarthik Abhiyan National Daily.</em></div>', 'published' => true, 'created' => '2014-07-30', 'modified' => '2014-10-10', 'keywords' => '', 'description' => 'The Nepal Communist Party-United Marxist Leninist (CPN-UML) exhaustively braces up for its ninth general convention, July 3-9 that is perhaps likely to see the fiercest battle ever to take the reins of this four decade-old outfit. The good news is, unlike in any archetypical communist organization, the chairman and other major office bearers will be chosen democratically through the ballots of the party cadres.', 'sortorder' => '2636', '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) 12 => 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 'any' 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'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's current term in office.</div> <div> </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> </div> <div> There are other unattended areas in the economy that are either causing excessive 'bleeding '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's money to project the jobs of a few hundred unproductive employees.</div> <div> </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'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> </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. 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 as Mahat's brainchild in 1992, doesn't seem to be the case now. </div> <div> </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) 13 => array( 'Article' => array( 'id' => '2786', 'article_category_id' => '40', 'title' => 'Outbound FDI : Can Nepali Businesses Go Global?', 'sub_title' => '', 'summary' => null, 'content' => '<div> </div> <div> <div> </div> <div> <strong>--By Siromani Dhungana</strong></div> <div> </div> <div> <em><span style="font-size: 16px;">A 50-year old law entitled ‘Act Restricting Investment Abroad, 1964’ is still in force in Nepal which stops Nepali citizens from investing in a foreign country. The existing fear is that the country’s economy will suffer if Nepal allows outbound FDI. But many evidences suggest that despite this law, Nepali people are investing in different other countries through one channel or other. And such evidences are becoming more visible. Policymakers are in dilemma while the business community is also largely divided on the issue. However, the debate on legitimatizing outbound FDI is heating up in recent times. What impact will it have on a country like Nepal where the national economy is not strong? Will it create BoP deficit as many fear? What happens if all businessmen start to set up industries in foreign countries which have better policy stability and lesser labour problem? New Business Age tries to analyse some of these major concerns:</span></em></div> <div> </div> <div> It is not surprising that Nepali businessmen, like many around the world, want to be competitive and set their footprint in the global market. But existing policies are keeping their dreams from being materialized. The government remains skeptic and reluctant to allow outward FDI citing probable impact on the national economy.</div> <div> </div> <div> However, zero capital mobility in and out of a country cannot be expected. Many evidences suggest that the investment is going abroad through one channel or the other. Any state should allow aspiring businessmen to invest anywhere globally because this will help the currency get its true value recognized, Dr Chiranjibi Nepal, Economic Advisor to the Prime Minister claims. “Investment is a must to increase the value of the money. The government should open up avenue for outward FDI to acknowledge this fact.”</div> <div> </div> <div> Evidences also show that the flow of money cannot be barricaded by any laws or policies. For instance, Nepal, according to a report of Global Financial Integrity (GFI), lost a total of $ 8.01 billion between 2001 and 2010 due to illicit capital flight. It means that on an average, $ 801.4 million (Rs 70.39 billion) went out of Nepal annually during that period of almost a decade. </div> <div> </div> <div> <img alt="" src="/userfiles/images/cs1(4).jpg" style="width: 550px; height: 163px; margin-left: 10px; margin-right: 10px;" /></div> <div> </div> <div> GFI’s another report entitled ‘Illicit Financial Flows from the Least Developed Countries: 1990-2008’ had put Nepal’s annual capital flight at $ 480.4 million. Based on the amount of capital flight, Nepal has been ranked 58th among 143 countries surveyed and sixth among the Least Developed Countries (LDCs) for exporting funds illegally.</div> <div> </div> <div> The report clearly points to the huge illegal financial flows from Nepal and it is high time that the government addresses this problem without making any further delays, Nepal opined. “The government should legalize outward FDI to keep the record of outflow of financial transaction in the formal system,” he said.</div> <div> </div> <div> <table border="0" cellpadding="10" width="99%"> <tbody> <tr> <td bgcolor="#F6CEF5"> <div> <span style="font-size: 14px;"><strong>Existing Laws Related to FDI</strong></span></div> <div> </div> <div> <strong>Foreign Investment and Technology Transfer Act – 1992</strong></div> <div> Foreign Investment and Technology Transfer Act (FITTA) – 1992 & Industrial Enterprises Act - 1992 are the two most important laws for the promotion of industries in Nepal. These two acts are highly encouraging acts for attracting FDI or Joint venture investments in Nepal. </div> <div> </div> <div> FITTA includes provisions related to facilities and concessions. This Act treats foreign investors as equals to local investors and provides them same incentives and facilities.</div> <div> </div> <div> The Act is also very positive on providing visa to foreign nationals. The Act has ensures 6 months non-tourist visa to a foreign national if he/she want to conduct survey, study or research with the objective of making investment in Nepal. </div> <div> </div> <div> After that if he or she makes investment or establishes an industry, the investor (along with the dependant family members) is granted business visa until the investment is retained. Similarly, residential visa is granted to a foreign investor and his family if s/he makes an investment of one hundred thousand US dollars in one business. All these are highly encouraging statements. However in actual practice, the investors face various problems, time and again. </div> <div> </div> <div> FITTA and IEA also offer some fiscal incentives including income tax relief. But the amended Finance Act and New Income Tax Act have withdrawn all such incentives, which is considered a controversial decision. Several amendments to FITTA through the Finance Act of 2001 and the progress made in this regard helped the nation in its efforts to gain membership of WTO, SAFTA, and BIMSTEC, but these amendments too are not enough, say investors.</div> <div> </div> <div> <strong>Industrial Enterprises Act - 1992</strong></div> <div> The IEA has one-window committee (OWC) provision, which is coordinated by the director general (DG) of Department of Industry (DoI) and has DGs of Customs, Inland Revenue, Value Added Tax (VAT) and Commerce as well as representatives from central bank, Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and the government.</div> </td> </tr> </tbody> </table> </div> <div> </div> <div> <strong style="font-size: 14px;"><img alt="Dr Chiranjivi Nepal" src="/userfiles/images/cs2(1).JPG" style="float: right; margin: 0px 0px 0px 10px; width: 300px; height: 166px;" />Need: A Positive Beginning</strong></div> <div> Nepal's legal system begins from the word restriction, which, according to many, rightly articulates the government’s mind-set. A 50-year old law entitled ‘Act Restricting Investment Abroad, 1964’ is still effective in the country. The law was introduced to restrict Nepalis from investing abroad. </div> <div> </div> <div> We need a fresh and positive beginning, economist and former chief secretary Dr Bimal Koirala told New Business Age. “The government should reform existing laws to facilitate businessmen to invest in foreign countries instead of imposing restriction.” The fear among policymakers is that what happens if businessmen do not bring back money to the country. And, the answer to this fear is to set up effective monitoring bodies that will keep record of every businessman who invests abroad, he suggested. </div> <div> </div> <div> Given the low trade volume of the country and frequent fluctuation in the Balance of Payment (BoP), some experts advise against allowing Nepali businessmen to invest abroad. Koirala slams such opinion claiming it to be an out-dated concept. </div> <div> </div> <div> Times have changed and the government has to realize this fact. The government should understand and accept the new liberalized and globalized world and business scenario, Koirala opines.</div> <div> </div> <div> <table border="0" cellpadding="10" width="99%"> <tbody> <tr> <td bgcolor="#F6CEF5"> <div> <span style="font-size: 14px;"><strong>Act Restricting Investment Abroad, 2021BS (1964)</strong></span></div> <div> </div> <div> Article 3 Restriction on making investment abroad: </div> <div> </div> <div> (1)<span class="Apple-tab-span" style="white-space: pre;"> </span>No one shall make any kind of investment abroad after the commencement of this Act.</div> <div> </div> <div> (2)<span class="Apple-tab-span" style="white-space: pre;"> </span>Notwithstanding anything contained in sub-section (1), in relation to any specific kind of investment, the Government of Nepal may, by a notification in the Nepal Gazette, grant exemption from the restriction set forth in that sub-section, and specify the kind, extent, period of the investment so exempted and other necessary terms pertaining thereto.</div> </td> </tr> </tbody> </table> </div> <div> </div> <div> <span style="font-size: 14px;"><strong>Past Initiatives</strong></span></div> <div> Nepal started systematic initiative of attracting FDI in 1981. The Sixth National Plan (1980/81-1984/85), for the first time, incorporated a policy for utilizing foreign capital and technology as a useful supplement. The Plan mentioned that foreign investment and technology was primarily required in large-scale industries and mineral industries. Since then, the government continued revising policies related to inward FDI. Foreign Investment and Technology Transfer Act was introduced in 1992 and amended in 1996 in line with open and liberal economic policies. But outward FDI-related provisions remained unchanged. </div> <div> </div> <div> Recently, the government has started fresh initiative to review the policy. Foreign Investment Policy 2014 has been prepared and consultations with stakeholders are underway on it, according to Ministry of Industry. However, business community blames the government for not being proactive to introduce new policy. </div> <div> </div> <div> <span style="font-size: 14px;"><strong>Policies that Restrict Outward FDI</strong></span></div> <div> <strong>Act Restricting Investment Abroad, 2021(1964):</strong> This law, as its name suggests, restricts any Nepali citizen from investing outside of Nepal. While this may be an old Act, it is still valid in the country. It defines restricted investments as foreign securities, partnership with foreigners, foreign bank accounts, owning house and land in a foreign country and any foreign investment in cash or kind except as prescribed by the government. This law has severely affected outward FDI as Nepali citizens cannot freely invest outside the country. Despite a provision within the Act that leaves a space for aspirant businessmen to invest abroad by taking approval from the government, nobody has received such approval. </div> <div> </div> <div> <strong>Foreign Exchange Regulation Act: </strong>This act does not allow Nepalis to open bank accounts in foreign countries if the money is earned in Nepal. Nepalis can open bank account abroad only if they earn money outside Nepal. But the account holder should inform Nepal Rastra Bank about the account. </div> <div> </div> <div> <span style="font-size: 14px;"><strong>Changing Times but Unchanged Laws</strong></span></div> <div> The existing laws were formulated at a time when entrepreneurship in Nepal was at a primitive stage and Nepali businessmen did not have sufficient capital and expertise to invest abroad, said Basudev Adhikari, Director of Nepal Rastra Bank. </div> <div> </div> <div> Nepali business community has come a long way since 1964. “For instance, now we have a Forbes-listed billionaire that shows that our businessmen have enough capital to invest in various sectors,” said Adhikari. Competitiveness of Nepali business sector has tremendously increased over the last few years. Lawmakers should reform existing laws considering the changed scenario, he added. The prevailing laws have failed to prevent outflow of capital from Nepal anyway. </div> <div> </div> <div> <span style="font-size: 14px;"><strong><img alt="Anup Bahadur Malla" src="/userfiles/images/cs3(5).jpg" style="float: right; margin: 0px 0px 0px 10px; width: 300px; height: 166px;" />Need for Caution</strong></span></div> <div> Still the policy of allowing Nepalis to invest abroad cannot be introduced without caution. The most challenging job for the government is to set the ceiling for outward FDI, opined Anup Bahadur Malla, executive member of FNCCI. The government should not introduce any law haphazardly, he suggested. Meticulous studies are required even when formulating laws related to inward FDI, he said. </div> <div> </div> <div> There are flaws in inward FDI policies as well which have created some adverse impact on the economy, according to him. Foreigners in Nepal are venturing into small businesses which have nominal contribution to the national economy, he argued. For instance, Chinese nationals, according to him, have been replacing Nepali small entrepreneurs from Thamel and other places but their contribution to the national economy and employment generation is negligible. From this, the government should learn that both inward and outward FDI can be harmful if laws are formulated without rigorous study, he claimed.</div> <div> </div> <div> Along with fixing ceiling, he claims identification of competitive sectors is the most challenging job for the government. It should initiate debate on maximum investment-ceiling limit on outward FDI, and identify the sectors where Nepalis can take competitive advantages, he suggested. </div> <div> </div> <div> <table border="0" cellpadding="10" width="99%"> <tbody> <tr> <td bgcolor="#F6CEF5"> <div> <span style="font-size: 14px;"><strong>Defining FDI</strong></span></div> <div> Foreign direct investment (FDI) is defined as an investment involving a long-term relationship and reflecting a lasting interest and control by a resident entity in one economy (foreign direct investor or parent enterprise) in an enterprise resident in an economy other than that of the foreign direct investor (FDI enterprise or affiliate enterprise or foreign affiliate). FDI implies that the investor exerts a significant degree of influence on the management of the enterprise resident in the other economy. </div> <div> </div> <div> Such investment involves both the initial transaction between the two entities and all subsequent transactions between them and among foreign affiliates, both incorporated and unincorporated. FDI may be undertaken by individuals as well as business entities.</div> <div> </div> <div> Flows of FDI comprise capital provided (either directly or through other related enterprises) by a foreign direct investor to an FDI enterprise, or capital received from an FDI enterprise by a foreign direct investor. FDI has three components: equity capital, reinvested earnings and intra-company loans.</div> <div> •<span class="Apple-tab-span" style="white-space: pre;"> </span>Equity capital is the foreign direct investor’s purchase of shares of an enterprise in a country other than its own.</div> <div> •<span class="Apple-tab-span" style="white-space: pre;"> </span>Reinvested earnings comprise the direct investor’s share (in proportion to direct equity participation) of earnings not distributed as dividends by affiliates, or earnings not remitted to the direct investor. Such retained profits by affiliates are reinvested.</div> <div> •<span class="Apple-tab-span" style="white-space: pre;"> </span>Intra-company loans or intra-company debt transactions refer to short- or long-term borrowing and lending of funds between direct investors (parent enterprises) and affiliate enterprises.</div> <div> (Source: World Investment Report 2012, UNCTAD)</div> <div> </div> </td> </tr> </tbody> </table> </div> <div> </div> <div> <span style="font-size: 14px;"><strong>Outbound FDI: An Open Secret </strong></span></div> <div> Policies on outward investment have been seen as a screening device to restrict the outflow of capital from the country. But it is an open secret that Nepalis have already started investing abroad. </div> <div> </div> <div> Chaudhary Group (CG), a company owned by Forbes-listed billionaire and renowned industrialist Binod Chaudhary who has invested abroad through Cinnovation Group, a multi-dimensional conglomerate established in 1990 headquartered in Singapore. The company was created to take CG’s business interests global. Currently, it is expanding its footprint in global market. </div> <div> </div> <div> Business leaders and government officials hesitate to give opinion regarding outflow of capital from Nepal in public. But they privately confide that there are many instances where the investment is going abroad through one channel or the other. India has been one of the easiest destinations for Nepali investors to invest, one businessman told New Business Age. “Businessmen channel capital to India through their relatives and acquaintances living in India,” he disclosed. More than a dozen of reputed Nepali business houses have invested in India in one or other way and even government officials are aware of this fact, he claimed. So, it is better to legalize outward FDI to control informal outflow of money. </div> <div> </div> <div> <span style="font-size: 14px;"><strong><img alt="Dr Bimal Koirala" src="/userfiles/images/cs4(3).jpg" style="float: right; margin: 0px 0px 0px 10px; width: 300px; height: 169px;" />Drives of Outward FDI</strong></span></div> <div> A question worth asking is: what triggers outward FDI from Nepal? There is not an easy answer. Generally, two major drives can be analysed: market-seeking drive and resource-seeking one. Nepali businessmen want to go outside country for market-seeking purpose, said Pradeep Jung Pandey, president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI). </div> <div> </div> <div> Businessmen eye foreign market when their businesses are saturated in the home country, he said. It can thus be said that the drivers of outward FDI from Nepal are largely determined by market-seeking factors with little role played by policy measures. </div> <div> </div> <div> Political instability, labour unrest and terror created by conflicting parties might have triggered businessmen to invest abroad during a decade-long conflict, he said. But the situation has changed now and businessmen do not want to go global if there is prospect of good business in Nepal. </div> <div> </div> <div> <span style="font-size: 14px;"><strong>Anti Outward FDI Logics</strong></span></div> <div> 1.<span class="Apple-tab-span" style="white-space: pre;"> </span>Positive Financial and Macro Economic Indicators: Experts say that the overall economic indicators including economic growth should be in positive direction and should be stable to allow Nepalis to invest in foreign country. Given Nepal’s volatile economic situation, some economists advise not to allow outflow of the capital. </div> <div> </div> <div> 2.<span class="Apple-tab-span" style="white-space: pre;"> </span>Investment Climate: Why do our businesses want to go outside though market in Nepal has been growing? An easy answer is that there is no investment climate in the country. It is not possible to open up outward FDI without ensuring investment climate in the country. Our own country is in dire need of investment in almost all sectors and it is a matter of concern as to why businessmen are lobbying to open up outward FDI, an economist questioned. Several structural bottlenecks and supply-side constraints are impacting the investment climate in Nepal. Tough reform measures have to be formulated before bringing policies related to outward FDI, he suggested. </div> <div> </div> <div> </div> <div> 3.<span class="Apple-tab-span" style="white-space: pre;"> </span>Trade Deficit: Nepal has been witnessing a whopping trade deficit year after year. Nepal imports essentials goods and services by drawing on its foreign currency reserves, which are primarily contributed by remittances. Many experts fear that foreign currency reserve may deplete if the country allows businessmen to invest aboard. </div> <div> </div> <div> 4.<span class="Apple-tab-span" style="white-space: pre;"> </span>Distrust on Businessmen: Another crucial problem is trust deficit. The government is not certain that businessmen who invest abroad will sincerely send their profit back to the country. “The country that does not trust its own businessmen cannot make progress. The environment of trust should be built between business community and the government that will facilitate the process of bringing policies related to outbound FDI,” opined CNI vice president Haribhakta Sharma.</div> <div> </div> <div> </div> <div> 5.<span class="Apple-tab-span" style="white-space: pre;"> </span>Competitiveness: According to Global Competitiveness Report released by World Economic Forum, Nepal ranked 117 among 144 economies in 2013-14. In order to succeed in the global business, businessmen should be competitive. But, can Nepali businessmen be competitive when they have not been able to show their competitiveness in domestic front, questioned Dr Chiranjibi Nepal. He suggests that the government should provide competitive business environment.</div> <div> </div> <div> 6.<span class="Apple-tab-span" style="white-space: pre;"> </span>Absence of Entrepreneurial Attitude: Entrepreneurship needs innovative ideas and risk taking skills. Given their low entrepreneurial activities in homeland, many argue that the business community in Nepal still lacks entrepreneurial attitude. Most of the businessmen are involved either in hereditary business or in service sector or trade activities. These traits are not sufficient to compete in global market and most of them do not have entrepreneurial bent of mind, claims an expert. “This fact should be kept in mind while formulating policies.”</div> <div> </div> <div> 7.<span class="Apple-tab-span" style="white-space: pre;"> </span>Poor Performance of Manufacturing Sector: Nepal’s manufacturing sector is in weak state. The country cannot create much employment in absence of manufacturing activities. On the other hand, the country relies heavily on imports to meet daily consumer needs. In such circumstance, opening up outward FDI without improving the performance of country’s manufacturing sector might be suicidal, says a FNCCI member requesting anonymity. </div> <div> </div> <div> 8.<span class="Apple-tab-span" style="white-space: pre;"> </span>Fluctuation in BoP: Generally, businessmen prefer to invest in a strong economy where their capital is safe. If allowed to invest abroad, Nepali businessmen may make majority of their investment in the countries which have strong economy. Currently, remittance has helped maintain Nepal’s Balance of Payment (BoP). If in the future, inflows of remittance drops and at the same time businessmen take capital abroad, there will be severe BoP crisis. This is why the government is still reluctant to introduce outward FDI-related policies, an official at Finance Ministry said.</div> <div> </div> <div> <span style="font-size: 14px;"><strong>Rhetorical Logics and Laxity of the Government </strong></span></div> <div> Some experts vocally criticize the government’s laxity in creating business friendly environment and improve overall macroeconomic scenario. For how long can Nepal restrict businessmen from investing abroad, questioned economist Dr Posh Raj Pandey. The government and experts who do not favour the idea of opening outward FDI often repeat the same rhetorical logic but do nothing to improve the scenario, he said. </div> <div> </div> <div> The government is literally idle in terms of bringing any policy to foster an environment favourable for investment. Presently, the government is not taking any risks as the remittance influx has helped maintain economic stability. But the same situation cannot continue forever, according to him. He said that the government should not always repeat same logic to restrict outward FDI. If our government wants to promote economic prosperity, it should be ready to take risks and formulate smart policies, he suggested.</div> <div> </div> <div> <span style="font-size: 14px;"><strong>FDI and Mobility of Money </strong></span></div> <div> Numerous positive aspects of outward FDI are overshadowed by a few negative ones, said Dr Bimal Koirala, economist and former chief secretary. Outflow of capital also helps create more opportunities to lure inward FDI and Nepali businessmen come back to the home country with more expertise and skills which will ultimately contribute to the domestic economy, according to him.</div> <div> </div> <div> The mobility of money in and out of a country does not stop simply by laws. A state should facilitate in the continuity of the mobility of money because if the movement of money slowsdown it will depreciate the value of currency. Investment, regardless of the frontiers, is a must to increase the movement of the money. Acknowledging the fact, the government should open up avenue for outward FDI, said Dr Chiranjibi Nepal.</div> <div> </div> <div> <span style="font-size: 14px;"><strong>Pragmatic Approach</strong></span></div> <div> Some experts suggest the government to allow Nepalis to invest abroad but only in competitive sectors. According to economist and former finance secretary Rameshore Khanal, the government should identify competitive sectors and should allow businessmen to invest only in those sectors. Some of these sectors, according to him, are:</div> <div> 1.<span class="Apple-tab-span" style="white-space: pre;"> </span>Tourism (eco-tourism, home stay)</div> <div> 2.<span class="Apple-tab-span" style="white-space: pre;"> </span>Adventurous sector (climbing, rafting)</div> <div> 3.<span class="Apple-tab-span" style="white-space: pre;"> </span>Hospitality sectors: Hotel and restaurant (antique hotels like Dwarika)</div> <div> 4.<span class="Apple-tab-span" style="white-space: pre;"> </span>Banking/insurance</div> <div> 5.<span class="Apple-tab-span" style="white-space: pre;"> </span>Construction</div> <div> </div> <div> <span style="font-size: 14px;"><strong>Way Forward</strong></span></div> <div> The government should carry out empirical studies on the effect of outward FDI on domestic economic activities. Before formulating laws, the government should assess some aspects of outward FDI including whether it will have a positive and significant impact on economic growth, and potential adverse impacts on various sectors. </div> <div> </div> <div> On the part of the government, it is not appropriate to remain literally idle on the issue of outbound FDI. The government should not see policies as a screening device to restrict the outflow of capital from the country. Rather it should formulate policies that will facilitate it. The Nepali private sector’s long wait to go around the globe to invest should take a positive turn soon.</div> </div> <p> </p>', 'published' => true, 'created' => '2014-07-30', 'modified' => '2014-09-12', 'keywords' => 'new business age cover story news & articles, cover story news & articles from new business age nepal, cover story headlines from nepal, current and latest cover story news from nepal, economic news from nepal, nepali cover story economic news and events, ongoing cover story news of nepal', 'description' => 'It is not surprising that Nepali businessmen, like many around the world, want to be competitive and set their footprint in the global market. But existing policies are keeping their dreams from being materialized. The government remains skeptic and reluctant to allow outward FDI citing probable impact on the national economy.', 'sortorder' => '2634', '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) 14 => array( 'Article' => array( 'id' => '2782', 'article_category_id' => '48', 'title' => 'The Frog Country', 'sub_title' => '', 'summary' => null, 'content' => '<div> <strong>--By Madan Lamsal</strong></div> <div> </div> <div> If I propose to make frog the national animal of new Nepal, I am sure, you will happily agree and also congratulate me for this brilliant idea. Nepal’s every bit of life has been touched by the benevolent frog and its various qualities. One of our revolutionary finance minister a few year ago declared that Nepal’s economy should now grow not in a reptiles’ dragging but in leap-frogging pace. Leap-frogging indeed is a right simile for Nepal. No Nepali believes in being rich taking a long route walk. Inspired by the frog, everybody wants to leap- frog from penury to instant prosperity. We never get tired of emphasizing that Nepal is an agrarian economy. The plantation season begins with the beacons of twaar-twaar-twaar of the frogs in the banks of the river and main fields. For many, frogs provide for a barbequed lunch or snack at the middle of the hard day’s work in the field.</div> <div> </div> <div> If you think of less relevance of iconic frog in the civilized life, you are wrong. The fortunate ones who have got employment must have fine qualities of a frog -- to jump a queue, to jump enter into influential leader’s living rooms jumping off the high fences and learn to find some excuses to jump across the process of meritocracy.</div> <div> </div> <div> If you happen to meet a frog-mouthed personality in the busy city, you can be sure that he must be a high-ranking official in bureaucracy, bank or NGO. If not, he must be a seasoned politician whose skin is gradually transforming into that of rhino from that of a frog. These are the key people for the very existence and functionality of the country. </div> <div> </div> <div> You might ask, how would you recognize these frog-mouthed ones in crowded cities? It is pretty simple. Bring along a dead frog with you and begin to compare the looks of people with it. Protruding eyes, lumped eyelids as the result of over drinking, large potbellies, twisted legs and habit of jumping the queues anywhere possible, be that temple or service station. The growth rate of the country may be low, but these frog-mouthed talents can make it sound great with their hoarse voice. The bank CEOs can ensure great profits regardless of the fact that only twenty percent people have access to the banking services. (How much profit will they earn if every citizen has a bank account in the country?)</div> <div> </div> <div> If you meet a proper frog-mouthed politician, he must be a youth leader of the party as he is aged just 65 years or so. You can argue that frog mouthed ones are spared by nature from entering into the old age. </div> <div> </div> <div> There are other great qualities of the frog we have emulated. The best among them is to live life free of all worries in any degree of precariousness. You must have seen a frog that is being swallowed by a snake that still wants to catch a spider, not being concerned that it will die in next few seconds. The country has long hours of load-shedding, we Nepalis don’t worry. There is no sign of new constitution being written, we rather worry about American visa. We don’t have enough supply of petrol, but it doesn’t stop us from buying a car. We prefer big LED to mount on our living room wall, without counting hours we actually have power supply.</div> <div> </div> <div> Also, you have heard the fable of Nepali frogs exported to the USA in an open basket and all of them reached intact, not even a single one jumping out from the basket as each of them had learnt the leg-pulling skills from our politicians. It is no wonder, our politicians and decision makers also have learnt many skills from the frogs, as mentioned above. Since, Nepalis and frogs have developed such a cordial bond, only suitable thing is to call Nepal a frog country and declare frog as the national animal.</div>', 'published' => true, 'created' => '2014-06-08', 'modified' => '2014-09-08', 'keywords' => 'new business age no laughing matter news & articles, no laughing matter news & articles from new business age nepal, no laughing matter headlines from nepal, current and latest no laughing matter news from nepal, economic news from nepal, nepali no laughing matter economic news and events, ongoing', 'description' => 'If I propose to make frog the national animal of new Nepal, I am sure, you will happily agree and also congratulate me for this brilliant idea. Nepal’s every bit of life has been touched by the benevolent frog and its various qualities. One of our revolutionary finance minister a few year ago declared that Nepal’s economy should now grow not in a reptiles’ dragging but in leap-frogging pace.', 'sortorder' => '2633', 'image' => null, 'article_date' => '0000-00-00 00:00:00', 'homepage' => false, 'breaking_news' => false, 'main_news' => false, 'in_scroller' => false, 'user_id' => '0' ) ) ) $current_user = null $logged_in = false $xml = falseinclude - APP/View/Elements/side_bar.ctp, line 133 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::_renderElement() - CORE/Cake/View/View.php, line 1224 View::element() - CORE/Cake/View/View.php, line 418 include - APP/View/Articles/index.ctp, line 157 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::render() - CORE/Cake/View/View.php, line 473 Controller::render() - CORE/Cake/Controller/Controller.php, line 968 Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200 Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167 [main] - APP/webroot/index.php, line 117
Warning (2): simplexml_load_file() [<a href='http://php.net/function.simplexml-load-file'>function.simplexml-load-file</a>]: I/O warning : failed to load external entity "" [APP/View/Elements/side_bar.ctp, line 133]file not found!Code Context// $file = 'http://aabhiyan:QUVLg8Wzs2F7G9N7@nepalstock.com.np/api/subindexdata.xml';if(!$xml = simplexml_load_file($file)){$viewFile = '/var/www/html/newbusinessage.com/app/View/Elements/side_bar.ctp' $dataForView = array( 'articles' => array( (int) 0 => array( 'Article' => array( [maximum depth reached] ) ), (int) 1 => array( 'Article' => array( [maximum depth reached] ) ), (int) 2 => array( 'Article' => array( [maximum depth reached] ) ), (int) 3 => array( 'Article' => array( [maximum depth reached] ) ), (int) 4 => array( 'Article' => array( [maximum depth reached] ) ), (int) 5 => array( 'Article' => array( [maximum depth reached] ) ), (int) 6 => array( 'Article' => array( [maximum depth reached] ) ), (int) 7 => array( 'Article' => array( [maximum depth reached] ) ), (int) 8 => array( 'Article' => array( [maximum depth reached] ) ), (int) 9 => array( 'Article' => array( [maximum depth reached] ) ), (int) 10 => array( 'Article' => array( [maximum depth reached] ) ), (int) 11 => array( 'Article' => array( [maximum depth reached] ) ), (int) 12 => array( 'Article' => array( [maximum depth reached] ) ), (int) 13 => array( 'Article' => array( [maximum depth reached] ) ), (int) 14 => array( 'Article' => array( [maximum depth reached] ) ) ), 'current_user' => null, 'logged_in' => false ) $articles = array( (int) 0 => array( 'Article' => array( 'id' => '2797', 'article_category_id' => '48', 'title' => 'Sexy Settings', 'sub_title' => '', 'summary' => null, 'content' => '<div> </div> <div> <strong>--By Madan Lamsal</strong></div> <div> </div> <div> What is most popular these days in Nepal? You may say, it is betting or netting and dating. You may be right to some extent, but I say the most practiced thing is the setting. Let’s look it into more details.</div> <div> </div> <div> Yes, betting is quite popular in Nepal’s share market. Till recent past, the Nepali casinos were ahead in betting than the share market. But as the setting in the casinos became a bit weak, share market was ahead in the betting game. The retail investors in Nepal’s share market buy or sell the stocks going by the grapevine than reading the balance sheets of the companies. This can be called betting. Therefore, when Dr Baburam Bhattarai became the Finance Minister, he had termed Nepal’s share market as a casino where betting is the mainstay. And he was not wrong. However, even the betting in share market will not yield returns if the setting is not right.</div> <div> </div> <div> Again, it is true that dating after netting, such as checking facebook, is quite popular and it is personal and a most favoured pastime of most Nepalis - be a youth or a senior citizen. They seem to spend most of their productive three to four hours of their day or night in netting and dating. If they don’t spend few hours in netting, they feel they have missed a lot in their lives. Therefore, their eyes may be in one of the social sites. But again setting plays more dominant role also here. Netting and dating are not successful if the setting of the dating is not right. </div> <div> </div> <div> To be successful in Nepal in any field, especially in business and politics, you must know the art of setting. Otherwise you will fail. There is a special class in Nepali society which has become super rich just by the art of setting rather than by making a huge investment or knowledge of business. Therefore, setting is a new management mantra in Nepal. In fact, the management colleges should start teaching the art of setting to their students so that they are successful in their future profession as well as everyday life.</div> <div> </div> <div> Nowadays, there are many news reports in the Nepali media that people, especially government officers, are caught or interrogated by the anti-corruption body, the CIAA. But the fact is that they were caught or interrogated just because they did not know the art of setting. Many who commit bigger wrongs are never caught because they know the art of setting.</div> <div> </div> <div> If you look at it minutely, it is an open secret that nothing moves in Nepal if one doesn’t have proper setting in government offices or in the court, or in the company registrar’s office or the customs offices. Be it for receiving a license or getting a job transfer or promotion in the bureaucracy, the role of setting is paramount. So, more than the educational certificates or anything else, setting is the most important factor. If you don’t know this art, you may have to lose your job or your business also.</div> <div> </div> <div> Nobody seems to have peeped deep to see why the constitution could not be made in the first Constituent Assembly. It was just because the setting among the top gang-of-four leaders of three parties could not happen. Even now, however hard the people or CA members harp on the new constitution string, if the setting among this gang-of-four is not proper, it will not happen again. This gang calls it ‘consensus’, but it is nothing but another word for setting. </div> <div> </div> <div> Therefore, this ‘setting’ is not only omnipresent and omnipotent, but also cool and sexy. Don’t you agree?</div>', 'published' => true, 'created' => '2014-10-10', 'modified' => '2014-12-23', 'keywords' => 'new business age no laughing matter news & articles, no laughing matter news & articles from new business age nepal, no laughing matter headlines from nepal, current and latest no laughing matter news from nepal, economic news from nepal, nepali no laughing matter economic news and events, ongoing', 'description' => 'What is most popular these days in Nepal? You may say, it is betting or netting and dating. You may be right to some extent, but I say the most practiced thing is the setting. Let’s look it into more details.', 'sortorder' => '2647', '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' => '2795', 'article_category_id' => '52', 'title' => 'Auto Dream', 'sub_title' => '', 'summary' => null, 'content' => '<p> </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. Given the increasing demand due to expansion in the road network and resultant steady increase in import of all sorts of vehicles, Dr.Mahat’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. </div> <div> </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 – 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. </div> <div> </div> <div> Dr.Mahat’s call has come at a time when Nepal’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. </div> <div> </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’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. </div> <div> </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 – the latest being the power trade agreement with India and finalization of project development agreement template for power projects to the satisfaction of investors – are good indications for the future. But that is not going to be enough for development of automobile industry. </div> <div> </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. </div> <div> </div> <div> These centres should ideally be focused on developing electricity operated vehicles given the country’s hydropower potentials. </div> <div> </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. </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) 2 => array( 'Article' => array( 'id' => '2800', 'article_category_id' => '40', 'title' => 'Unlocking Nepal's Growth Prospect', 'sub_title' => '', 'summary' => null, 'content' => '<div> </div> <div> </div> <div> <strong> --By Akhilesh Tripathi</strong></div> <div> </div> <div> ‘Nepal does have natural resources. They are of course our growth potentials but not necessarily the key element needed for our future economic growth. The key element is human resource; the brainpower, creativity of the people, entrepreneurship and innovation. If we can unlock our human potential, if we can unlock entrepreneurship and innovation which will make use of the natural resources that Nepal has, then our growth potential will be unlocked; we will become a rich country.”</div> <div> </div> <div> Thus spoke Finance Minister Dr Ram Sharan Mahat, the chief guest of the second edition of the Asian Paints NewBiz Business Conclave & Awards, organized by New Business Age Pvt Ltd at Hotel Soaltee Crowne Plaza on September 11.</div> <div> </div> <div> <img alt="" src="/userfiles/images/cs1(5).jpg" style="width: 550px; height: 234px; margin-left: 10px; margin-right: 10px;" /></div> <div> </div> <div> <strong><img alt="" src="/userfiles/images/cs2(2).JPG" style="float: right; margin: 0px 0px 0px 10px; width: 300px; height: 397px;" />Investing in Human Resource</strong></div> <div> The remarks of Dr Mahat, a six-time finance minister, are a clear departure from the traditional belief that natural resources are a must for the economic growth of any country. The appropriate use of the available natural resources is necessary, the Finance Minister said, adding, however, that the country’s economic development is possible through the use of brainpower, creativity, entrepreneurship and innovation. He cited examples of Japan, Hong Kong, Taiwan and South Korea which have achieved fast economic growth despite having practically very little natural resource.</div> <div> </div> <div> Deependra Bahadur Kshetry, former vice-chairman of the National Planning Commission (NPC), who too attended the Conclave, agrees with the finance minister. “We need more skilled and trained human resource, creativity and innovation in business and entrepreneurship to exploit our abundant natural resource, which gives us a comparative advantage. However, the endowment of natural resource alone is not enough. This is what the finance minister means. And this is true as well,” said Kshetry, while talking to New Business Age after the conclusion of the Conclave.</div> <div> </div> <div> Kshetry says the government should invest more in developing the country’s human resources because it will help build the national capacity. “In simpler terms, it means investing more in education and skill-oriented training. Investment in human resource will help unlock our growth prospects,” he added.</div> <div> </div> <div> To invest in human resource development is to compete with investment in infrastructure and other social sectors. Here, the government has harder choices to make as it cannot choose one sector over the other as almost all sectors in Nepal need investment, and huge ones, for the matter. So, according to economists and development experts, the government will do well to have a well-designed national development plan, which will clearly spell out our national priorities. “It will help attract international support as well. Then it will be easier for the government to decide in which areas to use domestic resources and in which areas external resources,” say Kshetri. </div> <div> </div> <div> Managing Director of Jade Consult, Bkesh Pradhanga, another speaker of the Conclave, echoed similar sentiments. “The government should mobilize our human resource properly. For this, the government should invest in higher education of the country’s workforce and this should be the primary focus,” he opined. </div> <div> </div> <div> <strong><img alt="" src="/userfiles/images/cs3(1).JPG" style="float: right; margin: 0px 0px 0px 10px; width: 300px; height: 604px;" />Focus on Three ‘I’s</strong></div> <div> Our development priorities should not miss the three ‘I’s – infrastructure, investment and inclusion – according to Johannes Zutt, World Bank country director for Nepal and Bangladesh. Zutt, who was also one of the speakers of the Conclave, clearly said that the three ‘I’s should be Nepal’s top priority for now if the country is to achieve fast economic growth.</div> <div> </div> <div> On the investment front, the level of foreign investment has been low. According to the Investment Board, the total amount of foreign investment in 2012 which was declared the Investment Year was USD 62 million. It went up in 2013 to USD 208 million. In 2014 so far, it is USD 130 million. Domestic investment, too, hasn’t been growing at the expected rate. “Nepal is investing below the rate of investment needed to achieve a double digit growth. There is actually money available in Nepal for higher investment, but it isn’t happening. The business community complains about access to finance, regulatory burdens and labour costs. These are the problems existent is South Asia but it is debilitating in Nepal,” observed Zutt.</div> <div> </div> <div> But why has large scale investment not come to Nepal? Pradhananga answers, “It is because of political instability, lack of policy predictability, and industrial disputes that have caused the closure of companies like Surya Nepal in the recent past.” He added that Nepal immediately needs an investment of USD 15 billion for various projects that are ready for implementation.</div> <div> </div> <div> “For private investment to come, we need to create more enabling environment. This is why we have initiated some new incentives to lure private investment from this year’s budget, Dr Mahat said, “In the hydropower sector, for example, we have announced income tax exemption for the next ten years and fifty percent tax rebate for another five years.”</div> <div> </div> <div> Zutt opined that Nepal is caught in a vicious cycle of investment and infrastructure. “Nepal doesn’t have high enough levels of investment in infrastructure that is necessary for businesses to succeed and because it doesn’t have that infrastructure, it is not getting the investment,” he said.</div> <div> </div> <div> Pradhananga suggested to the government to focus on infrastructure development for the next one decade. He also advised to change old laws and policies and introduce new ones to attract private investment. “The Hydropower Policy 2001 and Foreign Investment and Technology Transfer Act 1992, to give a few examples, are quite old. The aim of these laws and policies is to attract FDI in the country. But we haven’t been able to make them timely and updated. This has negatively affected our development efforts,” said Pradhananga. </div> <div> </div> <div> <strong>Hydro Hopes</strong></div> <div> All the speakers of the Conclave agreed that hydropower has great potential in Nepal. “We are rich in water resource. We have huge hydropower potential. We can be the power house of clean energy in South Asia,” said Dr Mahat. </div> <div> </div> <div> But the reality is different from the rhetoric. Nepal has hardly tapped one percent of its total hydropower potential. So far, the country has been able to produce only about 750 MW of hydroelectricity though the total hydropower potential of the country is said to be over 80,000 MW. That means one of the sectors where Nepal’s growth prospects lie is the hydropower sector. Over half a dozen projects that are together expected to produce more than 5,000 MW of hydroelectricity are in advanced stage of development (see box). The government’s claim to do away with load-shedding over the next three-four years is based on these projects.</div> <div> </div> <div> “In Nepal, hydropower is one such sector of investment which can bring about a positive change in the entire econom</div> <div> “If the PDA [project development agreement] with the Upper Karnali hydropower project is signed over the next few days or weeks, then it will be a game changer. It will lead to the signing of PDA with half a dozen other major hydropower projects,” said Dr Mahat.</div> <div> </div> <div> <strong><img alt="" src="/userfiles/images/cs4(4).JPG" style="float: right; margin: 0px 0px 0px 10px; width: 300px; height: 231px;" />Nepal’s Strategic Location</strong></div> <div> The speakers of the Conclave also said that Nepal’s geographic location between China and India, two rapidly growing economies of the world, provides the Himalayan nation a great opportunity for economic growth. “Nepal’s growth prospects also lie in the fact that it is located between China and India, two of the fastest growing economies of the world. If Nepal can establish itself a trading partner between China and India, it will greatly help Nepal’s economic growth,” said Zutt.</div> <div> </div> <div> It is worth mentioning here that the annual trade volume between India and China has already crossed USD 70 billion and the two countries have planned to increase it to USD 100 billion by 2015. If Nepal can build roads, highways and rail links to connect its northern border with southern border, then it can effectively work as a trading partner between the two Asian giants, according to economists and development experts. </div> <div> </div> <div> <strong>‘2015: Nepal’s critical juncture’</strong></div> <div> Addressing the Conclave, Dr Swarnim Wagle, member of National Planning Commission said that the year 2015 will be very crucial for Nepal as the country’s new constitution is expected to be promulgated in 2015. Once, the constitution is ready, Dr Wagle said, Nepal’s political transition would be complete and then the country’s economy can take off. “We are few centuries behind other countries but I think that we can really make the year 2015 our critical juncture and really expedite our path into modernity,” said Wagle.</div>', 'published' => true, 'created' => '2014-11-09', 'modified' => '2014-11-21', 'keywords' => 'new business age cover story news & articles, cover story news & articles from new business age nepal, cover story headlines from nepal, current and latest cover story news from nepal, economic news from nepal, nepali cover story economic news and events, ongoing cover story news of nepal', 'description' => 'Nepal needs to invest in its human resource and exploit its natural resource to the fullest to unlock its growth prospects.', 'sortorder' => '2645', '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' => '2796', 'article_category_id' => '168', 'title' => 'MBA For Working Managers', 'sub_title' => '', 'summary' => null, 'content' => '<div> </div> <div> </div> <div> <strong>--By Upashana Neupane</strong></div> <div> </div> <div> Along with MBA and BBA there were lot of other options available for fresh graduates or regular students who aspired to gain a degree in management studies. But the options were limited for the working entrepreneurs or managers who wanted to sharpen their skills or upgrade their status in their field or start their own enterprise. Now, they too have an option in the form of Executive MBA or EMBA. </div> <div> </div> <div> MBA or EMBA are graduate level business degree especially designed for working professionals of the same field. These are post-experience management education programmes that help managers learn to change and grow in their career. They are lot like a regular MBA programmes only that they are primarily designed to educate working executives, managers, entrepreneurs, and other business leaders. </div> <div> </div> <div> Executive MBA was started in the early 1980s as a response to the need of the post experience education was felt. It was introduced as MBA for working managers, for the people working in managerial sectors who had no MBA backgrounds. It aimed to furbish their managerial performance at their respective institutions. </div> <div> </div> <div> In Nepal, Ace Institute of Management started the EMBA programme in 1999 under the affiliation of Pokhara University, while Kathmandu University School of Management (KUSOM) started its EMBA programme in 2000.</div> <div> </div> <div> <strong>Different from MBA</strong></div> <div> EMBA and MBA programmes generally attract people of different ages and at points in their career lives. These programmes are somehow similar in content but the EMBA classes are of faster paces, which allow students to receive their degree in two years or less while working full time. EMBA Programme emphasises applied learning, leadership and personal skill development, and a global mindset. </div> <div> </div> <div> Subas KC, dean at KUSOM shares that the EMBA is more generalist programme while MBA is more specialised programme. “We’ve designed EMBA focusing more on the things like leadership and skills enhancement which is needed for a working professional to enhance their career,” he says, “We are focusing particularly on those skills which are direct and visibly necessary for them.”</div> <div> </div> <div> Similarly, Kumar Thapa, former Associate Director of EMBA programme at Ace Institute of Management also shares same feeling, “EMBA is more fundamental- general class which is elective not specialized and the course is more focused on what working professionals need in the workplace,” he says, “While MBA is more academic and specialized course.” </div> <div> </div> <div> With that, the cohorts also often turn into a valuable network that students can tap long after they receive their degree. KC shares there have been lot of cases where students from managerial background have switched to start their own enterprises as they develop a strong network from the wider range of opportunities provided by the college.</div> <div> </div> <div> There are various factors people join EMBA. KC shares that “most of the students join the programme to perform better in current job, some to upgrade their current position in their organisation. Basically, all want to develop their ability and skills to choose a better path in their career. Some people want to change their career also, so they join to gain a better perspective and opportunities.”</div> <div> </div> <div> <strong>Growing Trend</strong></div> <div> Executive MBA is a good opportunity that is made available for the working people who want to upgrade their career and the attraction towards it is increasing lately. People from various background: corporate sector, public and development sector, entrepreneurship sector, everyone is now willing to join the programme for various reasons. Mostly, senior level executives join the programme but Thapa believes that lately younger people are joining this programme with relatively short working experience.</div> <div> </div> <div> KC believes that the trend has been good so far and believes that it will remain same for some more years but he said that the course needs should be revised and redesigned after some years.</div>', 'published' => true, 'created' => '2014-10-10', 'modified' => '2014-11-21', 'keywords' => 'new business age business education news & articles, business education news & articles from new business age nepal, business education headlines from nepal, current and latest business education news from nepal, economic news from nepal, nepali business education economic news and events, ongoing', 'description' => 'Along with MBA and BBA there were lot of other options available for fresh graduates or regular students who aspired to gain a degree in management studies. But the options were limited for the working entrepreneurs or managers who wanted to sharpen their skills or upgrade their status in their field or start their own enterprise. Now, they too have an option in the form of Executive MBA or EMBA.', 'sortorder' => '2644', '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' => '2792', 'article_category_id' => '167', 'title' => 'UML's Transformation : Leninism To Panelism', 'sub_title' => '', 'summary' => null, 'content' => '<div> </div> <div> <strong>--By Achyut Wagle</strong></div> <div> </div> <div> The Communist Party of Nepal-United Marxist-Leninist (CPN-UML) passed yet another acid test to vindicate its democratic credentials by electing the entire 159-member Central Committee (CC), including the new chairman through ballots, in the ninth general convention (GC) held in Kathmandu, July 3-10, 2014. In a closely contested bid to chairmanship, KP Sharma Oli defeated Party's former, two-time, general secretary Madhav Kumar Nepal by a narrow margin of forty-four out of two thousand and two hundred votes of the GC delegates.</div> <div> </div> <div> <strong>Democratic Domain </strong></div> <div> There is no dearth of cynics who claim that bitter factionalism that surfaced during the contest for chairmanship would further divide the party that is already mired by groupism. But what must be appreciated here is: UML is the only political party of the country that has developed best internal democratic practices. Unlike many communist outfits who choose to break-away as the separate entity once some differences crop-up within the group, the UML has exhibited tremendous level of resilience to save it from fragmentation; thanks to the democratic space it created to vent the differing views and ideologies. For this reason it has withstood the test of time as the mainstream left force amongst some three dozen odd communist 'parties'. It must not also be forgotten that it is a communist party that has painstakingly and by now convincingly transformed itself to a credible democratic alternative of the country. More importantly, it has set a practical contemporaneous formula for democratic transformation of any communist force that is originally indoctrinated to rise to power of 'people's republic' by using the 'bullets and barrels'to a force that readies itself to multi-party competition through ballots. No doubt, for this party, metamorphosis of greater magnitude is still inevitable to shake-off many dogmas and nostalgia of Soviet era. But, whatever it has achieved and maintained itself is in no way instantly dismissive. The ninth GC too has proved to be a new milestone as it elected mainly new set of younger leaders in CC, who have firmer belief in democracy than the older generation.</div> <div> </div> <div> It is not difficult to see that the Party's polity has now shifted from 'Proletarianism' or 'Leninism' to Panelism, which from a democratic perspective is a welcome dimension of change. The political sportsmanship and democratic spirit was clearly demonstrated by the leaders at the official closing ceremony of the GC on July 17. Both the victor and vanquished, Oli and Nepal respectively, along with other elected central body members vowed to work for the party unity, terming the vertical division during the CC election mere 'democratic exercise'. Not only both the factions won equal number of members as the office-bearers, the representatives seem to have guided to votemore by the quality of the candidate than the factional affiliation, electing a completely mixed panel. Any 'bright' person from both panels got place in the new CC.</div> <div> </div> <div> <strong>Road Ahead</strong></div> <div> If the mood of the Declaration made at the UML headquarters on 17th of July, is any indication, the party would soon enter into an era of a joint-leadership of many influential leaders. The chairman-elect Oli in very clear terms, with tears in his swollen eyes, declared that he did not have many days to live, and extended his arms for unity. It was momentarily a piece of emotional melodrama, unique to political cruelty. He couldn't even complete his short written speech. It is his eighth year running since his kidney transplant and, of late, the infection has now spread to his whole body, with septic deep wounds and swellings. There was a whirling question in the minds of the entire rank and file, why did he at the first place choose to run for chairmanship despite such precarious health condition? There is a strong school of thought which believes, there were mischievous minds like that of Bamdev Gautam who harboured dream of running the party as officiating chief as Oli is already a dilapidated figure. But, this possibility is clearly thwarted by the 'ideologues' belonging mainly to Nepal faction, who changed the party statute such that now there are five second men (vice-chairmen) in the hierarchy after the chairman. This is the very statute the GC ratified, albeit with some resistance. And, incidentally, Gautam ranked second among these five in terms of popular vote, behind Bhim Rawal, a Nepal loyalist. In any event of Oli's absence, there would be moral pressure (as there is no clear statutory provision) to handover charges to Rawal, not Gautam, or Bidya Bhandari, another vice-chair elect and the most trusted aid of Oli.</div> <div> </div> <div> What the UML's change in leadership means for the nation, is another issue widely debated in the political circles after Oli’s victory. Again, effectively it depends on the health of Oli. Should his health permit, he naturally dreams of becoming the next prime minister of the country. If the things move according to agreement between the Nepali Congress and UML to promulgate a new constitution by the end of January 2015, under the turn-key clause of the agreement, the premiership would automatically come to the UML candidate, as things stand now, to Oli as the Party's parliamentary party leader. There are newly emerged political equations within that party such that no single person, except the chairman given his current level of comfortable majority in CC, is likely to hold the sway in any decisions. The ambitions like that of Gautam are dampened as such, once the power gets transferred to lower ranks from the chairman.</div> <div> </div> <div> <strong>Policy Paradigm</strong></div> <div> During the run-up to the ninth convention, there was a sort of euphoria created by a 'club' of party's young 'thinkers' that Party's socio-politico-economic policy paradigm would be redefined and formalized through the GC. But, the entire GC was so much consumed by the fight for the posts that it hardly could undertake much deserved discussions with due seriousness on any policy document. At the end, when it came-out with the thirty-three point Declaration on July 17, many of the same old communist verbose again found the place in it. 'Awarding land-ownership rights to tillers', 'protecting trade union rights', 'deploring of infringements on human rights' in some weird part of the world etc. were repeated, rather artlessly. Some of the hasty conclusions like the 'global economic crisis like that of 2008 justifies the rationale of socialism' were also incorporated.</div> <div> </div> <div> Interestingly though, this Declaration has very carefully avoided over use of redundant communist jargons and jingoisms. Not only it doesn't carry terms like 'Indian expansionism', 'American imperialism', it also cautiously reduces the frequency of the words like 'revolution', 'struggle' or 'class struggle' that are invariably and clumsily thrusted into policy papers of almost all communist formations. The ninth GC Declaration instead proposes interesting separate economic prescriptions for their cadres and the country.</div> <div> </div> <div> 'This GC urges all the local committees of the party, affiliated sister organizations and all members of the party to devise concrete plans for their respective locality to augment economic development, productivity and employment and involve in the production functions so as to establish themselves as the leading-lights of the economicprosperity,' says the point number 23 of the Declaration. The Declaration has also 'appreciated' the 'improving' relations between India and China and has wished to make Nepal beneficiary to the impressive economic growth of both the neighbours.</div> <div> </div> <div> <strong>Opportunities and Challenges</strong></div> <div> Perhaps the biggest opportunity for the CPN-UML is the growing compulsion for all other communist forces to follow its 'janatako bhudaliya janbad' or multiparty democracy route, should they opt to remain relevant in modern day pluralistic politics. It is becoming increasingly difficult for parties with Maoist tags not to follow the exact process the UML did for the last two and half decades. If the party wereto equip itself to harness this opportunity, it could provide a major fillip to its organizational strength. Certainly, its increasing global recognition as trustworthy democratic force is another very powerful factor that helps to retain it as a major player in Nepali politics. Its gradual policy shift from Left to the Centre is crucial to ensure the outfit's long lasting relevance.</div> <div> </div> <div> There are challenges too, mostly emanated from three sources - policy confusions, organizational efficiency and 'class' shifts. The ninth GC also could not change its name by dropping the 'Marxist-Leninist' tag and the term 'Communist' from its official name, despite the fact that there is a widespread realization of this need within the Party. The psychological divide in the mandarins is debilitating -- they often times love to retain communist identity and yet want to change this 'as soon as possible' for public interface. The Party has failed to bring into effect a much-needed departure from three the decade-old nostalgia of 'classless society'. Instead the Party itself has become the 'class' of riches with 'too many, too big' leaders. The only reason the Party substantially increased the number of office bearers from six to fourteen was to accommodate these 'big' names with suitably high-sounding positions. Generally, those who have been prime ministers, deputy prime ministers and ministers in the past have sought those 'elitist' titles. This is resulting into overlaps and duplications on responsibilities and duties, and ego clashes at every decision points. The cumulative effect of all these is sure to have telling effect in organizational efficiency and cadre-leader relations, not in so distant future.</div> <div> </div> <div> Effectively, the UML has graduated from the party of 'proletariats' to 'new riches', not only in terms of policy-base but as the class representation. To borrow a phrase from the communist literature itself, 'the class division' within the party has been strikingly vivid in recent years. In many cases, its leaders have protected criminals just to extract money in return. There is not any binding ideology available in any political literature that can accommodate all these extremes. The task of managing all these paradoxes, the sooner the better, comes on the shoulder of the new leadership. But, unfortunately, the shoulders of the commander are now sick, severely.</div> <div> </div> <div> <em>The writer is former editor of Aarthik Abhiyan National Daily.</em></div>', 'published' => true, 'created' => '2014-09-08', 'modified' => '2014-11-21', 'keywords' => '', 'description' => 'The Communist Party of Nepal-United Marxist-Leninist (CPN-UML) passed yet another acid test to vindicate its democratic credentials by electing the entire 159-member Central Committee (CC), including the new chairman through ballots, in the ninth general convention (GC) held in Kathmandu, July 3-10, 2014. In a closely contested bid to chairmanship, KP Sharma Oli defeated Party's former, two-time, general secretary Madhav Kumar Nepal by a narrow margin of forty-four out of two thousand and two hundred votes of the GC delegates.', 'sortorder' => '2643', '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' => '2783', 'article_category_id' => '166', 'title' => 'Deciphering The Indian Election: Challenges Before Modi & The South Asian Message', 'sub_title' => '', 'summary' => null, 'content' => '<div> <strong>--By Prof Ujjwal K Chowdhury</strong></div> <div> </div> <div> <span style="font-size:14px;"><strong>Queerness of the Results</strong></span></div> <div> Interesting times indeed. Modi-fied BJP’s remarkable election campaign surely was fuelled by unprecedented sums of money, but more interestingly magnified by the rule of the first-past-the-post system. A mere 12 per cent difference in vote-share with the Congress has turned into 600 per cent difference in seats (NDA with 335 seats, including 282 of BJP against UPA with 60 seats, including 44 of Congress). </div> <div> </div> <div> It has two repercussions: Modi’s darker past with regards to poor governance during 2002 riots in Gujarat has been almost banished, and Congress-led UPA’s abysmally poor record of scams-ridden governance has made the party justifiably suffer the worst defeat in its 129-year history. </div> <div> </div> <div> The 'Modi Wave' has touched 40 per cent of voters, and left 60 per cent cold, with not much dent made in those states where regional parties still enjoy a high degree of credibility, like Tamil Nadu, Odisha and West Bengal, though it has wrecked the Congress everywhere. The wave swept through Uttar Pradesh, where it also managed to draw away voters from the BahujanSamaj Party, partially from the Samajwadi Party, and of course in Bihar too.</div> <div> </div> <div> Taken together, MPs from national parties like Congress, the Left and the AamAadmi Party barely add up to 70, and regional parties like the AIADMK, the TRS and the BijuJanata Dal, or the Trinamool Congress, are unlikely to show much interest in, let alone challenge, the Modi government on a large number of crucial areas of policymaking. And this does not bode well for the largest functional democracy of the world.</div> <div> </div> <div> <span style="font-size:14px;"><strong>How did Brand Modi Succeed?</strong></span></div> <div> Modi’s strategy was to turn the elections into a Presidential format by positioning the polls as a referendum on his performance in Gujarat and his India Vision. Rather than just harping on UPA failures, Modi chose, instead, to focus on a positive campaign around his perceived delivery in a mid-sized state, and the promise that he could make this national, telling one and all: ‘Vote for me and I will give you good governance’.He raised people’s high expectations from the party and him by promising ‘Minimum government, but maximum governance.’</div> <div> </div> <div> Modi has won on the promise of ‘fixing’ the economy, combating corruption and inflation, and promising jobs and job security. He show-cased ‘Gujarat Development Model’ through a high-decibel, liberally-funded integrated media campaign, using the social media also to the hilt. Interestingly, by all accounts, Gujarat development story is poorer in content than that of Tamil Nadu or Kerala, but packaged like never ever before. </div> <div> </div> <div> The anti-corruption plank of the Anna Movement and later AamAdmi Party electioneering was usurped by the same high-decibel Modi campaign effectively and the facts that Gujarat has no Lokayukta for the last one decade or that some ministers in Gujarat government are convicted criminals got lost in the din and bustle.</div> <div> </div> <div> Indian youths, numbering more than half the electorate, with more than a hundred million first-time voters, are an impatient lot, and rightly so, with spiralling frustration at the dipping job prospects, lowering growth rates and increasing violence against women, on one side, and with surging expectations of quality life style of the developed nation, which they are exposed due to the easy access of information technology. This youth is bitterly opposed to corruption, and hence Congress or UPA as the fountainhead of corruption. Appreciating the AAP movement against corruption, the youth also wants to dream of a rosy future, and hence the dream-merchants of BJP campaign could create the immense eye-balls among the youth.</div> <div> </div> <div> BJP successfully and steadfastly used information technology, 3D technology, and the like to create the lethal mix of slogans, machines and dreams, all fuelled by an immense investments from sources little known, creating the right surrounding sound ensuring victory even in areas where they hardly have organization on ground, as seen in Bengal or Assam, for example.</div> <div> </div> <div> <span style="font-size:14px;"><strong>Political Leadership Challenges</strong></span></div> <div> The NDA’s emphatic victory in the national election establishes Modi as the BJP’s undisputed leader, who is next expected to overhaul leadership roles within the party by promoting leaders who hold sway over social and regional groups and dilute the upper-caste dominance in decision-making within the party.Modi's focus may be to promote a new set of leaders who would eventually become "faces" of the party in their respective areas. This will be a challenge indeed.</div> <div> </div> <div> Modi’s immediate challenge will be to replicate the national success in the crucial assembly elections that follow in states such as Haryana, Maharashtra and Delhi, where the BJP has performed well. However, the actual performance of the Central government under Modi over the next four months will influence the situation in these states later this year.</div> <div> </div> <div> <span style="font-size:14px;"><strong>The South Asian Message</strong></span></div> <div> Surely Modi-fied India will be a bolder India in the region, firmer on the borders, ruthless with foreign espionage on the Indian soil, intolerant with any form of terrorism or fake currency onslaught and even infiltration of the poor and hapless from across the borders. </div> <div> </div> <div> Electoral rhetoric apart, the new government is expected to pursue the national interests zealously, though the focus will be more on domestic economy and internal security of India. </div> <div> </div> <div> On the neighbourhood front, closer relations with Nepal and Sri Lanka, and a balanced business-like approach to China, Pakistan and Bangladesh are expected. There will be a setback of the radical Islamic forces in Pakistan, Bangladesh and Maldives consequently, and the new Indian government overtly or covertly will do all it can to that end. The centrist and rightist forces in Nepal and the pro peace reconciliatory forces of Sri Lanka may expect to get tacit support of the new Indian government. </div> <div> </div> <div> Due to pressing domestic economic and strategic compulsions, the Modi government will need a working relation of low or no tension with China and Pakistan and focus more on economic cooperation. And, for Nepal, due to historic and geo-political reasons, the flow of capital, people and businesses may see a further surge, coupled with stricter border monitoring to curb cross-border movement of terrorist modules.</div> <div> </div> <div> <span style="font-size:14px;"><strong>Economic Contradictions in the New Disposition</strong></span></div> <div> While the Indian corporate sector and native and foreign investors in the stock market are justified in celebrating the arrival of a "right wing", business-friendly Modigovernment in India, this is not necessarily the side of 'Modinomics' that most BJP voters would like to see. Modi campaigned hard on a platform of economic development, job creation and an efficient administration, and the 40 per cent of voters who backed the BJP-led alliance did so because they believe he will deliver on these promises. But contradictions exist in areas where satisfying the aspirations of a corporate constituency - for example in the area of labour reform - will end up undermining the aspirations of voters for jobs and job security. Another area to watch closely will be Modi government's approach towards law and order, and especially the right of vulnerable citizens - women, minorities, adivasis and dalits - to security, justice and equity.</div> <div> </div> <div> The BJP-led government has filled investors’ hearts with the hope of a turnaround in India’s economic fortunes. The stock market is scaling record highs every day and the rupee has gained considerably against the US dollar. Foreign Direct Investment (FDI) of more than a trillion rupees has already been pledged in the first three days after results were announced. Perhaps the expectation is that Modi’s pro-business stance will help to lift India out of its current economic mire— GDP has grown by less than five per cent year-on-year for the past seven quarters, well below the near eight per cent average of the previous ten years. </div> <div> </div> <div> But given the deep roots of India’s current predicament and the type of reforms that are required, along with dip in investment cycle in the last two years, one may suggest that investors’ optimism about an economic bounce may not be easy. India has, so far, narrowly avoided a downgrade of its sovereign credit rating to junk status. So, the fiscal position will continue to be precarious. Unless it is reversed, the government’s hands, with regards to increasing capital expenditure to boost infrastructure and therefore potential growth, will remain tied down. </div> <div> </div> <div> The health of the private sector has also deteriorated considerably. Companies are highly leveraged, with the debt-to-equity ratio elevated at 83 per cent, highest among all emerging markets, and below only that of Greece and Italy. The levels of bad debt in the financial system are also rapidly on the rise. So, regardless of the party in power, both banks’ ability to lend money to businesses and companies’ propensity to invest are limited. </div> <div> </div> <div> Further, many believe that a stronger government with more capable leadership will be able to restart stalled infrastructure projects, which have been held back so far due to regulatory hurdles. However, according to a recent report by Credit Suisse, only a quarter of the stalled investment projects are stuck with the central government, of which two-thirds are in power and steel - sectors that are already swamped with overcapacity. The other projects need clearance from state governments.</div> <div> </div> <div> In order to achieve the government’s target growth rate exceedingeight per cent a year, as promised by BJP in its manifesto, India requires a major institutional overhaul aimed at reducing crony capitalism (which even the BJP government in Gujarat has been squarely accused of) and improving the business environment. According to the World Bank’s Ease of Doing Business Survey for 2014, out of 185 economies India ranked 134— well below its emerging market counterparts. And India scores just 36 on the World Bank’s Corruption Perceptions Index for 2013, where 100 is the least corrupt.</div> <div> </div> <div> <span style="font-size:14px;"><strong>Economic Challenges before Modi Government</strong></span></div> <div> Modi government’s first credibility test with markets will be when it delivers a budget by July that will need to convince investors that India can realistically contain its fiscal deficit. The subsidies and austerity of the outgoing UPA government would prove hard to sustain, and harder to reverse. Continuing to defer payments to state-run companies that would compensate them for selling fuel, fertiliser and food below market prices can create havoc with their finances and make them rely on borrowing to fund operations; while, on the other hand, tax revenues are unlikely to recover immediately in a weak economy. </div> <div> </div> <div> Further, higher duties and other restrictions almost halved gold imports, but the moves have been deeply unpopular. Gold smuggling surged after the UPA measures, casting doubt on reported data. The BJP promised to review gold import duties within three months of coming to power. That may please gold buyers, but not investors, as concerns about the current account deficit sent the rupee to a record low last August. </div> <div> </div> <div> There are other challenges beyond government control: the El Nino weather pattern, typically associated with weak rains. Citigroup estimates that below-average rainfall in the June-September monsoon could reduce up to one percentof economic growth forecast and lead to a spike in inflation. Surging prices could spark tension with the central bank, which has made containing inflation a priority. </div> <div> </div> <div> Replicating Gujarat at the national level will prove to be a yeomen task due to the variegated development stages across India, high differences in economic basics and social indices among provinces of India, among other things.</div> <div> </div> <div> India is burdened with Rs.6000 billion bad loans in all nationalized banks put together, about 10 percent of all such bank loans. The bulk of these bad loans are related to infrastructure projects, which have made banks circumspect in lending. Also, crony capitalism will come in the way of recovering these loans.</div> <div> </div> <div> Keeping the promise of 10 million jobs a year is the other big hurdle for the new government as the Indian economy has been witnessing almost a jobless growth for a decade now.</div> <div> </div> <div> <span style="font-size:14px;"><strong>A Silent Prayer</strong></span></div> <div> A day after Modi wins India, my prayers: let India remain the synthetic cosmopolitan diverse nation that it is with the co-existence of so many different groups; let the tribal population not continuously suffer in the name of 'development'; let minimum standards of life of all precede maximum profits of some; let not, in the name of equal opportunities, snatch the minimum benefits the system at times gives to those who are born highly unequal; let justice and equity precede the blind search of growth and GDP; let not entrepreneurship gasp for breath under the tutelage of big business; let a thousand flowers bloom in expressions of all kinds - some unkind to those who rule too; let not mobs dictate terms to free souls; let hope replace cynicism and joy amid struggles to take precedence over apathy in abundance. Let my nation remain committed to the lofty ideals of humanity!</div> <div> </div> <div> <em>(Prof Chowdhury is education & media consultant. While the analysis and conclusions are his own, he has drawn on facts, figures and arguments available on Indian media specially The Outlook, The Hindu and The Hindustan Times.)</em></div>', 'published' => true, 'created' => '2014-06-08', 'modified' => '2014-11-21', 'keywords' => 'new business age south asia news & articles, south asia news & articles from new business age nepal, south asia headlines from nepal, current and latest south asia news from nepal, economic news from nepal, nepali south asia economic news and events, ongoing south asia news of nepal', 'description' => 'Interesting times indeed. Modi-fied BJP’s remarkable election campaign surely was fuelled by unprecedented sums of money, but more interestingly magnified by the rule of the first-past-the-post system. A mere 12 per cent difference in vote-share with the Congress has turned into 600 per cent difference in seats (NDA with 335 seats, including 282 of BJP against UPA with 60 seats, including 44 of Congress).', 'sortorder' => '2642', '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' => '2788', 'article_category_id' => '37', 'title' => 'Policy For Inclusive Growth', 'sub_title' => '', 'summary' => null, 'content' => '<div> </div> <div> <strong>--By Hom Nath Gaire</strong></div> <div> </div> <div> The phrase 'Inclusive Growth' is quite popular in recent days not only among academia but also with policy makers, development partners and media as well. It seems that there is paradigm shift in development strategies among the stakeholders. The concept of inclusive growth refers to both the pace and distribution of economic growth. In order for growth to be sustainable and effective in reducing poverty, it needs to be inclusive. </div> <div> </div> <div> Traditionally, poverty (or inequality) and economic growth analyses have been done separately. However, recent works indicate that there may not be a trade-off between equity and efficiency as suggested by Okun (1975) and that it would be a big mistake to separate analyses of growth and income distribution. Inclusive growth has commonly been explained as about raising the pace of growth and enlarging the size of the economy by providing a level playing field for investment and increasing productive employment opportunities. The definition of inclusive growth implies direct links between the macro and micro determinants of the economy and economic growth. The microeconomic dimension captures the importance of structural transformation for economic diversification and competition, while the macro dimension refers to periodic changes in economic aggregates such as the country’s gross national product (GNP) or gross domestic product (GDP). </div> <div> </div> <div> Sustainable economic growth requires inclusive growth. Maintaining this is sometimes difficult because economic growth may give rise to negative externalities, such as a rise in corruption, which is a major problem in developing nations. However, inclusiveness lays emphasis on equality of opportunity in terms of access to markets, resources, and unbiased regulatory environment for businesses and individuals. The inclusive growth approach takes a longer-term perspective, as the focus is on productive employment as a means of increasing the incomes of poor and excluded groups and raising their standards of living. </div> <div> </div> <div> <strong>Determinants of Inclusive Growth</strong></div> <div> Different countries, especially developing countries, may have very different institutional as well as policy arrangements for promoting inclusive growth. Similarly, there may be a number of distortions preventing the allocation of limited resources in such a way that productivity in different sectors is equalized. The shift of resources from one sector to another may have an important effect on the overall level of output and growth. </div> <div> </div> <div> In this context, although growth theories have contributed to our understanding of how growth is determined and how it might be influenced, it has in many ways missed some of the crucial issues for developing countries. It may be possible to model the role of management and organization, the improvement of infrastructure, and sectoral transfer in developing economies to measure real determinants of growth and to the design of policy. </div> <div> </div> <div> They are directly concerned with the long-run growth in the sense of the steady-states as well as important for a medium term of some considerable duration. Government macroeconomic policies--- both fiscal policy and monetary policy--- are considered to be instrumental in promoting inclusive growth in the respective economy. </div> <div> </div> <div> <strong>Fiscal Policy and Inclusive Growth </strong></div> <div> Fiscal policy involves the use of government spending, taxation and borrowing to affect the level and growth of aggregate demand, output and jobs. It is also a means by which a redistribution of income and wealth can be achieved as an instrument of intervention to correct the market failures. Thus fiscal policy is considered more effective in encouraging both pace and size of economic economy. </div> <div> </div> <div> Based on this belief, Asian Development Bank (ADB) has recently urged the Asian governments to use their fiscal policy more adeptly to combat the widening income gaps in the region. “As the inequalities rising almost everywhere in Asia, governments need to urgently expand and improve their public investments in inclusive growth,” President Takehiko Nakao told in seminar titled, Leveraging Fiscal Policy for Inclusive Growth on the occasion of bank's 47th AGM. </div> <div> </div> <div> More than 80 percent of Asia’s population live in countries where inequality is worsening, meaning that many are being left behind even as globalization, technological progress, and market reform have led to strong economic growth. The bank emphasized on a range of issues including taxation to boost social and other spending, existing government programmes to promote equality, and the best balance spending to help the poorest without compromising fiscal sustainability.</div> <div> </div> <div> <strong>Monetary Policy and Inclusive growth</strong></div> <div> It is well accepted that macroeconomic stability and low inflation rates, inter alia, have positive effects on growth and on reducing inequality. In this connection, well-managed monetary policy is critical in achieving stable and inclusive economic growth. Similarly, monetary policy is mandated to achieve and maintain price stability in the interest of inclusive and sustainable economic growth along with maintaining financial stability. </div> <div> </div> <div> Price stability reduces uncertainty in the economy and provides a favourable environment for inclusive growth and cumulative employment creation over the longer term. Low inflation, on the other hand, helps to protect the purchasing power and living standards of all classes of people. Although low inflation may not necessarily in itself reduce income inequality, it does ensure the protection of income, which is particularly important for poor people who generally do not have the means to adjust their nominal incomes to take account of rapid price increases. </div> <div> </div> <div> <strong>PPP and Inclusive Growth </strong></div> <div> The Public Private Partnership (PPP) is a governance tool to bring together resources as well as strengths and share experiences of the public and private sector for the purpose of provisioning of public assets or services for public benefit. In order to achieve inclusive growth, developing countries should create more PPP opportunities to address their infrastructure gap and steer private money and skills into much-needed infrastructure projects. </div> <div> </div> <div> The infrastructure deficit in the developing countries like Nepal is so enormous that we can’t expect either private investors or the public sector to fill up it alone. It needs collaboration between the private and public players to make things work, and to bring critical services to the community. Good infrastructure is critical to inclusive growth, allowing communities to access essential social services, markets, and jobs, and making cities cleaner and easier to navigate. PPPs can help developing countries address critical infrastructure needs, from roads to hospitals to water supply systems. </div> <div> </div> <div> The PPP investment model with various structures is effective in helping centrally planned countries transition to private sector-oriented market economies. PPPs can be promoted through fully assessed and appropriate risk sharing and performance-based arrangements between the parties. The aim is to deliver “value-for-money” projects to provide a full set of benefits for investors, the public, and the economy.</div> <div> </div> <div> <strong>Knowledge Economy and Inclusive Growth</strong></div> <div> The development of the knowledge economy and inclusiveness has been seen as closely related. Global firms have built integrated international production chains, with innovation creating new products with added value in “knowledge” areas such as design and marketing and providing associated services. </div> <div> </div> <div> The growth of the knowledge economy is seen as part of the growth strategy to import jobs from low wage economies such as China and India investing heavily in knowledge. Shifting from low-cost manufacturing to economies based on knowledge, innovation, and high-end services is imperative for developing countries to achieve and sustain broad based inclusive growth. Emerging economies can reach and go beyond middle-income levels by becoming knowledge-based economies like Japan, the Republic of Korea, and Singapore. </div> <div> </div> <div> Similarly, least developed countries like Nepal can upgrade themselves to developing one through systematic investment in new information and communication, manufacturing and other technologies to promote knowledge economy. For this, they have to spend time and resources to move up the value chain by drawing on best practices and latest technologies, for example, shifting to smart energy grids, cloud computing, 3D manufacturing, and mobile rather than fixed-line communications.</div> <div> </div> <div> <strong>Rational </strong></div> <div> According to the World Bank’s Commission on Growth and Development, a persistent, determined focus on inclusive long-term growth by governments is a key ingredient of all successful growth strategies. Policies that encourage inclusive growth tend to emphasize removing constraints to growth, creating opportunity, and creating a level playing field for investment.</div> <div> </div> <div> To that end, developing countries need to increase investment in infrastructures as well as research and development to create knowledge based, innovative and competitive industries. For this, public funding may be needed to help companies start up. Public spending on education and health services improve the well-being of the poor and augment their productive capacity. </div> <div> </div> <div> Targeted subsidies and transfer payments protect the most vulnerable and deprived segments of society while better public infrastructure can make it easier for the entrepreneurs to create more jobs and additional value for the economy. Higher education and training need to be significantly improved to generate the skills and critical thinking processes vital to a modern competitive economy. </div> <div> </div> <div> In addition, governments need to put in place mechanisms and adopt policies that enable innovation and creativity to flourish. This includes protecting intellectual property rights, providing adequate financing options, and nurturing more flexible labour markets.</div> <div> </div> <div> <strong>Finally</strong></div> <div> Policies on both monetary and revenue front such as non-inflationary monetary and progressive taxation can promote inclusive growth. But among policy tools, fiscal policy with productive government expenditure and progressive taxation has a tangible effect on boosting equality and promoting inclusive growth.</div> <div> </div> <div> <div> <em><span style="font-size: 14px;"><strong>What is Inclusive Growth?</strong></span></em></div> <div> An IMF Commission on Growth and Development (2008) notes that inclusiveness—a concept that encompasses equity, equality of opportunity, and protection in market and employment transitions—is an essential ingredient of a successful growth strategy.</div> </div> <div> </div>', 'published' => true, 'created' => '2014-07-30', 'modified' => '2014-11-21', 'keywords' => '', 'description' => 'The phrase 'Inclusive Growth' is quite popular in recent days not only among academia but also with policy makers, development partners and media as well. It seems that there is paradigm shift in development strategies among the stakeholders. The concept of inclusive growth refers to both the pace and distribution of economic growth.', 'sortorder' => '2641', '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) 7 => array( 'Article' => array( 'id' => '2791', 'article_category_id' => '52', 'title' => 'Budget 2014/15 Private Sector Neglected', 'sub_title' => '', 'summary' => null, 'content' => '<div> </div> <div> </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' remittances and, continuity of archaic practice of development that is heavily dependent on supply-driven central planning.</div> <div> </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> </div> <div> One of the clear departures expected from Mahat was government’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'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> </div> <div> The most crucial departure expected from Mahat, for his philosophical leanings as an open-market economist, was to stop 'merciful allocation' 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> </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 'the Mahat budget' this time.</div> <div> </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) 8 => array( 'Article' => array( 'id' => '2794', 'article_category_id' => '40', 'title' => '2nd Newbiz Business Conclave & Awards 2014', 'sub_title' => '', 'summary' => null, 'content' => '<p> </p> <p> <span style="font-size:14px;"><a href="http://www.abhiyan.com.np/article-conclav_27bhadau2071_presentation">Presentations of some speakers in the conclave</a><br /> <br /> <a href="http://www.abhiyan.com.np/article-news_25bhadau2071_award">न्यूबिज बिजनेश कन्क्लेभ एण्ड अवार्ड वितरण शुरु</a><br /> <br /> <a href="http://www.abhiyan.com.np/article-news_26bhadau2071_award">न्यूबिज बिजनेश कन्क्लेभ एण्ड अवार्ड कार्यक्रम शुरु</a><br /> <br /> <a href="http://www.abhiyan.com.np/article-news_26bhadau2071_conclave">न्यूबिज कन्क्लेभ एण्ड अवार्डको दोस्रो संस्करण आज</a><br /> <br /> <a href="http://www.abhiyan.com.np/article-BSchoolAward2014">न्यू विज् विजनेश स्कूल अवार्ड २०१४</a></span></p>', 'published' => true, 'created' => '2014-09-12', 'modified' => '2014-10-10', 'keywords' => '', 'description' => '2nd Newbiz Business Conclave & Awards 2014', 'sortorder' => '2639', '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) 9 => array( 'Article' => array( 'id' => '2790', 'article_category_id' => '40', 'title' => 'Nepal Strives For DC Degree: What Is In Store For Private Sector?', 'sub_title' => '', 'summary' => null, 'content' => '<div> </div> <div> </div> <div> <strong>--By Akhilesh Tripathi</strong></div> <div> </div> <div> If everything goes as planned by the government, Nepal will graduate from the Least Developed Country (LDC) status over the next eight years (i.e. by 2022) to a Developing Country (DC) status. Even if that target is not achieved by the specified time, the process that has been initiated already with the start of the current three-year plan (FY 2014 to FY 2016) has a lot in store for the private sector as opportunities, say analysts. </div> <div> </div> <div> Foremost among such analysts is Dr Govind Raj Pokharel, Vice Chairman of National Planning Commission (NPC). He says, “Graduation from the LDC status is a Herculean task but it is achievable if the government and the private sector work together and there is strong support of the donor community. We have pinned a lot of hope on the private sector.”</div> <div> </div> <div> Dr Pokharel claims that the next eight years over which Nepal will try its best to graduate from the LDC status to DC status will be full of business opportunities for the private sector. “We have expected a huge investment from the private sector. We know that the private sector will not invest without seeing opportunities first. Still, we hope that such investment will come from the private sector because there will indeed be opportunities,” he says. </div> <div> </div> <div> <img alt="" src="/userfiles/images/cs1(1).JPG" style="float: right; margin: 0px 0px 0px 10px; width: 300px; height: 485px;" />According to economists as well as the country’s graduation strategists, there will be business opportunities in all major sectors - agriculture, manufacturing, services, hydropower, tourism, infrastructure development etc. “These are the major areas where the private sector will find ample business opportunities provided that the government creates an enabling environment. But there will be opportunities in other sectors as well if there is an enabling environment,” shares Dr Hemanta Dawadi, Director General of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI).</div> <div> </div> <div> It seems the government is keen about creating those opportunities for the private sector through change in policy in line with the development targets which will have to be achieved over the next eight years for Nepal to become a developing country. The good thing is this has started with the recently announced budget for the new fiscal year. “The budget is also poised to graduate Nepal from a Least Developed Country status as defined by the UN,” said Finance Minister Dr Ram Sharan Mahat while presenting the budget on July 13.</div> <div> </div> <div> In his budget speech, Dr Mahat said that the country needs to invest minimum 30 percent of GDP in fixed capital formation to earn the identity of a developing country in the next eight years. “However, the average investment of past three years has been only 22 percent,” he noted, “To bridge this gap of eight percentage point in fixed capital formation, additional Rs 160.00 billion should be invested in the coming Fiscal Year alone.” </div> <div> </div> <div> The Finance Minister proclaimed that various reform measures will be carried out in this fiscal year in order to increase domestic and external investment and facilitation. He said additional reforms and revisions will be carried out by evaluating the practices and experiences of policies, regulations and laws regarding industry, trade, energy, banking and financial sector that were started back in 1990's decade, adding that the next (14th) Periodic Plan will have a clear roadmap for transforming the country into developing country status within coming eight years. </div> <div> </div> <div> To create the right opportunities for the private sector, the budget has also stated to amend the Companies Act, Competition Promotion and Market Protection Act and Insolvency Act. This will simplify the process of company establishment, renewal and liquidation. Similarly, the budget talks about amending the provisions of existing Debt and Guarantee Act in order to attract foreign investment in mega projects and viable sectors, where the domestic investment is insufficient.</div> <div> </div> <div> “New laws regarding industrial enterprise and foreign investment and technology transfer will be formulated. Foreign Investment Policy and Industrial and Intellectual Property Policy will be formulated. Bill regarding Special Economic Zone will be tabled in Parliament. Procedures regarding the establishment of large industries under foreign investment will be simplified,” said the Finance Minister.</div> <div> </div> <div> <strong><img alt="" src="/userfiles/images/cs2(4).jpg" style="float: left; margin: 0px 10px 0px 0px; width: 300px; height: 468px;" />Opportunities in Energy Sector</strong></div> <div> The government plans to end load-shedding over the next three years. In this period, four major public sector-funded projects namely Upper Tamakoshi, Kulekhani II, Chameliya and Upper Trishuli hydroelectric projects will enter production phase and will together generate 560 MW of electricity. Similarly, 42 private sector-funded hydroelectric projects will generate 628 MW of electricity in this period. Similarly, the government will start the construction of other projects such as Tamakoshi V, Madi Khola, Maiwa Khola hydroelectric projects including Tanahu and Rahughat projects. Similarly, according to the budget, the construction of Kabeli Hydroelectric Project will be started in Public-Private-Partnership model.</div> <div> </div> <div> “The private sector will be invited to carry out various works related to these energy projects. That clearly means business opportunity,” explains Dr Arjun Karki, International Coordinator of LDC Watch, “Several other bigger projects will be initiated over the next eight years which means there will be good business opportunities for the private sector.”</div> <div> </div> <div> In order to complete the projects on time, the budget has announced to provide full exemption on income tax for the first ten years and 50 percent exemption for additional five years to those producers who generate and connect electricity to national grid and export it within FY 2022/23. “I have made an arrangement to provide a lump sum grant of Rs 5 million per MW of electricity to those producers who generate and connect the generated electricity to national grid. I have also made provision of an additional 10 percent of such grant to those producers who generate and connect the generated electricity to national grid within FY 2017/18,” says Dr Mahat. </div> <div> </div> <div> <strong>Opportunities in Agriculture</strong></div> <div> The government plans to modernise, diversify and commercialize the agriculture sector over the next one decade. This is reflected in the newly announced budget as well. The budget targets to keep interest rate on six percent on loans to be provided by the commercial banks for modern farming, livestock and poultry farming, medicinal plants, vegetables and horticulture, dairy business, aquaculture, agro storage, cold storage, slaughter house and meat-related business. This provision, the government thinks, will also help address the problem of unemployment and youth migration from rural areas.</div> <div> </div> <div> Similarly, the budget has provisioned up to 50 percent subsidy in the loan interest taken in order to develop land and mechanize farming for private groups which are involved in the commercialization and mechanization of farming by integrating 10 hectares land in mountain and 20 hectares land in Terai and up to 75 percent interest grant for the cooperatives of marginalized and landless farmers.</div> <div> </div> <div> Similarly, the construction of the main as well as branch canals of major irrigation projects such as Sikta, Babai, Mahakali and Rani Jamara Kulariya etc will be given continuity. It is the private sector that will be awarded contracts to carry out these works which clearly means good business opportunities for the private sector. Similarly, the tunnel construction work of Bheri Babai Multipurpose Diversion Project will also be initiated in this fiscal year. </div> <div> “The government wants significant private sector investment in agriculture. For this it is ready to create the environment,” remarks Dr Pokharel.</div> <div> </div> <div> <strong><img alt="" src="/userfiles/images/cs3(6).jpg" style="float: right; margin: 0px 0px 0px 10px; width: 300px; height: 434px;" />Opportunities in Tourism</strong></div> <div> Tourism is going to be another sector of good business opportunities for the private sector. The government, through the latest national budget, has already announced to provide income tax exemption for five years to the industries established with an investment of more than Rs 2 billion in the tourism sector. Similarly, aviation companies, too, will get such income tax exemption. They will further get 50 percent income tax exemption for subsequent three years, according to the budget.</div> <div> </div> <div> “This income tax exemption is aimed at promoting the establishment of good hotels and resorts at the major tourist destinations and other places of the country. This is a clear opportunity for the private sector,” explains Dr Pokharel.</div> <div> </div> <div> <strong>Opportunities in Infrastructure Development</strong></div> <div> Nepal has to do a lot in infrastructure development so as to increase accessibility, facilitate service delivery and enhance cost effectiveness. For example, the government wants to construct at least one road on multi-year contract basis in each electoral constituency where there is no year-round transportation. Similarly, the construction work of the Kathmandu-Terai Fast Track will be started in this fiscal year. </div> <div> </div> <div> The government plans to open the track of several new roads, black-top and expand several existing roads and build hundreds of bridges across the country. The government has allocated more than Rs 14.3 billion for this purpose in the current fiscal year alone. Similarly, the new budget has allocated Rs 4.5 billion for the maintenance of 16,788 kilometres of strategic and local roads including their regular maintenance, routine maintenance, periodic maintenance, and rehabilitation and urgent maintenance.</div> <div> </div> <div> Similarly, according to the new budget, the government will carry out urban infrastructure development programmes in cities like Biratnagar, Birgunj, Butwal, Dharan, Janakpur and Nepalgunj including the development of 10 Urban Corridors with eight ongoing and two new.</div> <div> </div> <div> “The national budgets to be announced in the fiscal years to come will have to continue such infrastructure development programmes, if Nepal is to achieve the DC status by 2022. So, there is no dearth of business opportunities for the private sector,” says Dr Pokharel. </div> <div> </div> <div> <strong>Investment Requirement</strong></div> <div> According to NPC’s estimates, the government or the public sector will have to invest Rs 3,300 billion and the private sector will have to invest double the amount – a whopping Rs 6,600 billion -by 2022 if Nepal is to achieve the status of a developing country by then. But will such a huge investment really come from the private sector?</div> <div> </div> <div> “We hope it will because the country is now headed towards political stability and legal and economic reforms are in the pipeline. That means the next eight years are going to be a wonderful business opportunity for the private sector,” assures Dr Pokharel.</div> <div> </div> <div> According to NPC’s investment plan, Nepal will need a total investment of Rs 1013.91 billion in the agriculture sector by FY 2021/22 to achieve the graduation target. Two-thirds of this investment, i.e. around Rs 675.94 billion is expected from the private sector. The agriculture sector includes forestry and fishing as its subsectors. </div> <div> </div> <div> “The private sector is expected to invest in the modernization of agriculture and increase productivity, replace agricultural imports and promote exports. The government is expected to make this easier through policy and legal reforms, if necessary,” says Dr Pokharel.</div> <div> </div> <div> Similarly, the industrial sector which includes mining and quarrying, manufacturing; electricity, gas and water, and construction will require a total investment of Rs 1807.87 billion. Of this amount, Rs 1205.24 is expected from the private sector. “So there is a huge opportunity for the private sector in the industrial sector as well,” thinks former NPC Vice Chairman Prithvi Raj Ligal.</div> <div> </div> <div> Likewise, according to the NPC plan, the service sector which comprises wholesale and retail trade; hotels and restaurants; transport, storage and communications; financial intermediation; real estate, renting and business activities; public administration and defence; education; health and social work; and other community, social and personal service activities will require a total investment of Rs 6874.98 billion – Rs 4583.32 billion from the private sector and Rs 2291.66 billion from the public sector.</div> <div> </div> <div> <img alt="" src="/userfiles/images/cs4(4).jpg" style="width: 550px; height: 110px; margin-left: 10px; margin-right: 10px;" /></div> <div> </div> <div> <strong>Criteria for Graduation </strong></div> <div> There are basically three criteria to graduate from the LDC status – Human Assets Index (HAI), Economic Vulnerability Index (EVI) and GNI per capita. HAI is about the stock of the human capital of the country and comprises the nutrition status of the population, mortality rate of children aged five or under, and gross secondary school enrolment ratio and adult literacy rate. EVI reflects the country’s vulnerability to exogenous shocks and comprises of population size; remoteness; merchandise export concentration; share of agriculture, forestry and fisheries in GDP; share of population living in low elevated coastal zones; instability in export of goods and services; victims of natural disasters; and instability in agricultural production. </div> <div> </div> <div> Likewise, GNI per capita is related with the country’s income-generating capacity and is based on a three-year average estimate of the country’s per capita GNI (World Bank Atlas Method). After determining threshold level for each of the criteria every three years, the United Nations Committee for Development Policy (CDP) reviews the progress made by LDCs and if the country has been eligible at two successive triennial reviews, it recommends a country for graduation from the LDC category. At least two of the three criteria or GNI per capita twice higher than the threshold should be met in order to be eligible for graduation.</div> <div> </div> <div> “Among the three criteria for LDC assessment, Nepal has already met the EVI threshold level and is very close to meeting the HAI criteria; however, there is a huge gap between the GNI threshold level and Nepal’s present status. The role of the private sector is going to be very important to meet this criterion,” observes Dr Karki. </div> <div> </div> <div> <strong>Increasing Productive Capacity</strong></div> <div> Karki is of the opinion that Nepal will have to start working seriously to enhance its productive capacity significantly to achieve the GNI per capita threshold. “The country is facing problems like huge trade deficits, high underemployment rate, income inequality and low quality of life,” says Dr Karki, “Factors including subsistence agriculture, deteriorated industrial environment, power shortage etc., have led to a low level of economic growth and development. Therefore, there exists a great challenge to sustain the achievements and narrow down the gaps between GNI threshold level and the current status.” </div> <div> </div> <div> Our GNI per capita has improved over the past few years but we still need to accelerate it, he adds. Karki’s observation points to two important areas where private sector can come forward – commercial agriculture and power generation. Fortunately, these are the two major areas of emphasis in the budget presented at the parliament recently. If the government really implements the policies and budget allocations announced in the budget speech, the privates sector can make good money while contributing to this graduation of the country. </div> <div> </div> <div> Ligal lists more areas where the private sector has such opportunities. “Productive capacity has basically four components – infrastructure; energy; science, technology and innovation; and private sector development,” says Ligal, adding “The role of the private sector is very important in increasing the country’s productive capacity by investing in infrastructure development, energy exploitation and by making technological innovations.”</div> <div> </div> <div> “Although Nepal has already met the EVI criterion, it still has to either increase its GNI per capita by US$ 770 or the HAI score by 6.17 before 2015 to be eligible for consideration for graduation. This is because eligibility conditions should be fulfilled during two successive triennial reviews, and the CDP will now review the progress only in 2015,” Chandan Sapkota, an economist with the Asian Development Bank, Nepal, says, “After the review, Nepal will have to sustain the progress through 2018, the next triennial review, only after which the CDP will recommend for graduation.”</div> <div> </div> <div> This means Nepal has good length of time to fulfil the criteria. But effective intervention from the government is a must. And the NPC has recognised this clearly. “If the past trend is of any guide to future, it will be difficult for Nepal to meet the projected threshold of US$ 1,502 even by 2021, unless effective policy interventions are in place. Vigorous efforts are needed to achieve the projected GNI per capita of US $ 2,094 in 2021 so that the economy is on the way to achieve the estimated threshold by 2021,” reads NPC’s Approach Paper to Graduation from LDC by 2022.</div> <div> </div> <div> According to Ligal, the private sector – both domestic and foreign – will have to invest heavily in sectors like physical infrastructure, hydropower, tourism and agriculture over the next eight years. “But the private sector will not make such a huge investment under the present circumstances. For private sector investment to come, the government will have to create conducive environment through legal, administrative and policy reforms. If this happens, private sector will come forward as the Graduation process would offer lucrative business opportunities,” he says, adding that Nepal needs more aggressive economic reforms in the near future.</div> <div> </div> <div> <img alt="" src="/userfiles/images/cs5.JPG" style="width: 550px; height: 430px; margin-left: 10px; margin-right: 10px;" /></div> <div> </div> <div> <strong>Partnership with Private Sector</strong></div> <div> The Istanbul Programme of Action, which aims to at least halve the number of LDCsby 2020, too, has laid great emphasis on public-private partnership. It says, “Partnerships with the private sector play an important role for promoting entrepreneurship, generating employment and investment, increasing the revenue potential, developing new technologies and enabling high, sustained, inclusive and equitable economic growth in least developed countries.” In the present circumstances, when the private sector is complaining of lack of enough conducive environment for investment, PPP model can be a good alternative so that the private sector can feel secure as the government too will have stake in such projects. </div> <div> </div> <div> Economists say that investment in the industrial sector is a must to increase the economic productivity. “Productivity and job opportunities in the service sector have remained low. And it consists of more informal sectors,” observes Shanker Sharma, former vice-chairman of NPC, “We need more manufacturing industries. If there is political stability, right policies in place and adequate legal reforms, then investment in the manufacturing sector will come.”</div> <div> </div> <div> Karki, too, stresses on the need for public-private partnership (PPP) model of development. “The PPP model is going to be very helpful in those areas of investment where the private sector alone is a bit hesitant to enter,” he says. If the government comes forward to invest in such sectors, the private sector will follow suit, he adds.</div> <div> </div> <div> Dr Dawadi is also of the opinion that the government alone cannot take the country out of the LDC status to the developing country status. “To be successful, the graduation strategy will require a full and uninterrupted understanding, support and cooperation from the private sector,” he opines.</div> <div> </div> <div> True that both economists and development activists are right in their view that this target spelt out in the approach paper to the latest three-year plan (FY 2014 to FY 2016), is highly ambitious. But the government has its own basis for its optimism.</div> <div> </div> <div> The doubt of the economists and activists is based on the fact that the previous three-year plan (FY 2010 to FY 2013) had aimed such graduation by 2030. But the government officials say they pre-poned the target by eight years looking at the rapid progress in the recent years. They particularly cite increase in the country’s per capita gross national income (GNI), decreased poverty level, and significant progress on major social indicators such as mortality rates, school enrolment rates, life expectancy etc. Since the LDC category was brought in practice in the international development parlance in 1970, only four LDCs have graduated to DC status so far – Botswana (1994), Cape Verde (2007), Maldives (2011) and Samoa (January 2014). But the number of LDCs has almost doubled since then. It means graduation from the LDC status is not so easy. But development experts think that the goal is achievable if the public and private sectors of the country work together. </div> <div> </div> <div> When the economy grows and businesses thrive, the sky is the limit for the individual private sector operator. It means a large pool of resources, a larger market and a higher level of operation,” Dr Dabwdi concludes, “The opportunity will be for both new business creation as well as horizontal growth of existing businesses.”</div>', 'published' => true, 'created' => '2014-09-08', 'modified' => '2014-10-10', 'keywords' => '', 'description' => 'The role of the Nepali private sector is going to be very crucial if Nepal is to become a developing country by 2022, as planned by the government. It means large business opportunities await the private sector over the next eight years.', 'sortorder' => '2638', '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) 10 => array( 'Article' => array( 'id' => '2793', 'article_category_id' => '91', 'title' => '2nd NewBiz Business Conclave And Awards 2014', 'sub_title' => '', 'summary' => null, 'content' => '<p> <span style="font-size:16px;">Please visit to <a href="http://www.abhiyan.com.np">http://www.abhiyan.com.np</a> for details.</span></p>', 'published' => true, 'created' => '2014-09-12', 'modified' => '2014-10-10', 'keywords' => '', 'description' => '', 'sortorder' => '2637', '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) 11 => array( 'Article' => array( 'id' => '2787', 'article_category_id' => '167', 'title' => 'UML’s Throb To Democratize', 'sub_title' => '', 'summary' => null, 'content' => '<div> </div> <div> <strong>--By Achyut Wagle</strong></div> <div> </div> <div> The Nepal Communist Party-United Marxist Leninist (CPN-UML) exhaustively braces up for its ninth general convention, July 3-9 that is perhaps likely to see the fiercest battle ever to take the reins of this four decade-old outfit. The good news is, unlike in any archetypical communist organization, the chairman and other major office bearers will be chosen democratically through the ballots of the party cadres.The Party over the last two and half decades, since the successful reinstatement of democracy in 1990, has established itself not only as a quintessential political force of the country but also a relatively credible democratic alternative with left-to-the-centreideologies. It is now the second largest party in the Constituent Assembly (CA), which is also the legislature parliament, and the major coalition partner in the Nepali Congress-led government.</div> <div> </div> <div> This transformation from an out-and-out communist to largely a democratic force has definitely not been a cakewalk and yet far from complete. Thanks to late General Secretary of the Party, Madan Bhandari who coined a transitional lexicon 'janatako bahudaliya janabad (JBJ)' or people's multi-party democracy that facilitated it to become a reckoning force in multi-party polity. In essence, except one seemingly unequivocal commitment to remain in the 'politics of ballots'; forsaking the dogma of the 'power from the bullets', the task of redefining other philosophical foundations of the Party is still pending and currently undergoing a rigorous discourse. This is what going to be one of the characteristic features of the upcoming Convention as well. The pain experienced in the process of refurbishment of a force that carried over the legacy of Jhapa andolan of early 1970s, a naive killing spree of landlords to eliminate the class enemy andwith its cadres indoctrinated to 'establish a proletariat dictatorship' or 'new people's democratic republic' ostensibly through violent over throw of 'old regimes' to a disciplined political party believing in a peaceful process of change is not unnatural. But, the most worrying factor is: it is taking too long a time to accept the changing realities of the world and declare that the party no longer remains 'a communist' one. And, the debate also has been too fluid to shape a convincing new 'doctrine' with a double edged sword which preserves the face of the communist party and, at the same time, adapts itself as a credible democratic force.</div> <div> </div> <div> To borrow the word from communist lingo, the 'class struggle' within the party is at its height, but it is not two directional - between the exploiting and exploited classes as explained by Marx. It is in fact innumerably multi-directional and cover everything by a single 'blanket principle' is requiring it to be too large to manage. There is still a fine dividing line between the factions that accept the JBJ as defined by Bhandari as a complete principle and that takes it only as one of the 'many' components of philosophical evolution of the Party. KP Oli and Madhav Nepal, who are the two contenders for the post of chairman in the ninth convention, now represent these two factions respectively There is yet another traditional school that is not vocal but still considers JBJ hastened the aberration of the Party from a true communist force to operatives of ‘comprador bourgeoisie. 'The current Party Chairman Jhalanath Khanal lost party leadership to Madan Bhandari in the fifth convention in 1993, as he campaigned in this potential aberration plank. By now, Khanal seems to be compelled to change as there is no escape from the vote politics, but the reservation to accept the JBJ as 'only' guiding principle of the party still appears to be a bitter pill for him to swallow.</div> <div> </div> <div> There is also a tangible difference in opinion between the so called ‘old school’ and the ‘new school’. The old school represented by the hawks of pre-panchayat underground era are persistent not to give-up the communist tag. The septuagenarian leader Bharat Mohan Adhikari categorically said, ‘There is no need to change the party name to something that doesn’t carry the word communist and the universal communist standard, hammer-and-sickle flag, should be retained.’ The new school, which calls itself a pragmatic left is keen to change the both, just limiting it to convey a ‘socialistic’ meaning - far more softline approach than being a communist. The confusion has run long. So long that immediately after the UML formed a minority government in 1994, the Party dramatically removed the portraits of Marx and Lenin from the Party HQ meeting hall when the then US ambassador to Nepal visited UML headquarters. The act though was subject to acute mockery then but had a symbolic personification of confusion. First, it signified, the Party leadership had realized the redundancy of these figures but was unable to get rid of their hangovers. Second, from the inner self, it wanted to convey that the party doesn’t want to be identified and viewed as the communist in classic sense of the term. And, the third, it wanted to interact with the world as liberal democratic or a social democratic force.</div> <div> </div> <div> But, over all these years, party has hardly been able to embark on this wishful direction it had then contemplated. All these confusions still persistently gnaw the party and all the policy debates still revolve around the same confusion – whether or not to remain a communist and how to keep-up with the pace of openness the world is now moving with. It is for this reason, different ‘think tanks’ within the party are working to give a functional shape to their ideological basis such that it fits to modern-day political parlance.</div> <div> </div> <div> One of such recent exercises of the party has concluded that Nepali society has essentially become a capitalist one leaving behind the traditional agro related feudal production and productivity relations. This in fact is the theoretical basis to do away with the politics of proletarian supremacy and misery due to mass exploitation. However, the entire ‘philosophical’ discourse suffers from a mindset that party cannot function without such ‘grand narrative’. The party very tactfully removed the anti-Indian and anti American diatribes as soon as it rode to power saddle in 1994, forming the first communist government in the world after the collapse of the Berlin Wall, that too through elections.</div> <div> </div> <div> At present, the issues of the centre-stage debate include the massive criminalization of the party politics by protecting and promoting goons and underworld operators, colloquially known as dons–the word borrowed from taekwondo. This began with when Bamdev Gautam was made Home Minister in 1997 under Rastryia Prajatantra Party-led coalition government. He allegedly opened all smuggling channels and protected them using the security establishment. KP Oli did the same when he was Home Minister and now many noted dons are in party rank and file. Madhav Nepal faction has devised its campaign strategy focusing on the theme of ‘cleaning the party from goons.’ But the weight in the balance gradually appears to be tilting to the kings of the goons. Therefore, it will not be a surprise if Oli wins the race.</div> <div> </div> <div> Perhaps the greatest potential for the party to benefit arises from the fact that UCPN-Maoist is now forced to follow the same path the UML has traversed since its fifth convention. This can give a righteous sense of direction to the UML in making timely policy choices as a communist force that wants to survive in the competitive pluralistic politics. Theoretically speaking, UML should have been able to take great advantage given the vindication of timeliness JBJ. But, internal wrangling and factionalism has marred all its potentials of organizational growth.</div> <div> </div> <div> As the ninth convention inches closer, the campaign becomes nasty. The official manifestos of both Oli and Nepal do not differ much, which is an indication that there is not much differences in principles and policies. But when it comes to practical politics, the competition on mudslinging has crossed all possible decencies. Oli commands very strong organizational support and as an additional advantage Deputy Prime Minister BamdevGautam is in his favour. Oli’s illness is debated in both the camps. Oli has tried to bank on his illness requesting to vote him for the last chance and Nepal faction has asked him to take ‘rest’ on health grounds.</div> <div> </div> <div> It would not be a practical assumption to expect UML to reincarnate by changing its name and revamping all of its communist ideologies . But the throb of need for this change is intensely realized, in more than one spheres – in ideology, organizational orientation, external relations and internal democracy. This certainly gives better hope for overall consolidation of country’s democracy, sometime in near future. </div> <div> </div> <div> <em>The writer is former editor of Aarthik Abhiyan National Daily.</em></div>', 'published' => true, 'created' => '2014-07-30', 'modified' => '2014-10-10', 'keywords' => '', 'description' => 'The Nepal Communist Party-United Marxist Leninist (CPN-UML) exhaustively braces up for its ninth general convention, July 3-9 that is perhaps likely to see the fiercest battle ever to take the reins of this four decade-old outfit. The good news is, unlike in any archetypical communist organization, the chairman and other major office bearers will be chosen democratically through the ballots of the party cadres.', 'sortorder' => '2636', '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) 12 => 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 'any' 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'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's current term in office.</div> <div> </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> </div> <div> There are other unattended areas in the economy that are either causing excessive 'bleeding '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's money to project the jobs of a few hundred unproductive employees.</div> <div> </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'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> </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. 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 as Mahat's brainchild in 1992, doesn't seem to be the case now. </div> <div> </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) 13 => array( 'Article' => array( 'id' => '2786', 'article_category_id' => '40', 'title' => 'Outbound FDI : Can Nepali Businesses Go Global?', 'sub_title' => '', 'summary' => null, 'content' => '<div> </div> <div> <div> </div> <div> <strong>--By Siromani Dhungana</strong></div> <div> </div> <div> <em><span style="font-size: 16px;">A 50-year old law entitled ‘Act Restricting Investment Abroad, 1964’ is still in force in Nepal which stops Nepali citizens from investing in a foreign country. The existing fear is that the country’s economy will suffer if Nepal allows outbound FDI. But many evidences suggest that despite this law, Nepali people are investing in different other countries through one channel or other. And such evidences are becoming more visible. Policymakers are in dilemma while the business community is also largely divided on the issue. However, the debate on legitimatizing outbound FDI is heating up in recent times. What impact will it have on a country like Nepal where the national economy is not strong? Will it create BoP deficit as many fear? What happens if all businessmen start to set up industries in foreign countries which have better policy stability and lesser labour problem? New Business Age tries to analyse some of these major concerns:</span></em></div> <div> </div> <div> It is not surprising that Nepali businessmen, like many around the world, want to be competitive and set their footprint in the global market. But existing policies are keeping their dreams from being materialized. The government remains skeptic and reluctant to allow outward FDI citing probable impact on the national economy.</div> <div> </div> <div> However, zero capital mobility in and out of a country cannot be expected. Many evidences suggest that the investment is going abroad through one channel or the other. Any state should allow aspiring businessmen to invest anywhere globally because this will help the currency get its true value recognized, Dr Chiranjibi Nepal, Economic Advisor to the Prime Minister claims. “Investment is a must to increase the value of the money. The government should open up avenue for outward FDI to acknowledge this fact.”</div> <div> </div> <div> Evidences also show that the flow of money cannot be barricaded by any laws or policies. For instance, Nepal, according to a report of Global Financial Integrity (GFI), lost a total of $ 8.01 billion between 2001 and 2010 due to illicit capital flight. It means that on an average, $ 801.4 million (Rs 70.39 billion) went out of Nepal annually during that period of almost a decade. </div> <div> </div> <div> <img alt="" src="/userfiles/images/cs1(4).jpg" style="width: 550px; height: 163px; margin-left: 10px; margin-right: 10px;" /></div> <div> </div> <div> GFI’s another report entitled ‘Illicit Financial Flows from the Least Developed Countries: 1990-2008’ had put Nepal’s annual capital flight at $ 480.4 million. Based on the amount of capital flight, Nepal has been ranked 58th among 143 countries surveyed and sixth among the Least Developed Countries (LDCs) for exporting funds illegally.</div> <div> </div> <div> The report clearly points to the huge illegal financial flows from Nepal and it is high time that the government addresses this problem without making any further delays, Nepal opined. “The government should legalize outward FDI to keep the record of outflow of financial transaction in the formal system,” he said.</div> <div> </div> <div> <table border="0" cellpadding="10" width="99%"> <tbody> <tr> <td bgcolor="#F6CEF5"> <div> <span style="font-size: 14px;"><strong>Existing Laws Related to FDI</strong></span></div> <div> </div> <div> <strong>Foreign Investment and Technology Transfer Act – 1992</strong></div> <div> Foreign Investment and Technology Transfer Act (FITTA) – 1992 & Industrial Enterprises Act - 1992 are the two most important laws for the promotion of industries in Nepal. These two acts are highly encouraging acts for attracting FDI or Joint venture investments in Nepal. </div> <div> </div> <div> FITTA includes provisions related to facilities and concessions. This Act treats foreign investors as equals to local investors and provides them same incentives and facilities.</div> <div> </div> <div> The Act is also very positive on providing visa to foreign nationals. The Act has ensures 6 months non-tourist visa to a foreign national if he/she want to conduct survey, study or research with the objective of making investment in Nepal. </div> <div> </div> <div> After that if he or she makes investment or establishes an industry, the investor (along with the dependant family members) is granted business visa until the investment is retained. Similarly, residential visa is granted to a foreign investor and his family if s/he makes an investment of one hundred thousand US dollars in one business. All these are highly encouraging statements. However in actual practice, the investors face various problems, time and again. </div> <div> </div> <div> FITTA and IEA also offer some fiscal incentives including income tax relief. But the amended Finance Act and New Income Tax Act have withdrawn all such incentives, which is considered a controversial decision. Several amendments to FITTA through the Finance Act of 2001 and the progress made in this regard helped the nation in its efforts to gain membership of WTO, SAFTA, and BIMSTEC, but these amendments too are not enough, say investors.</div> <div> </div> <div> <strong>Industrial Enterprises Act - 1992</strong></div> <div> The IEA has one-window committee (OWC) provision, which is coordinated by the director general (DG) of Department of Industry (DoI) and has DGs of Customs, Inland Revenue, Value Added Tax (VAT) and Commerce as well as representatives from central bank, Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and the government.</div> </td> </tr> </tbody> </table> </div> <div> </div> <div> <strong style="font-size: 14px;"><img alt="Dr Chiranjivi Nepal" src="/userfiles/images/cs2(1).JPG" style="float: right; margin: 0px 0px 0px 10px; width: 300px; height: 166px;" />Need: A Positive Beginning</strong></div> <div> Nepal's legal system begins from the word restriction, which, according to many, rightly articulates the government’s mind-set. A 50-year old law entitled ‘Act Restricting Investment Abroad, 1964’ is still effective in the country. The law was introduced to restrict Nepalis from investing abroad. </div> <div> </div> <div> We need a fresh and positive beginning, economist and former chief secretary Dr Bimal Koirala told New Business Age. “The government should reform existing laws to facilitate businessmen to invest in foreign countries instead of imposing restriction.” The fear among policymakers is that what happens if businessmen do not bring back money to the country. And, the answer to this fear is to set up effective monitoring bodies that will keep record of every businessman who invests abroad, he suggested. </div> <div> </div> <div> Given the low trade volume of the country and frequent fluctuation in the Balance of Payment (BoP), some experts advise against allowing Nepali businessmen to invest abroad. Koirala slams such opinion claiming it to be an out-dated concept. </div> <div> </div> <div> Times have changed and the government has to realize this fact. The government should understand and accept the new liberalized and globalized world and business scenario, Koirala opines.</div> <div> </div> <div> <table border="0" cellpadding="10" width="99%"> <tbody> <tr> <td bgcolor="#F6CEF5"> <div> <span style="font-size: 14px;"><strong>Act Restricting Investment Abroad, 2021BS (1964)</strong></span></div> <div> </div> <div> Article 3 Restriction on making investment abroad: </div> <div> </div> <div> (1)<span class="Apple-tab-span" style="white-space: pre;"> </span>No one shall make any kind of investment abroad after the commencement of this Act.</div> <div> </div> <div> (2)<span class="Apple-tab-span" style="white-space: pre;"> </span>Notwithstanding anything contained in sub-section (1), in relation to any specific kind of investment, the Government of Nepal may, by a notification in the Nepal Gazette, grant exemption from the restriction set forth in that sub-section, and specify the kind, extent, period of the investment so exempted and other necessary terms pertaining thereto.</div> </td> </tr> </tbody> </table> </div> <div> </div> <div> <span style="font-size: 14px;"><strong>Past Initiatives</strong></span></div> <div> Nepal started systematic initiative of attracting FDI in 1981. The Sixth National Plan (1980/81-1984/85), for the first time, incorporated a policy for utilizing foreign capital and technology as a useful supplement. The Plan mentioned that foreign investment and technology was primarily required in large-scale industries and mineral industries. Since then, the government continued revising policies related to inward FDI. Foreign Investment and Technology Transfer Act was introduced in 1992 and amended in 1996 in line with open and liberal economic policies. But outward FDI-related provisions remained unchanged. </div> <div> </div> <div> Recently, the government has started fresh initiative to review the policy. Foreign Investment Policy 2014 has been prepared and consultations with stakeholders are underway on it, according to Ministry of Industry. However, business community blames the government for not being proactive to introduce new policy. </div> <div> </div> <div> <span style="font-size: 14px;"><strong>Policies that Restrict Outward FDI</strong></span></div> <div> <strong>Act Restricting Investment Abroad, 2021(1964):</strong> This law, as its name suggests, restricts any Nepali citizen from investing outside of Nepal. While this may be an old Act, it is still valid in the country. It defines restricted investments as foreign securities, partnership with foreigners, foreign bank accounts, owning house and land in a foreign country and any foreign investment in cash or kind except as prescribed by the government. This law has severely affected outward FDI as Nepali citizens cannot freely invest outside the country. Despite a provision within the Act that leaves a space for aspirant businessmen to invest abroad by taking approval from the government, nobody has received such approval. </div> <div> </div> <div> <strong>Foreign Exchange Regulation Act: </strong>This act does not allow Nepalis to open bank accounts in foreign countries if the money is earned in Nepal. Nepalis can open bank account abroad only if they earn money outside Nepal. But the account holder should inform Nepal Rastra Bank about the account. </div> <div> </div> <div> <span style="font-size: 14px;"><strong>Changing Times but Unchanged Laws</strong></span></div> <div> The existing laws were formulated at a time when entrepreneurship in Nepal was at a primitive stage and Nepali businessmen did not have sufficient capital and expertise to invest abroad, said Basudev Adhikari, Director of Nepal Rastra Bank. </div> <div> </div> <div> Nepali business community has come a long way since 1964. “For instance, now we have a Forbes-listed billionaire that shows that our businessmen have enough capital to invest in various sectors,” said Adhikari. Competitiveness of Nepali business sector has tremendously increased over the last few years. Lawmakers should reform existing laws considering the changed scenario, he added. The prevailing laws have failed to prevent outflow of capital from Nepal anyway. </div> <div> </div> <div> <span style="font-size: 14px;"><strong><img alt="Anup Bahadur Malla" src="/userfiles/images/cs3(5).jpg" style="float: right; margin: 0px 0px 0px 10px; width: 300px; height: 166px;" />Need for Caution</strong></span></div> <div> Still the policy of allowing Nepalis to invest abroad cannot be introduced without caution. The most challenging job for the government is to set the ceiling for outward FDI, opined Anup Bahadur Malla, executive member of FNCCI. The government should not introduce any law haphazardly, he suggested. Meticulous studies are required even when formulating laws related to inward FDI, he said. </div> <div> </div> <div> There are flaws in inward FDI policies as well which have created some adverse impact on the economy, according to him. Foreigners in Nepal are venturing into small businesses which have nominal contribution to the national economy, he argued. For instance, Chinese nationals, according to him, have been replacing Nepali small entrepreneurs from Thamel and other places but their contribution to the national economy and employment generation is negligible. From this, the government should learn that both inward and outward FDI can be harmful if laws are formulated without rigorous study, he claimed.</div> <div> </div> <div> Along with fixing ceiling, he claims identification of competitive sectors is the most challenging job for the government. It should initiate debate on maximum investment-ceiling limit on outward FDI, and identify the sectors where Nepalis can take competitive advantages, he suggested. </div> <div> </div> <div> <table border="0" cellpadding="10" width="99%"> <tbody> <tr> <td bgcolor="#F6CEF5"> <div> <span style="font-size: 14px;"><strong>Defining FDI</strong></span></div> <div> Foreign direct investment (FDI) is defined as an investment involving a long-term relationship and reflecting a lasting interest and control by a resident entity in one economy (foreign direct investor or parent enterprise) in an enterprise resident in an economy other than that of the foreign direct investor (FDI enterprise or affiliate enterprise or foreign affiliate). FDI implies that the investor exerts a significant degree of influence on the management of the enterprise resident in the other economy. </div> <div> </div> <div> Such investment involves both the initial transaction between the two entities and all subsequent transactions between them and among foreign affiliates, both incorporated and unincorporated. FDI may be undertaken by individuals as well as business entities.</div> <div> </div> <div> Flows of FDI comprise capital provided (either directly or through other related enterprises) by a foreign direct investor to an FDI enterprise, or capital received from an FDI enterprise by a foreign direct investor. FDI has three components: equity capital, reinvested earnings and intra-company loans.</div> <div> •<span class="Apple-tab-span" style="white-space: pre;"> </span>Equity capital is the foreign direct investor’s purchase of shares of an enterprise in a country other than its own.</div> <div> •<span class="Apple-tab-span" style="white-space: pre;"> </span>Reinvested earnings comprise the direct investor’s share (in proportion to direct equity participation) of earnings not distributed as dividends by affiliates, or earnings not remitted to the direct investor. Such retained profits by affiliates are reinvested.</div> <div> •<span class="Apple-tab-span" style="white-space: pre;"> </span>Intra-company loans or intra-company debt transactions refer to short- or long-term borrowing and lending of funds between direct investors (parent enterprises) and affiliate enterprises.</div> <div> (Source: World Investment Report 2012, UNCTAD)</div> <div> </div> </td> </tr> </tbody> </table> </div> <div> </div> <div> <span style="font-size: 14px;"><strong>Outbound FDI: An Open Secret </strong></span></div> <div> Policies on outward investment have been seen as a screening device to restrict the outflow of capital from the country. But it is an open secret that Nepalis have already started investing abroad. </div> <div> </div> <div> Chaudhary Group (CG), a company owned by Forbes-listed billionaire and renowned industrialist Binod Chaudhary who has invested abroad through Cinnovation Group, a multi-dimensional conglomerate established in 1990 headquartered in Singapore. The company was created to take CG’s business interests global. Currently, it is expanding its footprint in global market. </div> <div> </div> <div> Business leaders and government officials hesitate to give opinion regarding outflow of capital from Nepal in public. But they privately confide that there are many instances where the investment is going abroad through one channel or the other. India has been one of the easiest destinations for Nepali investors to invest, one businessman told New Business Age. “Businessmen channel capital to India through their relatives and acquaintances living in India,” he disclosed. More than a dozen of reputed Nepali business houses have invested in India in one or other way and even government officials are aware of this fact, he claimed. So, it is better to legalize outward FDI to control informal outflow of money. </div> <div> </div> <div> <span style="font-size: 14px;"><strong><img alt="Dr Bimal Koirala" src="/userfiles/images/cs4(3).jpg" style="float: right; margin: 0px 0px 0px 10px; width: 300px; height: 169px;" />Drives of Outward FDI</strong></span></div> <div> A question worth asking is: what triggers outward FDI from Nepal? There is not an easy answer. Generally, two major drives can be analysed: market-seeking drive and resource-seeking one. Nepali businessmen want to go outside country for market-seeking purpose, said Pradeep Jung Pandey, president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI). </div> <div> </div> <div> Businessmen eye foreign market when their businesses are saturated in the home country, he said. It can thus be said that the drivers of outward FDI from Nepal are largely determined by market-seeking factors with little role played by policy measures. </div> <div> </div> <div> Political instability, labour unrest and terror created by conflicting parties might have triggered businessmen to invest abroad during a decade-long conflict, he said. But the situation has changed now and businessmen do not want to go global if there is prospect of good business in Nepal. </div> <div> </div> <div> <span style="font-size: 14px;"><strong>Anti Outward FDI Logics</strong></span></div> <div> 1.<span class="Apple-tab-span" style="white-space: pre;"> </span>Positive Financial and Macro Economic Indicators: Experts say that the overall economic indicators including economic growth should be in positive direction and should be stable to allow Nepalis to invest in foreign country. Given Nepal’s volatile economic situation, some economists advise not to allow outflow of the capital. </div> <div> </div> <div> 2.<span class="Apple-tab-span" style="white-space: pre;"> </span>Investment Climate: Why do our businesses want to go outside though market in Nepal has been growing? An easy answer is that there is no investment climate in the country. It is not possible to open up outward FDI without ensuring investment climate in the country. Our own country is in dire need of investment in almost all sectors and it is a matter of concern as to why businessmen are lobbying to open up outward FDI, an economist questioned. Several structural bottlenecks and supply-side constraints are impacting the investment climate in Nepal. Tough reform measures have to be formulated before bringing policies related to outward FDI, he suggested. </div> <div> </div> <div> </div> <div> 3.<span class="Apple-tab-span" style="white-space: pre;"> </span>Trade Deficit: Nepal has been witnessing a whopping trade deficit year after year. Nepal imports essentials goods and services by drawing on its foreign currency reserves, which are primarily contributed by remittances. Many experts fear that foreign currency reserve may deplete if the country allows businessmen to invest aboard. </div> <div> </div> <div> 4.<span class="Apple-tab-span" style="white-space: pre;"> </span>Distrust on Businessmen: Another crucial problem is trust deficit. The government is not certain that businessmen who invest abroad will sincerely send their profit back to the country. “The country that does not trust its own businessmen cannot make progress. The environment of trust should be built between business community and the government that will facilitate the process of bringing policies related to outbound FDI,” opined CNI vice president Haribhakta Sharma.</div> <div> </div> <div> </div> <div> 5.<span class="Apple-tab-span" style="white-space: pre;"> </span>Competitiveness: According to Global Competitiveness Report released by World Economic Forum, Nepal ranked 117 among 144 economies in 2013-14. In order to succeed in the global business, businessmen should be competitive. But, can Nepali businessmen be competitive when they have not been able to show their competitiveness in domestic front, questioned Dr Chiranjibi Nepal. He suggests that the government should provide competitive business environment.</div> <div> </div> <div> 6.<span class="Apple-tab-span" style="white-space: pre;"> </span>Absence of Entrepreneurial Attitude: Entrepreneurship needs innovative ideas and risk taking skills. Given their low entrepreneurial activities in homeland, many argue that the business community in Nepal still lacks entrepreneurial attitude. Most of the businessmen are involved either in hereditary business or in service sector or trade activities. These traits are not sufficient to compete in global market and most of them do not have entrepreneurial bent of mind, claims an expert. “This fact should be kept in mind while formulating policies.”</div> <div> </div> <div> 7.<span class="Apple-tab-span" style="white-space: pre;"> </span>Poor Performance of Manufacturing Sector: Nepal’s manufacturing sector is in weak state. The country cannot create much employment in absence of manufacturing activities. On the other hand, the country relies heavily on imports to meet daily consumer needs. In such circumstance, opening up outward FDI without improving the performance of country’s manufacturing sector might be suicidal, says a FNCCI member requesting anonymity. </div> <div> </div> <div> 8.<span class="Apple-tab-span" style="white-space: pre;"> </span>Fluctuation in BoP: Generally, businessmen prefer to invest in a strong economy where their capital is safe. If allowed to invest abroad, Nepali businessmen may make majority of their investment in the countries which have strong economy. Currently, remittance has helped maintain Nepal’s Balance of Payment (BoP). If in the future, inflows of remittance drops and at the same time businessmen take capital abroad, there will be severe BoP crisis. This is why the government is still reluctant to introduce outward FDI-related policies, an official at Finance Ministry said.</div> <div> </div> <div> <span style="font-size: 14px;"><strong>Rhetorical Logics and Laxity of the Government </strong></span></div> <div> Some experts vocally criticize the government’s laxity in creating business friendly environment and improve overall macroeconomic scenario. For how long can Nepal restrict businessmen from investing abroad, questioned economist Dr Posh Raj Pandey. The government and experts who do not favour the idea of opening outward FDI often repeat the same rhetorical logic but do nothing to improve the scenario, he said. </div> <div> </div> <div> The government is literally idle in terms of bringing any policy to foster an environment favourable for investment. Presently, the government is not taking any risks as the remittance influx has helped maintain economic stability. But the same situation cannot continue forever, according to him. He said that the government should not always repeat same logic to restrict outward FDI. If our government wants to promote economic prosperity, it should be ready to take risks and formulate smart policies, he suggested.</div> <div> </div> <div> <span style="font-size: 14px;"><strong>FDI and Mobility of Money </strong></span></div> <div> Numerous positive aspects of outward FDI are overshadowed by a few negative ones, said Dr Bimal Koirala, economist and former chief secretary. Outflow of capital also helps create more opportunities to lure inward FDI and Nepali businessmen come back to the home country with more expertise and skills which will ultimately contribute to the domestic economy, according to him.</div> <div> </div> <div> The mobility of money in and out of a country does not stop simply by laws. A state should facilitate in the continuity of the mobility of money because if the movement of money slowsdown it will depreciate the value of currency. Investment, regardless of the frontiers, is a must to increase the movement of the money. Acknowledging the fact, the government should open up avenue for outward FDI, said Dr Chiranjibi Nepal.</div> <div> </div> <div> <span style="font-size: 14px;"><strong>Pragmatic Approach</strong></span></div> <div> Some experts suggest the government to allow Nepalis to invest abroad but only in competitive sectors. According to economist and former finance secretary Rameshore Khanal, the government should identify competitive sectors and should allow businessmen to invest only in those sectors. Some of these sectors, according to him, are:</div> <div> 1.<span class="Apple-tab-span" style="white-space: pre;"> </span>Tourism (eco-tourism, home stay)</div> <div> 2.<span class="Apple-tab-span" style="white-space: pre;"> </span>Adventurous sector (climbing, rafting)</div> <div> 3.<span class="Apple-tab-span" style="white-space: pre;"> </span>Hospitality sectors: Hotel and restaurant (antique hotels like Dwarika)</div> <div> 4.<span class="Apple-tab-span" style="white-space: pre;"> </span>Banking/insurance</div> <div> 5.<span class="Apple-tab-span" style="white-space: pre;"> </span>Construction</div> <div> </div> <div> <span style="font-size: 14px;"><strong>Way Forward</strong></span></div> <div> The government should carry out empirical studies on the effect of outward FDI on domestic economic activities. Before formulating laws, the government should assess some aspects of outward FDI including whether it will have a positive and significant impact on economic growth, and potential adverse impacts on various sectors. </div> <div> </div> <div> On the part of the government, it is not appropriate to remain literally idle on the issue of outbound FDI. The government should not see policies as a screening device to restrict the outflow of capital from the country. Rather it should formulate policies that will facilitate it. The Nepali private sector’s long wait to go around the globe to invest should take a positive turn soon.</div> </div> <p> </p>', 'published' => true, 'created' => '2014-07-30', 'modified' => '2014-09-12', 'keywords' => 'new business age cover story news & articles, cover story news & articles from new business age nepal, cover story headlines from nepal, current and latest cover story news from nepal, economic news from nepal, nepali cover story economic news and events, ongoing cover story news of nepal', 'description' => 'It is not surprising that Nepali businessmen, like many around the world, want to be competitive and set their footprint in the global market. But existing policies are keeping their dreams from being materialized. The government remains skeptic and reluctant to allow outward FDI citing probable impact on the national economy.', 'sortorder' => '2634', '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) 14 => array( 'Article' => array( 'id' => '2782', 'article_category_id' => '48', 'title' => 'The Frog Country', 'sub_title' => '', 'summary' => null, 'content' => '<div> <strong>--By Madan Lamsal</strong></div> <div> </div> <div> If I propose to make frog the national animal of new Nepal, I am sure, you will happily agree and also congratulate me for this brilliant idea. Nepal’s every bit of life has been touched by the benevolent frog and its various qualities. One of our revolutionary finance minister a few year ago declared that Nepal’s economy should now grow not in a reptiles’ dragging but in leap-frogging pace. Leap-frogging indeed is a right simile for Nepal. No Nepali believes in being rich taking a long route walk. Inspired by the frog, everybody wants to leap- frog from penury to instant prosperity. We never get tired of emphasizing that Nepal is an agrarian economy. The plantation season begins with the beacons of twaar-twaar-twaar of the frogs in the banks of the river and main fields. For many, frogs provide for a barbequed lunch or snack at the middle of the hard day’s work in the field.</div> <div> </div> <div> If you think of less relevance of iconic frog in the civilized life, you are wrong. The fortunate ones who have got employment must have fine qualities of a frog -- to jump a queue, to jump enter into influential leader’s living rooms jumping off the high fences and learn to find some excuses to jump across the process of meritocracy.</div> <div> </div> <div> If you happen to meet a frog-mouthed personality in the busy city, you can be sure that he must be a high-ranking official in bureaucracy, bank or NGO. If not, he must be a seasoned politician whose skin is gradually transforming into that of rhino from that of a frog. These are the key people for the very existence and functionality of the country. </div> <div> </div> <div> You might ask, how would you recognize these frog-mouthed ones in crowded cities? It is pretty simple. Bring along a dead frog with you and begin to compare the looks of people with it. Protruding eyes, lumped eyelids as the result of over drinking, large potbellies, twisted legs and habit of jumping the queues anywhere possible, be that temple or service station. The growth rate of the country may be low, but these frog-mouthed talents can make it sound great with their hoarse voice. The bank CEOs can ensure great profits regardless of the fact that only twenty percent people have access to the banking services. (How much profit will they earn if every citizen has a bank account in the country?)</div> <div> </div> <div> If you meet a proper frog-mouthed politician, he must be a youth leader of the party as he is aged just 65 years or so. You can argue that frog mouthed ones are spared by nature from entering into the old age. </div> <div> </div> <div> There are other great qualities of the frog we have emulated. The best among them is to live life free of all worries in any degree of precariousness. You must have seen a frog that is being swallowed by a snake that still wants to catch a spider, not being concerned that it will die in next few seconds. The country has long hours of load-shedding, we Nepalis don’t worry. There is no sign of new constitution being written, we rather worry about American visa. We don’t have enough supply of petrol, but it doesn’t stop us from buying a car. We prefer big LED to mount on our living room wall, without counting hours we actually have power supply.</div> <div> </div> <div> Also, you have heard the fable of Nepali frogs exported to the USA in an open basket and all of them reached intact, not even a single one jumping out from the basket as each of them had learnt the leg-pulling skills from our politicians. It is no wonder, our politicians and decision makers also have learnt many skills from the frogs, as mentioned above. Since, Nepalis and frogs have developed such a cordial bond, only suitable thing is to call Nepal a frog country and declare frog as the national animal.</div>', 'published' => true, 'created' => '2014-06-08', 'modified' => '2014-09-08', 'keywords' => 'new business age no laughing matter news & articles, no laughing matter news & articles from new business age nepal, no laughing matter headlines from nepal, current and latest no laughing matter news from nepal, economic news from nepal, nepali no laughing matter economic news and events, ongoing', 'description' => 'If I propose to make frog the national animal of new Nepal, I am sure, you will happily agree and also congratulate me for this brilliant idea. Nepal’s every bit of life has been touched by the benevolent frog and its various qualities. One of our revolutionary finance minister a few year ago declared that Nepal’s economy should now grow not in a reptiles’ dragging but in leap-frogging pace.', 'sortorder' => '2633', 'image' => null, 'article_date' => '0000-00-00 00:00:00', 'homepage' => false, 'breaking_news' => false, 'main_news' => false, 'in_scroller' => false, 'user_id' => '0' ) ) ) $current_user = null $logged_in = false $xml = falsesimplexml_load_file - [internal], line ?? include - APP/View/Elements/side_bar.ctp, line 133 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::_renderElement() - CORE/Cake/View/View.php, line 1224 View::element() - CORE/Cake/View/View.php, line 418 include - APP/View/Articles/index.ctp, line 157 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::render() - CORE/Cake/View/View.php, line 473 Controller::render() - CORE/Cake/Controller/Controller.php, line 968 Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200 Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167 [main] - APP/webroot/index.php, line 117
| Currency | Unit |
Buy | Sell |
| U.S. Dollar | 1 | 121.23 | 121.83 |
| European Euro | 1 | 131.65 | 132.31 |
| UK Pound Sterling | 1 | 142.47 | 143.18 |
| Swiss Franc | 1 | 124.29 | 124.90 |
| Australian Dollar | 1 | 71.69 | 72.05 |
| Canadian Dollar | 1 | 83.90 | 84.32 |
| Japanese Yen | 10 | 10.94 | 11.00 |
| Chinese Yuan | 1 | 17.17 | 17.26 |
| Saudi Arabian Riyal | 1 | 32.27 | 32.43 |
| UAE Dirham | 1 | 33.01 | 33.17 |
| Malaysian Ringgit | 1 | 27.36 | 27.50 |
| South Korean Won | 100 | 9.77 | 9.82 |
Update: 2020-03-25 | Source: Nepal Rastra Bank (NRB)
| 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
| Petrol | 1 Liter | 106.00 |
| Diesel | 1 Liter | 95.00 |
| Kerosene | 1 Liter | 95.00 |
| LP Gas | 1 Cylinder | 1375.00 |
Update : 2020-03-25
