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			'title' => 'Developers Need To Be Transparent To Win Public Confidence(june 2011)',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 120%; vertical-align: middle;">
	<span style="font-size: 14px;"><b><span style="line-height: 120%;">Ashoke SJB Rana</span></b></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 120%; vertical-align: middle;">
	<span style="font-size: 7pt; line-height: 120%;">President</span></div>
<div style="text-align: justify;">
	<span style="font-size: 7pt; line-height: 115%;">Nepal Bankers’ Association</span></div>
<div style="text-align: justify;">
	The home loan is based on the repayment capacity of the borrower. This depends on the borrower’s income. The borrower’s income should be sufficient to pay the EMI (Equated Monthly Instalment). Under this system, the bank can quickly notice if a borrower defaults on his or her scheduled payment.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>How does the banking community look at the overall prospect of the housing industry?</strong></div>
<div style="text-align: justify;">
	When we interact with Nepal Land and Housing Developer’s Association (NLHDA), they put forth their arguments why the housing developers should be encouraged. Their point is that it promotes infrastructure development that the government has failed to provide such as water, electricity and other facilities that come along with housing standards mentioned in the building code. So, I think this is very positive. It is only the speculative side we need to be wary of.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>How much have the banks invested in this sector?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: 0.1pt;">Our estimate is that the banks have invested in average of 25 percent of their loan portfolio into this sector. However, this is an average only. I think that the NRB has put the cap at the right time to prevent the bubble from bursting. We were afraid that the share of housing industry in the total loan portfolio of the banking system might go higher because of the asset price bubble expanding till last year. If you can get regular income and recover your investments in 15 to 20 years, it’s good to invest in this sector. But when the price of the property and the development cost increases and the return comes around in 50 to 60 years that is not economically viable. The mortgage in the west is done usually for 15 to 20 years. </span></div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>How will the banking sector benefit with the improvement in housing industry?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: 0.1pt;">One of the major aspects of the housing industry is infrastructure development. The NRB has welcomed this because that means value addition but it also wanted to control the speculative part. People were buying property on credit or with loan hoping the price would go up and they would he able to sell it for profit even before paying the entire price. And that was the dangerous part of the entire chain.</span></div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>A lot of housing and apartment units are unsold. In this market situation how confident are you of the banks recovering the loans they have given to this sector?</strong></div>
<div style="text-align: justify;">
	The NRB has recently changed its directive and allowed&nbsp;home loans of up to Rs 6 million to be considered as normal loan. This means people who want to buy a house can borrow up to Rs 6 million from the bank and manage the rest from the equity. High-end apartments cost around Rs 10 to 15 million. So, this loan amount is sufficient. There should not be any problem to recover such loans.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>As an investor, what kind of policy reforms do you think are required to improve this industry?</strong></div>
<div style="text-align: justify;">
	I think a little bit of transparency on the part of developers has to come. Just like the banks disclose about their capital, deposit, liquidity ratio and investment, the real estate developers too need to make certain disclosures to the public. The big fear is that the investors might be putting in money where the developers have not put any. It could be all borrowed. Investors want to know the strength of the developers. I think some kind of transparency and disclosure from developers can give confidence to the banks and the individual buyers.<br />
	<br />
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0.15pt;">Till recently there was a rule which made it compulsory that all payments exceeding Rs. 5 million in a real estate transaction be made through a bank. Recently the Supreme Court declared that such a rule was illegal. What is your comment on it?</span></strong></div>
<div style="text-align: justify;">
	That provision was there because banks felt that dealing in cash is an expensive proposition. We try to encourage use of cheques. It has been now ruled out and it is unfortunate. I don’t think that the real problem was with payment through bank. The problem was with the disclosure of income source. Even if someone comes with cash, they still have to disclose the income source to the Land Revenue office while getting the transaction registered. I don’t think it is a meaningful ruling.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>What are the requirements for granting loans to individual buyers of apartments? What is the current trend?</strong></div>
<div style="text-align: justify;">
	The home loan is based on the repayment capacity of the borrower. This depends on the borrower’s income. The borrower’s income should be sufficient to pay the EMI (Equated Monthly Instalment). Under this system, the bank can quickly notice if a borrower defaults on his or her scheduled payment. It’s not a project loan where there may be an implementation risk that the borrower may not implement the project in time. It’s about buying a home that the developer constructs. The bank has to properly evaluate the developer to minimise the implementation risk. So, I think the housing loan is a very structured product. I think that for the banks, it is an easier loan to recover.<br />
	<br />
	 </div>
<div style="text-align: justify;">
	The risk is only when an institution is exposed high on the speculative side of real estate business. If the exposure is not high, the institution may be stuck with a project or two for sometime, but that will not impact much in the overall health of the bank.</div>
<div style="text-align: justify;">
	<br />
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>What is your suggestion to the real estate developers?</strong></div>
<p style="text-align: justify;">
	<span style="font-size: 11pt; line-height: 115%;">We need to separate the good developers from the others, some of them may not be financially sound. The public should find out who the serious developers are and distinguish them from the inexperienced ones. There are developers who have no engineering knowledge and only believe that it is like a real estate transaction. If there are people who are trained engineers and have business plans like the ones from CE construction, it gives confidence to the entire sector. I think we need to support these people and ignore the others. <br />
	</span></p>
<p style="text-align: justify;">
	 </p>
<p style="text-align: justify;">
	<span style="font-size: 11pt; line-height: 115%;"><br />
	</span></p>',
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			'id' => '372',
			'article_category_id' => '40',
			'title' => 'Real Estate Sector Must Develop Professionally (june 2011)',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-align: justify; text-indent: 0in;">
	<span style="font-size: 14px;"><b><span style="line-height: 120%;">Bhaskar Mani Gyawali</span></b></span></div>
<div style="text-align: justify; text-indent: 0in;">
	<span style="font-size: 11px;"><span style="line-height: 120%;">Executive Director-Banks and Financial Institutions Regulation Department</span></span></div>
<div style="text-align: justify; text-indent: 0in;">
	<span style="font-size: 11px;"><span style="line-height: 120%;">Nepal Rastra Bank</span></span></div>
<div style="text-align: justify;">
	<span style="font-size: 11px;"><br />
	</span></div>
<div style="text-align: justify;">
	The banks should invest in the housing industry because real estate sector too must develop. This is required to ensure the right of the people to live in their own houses. There must be investments in this sector and this sector must develop but all this has to be transparent and healthy.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>What actually does NRB want in the investment of commercial banks in the housing industry?</strong></div>
<div style="text-align: justify;">
	The NRB wants real estate and housing business to develop as a true industry. In this sector currently, a huge amount is invested from the banks, the developers and the general people. Concentration of such a huge amount in a single sector affects other sectors too.&nbsp;The NRB wants this sector to surge professionally. There will be investment as required and the transparency and honesty has to be maintained at the highest degree.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>Is the investment in the housing industry feasible for the banks in Nepal?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: 0.15pt;">The banks should invest in the housing industry because real estate sector too must develop. This is required to ensure the right of the people to live in their own house. But we thought the trend of unnatural price hike driven by the investment for profit from money borrowed from the bank wouldn't be sustainable. Therefore, the NRB has put a limit for bank investment in this sector. However, it does not mean that the banks should not invest in this sector. There must be investments in this sector and this sector must develop but all this has to be transparent and healthy. </span></div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>The NRB recently relaxed the cap it had imposed on bank lending in the real estate sector. Why was the NRB late in realising this sector's potential as an industry?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: 0.15pt;">What was happening in the past was: people were buying land with the help of bank borrowing and selling the same land to others for profit who in turn, were borrowing from the bank to pay for the purchase and selling the same land further for profit. It formed a never-ending chain that resulted in land prices being unnaturally hiked. The NRB is against such practice. We believe the real estate sector should develop in a professional way.&nbsp;Lending for purchasing real estate properties meant for personal use should not be stopped if the buyer of such property has enough income to service the loan obligations.&nbsp;Such real estate lending is to buy land for constructing personal residence, to construct a residential house on&nbsp;the borrower's land and to buy houses or flats in the community housing projects. So, we recently issued a directive to remove loans up to Rs 6 million from the category of the real estate loan. If the banks do not invest in houses and apartments, the people's right to have their own house will be a mere dream. In the long run, old houses will need to be replaced and with the increase in population, more people will need houses. We have not tried to discourage investment into this sector and that is why we relaxed the lending.</span></div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>How can you say that the real estate loan provided to under a new name 'home loan' would not result in similar adverse consequences as in the past?</strong></div>
<div style="text-align: justify;">
	The loans up to Rs 6 million have been removed from the category of real estate loan. This loan is provided by banks depending on the borrower's ability to pay back the instalments. Previously, the real estate loans went mostly for the speculative business of land plotting that created undesired consequences. But the home loan is not speculative and will not create problems.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>&nbsp;The developers complain that the NRB has been hurting their business by introducing adverse policies. What do you have to say about it?</strong></div>
<div style="text-align: justify;">
	Well, considering the demand of the real estate developers, we removed the loans of up to Rs 6 million for the purchase of apartments and houses from the category of 'real estate loan'. But the developers are demanding that this limit has to be lifted further. We believe that Rs 6 million is a huge amount of money and higher than required by an average Nepali to purchase a house. So, it is not possible to lift this limitation any further.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>The Supreme Court recently nullified the earlier rule that required all the real estate transactions exceeding Rs. 5 million in value to be through a bank. What is the view of NRB on it?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: 0.15pt;">The verdict of the Supreme Court is equivalent to law and we respect the decision. Cheques, cash or any other methods are just the instruments of payment. Looking at the international practice of making payments, it is difficult to say that payments through cheques would create problems and cash wouldn't.&nbsp;We recommend that transactions should be made through any other method other than cash. And a cheque is safer, simpler and easier. This is the intention of the banking system around the world and the NRB's wish is no different.<br />
	<br />
	</span></div>
<div style="text-align: justify;">
	<strong>What are the possible measures that the NRB can initiate or facilitate for the smooth growth of the housing industry?</strong></div>
<div style="text-align: justify;">
	We have now brought the home loans of up to Rs 6 million under the category of personal loan. This indicates that the NRB wants this business to develop and move ahead in a healthy way. With the time and demand, there will always be room for necessary amendments.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>What is the current status on loan recovery from the housing industry?</strong></div>
<div style="text-align: justify;">
	The banks have to recover any lending within the stipulated time period. We have received information that the loans are being repaid.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>What is the total investment of the banking industry in this sector? Do you see further investments coming into this sector in the coming years despite its present precarious position?</strong></div>
<p style="text-align: justify;">
	<span style="font-size: 11pt; line-height: 115%;">Currently, the total investment in this sector is Rs 97 billion which is 18.9 per cent of the total investments made by commercial banks. The real estate and housing sector is a growing business and there must be further investments in in this sector also in the future. The past practice of using bank's money to speculate on the real estate should not be there. However, to fulfil the people's need for houses and apartments, there must be further investments pumped into this sector.</span></p>',
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			'title' => 'Urban Infrastructure Development Has Failed To Keep Pace With Urbanisation (june 2011)',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;"><strong><span style="line-height: 120%;"><br />
	Shivahari Sharma</span></strong></span><span style="font-size: 7pt; line-height: 120%;"><br />
	Deputy Director General</span><span style="font-size: 7pt; line-height: 115%;"><br />
	Department of Urban Development and Building Construction<br />
	<br />
	<br />
	</span><strong><span style="font-size: 9.5pt;"><br />
	How safe are the buildings constructed by housing developers in Kathmandu?<br />
	</span></strong><span style="font-size: 8.5pt;"><br />
	The housing companies that want to construct community housing get license only after fulfilling a few procedures. First, the developer should get a planning permit from the Town Development Committee (TDC) based on regulations and by-laws. Next, the developers plan and design buildings and apartments which are later approved by the Department of U</span><span style="font-size: 8.5pt;">rban Development and Building Construction (DUDBC). The approval is subject to fulfilling the requirements of the National Building Code on safety, power supply, fire hazards, other possible disasters and structural design. Following that, the project, if big one, must pass Environmental Impact Assessment (EIA). If it is small one, it must pass the Initial Environmental Examination (IEE). EIA is approved by the Ministry of Environment and IEE from the Ministry of Physical Planning and Works. Then the site map is passed by the concerned municipality or VDC. The housing and apartment complexes have been properly designed and approved. So I don't think they are unsafe. We have our monitoring mechanism in place. But we feel it is not adequate. So, we are in the process of strengthening it. We have planned a third party monitoring system which means outsourcing the job as we have human resource constraint.&nbsp;The pace of urbanisation in the last decade in the capital has been tremendous because of the conflict. However, the growth is largely a haphazard one and urban infrastructure development has failed to keep pace with that of urbanisation. I feel infrastructure development in the city must be able to meet the pressures of migration and rapid urbanisation and such infrastructure development should be carried out by the metropolitan city and local bodies.&nbsp;</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<br />
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 9.5pt;">Could you tell us more about your monitoring mechanism that ensures the housing companies adhere to safety standards? <br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 8.5pt;">We do have our own in-house monitoring mechanism. However, monitoring of the environmental compliance has to be done by the concerned ministry as well. Similarly, adherence to the planning permit is evaluated by the TDC. The size of open space, size and number of units, ground coverage and some others aspects are specified in the planning permit. The monitoring by the division office of DUDBC has not been extensive due to resource scarcity.&nbsp;So, we are instituting a system of third party monitoring next year to evaluate the level of compliance. This will make the process more transparent.&nbsp;We have found cases where constructions have begun even before the approval.&nbsp;However, it has been tightened now and we have taken actions against such practices. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<br />
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 9.5pt;">Do you have plans to limit the number of projects that come to you for approval?<br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 8.5pt;">With the fast pace of urbanisation, there is a huge demand for housing.&nbsp;The competition is still not adequate in community living and group housing. The target buyers of such housing should be the middle and lower income groups. But at present, the housing companies have targeted only the higher income groups. The main reason behind this is the high land price and complex land management system.&nbsp;Unless the land price comes down, this market cannot become competitive. Rather than controlling, this sector needs regulation through set standards. There are flaws that need to be corrected so that this industry will improve. The demand was affected after tightening of the housing loan. Last year’ inflation in the land price also affected a number of housing projects. In 2007-08 and 2008-09, there were a lot of new projects which took license but now we hardly have any takers.&nbsp;At present, the average cost of apartments is around Rs 6.5 to 9 million. However, some companies have recently introduced flats for around Rs 1.7 million. When the price comes down to around Rs 0.8 to 1 million, we can have housing for the masses.<br />
	<br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 8.5pt;">After the recent relaxation by Nepal Rastra Bank in the control in housing loan, we can expect that the number of new projects may increase. Until 26 October 2010, 59 projects were given license and now there are 18 new projects in the process of acquiring licenses. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<br />
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 9.5pt;">It has been observed that the process of issuing licence is rather lengthy and the companies need to visit numerous authorities in this connection. What is being done to simplify it?<br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 8.5pt;">This is also a big issue raised by the private sector. We have discussed about the one-door licensing process in the ministry. The process can be simplified but for now, they must visit four different authorities.&nbsp;EIA and IEE fall under the purview of a separate unit. Planning permit and map approval can be brought under one unit. They are currently under the purview of municipalities and TDC offices. But the existing law has to be amended first for such changes to take place.&nbsp;Developers have also demanded a change in the parameters for EIA and IEE. Their view is that the housing projects facilitate managed urbanisation and do not harm the environment much. We have discussed that too in the ministry and sent a proposal to the Ministry of Environment for consideration on this. It is true that the current procedure is time consuming but if all the requirements are met by the developers, it won't take much time.&nbsp;</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<br />
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 9.5pt;">The geologists say the geology of Kathmandu is not suitable for constructing high rise buildings. Why then has the department given licenses to construct tall apartment buildings?<br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 8.5pt;">Nepal lies in 11th most risky area of the world in terms of earthquake. Kathmandu is located in one of the world's most seismically active zones. But let's not forget that despite frequent earthquakes in Japan, they have so many skyscrapers. Therefore, high rise apartments will not pose a major threat if appropriate design is made, the building code requirements are fulfilled, soil tests and geological studies are conducted properly and quality constructions materials are used. The important thing is that the specific local conditions of the construction area have to be considered while giving planning permit.<br />
	<br />
	<br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 9.5pt;">People are concerned about the safety of the apartment buildings that are approved by the department. What is your evaluation of the safety in these apartment buildings?<br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 8.5pt;">&nbsp;Going by the designs that are presented to us, I don't think people should be wary. The private sector has invested a lot of money in their projects. If something goes wrong with one particular project, it is bound to affect other projects as well. With the kind of massive investment they have put in, they wouldn't want to make it unsafe. With the current speed of urbanisation, there won't be an alternative to high rise apartments in the near future.&nbsp;So, it's imperative that the safety measures are of the highest standard to win the confidence of the general public. We have checked the designs for the apartment buildings and feel that they are safe enough. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<br />
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 9.5pt;">Why isn't there an inter-departmental coordination for developing infrastructure like electricity supply, road, sewage and drinking water?<br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 8.5pt;">Somewhere along the line, the inter-departmental and inter-ministerial coordination is missing. But the scenario has definitely improved now and there is no haphazard digging like in the past. If a maintenance work has to be done, prior approval from the road department must be taken. The problem is that one department does not trust the other's work. And a lack of discussion about the matter hampers the cause further. We also don't have a regulation unit for urban infrastructure in cities. We have proposed a town development corporation which will look at the local bodies and the planning unit in Kathmandu. However, the proposed bill is yet to be passed by the parliament. The proposed bill has proposed the formation of Kathmandu Valley City Development Corporation which will include five municipalities of the valley as well as the VDCs in the suburbs. We believe that if such an authority existed, coordination would definitely be improved.</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<br />
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 9.5pt;">By when do you think the city development mechanism will come through? How long will people have to continue to bear unmanaged and haphazard urbanisation? <br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 8.5pt;">There are plans for Kathmandu but they have not been implemented yet. A clear policy regarding land use is not there. After the formation of the national urban and housing policies, we prepared the draft of the bill and sent it to the relevant ministry. The policies are there but it does not have ownership in the absence of the physical development act. First of all, the land must be managed in order to ensure urban planning. For example, if someone decides to build a house in the middle of a field he would want to take the road, electricity and other infrastructure to the house. If there is a physical development act, it will prohibit the construction of a building in the farmland and deny the basic infrastructure for such land. We have also prepared the draft for an act on real estate business and regulation and sent it to the parliamentary committee. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 8.5pt; line-height: 115%;"><br />
	If that gets passed, the buying and selling of property can generate revenue for the government besides providing security to the buyers. The present haphazard situation is due to the absence of a proper law that would ensure a proper control mechanism. We want that the growing cities should not suffer the same fate as Kathmandu. There should be decentralisation of services and opportunities so that development can be spread throughout the country in a balanced proportion. The government is working towards it and we can certainly hope that there will be positive changes soon. </span></div>',
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			'created' => '2011-08-08',
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			'description' => 'How safe are the buildings constructed by housing developers in Kathmandu?
The housing companies that want to construct community housing get license only after .....',
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			'article_category_id' => '31',
			'title' => 'You Train Animals But You Educate People',
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			'content' => '<div style="text-indent: 0in; text-align: justify;">
	<span style="color: rgb(178, 34, 34);"><span style="font-size: 12px;"><img align="left" alt="" border="3" height="285" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/william.jpg" style="width: 250px; height: 285px;margin:10px;padding:10px;" vspace="2" width="250" /><br />
	William Westgate is the Director of Studies at London College of Management and Leadership. After completing his degree at University of British Columbia in Vancouver, Canada, he moved to London and started on the Midland Bank graduate training programme in 1984. Over the next 20 years, he rose to become Senior Vice President at HSBC Securities and Vice President and Director at Toronto Dominion Bank. He retired from investment banking in 2004 to take up a post lecturing in Business and Economics at Woodhouse College, one of the UK's top performing state colleges. Westgate is a founding partner in the London College of Management and Leadership and brings his knowledge of industry, enthusiasm for teaching and vast resources to the training sessions he delivers. He visited Kathmandu recently for the preliminary preparation of Finance &amp; Management Training scheduled for August this year&nbsp; targeted towards senior and middle level bank employees in Nepal. During his visit, he met the CEOs from major banks and financial institutions as part of his preparation. In an interview with <i>New Business Age</i>, Westgate shared his views on the overall banking industry in the country and the upcoming training programme. Excerpts:</span></span></div>
<div style="text-align: justify;">
	<span style="font-size: 12px;"><br />
	</span></div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0pt;">How do you assess the banking industry in Nepal during this short visit of yours?</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	It's ahead of the curve and banking has to be so. People do say that there are too many banks given the current economic level. When you are talking about a new Nepal, you have to develop the infrastructure, resources, processes, technologies and training people to a level where the economy is going to be. If you don't have the vision, you are left in the dust. Some of the bankers I have met recently do have a vision.</div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-indent: 0in; text-align: justify;">
	Finance and banking is not just another industry. It's integral to economic development, right from micro lending to massive project financing, ATMs, consumer products you name it. You cannot make economic progress without a functioning banking system. The banking system in Nepal has a lot of ground to cover though. There are billions of rupees that need to be brought into the formal banking system. You must also get rid of a practice like hundi because that's not good for the economy. We need transparency as these are big social issues.</div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-indent: 0in; text-align: justify;">
	<strong><span style="font-size: 9.5pt;">What is this Finance &amp; Management Training all about?<br />
	<br />
	</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	Well, I don't pretend that I am going to solve all the issues. Banking is a complex industry. In my experiences as a banker, there are a lot of things to know. But there are certain things that you have to know. So, it's a situation of nice-to-know vis-Ã&nbsp;-vis need-to-know We have designed this course based on what the bankers here really need-to-know. Cost of capital, time value of money, sales and distribution of financial products etc are essential for the people in the banking corporations, irrespective of their positions, to know. So, those are the aspects we hope to bring to our training.</div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0pt;">How did your preparation go towards the training programme?<br />
	<br />
	</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	Prior to coming here, I did a lot of research. But nothing matches meeting face-to-face the people who matter. I would say that it has given me invaluable education and encouragement. The conversations I have had here have given me a lot of good practice as well as ideas. I have met some of the most capable people running the banking industry here, however, they are restrained by current conditions. What we hope to do is bring fresh air new western thinking. But we have to tweak it to suit the Nepali market. Because what works for selling bonds in Wall Street is not going to work for selling a loan in Kathmandu. But the principles always stay the same; there are certain things that never change. We are hoping to adjust and adapt tactics as per local requirements.</div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0pt;">You had a lucrative investment banking career going well for you. What is it that stimulated your transition to lecturing and training?<br />
	<br />
	</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	Yes, I had a fantastic career as a banker. But for me, banking is more than just the money. I reached an age of my life where I didn't wish to remain a banker anymore. I love to explain things to people and making presentations using technology. I am an enthusiastic person and like to engage other people. It was more about aspiration and I wanted to move on to what I really enjoy doing.</div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0pt;">What was the idea behind founding the London College of Management and Leadership? How do you think you have made a difference?<br />
	<br />
	</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	We set ourselves apart because we bring a combination of real practical experiences with academic rigour. All my life, I have collected notes mentally and physically wondering I wish I knew that and why didn't someone tell me that earlier. In our teaching, we focus on what the students need-to-know For example, while doing an MBA, the students don't need to know half the MBA because they will never use it. We make sure that the students pay real attention to what they would be practicing in the course of their work careers. Doing so helps us earn a lot of trust from the students. I admire good training and I hate bad training. Inspirational training is something I have always loved and therefore, bring it into practice.</div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0pt;">How exactly will the training programme benefit Nepal's banking professionals?<br />
	<br />
	</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	<span style="letter-spacing: -0.1pt;">As I have already said, the training will bring in fresh air, thinking and new ideas. People starting their careers in banking now are a lot more fortunate compared to 20 years ago. Today, there is technology available to make training sessions very engaging process. They say that you train animals but you educate people. The programme will follow a holistic approach. Banking has many components and when we put them all together; the participants will better understand their roles, departments, banks, the industry and the economy. It will allow them to have a creative and original thought about banking. It will also help them think out of their respective work briefs and cubicles and expand their horizons. </span></div>',
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			'description' => 'William Westgate is the Director of Studies at London College of Management and Leadership. After completing his degree at University of British Columbia in....',
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			'id' => '356',
			'article_category_id' => '31',
			'title' => 'Communicate The Customer’s Way',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-indent: 0in; text-align: justify;">
	<span style="color: rgb(178, 34, 34);"><span style="font-size: 12px;"><img align="left" alt="" border="3" height="312" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/stephen.jpg" style="width: 255px; height: 312px;margin:10px;padding:10px;" vspace="2" width="255" /><br />
	Stephen Reynolds is the Founder and CEO of Stephen Reynolds Seminars (SRS) International, a leading provider of corporate training in Thailand and Asia. His website describes him as an Expert in Psychology of Sales and Marketing as well as creator and trainer on THE ONE Advanced Sales System and Magic WORDS Communication Systems. A well-known speaker on Leadership, Communication and Sales, Reynolds has trained leaders from over 60 companies in Thailand, Philippines and Malaysia in the past three years. He has over 27 years of experience, which he leverages to make his seminars, training and public speaking engagements bursting with information, guidance and direction that is both practical and relevant. He was in Kathmandu recently, on the invitation of National Banking Training Institute (NBTI), to impart two-day training to Nepali professionals. In an interview with <i>New Business Age</i>, Reynolds shares the tools and techniques that he teaches to make positive changes. Excerpts:</span></span></div>
<div style="text-align: justify;">
	<span style="font-size: 12px;"><br />
	<br />
	</span></div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0.2pt;">How do you assess the participants of this programme?<br />
	<br />
	</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	<span style="letter-spacing: 0.15pt;">The commonality among the trainees of this programme is that most of them had no sales background at all. Except for one participant, this was their first sales seminar. I tell people that what I am teaching is the most powerful sales technique in the world. It's usually helpful for them to go through other sales trainings as well so that they can contrast different trainings. Then they know what I am saying is true. But if they have never been to any other sales training, how can they compare. </span></div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-indent: 0in; text-align: justify;">
	<span style="letter-spacing: 0.15pt;">Having said that, I think the training was incredibly fruitful. The participants were smart, involved and committed. They were hungry for the knowledge. It happens often in corporate training that the participants sent by their bosses are apathetic towards training as they don't want to be there. But it was an exception here in Nepal. The people were charming and needless to say, I was very happy. </span></div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0.2pt;">What's The One psychology of Sales and Marketing all about?</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	<span style="letter-spacing: 0.15pt;">The One I believe, is the most powerful and effective sales technique in the world. Sales is very complicated. There are many sales systems that are based on as many as 500 techniques but this is the only sales system in the world based on one technique. We are trying to take something very complicated and make it much simpler and easier to apply. </span></div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-indent: 0in; text-align: justify;">
	<span style="letter-spacing: 0.15pt;">We start with the relatively new psychology of Neuro-linguistic programming. It is an approach to psychotherapy and organisational change based on a model of interpersonal communication chiefly concerned with the relationship between successful patterns of behaviour and the subjective experiences underlying them and a system of alternative therapy based on this which seeks to educate people in self-awareness and effective communication, and to change their patterns of mental and emotional behaviour </span></div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0.2pt;">How can communication techniques be made more effective for sales?<br />
	<br />
	</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	<span style="letter-spacing: -0.15pt;">There is no point in my inundating trainees with too much information that they can neither remember nor use. It's important to focus on a particular aspect which will make a difference. That is the challenge with sales. I go with the most powerful psychology and go right to the heart-of-the-matter how to sell face-to-face. ˜The One technique helps immensely as it is applicable for leadership, communication, negotiation etc. </span></div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0.2pt;">How do you define advanced psychological linking?<br />
	<br />
	</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	<span style="letter-spacing: -0.15pt;">It is when you take your products and link them together with the values of the person you are talking to. Basically, we are communicating the customer's way according to their values and vocabulary. The One focuses the entire sales process on the highest values of the person you are dealing with. It is a completely customised process. Sales is not just talking, you have to start seeing the psychology behind the word. </span></div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0.2pt;">Are you confident the trainees will be able to effectively apply the technique taught by you?<br />
	<br />
	</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	<span style="letter-spacing: 0.15pt;">Well, I hope so. Or else, my effort will amount to nothing. In two days, I have given them a real foundation. They should be able to walk out and start to communicate better and instantly be able to see an increase in their sales.What they have learnt during the course of the training should also help them improve their communication at their workplaces. They should now be able to communicate better with their bosses,&nbsp; subordinates and customers. Sales is communication and vice versa. </span></div>',
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			'description' => 'Stephen Reynolds is the Founder and CEO of Stephen Reynolds Seminars (SRS) International, a leading provider of corporate training in Thailand and Asia. His....',
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			'id' => '355',
			'article_category_id' => '31',
			'title' => '‘Customer Satisfaction Only Exists Where There Is Oversupply’',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-indent: 0in; text-align: justify;">
	<span style="color: rgb(255, 0, 0);"><span style="font-size: 12px;"><img align="left" alt="" border="3" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/kevin.jpg" style="width: 223px; height: 231px;" vspace="2" />Dr Kevin McCrohan is a Professor of Marketing – School of Management at George Mason University in Virginia, United States. A PhD from City University of New York, his research interests include marketing and efficient functioning of profit and non-profit organisations, competitive intelligence, information security, methods of marketing compliance for fiscal and philanthropic organisations and economic measurement to fill gaps in administrative data sets. Dr McCrohan has been a Senior Fulbright Scholar at the School of Management, Kathmandu University, Nepal as well as at Trinity College in Dublin, Ireland. During his recent visit to Kathmandu, he delivered a talk on ‘Customer Satisfaction in E-Commerce: Issues and Solutions’ and its implications for Nepal as the main theme under ‘SAIM Lecture Series’ initiated by South Asian Institute of Management, Lalitpur. In an interview with <i>New Business Age</i>, Dr McCrohan shared his views on the importance of customer satisfaction in e-commerce from Nepal’s perspective. Excerpts:</span></span></div>
<div style="text-align: justify;">
	<span style="font-size: 12px;"><br />
	</span></div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0pt;">How does customer satisfaction work in an e-commerce scenario?</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	We have a relationship between the firm and the customer in which they trust each other over the course of a transaction. It is of overriding importance that all the participants that deal with that transaction online can be trusted upon, particularly with personal and financial information.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0pt;">What was the focus of the talk programme today?</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	It was to make people aware of the fact that the firms have the best of intention out in the cyber world, while dealing with customers online. Of course, there are scores of mischievous elements who are trying to steal money. In the bargain, it breaks the trust between the consumer and the firm. As a result, the consumers stop dealing with the firm. &nbsp;I was totally fascinated with the programme today. It was delightful and certainly a privilege to be here.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0pt;">It is very hard to monitor customer satisfaction on the web as you don’t physically see the customer. How do you overcome this challenge and ensure they are satisfied?</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	You can contact them after the purchase through e-mail and find out if they are satisfied and if the product is working out for them as promised. You could also do surveys with your online customers by asking questions pertaining to their satisfaction level with respect to your firm and its products. I must point out that when people complain, paying attention to those complaints is critical. Marketing is about word-of-mouth. In today’s age of online blogs, a bad experience is posted and gets conveyed to n-number of people.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-indent: 0in; text-align: justify;">
	You need to benchmark yourself. In the western world like the European countries and the United States, there are customer satisfaction surveys that pop up online highlighting firms and organisations. The response thus generated can be tracked by the firms. For small firms, the best way is to design a questionnaire and occasionally contact the customers and try to determine how they can better serve them.&nbsp;They can appreciate the consumers for their valued feedback and thank them for helping them in their endeavour for ensuring improved customer service.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0pt;">To reduce customer apprehension and assure customers of legitimacy, how important is it to post “Customer Certified Ratings” on the web site?</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	If you can quote an online source, that’s even better. But if you can quote your own survey, that is still good. You can thank them and apprise them of your growth over a period of time. By doing that, you let the customer know you are monitoring customer satisfaction as it is important to you. You also convey a message that you are paying attention to what the customers tell you.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0pt;">Online retail sales still make up only a small portion of overall retail sales in the US but satisfied consumers are expanding their purchases online. How do you view this?</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	It’s neither good nor bad. In late 1990s and early 2000s, a lot of research projected that the growth rate for e-commerce would reach unprecedented heights and everything will be online. But there was a vital element missing from those surveys. In a country like the United States for example, shopping is recreation. A lot of people are what we can refer to as, full-contact shoppers – they love to shop.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-indent: 0in; text-align: justify;">
	There is no way that e-commerce is going to replace the actual experience of going to the store with family and friends, feeling the goods and shop in person. Almost everybody compare the shops online but still end up at the store to buy products first-hand. The real challenge for large e-retailers is to somehow convince more people to actually buy online. I have a statistic that tells me 25-30 per cent of amazon.com’s purchases are left in the cart – people go through the process of selecting goods and are ready to buy but eventually end up not buying.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0pt;">Customer satisfaction is non-existent in any kind of business in the third world countries. Except for the developed countries, do you see any potential whatsoever, for e-commerce in such countries?</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	<span style="letter-spacing: 0.05pt;">Exactly. One of the points I was trying to make during my presentation was that the concept of customer satisfaction does not exist in a country like Nepal. The market is in the United States and European countries. The beautiful carpets and woodworks that Nepali craftsmen make are phenomenal. The only way to reach the customers all around the world is to tell them about these products. In the US, a friend of mine wanted to buy a khukuri for his son. It took him five months in 1999 to contact the firm here. The only way he knew about khukuri was that I gave him one after one of my visits to Nepal. Now, all that can be done online.</span></div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-indent: 0in; text-align: justify;">
	It is not an issue that customer satisfaction does not exist in Nepal. What matters is that it exists where you have to sell. Customer satisfaction only exists where there is oversupply. The tragedy of the world is that people in a lot of countries have so little to spare but those in the United States, Europe and Japan have a lot of money. That’s the kind of consumers you have to reach. If some Nepali product needs to find a presence in the United States, for example, it has to be either word-of-mouth or online. So, a website showcasing local products to a worldwide audience will certainly help.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-indent: 0in; text-align: justify;">
	<span style="letter-spacing: -0.15pt;">People in rich countries are looking to buy something new and different. The products made in Nepal are certainly new, different and beautiful. You need to sell them to the people in these affluent countries. But then, if left unsatisfied, these people will go online and badmouth not just the product but the firm and the country as well. They will also go to the extent of recommending and advising others against dealing with the country they are disappointed with. That’s where the customer satisfaction impacts, not in your country but in the market you are catering to.</span></div>',
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			'keywords' => '',
			'description' => 'Dr Kevin McCrohan is a Professor of Marketing – School of Management at George Mason University in Virginia, United States. A PhD from City University....',
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	(int) 6 => array(
		'Article' => array(
			'id' => '354',
			'article_category_id' => '31',
			'title' => '‘Dealers Grow Confident With Exposure To New And Innovative Products’',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-indent: 0in; text-align: justify;">
	<span style="font-size: 12px;"><img align="left" alt="" border="3" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/boby.jpg" style="width: 220px; height: 255px;" vspace="2" /><span style="color: rgb(178, 34, 34);">Boby Johnson is the Senior Customer Marketing Manager (Export) - Asia Pacific, Philips Consumer Lifestyle. He was in Kathmandu recently for the Asia Pacific Region’s Dealers’ Meet. He also launched Fidelio Docking Speakers for Apple products, 3D Television, LED Televisions, Home Theatre System, Air Fryer, Grooming products, Garment Care and Floor Care products for the Nepali market, during his visit. In an interview with <i>New Business Age</i>, Johnson shared his views on the prospect for Philips products in Nepal. Excerpts:</span></span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>How will this event help enhance the sales and market expansion of Philips products in Nepal?</strong></div>
<div style="text-indent: 0in; text-align: justify;">
	To start with, we have received tremendous print and broadcast media coverage for this event, which I think, is fantastic.&nbsp;This should help us get a lot of brand awareness and generate sales.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Are there any special packages for the dealers to facilitate market penetration?</strong></div>
<div style="text-indent: 0in; text-align: justify;">
	We organise dealers’ meet every year and it energises our dealers. After each conference, the dealers grow confident because they have been exposed to new and innovative products. These meets give them the added belief that they can sell. I am certain that the dealers are very happy with the new introductions that we are going to bring to the market this year. This would rejuvenate them and help them sell even more this year.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>About a month ago, one of your competitors launched similar products. Don’t you think you were a bit late?</strong></div>
<div style="text-indent: 0in; text-align: justify;">
	I don’t think so because this is nothing new. Sometimes, we launch earlier and at others, it’s them who are earlier. It depends mainly on when you are ready for sales. I think what is important is how confident you are on your products. We are very confident with what we have.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>How do you view the market potential of these products in Nepal?</strong></div>
<div style="text-indent: 0in; text-align: justify;">
	Going by the reaction of the people I have met here, Air Fryer is one product that can register good sales in Nepal. Apart from that, 3D TV should do well. We also have very nice audio products like Fidelio range for Apple products which are very popular in Nepal. We are confident about all the products that we have here including kitchen appliances and beauty care products.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>There are similar products of premium brands in the market. How fierce would be the competition?</strong></div>
<div style="text-indent: 0in; text-align: justify;">
	I think the competition is good. Philips has been around for more than 100 years now. To be in existence for such a long period, you must be doing something very good.&nbsp;We are number one in so many categories worldwide, for example, shavers (male grooming), juicers, blenders and garment care. As a company, we are confident about innovation power and what we bring to the market. We do keep an eye on what our competitors do. However, we are also confident about our own innovation and position in the market.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>How are these products doing in the Asia Pacific Market?</strong></div>
<div style="text-indent: 0in; text-align: justify;">
	They are doing pretty well. Air Fryer, which is made in Singapore, is doing extremely well there. In Asia, all our products are doing very well.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What are your plans for the Nepali market?</strong></div>
<div style="text-indent: 0in; text-align: justify;">
	We have a very strong and good distributor in Nepal taking care of all business operations on behalf of Philips. Syakar Company is doing a great job. One of the reasons why we came to Nepal is to show our solidarity to encourage their dealers, distributors and sub distributors. I believe this will really help them grow the business further in Nepal. There are a lot of opportunities for business in this country. We are confident that we can do a good job in Nepal. We hope that besides the business, we establish Philips as a major brand in Nepal and distinguish it from other brands in the market.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What, according to you, are the problems and challenges in this market?</strong></div>
<p style="text-align: justify;">
	<span style="font-size: 12px;"><span style="line-height: 115%;">Wherever there are opportunities, there are challenges.&nbsp;We hope that the stability in the country will be ensured in the future. Besides political challenges which we all know about, I think the main challenge is the prevailing economic situation. The global economy is on the recovery path and we hope that it continues. We must stay positive and grab the opportunities in the market as they come our way.</span><br />
	</span></p>',
			'published' => true,
			'created' => '2011-07-20',
			'modified' => '2012-10-31',
			'keywords' => '',
			'description' => 'Boby Johnson is the Senior Customer Marketing Manager (Export) - Asia Pacific, Philips Consumer Lifestyle. He was in Kathmandu recently for the Asia Pacific....',
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	(int) 7 => array(
		'Article' => array(
			'id' => '350',
			'article_category_id' => '52',
			'title' => 'Hope And Fear Of Merger',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-indent: 0in; text-align: justify;">
	<span style="font-size: 13.5pt;">T</span>he trend of announcing merger plans by the banks and financial institutions (BFIs) has gathered pace in recent weeks. Media reports about the merger processes initiated between Everest and Kumari Banks, NMB and Clean Energy Development Banks, NCC and NB Banks, Bageshwori and Shangrila Development Banks, Kasthamandap Development Bank and Shikhar Finance, and Himchuli Development Bank and Birgunj Finance are testimonies to this fact. Not to mention several failures of Nepal Rastra Bank's (NRB) monetary policy operation of this year, but in the particular regard to mergers, it is gradually tasting success. The Bank not only had announced all possible facilitation to merger through the monetary policy of this fiscal year, it also introduced several packages of rebates, discounts, waivers and facilities to the BFIs opting for mergers. The NRB threat to force merger of the BFIs that particularly have poor corporate governance has seemingly reawakened several BFIs.</div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<span style="font-size: 13.5pt;"><img align="left" alt="from the editor" border="1" height="297" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/img1(1).jpg" style="width: 223px; height: 297px;margin:10px;padding:10px;" vspace="10" width="223" /></span><span style="letter-spacing: 0.2pt;">Apparently, the universal objectives of the merger or acquisition are to consolidate the capital, reduce operational expenses, expand business and maximise the profits. However, in our case, mergers of three distinct natures now seem to be in the offing. First, relatively large institutions are planning to create a larger capital base so they could compete with global players who would potentially begin their operation owing to WTO arrangements. Second type of merger would be compulsive of sort as the NRB has asked the BFIs belonging to the same business house to integrate without any ifs and buts. The third types are those who fear the complete meltdown if they fail to merge sooner than later to consolidate resources, introduce corporate best practices and reduce expenses. </span></div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	Nevertheless, irrespective of the reasons compelling BFIs to merge, it was the momentum of absolute imperative but long due. And every individual process to complete smoothly is another task uphill. Even if the process is unimpeded, it takes relatively long time of two to three years depending on the size of the institutions. Nepal does not have structural backing and institutional culture of transparency to allay fears of lay-offs among staff, sense of insecurity in the depositors and apprehensions losing the investment among the shareholders.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	In view of these several crucial stages, right from the expression of intent of merger, choice of the party, preliminary dialogues, due diligence assessment of the institutions, legal and regulatory processes and above all retaining the customer confidence, a dedicated structure that facilitates and provides expert services is indispensable. This could be set up by NRB, Bankers Association or by both combining the skills, needs and expertise. If the merger tempo evident today is not managed properly, none of them are likely to succeed to create another healthier institution. The fear and mismanagement of the process will acquire the hopes. And mergers will continue to be a mirage.&nbsp;</div>
<div style="text-align: justify;">
	<br />
	<br />
	 </div>',
			'published' => true,
			'created' => '2011-07-18',
			'modified' => '2012-08-28',
			'keywords' => '',
			'description' => 'The trend of announcing merger plans by the banks and financial institutions (BFIs) has gathered pace in recent weeks. Media reports about the merger processes....',
			'sortorder' => '268',
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	(int) 8 => array(
		'Article' => array(
			'id' => '344',
			'article_category_id' => '40',
			'title' => 'Nepal’s Trade Ratcheting Imports',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-indent: 0in; text-align: justify;">
	<span style="color: rgb(178, 34, 34);"><i>By Pinaki Roy</i></span></div>
<div style="text-align: justify;">
	<span style="font-size: 6.5pt; color: rgb(237, 28, 36);">*</span> The Annual Report of the World Trade Organisation (WTO) states that worldwide exports during 2010 registered a growth of 14.5 per cent, the highest since 1950. It also expects this trend to continue to improve in 2011.</div>
<div style="text-align: justify;">
	<span style="font-size: 6.5pt; color: rgb(237, 28, 36);">*</span> Nepal signed the Trade and Investment Framework Agreement (TIFA) with the United States recently which paves way for the promotion of more comprehensive trade agreements between Nepal and the US in the future.</div>
<div style="text-align: justify;">
	<span style="font-size: 6.5pt; line-height: 115%; color: rgb(237, 28, 36);">*</span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The second meeting of Nepal-Tibet Trade Facilitation Committee (NTTFC) – a bilateral talks forum – is being held in Kathmandu from May 8 to 10. The main focus of the talks will be to cut the ballooning trade deficit with China by taking maximum advantage of zero tariff on imports from Nepal offered by China.</div>
<div style="text-align: justify;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">While these developments may sound all good, analysing the state of Nepal’s foreign trade over the last <img align="left" alt="" border="2" height="450" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/cover1.jpg" vspace="1" width="350" />decade or so presents a bleak picture. It’s unfortunate that Nepal has very few products at present that hold any promise of competing in the international market. Add to it the dismal environment of domestic business in the country and the chances of reaping tangible benefits from any agreement in the near future look extremely slim. Nepal’s faltering export scenario has been unable to check an unsustainable trade deficit. The eternal power shortage, fragile law and order situation and transportation woes are among the main impediments to the development of export-oriented sector. These erode the confidence of the private sector. With dwindling confidence of the investors, let alone foreign direct investments, Nepal can’t expect to see domestic investment in the foreseeable future either. In short, Nepal’s economy is in dire straits with grim hope of the growth of export-oriented industries. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin: 11pt 0in 0.0001pt; vertical-align: middle; text-align: justify;">
	<strong><span style="font-size: 11.5pt;">Escalating Trade Balance</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">During the first eight months of the current fiscal year 2010-11, exports have increased to Rs 43.24 billion, an improvement by Rs 2.99 billion over the same period last fiscal year. Meanwhile, imports increased to Rs 252.88 billion, an increase by Rs 4.61 billion over the same period. The trade deficit amounted to Rs 209.64 billion, an increase by Rs 1.61 billion. Imports are expected to continue to increase in more or less the same pattern it is following so far. This indicates that trade deficit is expected to further widen in 2012. Due to some major foreign currencies getting weaker, Nepal’s exchange rate is expected to appreciate which will make exports costlier abroad. Besides, the impact of rising inflation rate in Nepal is likely to make exports more uncompetitive in the next year. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">The agriculture sector in Nepal has remained under-developed, with a very low productivity level. At the same time, the industrial sector suffers from a host of uncertainties. The inefficient structures of these important sectors of the economy have not only reduced the competitiveness of the economy but also resulted in a limited production base. It is far below the consumption needs of the people. As a result, Nepal depends heavily on import trade for meeting its large and varied needs. Despite a marginal increase in exports, the painfully slow growth of imports during the last decade doesn’t augur well for the country. Besides, most imports are confined to non productive and consumable items like vehicles, petroleum products and gold that does not directly contribute to economic activities. Therefore, it is an alarming situation and a challenge for the policy makers.</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin: 11pt 0in 0.0001pt; vertical-align: middle; text-align: justify;">
	<strong><span style="font-size: 11.5pt;">Infrastructural Bottlenecks</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">The export sector is still plagued by the same problems that have adversely affected the entire economy. Supply-side constraints such as intermittent blockades, labour disputes, access to technology and credit, virtual absence of trade facilitation measures, lack of human capital, power outages and road transport among other infrastructural bottlenecks are eroding Nepal’s competitiveness in the international market. These factors also result in preventing diversification of its export basket. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">Large gaps exist in trade efficiency based on indicators such as the cost incurred for the trade and number of days taken to close the deal. Infrastructures like roads, ports, information technology and communications network and other logistics, transit facilities, cross-border connectivity and customs facilities are also in short supply. Nepal is yet to enhance the capacities for trade strategies and negotiations, trade and investment finance and other capabilities related to export. The trade-related institutional, human resource and supply-side limitations constrain Nepal to take advantage from trade by meaningfully participating in multilateral and regional trading systems. Considering the problems, the new initiatives on Aid for Trade (AFT) could help overcome the problems and open up new trade opportunities for Nepal. But again, the said constraints could also impede the country from qualifying for such Aid. Structural reforms and infrastructure investments to reduce transportation and transactions costs are the key to improving the external competitiveness of Nepali products.</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin: 11pt 0in 0.0001pt; vertical-align: middle; text-align: justify;">
	<strong><span style="font-size: 11.5pt;">Limited Export Items</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">Another feature of Nepali export is its limited items of export. As major export items like carpets, garments, pashmina and handicrafts are produced mainly in labour-intensive industries, the impact of trade on employment is considered significant. Vegetable ghee along with the products mentioned above constitute a significant part of Nepal’s total export. This indicates high dependency of export on very few products. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">In the second half of the 1990s, the growth of export was higher than the growth of import reflecting a positive impact of adopting the liberal economic policies. However, this trend did not continue for long and experts attribute this primarily to the impact of the decade long conflict. Though the competitiveness of the export sector had increased in the early days of the liberalisation period, the policies were rendered ineffective during the conflict and the post conflict transition. As a result, the share of import to GDP has been far greater than that of export for the last decade. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">The progress in export has been slow due to a number of national and international events and circumstances. The 10th Plan had emphasised on identifying new exportable products of comparative advantage and improving their quality and export volume. It advocated rectifying the procedural hindrances to product-wise and country-wise diversification of foreign trade. It also looked at enhancing the competitiveness of the trade sector in harmony with the regional and multilateral agreements. The Plan envisaged strengthening institutional capacity of the government, non-government and the private sectors to enhance collection, processing and dissemination of information relating to export promotion. To make foreign trade simpler, more reliable and cost effective reforms were recommended in the areas of laws, regulations, policies, procedures and facilitation. It also recommended that organisational and managerial efforts be strengthened and export promotion prioritised in a coordinated manner. The Plan also talked about mobilising Nepali diplomatic network abroad in promoting foreign direct investment (FDI), export, and the economic interests of the nation so as to accelerate the industrial development and the expansion of export trade. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin: 11pt 0in 0.0001pt; vertical-align: middle; text-align: justify;">
	<strong><span style="font-size: 11.5pt;">Quality Certification</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">Nepal already imports almost seven times more than it exports. The growth prospect of exports and the industrial sector look as gloomy as ever. Most constraints that we face today are non-economic ones. It has been increasingly realised that market access alone does not guarantee flourishing of international trade. Nepal, like any other LDC, lags in trade capacity due to non-availability of sufficient number of exportable products on the one hand and the quantity and quality of available products to meet standards of the importing countries, on the other. Nepal’s trade is faced with constraints on supply side in terms of development of testing and certification facilities, accreditation of laboratories and mutual recognition of test and certification in facilitating trade. The improvement of laboratories and testing facilities in Nepal has, for example, remained an important agenda in Nepal’s trade with India, its largest trading partner. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin: 11pt 0in 0.0001pt; vertical-align: middle; text-align: justify;">
	<strong><span style="font-size: 11.5pt;">Trade Barriers</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">Nepal still pays a very high tariff to access major markets on the one hand and on the other, duty-free and quota-free initiatives have yet to prove fruitful due to hurdles imposed by non-tariff barriers. Non-tariff barriers (NTBs) in the form of regulatory requirements, quota restrictions, administrative procedures and rules of origin (ROO) are of major concern. Due to their technical complexity and non-transparent nature, they are the most difficult barriers to overcome. Standards-related NTBs such as sanitary and phyto-sanitary (SPS) restrictions act as major impediments to Nepal’s exports. Several instances have shown that process of discussions amongst the exporters and importers which results in better information sharing can itself help address more than half of such problems. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">Despite Nepal gaining enhanced market access into the developed countries, it cannot take advantage from it until the government and the private sector join hands to expand and diversify the country’s exports. Trade is governed, to a large extent, by trade regulations and related administrative procedures. More often than not, the entry and exit from the market as well as the volume of trade rely on the transparent and simplicity of trade and administrative procedures. A study reveals that submission of unnecessary documents, administrative hassles at custom offices, additional detention charges and untimely delivery of goods increase the cost of transaction in formal trade. These activities and procedures enormously affect the trade affairs. Ultimately, it discourages the business fraternity in carrying out their businesses freely and fairly. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin: 11pt 0in 0.0001pt; vertical-align: middle; text-align: justify;">
	<strong><span style="font-size: 11.5pt;">WTO Challenges</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">The WTO membership has brought both opportunities and challenges to Nepal. The main challenges before Nepal are to fulfill WTO commitments that need strengthening existing external trade institutions and legal mechanism, removal of supply side constraints to transform available market access into trade opportunities and restructuring of industrial sector to make it more competent and contemporary. In total, the benefits of membership depends on Nepal’s ability to identify and take advantage of trading opportunities, fulfill multilateral trade obligations, formulate and pursue development strategies within those framework and above all, defend its economic, financial and trade needs. Nepal could benefit from World Trade Organisation (WTO) only if it increases internal strength and quality of export items.</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">Nepal finds it difficult to implement some of its WTO commitments. Since the benefits accruing from the implementation of these agreements are much lower than the associated cost of implementation, the resource-strapped Nepali economy cannot take this additional burden. Quite naturally, it is demanding support from its development partners to implement such commitments. The basic objectives of technical assistance for Nepal lies in promoting activities which add value to its production, help export diversification and most crucially to reduce its transport and other infrastructure costs thereby making it easier for businesses to operate. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin: 11pt 0in 0.0001pt; vertical-align: middle; text-align: justify;">
	<strong><span style="font-size: 11.5pt;">Evolving Global Trade</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">The nature of trade is evolving globally. This is reflected in the changing composition of trade, from merchandise to services. This dynamic is largely driven by technological revolutions. While the transport revolution reduced transport costs and facilitated trade in merchandise goods, the information technology revolution has resulted in decreasing communication costs and increasing quality levels, thereby causing trade in services to be the fastest-growing component of global trade. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">In addition to natural advantages, the three services sectors – health, education and high-end retail services hold immense export potential from Nepal’s perspective. Nepal has comparative advantages for the export of these sectors which are generally found to be cost effective. The attraction of these services is also due, in part, to a high level of market integration with northern India, if it can take advantage of the open border in the south. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">In spite of liberalising the economy and changing trade and investment related laws, Nepal hasn’t been able to derive expected benefits. Trade is a technical subject. The deficiencies in knowledge concerning markets, access to distribution networks and use of the ICT, complicated regulatory procedures of shipments, weak transportation infrastructure and services and insufficient trade financing are major constraining factors. Addressing these problems would involve financial resources, time, efforts, proper management, and technical expertise. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin: 11pt 0in 0.0001pt; vertical-align: middle; text-align: justify;">
	<strong><span style="font-size: 11.5pt;">Aid For Trade</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">The new initiative of the Aid for Trade could be a prime source of funding to enhance competitiveness. However, there is a gap between commitment and disbursement of AFT. Pledges are made through international forums for aid for trade initiatives but the pace of implementation and the disbursement rate is very slow.&nbsp;</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">Developed countries and development partners coming forward to support product development programmes, development of trade infrastructure like inland clearance depots, container freight stations, special economic zones, roads and other forms of transportation in order to enhance Nepal’s trade capacity is of prime importance. Other possible areas of cooperation include enhancing the quality of infrastructure for test and certification of products, capacity building for trade negotiations and institutional development. All these require adequate technical as well as financial assistance. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin: 11pt 0in 0.0001pt; vertical-align: middle; text-align: justify;">
	<strong><span style="font-size: 11.5pt;">Prosperous Neighbours</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">The multilateral trading system has contributed significantly to the growth in exports that has been aptly exploited by countries like China and India. With respect to the markets created by these neighbouring countries, the disadvantage of Nepal as a land-locked country is significantly reduced because these two are after all, proximate markets. The economies of both the neighbouring countries are increasing enormously and Nepal can benefit or should be able to do so because of this. Despite increased industrialisation and trade activities in China and India, Nepal has failed to benefit from their economic growth.</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">Nepal’s internal problems such as poor trade policy and implementation, lack of business-friendly labour laws and other rules and regulations, political instability, frequently changing trade and industrial policies, social unrest and chaos, frequent strikes, lockouts and load-shedding are also equally responsible for poor export. The reasons behind the fall in export can also be attributed to erosion of preferences for Nepali goods due to the decreased MFN (Most Favoured Nation) tariff in India. The Government of India has signed several free trade agreements with various countries. It has committed to lower customs duty as a non-LDC member of SAFTA and BIMSTEC free trade area and also announced the Duty Free Tariff Preferences (DFTP) scheme as part of commitments made in the Hong Kong ministerial meeting of WTO. The irony of Nepal’s trade is eminent in respect of decreasing tariff in Nepal. It is obvious that Nepal will continue losing export volume and find itself in a precarious situation in the absence of concrete measures to check and reverse the process of decreasing export. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">Nepal’s export to India is increasing at a snail’s pace. The growth rate of export is highly fluctuating. At the same time, import from India is far stable. It implies that import from India is in a better position than export. As the gap between export and import increases, trade deficit soars. The trade deficit with India was Rs 66.4 billion in FY 2005-06 but it has rocketed to Rs 174.4 billion in FY 2009-10. It is alarmingly high for Nepali economy. The major reason for the unfavourable balance of trade on Nepal’s part can be blamed on not finding proper markets for manufactured goods in Nepal, in India. The prominent factors include the inability to compete in the Indian market on the grounds of quality, price, supply capability etc. From a trading point of view, it could be quantitative restrictions and product disqualifications. It is understandable that unless a sizable export of manufactured products fail to find market, the trade balance proportion cannot be reduced. Therefore, finding a proper segment in the Indian market for Nepali products is critical.&nbsp;</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin: 11pt 0in 0.0001pt; vertical-align: middle; text-align: justify;">
	<strong><span style="font-size: 11.5pt;">Service Sector Emphasis</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">The Government of Nepal launched Nepal Trade Integration Strategy (NTIS)-2010 last year which seeks to identify and develop key essential products and services to build its export base in a sustainable way. A total of 19 items were selected for driving export promotion. The 12 products and seven services were identified after careful scrutiny of potentiality for development along the value chains and their linkages with poverty alleviation. These products possess immense potentialities of backward linkages within the country. To sustain trade in the future, contributing to overall economic development by making trade more inclusive, increasing employment and government revenue is important. The seven services identified are namely Tourism, Labour Services, IT and BPO Services, Health, Education, Engineering and Hydro Electricity. It has been unanimously felt that Nepal has the potential to perform better in these service sectors provided there is an encouraging working environment. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin: 11pt 0in 0.0001pt; vertical-align: middle; text-align: justify;">
	<strong><span style="font-size: 11.5pt;">Trade Facilitation</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">Trade treaty is only a means and not an end in itself towards enhancing greater market access. The growth of trade basically depends upon the conditions that are created within the national boundary in respect to measures related to investment promotion and improvement in governance. Speedy trade facilitation is the key to success. Trade facilitation at its core aims at developing competitive advantage. Work on trade facilitation like simplification of customs procedures, criteria for procedures of transit and standards verification and transforming policies and rules in accordance with those of its major trading partners India and China, are of immense importance. Improving productivity and strengthening supply capacity remain the basic consideration guiding the development of the commercial sector of the country. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin: 11pt 0in 0.0001pt; vertical-align: middle; text-align: justify;">
	<strong><span style="font-size: 11.5pt;">Internal Preparations</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">Nepal is a country with major potential that needs to be realised and enhanced through various policies and related initiatives. At the same time, it has to address a number of difficulties linked to its logistical, financial and stability related concerns. The multilateral trading system can contribute towards Nepal’s potential gain in many ways. Trade-related aspirations to diversify trade and production bases into dynamic new products and services, integrating trade and trade capacity building policies into national development strategies, maximising benefits through development of effective labour market standards and institutions and striving for an ambitious, comprehensive, balanced, equitable and development-oriented outcome, are vital. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="text-align: justify;">
	<span style="font-size: 9.5pt; line-height: 115%;">To realise the benefits of the trade agenda, having hassle free market access through reduction of tariff and non tariff barriers, facilitation measures through increased connectivity, customs harmonisation, simplification of trade rules and procedures and efficient trade logistics and the enhancement of supply side capacity, are crucial. With the help of all the benefits – present and potential – Nepal will be in a better position to address the supply-side constraints, achieve better market access and help raise its domestic growth with greater equity. This assures help to increase above 4 per cent growth rate which Nepal has been stuck with, for some time. To increase export, there must be an increment in investment for production, both domestic and foreign, that can positively affect the investment and thereby exports. </span></div>',
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			'description' => 'The Annual Report of the World Trade Organisation (WTO) states that worldwide exports during 2010 registered a growth of 14.5 per cent, the highest since 1950. It also expects this trend to continue to improve in 2011.',
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			'id' => '343',
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			'title' => '‘We Are Mainstreaming Trade Into National Development Programme’',
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			'summary' => null,
			'content' => '<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 120%; vertical-align: middle;">
	<span style="color: rgb(178, 34, 34);"><b><span style="font-size: 8pt; line-height: 120%;"><img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/purushottam ojha.jpg" style="width: 182px; height: 185px;" vspace="1" />Purushottam Ojha</span></b></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 120%; vertical-align: middle;">
	<span style="color: rgb(178, 34, 34);"><span style="font-size: 7pt; line-height: 120%;">Secretary</span></span></div>
<div style="text-align: justify;">
	<span style="color: rgb(178, 34, 34);"><span style="font-size: 7pt; line-height: 115%;">Ministry of Commerce and Supplies</span></span></div>
<div style="text-align: justify;">
	<span style="color: rgb(178, 34, 34);">Production and development of the right product at the right time and capacity to supply it to the destination market in an efficient manner are crucial to enhance supply side capacity. Therefore, identification, selection and development of products in which Nepal has comparative and competitive advantage is the major issue in the development of Nepal’s trade.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>A total of 19 goods and services are identified as priority items for trade by NTIS (Nepal Trade Integration Strategy). How sustainable are these 19 products?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Yes&nbsp;12 goods and seven services are identified. They have been identified after careful scrutiny of their potential for development along the value chain and their linkages with poverty alleviation. These products possess immense potentialities of backward linkages within the country. These are products and services in which Nepal has comparative and competitive advantages. To sustain trade in the future, contributing to overall economic development by making trade more inclusive, it is important to increase employment and government revenue. Identification and selection alone cannot meet our objectives. We have to create necessary environment in the country to develop these products in a manner that will ensure sustainable trade in the future. Most of these products are related to agriculture. It is important to enhance the productivity, productive capacity and product quality in them. For this, we have to go on adopting good agricultural practices, integrated pest management and quality control mechanism. At the same time, we need to focus on improving the quality of infrastructure, for example in tests and certifications to ensure acceptance of the products in the international market.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>It is said that improved supply-side performance is the key to achieving sustained economic growth. What is hindering the improvement in supply side capacity?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Over the years, we have been enjoying increased market access in various destinations as tariff barriers are being lowered. However, there are certain non-tariff barriers that are hindering the export from the least developed countries (LDC) like Nepal. We have to address these issues as well. Production and development of the right product at the right time and capacity to supply it to the destination market in an efficient manner are crucial to enhance supply side capacity. Therefore, identification, selection and development of products in which Nepal has comparative and competitive advantage is the major issue in the development of Nepal’s trade. The causes for the hindrance in improving&nbsp;the supply side capacity include lack of adequate infrastructure - particularly transport infrastructure, energy supply, rising problems of labour unrest and law and order situation.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>How can we overcome these supply side constraints?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.1pt;">There are certain barriers for increasing our trade capacity as I mentioned earlier. We need to address these important issues to attract more investment and improve investment climate that will eventually help overcome supply side constraints. It is essential to bring more investment in the production as well as service sector. But it largely depends on political stability, law and order situation, industrial relations and adequacy of infrastructures. These need to be addressed in a coherent manner. We also need to increase our collaboration with development partners to get more support in the areas of economic cooperation and trade development. Enhancement of market access is crucial from the perspective of LDCs like Nepal since non-tariff barriers are being raised by importing countries in the name of plant and animal health, food safety, environmental concern and labour rights. Nepal is raising the voice against such barriers in bilateral, regional and multilateral forums.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Why hasn’t Nepal been able to benefit from trade despite having huge markets in the north and the south?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">It is true that the economies of both our neighbouring countries are increasing by leaps and bounds. The GDP growth rate of China is almost in the double digits and India’s GDP is increasing by eight per cent annually. Statistics show that trade between India and China is also increasing and has reached US$ 60 billion. They are aiming at increasing it to US$ 100 billion in the next five years. Despite such increased industrialisation and trade activities in neighbouring countries, we have failed to benefit from this. We need to adopt appropriate policies within the country to link our trade and economic relations to get the spill-over benefit from our neighbouring countries. We also have functioning trade agreements with both these countries but we have not been able to harness the potential benefit of exporting our goods and services. There are certain inherent problems associated with it. There are several non-tariff barriers to our exports in India and China. We need to enhance our efforts to remove these barriers. We have entered into an agreement with the Government of PR China in April 2010 to provide duty free access to 4,721 products in six digits customs tariff line. However, our industries and exporters have not been able to fully utilise this opportunity. We have initiated the process for assessing the situation and the reasons behind non utilisation of market access opportunities. This would require a constructive dialogue and deliberation between the government and businesses on both sides. Besides, we need increased engagement with our neighbouring partners in the area of economic cooperation for enhancing productive capacity in sectors like agriculture, manufacturing, export trade and infrastructure.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Why hasn’t Nepali economy benefited from trade?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">It is not true that Nepali economy is not benefiting from trade. But the question is about the level of benefit that we are harnessing.&nbsp;For this, we have to follow the path to sustainable and inclusive trade development. Trade is the output of total economic activities of the country. Trade cannot operate in isolation. Until and unless we develop our agriculture, forest, manufacturing and the service areas, trade cannot happen. All sectors of the economy should move towards the same direction and work in harmony so that there will be value addition in the export. Such a situation will help create employment, increase revenue to the government and bring more foreign currency. It will ultimately lead to the improvement in the macroeconomic situation of the country.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Why do you think Nepal has not been able to capitalise on WTO membership?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">The WTO membership has brought both opportunities and challenges to Nepal. Opportunities - because we have market access to all member countries and we can engage in constructive dialogue in the international trade forum through WTO. At the WTO, we can raise our voice together with likeminded countries to get more support from developed countries to remove market entry barriers and enhance our trade capacities. Besides, there are challenges. Ever since the liberalisation of tariff under multilateral trading system, our products have to compete with products from other countries particularly in big markets like the EU, the US and even in India. Since the tariff rate is going down, other competing countries are finding it easier to enter into these markets. This has proved to be a major challenge to maintain our market share in these markets. We have lost the export of some products like carpet, garments and pashmina in the international market and vegetable fats in Indian market during the last decade due to this reason.&nbsp;Accession to multilateral trading system and regional trade arrangement is not the panacea to remove the problems of trade. Rather, we need to develop our capacity to face increased competition on one side and utilise the opportunities available under regional and multilateral trading system on the other.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Nepal currently has a huge trade deficit. How can this be lowered?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">It is true that we are facing a huge trade deficit. During the last couple of years, exports have not increased and imports are galloping. In the last fiscal year, we had the record trade gap of around Rs 315 billion. Most imports are consumption items like petroleum, cars and gold. The gold does not directly contribute to enhance the economic activities. So, it is an alarming situation and a challenge for the policy makers. In the midst of such a precarious situation, the Government of Nepal has launched Nepal Trade Integration Strategy (NTIS)-2010 which seeks to identify and develop some key essential products and services to build our export base in a sustainable way. We must correct the deficiency which is hampering the growth of economy and the investment climate. We have to improve law and order situation, industrial relations and management of government-owned industries. We also need to develop adequate infrastructure and improve the regulatory regime so as to help in building confidence among investors. Similarly, streamlining of the transit procedure, incentives for industries like tax rebate, monetary and non-monetary incentives and improving governance systems are among the suggested reforms. Until and unless we improve our investment climate, it will be difficult to motivate and convince potential investors to invest in the industries or in any other sectors. Unless we have investment, we can improve neither international trade nor the supply situation within the country.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>The relatively stronger trade sector of the past has diminished gradually over the last decade. What can be done to revitalise trading sector again?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">During 1990s, we saw the growth of industries and trade in terms of export to India and other countries. But the industries we were nurturing during this period were not found sustainable. Carpet, garment and pashmina are no longer our niche products as many countries export similar goods. We were unable to improve the capacities of our industries in terms of economies of scale, quality and design of the products. The enhancement of productive capacities would require several steps as behind-the-border measures. One case in point is the development of Special Economic Zones (SEZ) for relocation of industries by providing one-stop services to industries in such zones combined with flexibility in labour regulations and tax rebates.&nbsp;The project for establishing special economic zones in the country was started some 12 years back but it is still in an indeterminate state as the development of physical infrastructure and creation of necessary legislation for regulating the zone is stagnant. Similarly, there is need to revisit laws related to the regulation of trade and investment regime, particularly the Industrial Enterprises Act and Foreign Investment and Technology Transfer Act (FITTA)-1992. The revival of Nepali trade will largely depend upon right choices of products and services in order to become sustainable. Efforts are to be made for maximising domestic value addition optimising the utilisation of human capital as well as other factors of production including land and natural resources which will culminate into healthy growth of economy. The growth of trade during 1990s was largely based on tariff arbitrage. When that arbitrage opportunity diminished, many such industries could not sustain. The Government of Nepal is now realigning trade through the manifestation made in NTIS-2010, Trade Policy-2009 and the current Three-Years Interim Plan (TYIP).&nbsp;Now, the challenge is to implement them in true spirit. </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>There are special privileges like zero tariffs &nbsp;for LDCs. How can we benefit from that?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Nepal enjoys zero tariffs in many countries that belong to the Organisation for Economic Cooperation and Development (OECD). The European Union provides duty free access to the products from LDCs under the Everything but Arms (EBA) initiative. Countries like USA, Canada and Japan provide Generalised System of Preferences (GSP) facilities to many products from countries like Nepal.&nbsp;Besides, Nepali products also enjoy zero tariff facilities in Indian and Chinese markets. Therefore, it is not the problem of market as such. Nepal, together with other least developed countries around the world, is pleading duty-free quota-free (DFQF) market access in developed and developing countries right from Geneva to Washington DC.&nbsp;The most important aspect is to increase our supply side capacity and competitiveness. Since zero tariff is available to all LDCs, only those can export to these markets who are more competitive. This would require revisiting the trade and export policy with a focus on choices of right products, improvement in quality and diversification of design and reduction in the cost along the value chain.&nbsp;Being a landlocked country, the transit transport cost is generally higher. Simplification of transit procedures and reduction of cost of transit is vital for Nepali trade.&nbsp;</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>A new concept ‘Aid for Trade’ has been gaining currency. What kind of reforms should Nepal make to get optimum benefit from it?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.05pt;">Aid for Trade is a new concept that emerged during the last decade. There is consensus and commitment among developed countries to support LDCs for trade development. There is a notion that LDCs need trade and not aid and this view is often expressed in various international forums. Developed countries and development partners should come forward to support product development programmes, development of trade infrastructure like inland clearance depot, container freight station, special economic zones, roads and other forms of transportation in order to enhance the trade capacity of the LDCs. Other possible areas of cooperation include enhancing the quality of infrastructure for test and certification of products, capacity building for trade negotiations and institutional development. All these require adequate technical as well as financial assistance. Pledges are made through international forums for aid for trade initiatives. However, the pace of implementation and the rate of disbursement are very slow.&nbsp;Some donors have played a tricky game just by renaming the regular official development assistance (ODA) as the aid for trade allocations which is not the spirit of these initiatives.&nbsp;Aid for trade is another stream of foreign assistance besides the regular allocation of ODA. In Nepal, we are considering creating a Fund for trade development in consultation with various development partners. An inter-ministerial task force is working on devising necessary regulatory framework for the administration of the Fund.&nbsp;&nbsp; </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.05pt;">The Government of Nepal has already taken steps for mainstreaming trade into national development agenda. Trade cannot be looked in isolation and is not a concern for the ministry of trade only. There are several entities and ministries associated with it. We have to bring them together to promote trade in goods and services. We are also aiming at getting adequate support from development partners to complement the national effort. If some products and services are important from trade perspective, they should get immediate attention for development and promotion. Support must go to the grassroots level, i.e. the enterprise level and the farm level so that benefits from export trickle down to the producers and growers. The assistance under aid for trade initiatives encompasses various sectors that contribute to trade development and thus various ministries and private sector entities have a role to play. The Ministry of Commerce and Supplies will work as the national focal point and coordinator for creating synergies of this effort. </span></div>',
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		'Article' => array(
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			'article_category_id' => '40',
			'title' => '‘Dealing With Supply Side Constraints Will Help Our Export Prospects’',
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			'summary' => null,
			'content' => '<div style="text-align: justify; text-indent: 0in;">
	<span style="color: rgb(178, 34, 34);"><b><span style="font-size: 8pt; line-height: 120%;"><img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/vidya nath nepal.jpg" style="width: 189px; height: 213px;" vspace="1" />Vidya Nath Nepal</span></b></span></div>
<div style="text-align: justify; text-indent: 0in;">
	<span style="color: rgb(178, 34, 34);"><span style="font-size: 7pt; line-height: 120%;">President </span></span></div>
<div style="text-align: justify; text-indent: 0in;">
	<span style="color: rgb(178, 34, 34);"><span style="font-size: 7pt; line-height: 120%;">Centre for Public Policy Dialogue and Former Special Secretary of Commerce</span></span></div>
<div style="text-align: justify;">
	<span style="color: rgb(178, 34, 34);">An NRB source says that in the first five months of FY 2009-10, export of goods has declined by 16.8 per cent while import of goods has increased by 30.4 per cent. This has created huge trade deficit of 48.6 per cent. Volume of trade deficit with India is higher than with the rest &nbsp;of the world.</span></div>
<div style="text-align: justify;">
	<span style="color: rgb(178, 34, 34);"><br />
	</span></div>
<div style="text-align: justify;">
	<strong>How do you evaluate the current trade situation of Nepal?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">I have been observing the economy and policies for the last four decades. But the trade deficit was never this bad. Today, the deficit is in billions of rupees which is a painful situation. The import growth has spiralled while the exports have dwindled. Nepal’s value of exports for the year 2001-02 was more than Rs 45,000 million which reduced to only about Rs 41,000 million in 2007-08. On the other hand, imports in the same period increased from about Rs 103,000 million to Rs 154,000 million. Export to India remained almost stable while export to other countries decreased sharply. During this period, about 63 per cent of Nepal’s total exports went to India while about 59 per cent of its total imports were from India. Thus, Nepal’s total trade with India was about 60 per cent. The increased import has been largely for consumption materials rather than for raw material or industrial inputs. For example, gold and many other goods are imported into Nepal considering the Indian fiscal policy. Our liberal trade policy does not allow controlling imports. According to our law, we cannot prohibit any business, we can only restrict only a few items. Nepal is the most liberal country in entire South Asia in terms of its trade policy. We don’t have any import restriction and quantitative restriction. We have very small negative list for imports.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>How do you compare the current situation with the past?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Current trade situation has grown very weak when compared to the past. Increasing trade deficit is evident. An NRB source says that in the first five months of FY 2009-10, export of goods has declined by 16.8 per cent while import of goods has increased by 30.4 per cent. This has created huge trade deficit of 48.6 per cent. Volume of trade deficit with India is higher than with the rest of the world. There is very little attention towards production of exportable goods. There is no favourable environment for that. Therefore the trade situation has worsened now. In 1996, a trade treaty was signed with India. In that treaty there were very little restrictions on export to India, the negative list was shorter and the rule of origin was not so strict. The treaty renewal in 2002 retracted such liberal provisions. The rule of origin was made tougher. Similarly, India exerted quantitative restrictions on some products. That disrupted our export. The political turmoil after 2002 and the resultant current transitional phase has led to poor trade situation compared to that of the past. </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What are the main reasons for poor development of Nepali trade?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Trade has to be looked on the basis of import and export. The import is continuously increasing but that is not a reason to rejoice. To increase export, there must be an increment in investment for production. Investment can be both domestic and foreign. Forget about the foreign investment, even the domestic investors are not encouraged to invest. The main reason is the volatile and unstable political situation. Because of this, there are no new investment and production of exportable items. Apart from that, there are issues of labour, peace and security, industrial security and unstable policies that have put investors at bay. A policy must last for at least five to 10 years to attract investment. But in Nepal that is not the case. Government is changing frequently, and every change of government brings change in the policy too. Since last year, also the interest rate has sky rocketed due to liquidity crunch in the financial institutions. That has also affected the investment and thereby exports.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Nepal faces non-tariff barriers with its trading partners. How can such barriers be removed?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">We are the member of WTO, SAFTA and BIMSTEC along with our trade partners like China and India. WTO’s policy states that the non-tariff barriers must not be exerted unless it is justified. There should be certain tariff barriers but very little. The trade must be gradually made free by removing the restrictions. The facility given to one country must be provided to other country too. In spite of this, agriculture based products’ export to India face a lot of non-tariff barriers. For example, when some agro-products have to be exported to India from either Sunauli or Birgunj, quarantine tests have to be carried out at a far away laboratory. That adds huge cost for exports. One of the main problems with export trade of Nepal is transit cost which is usually prohibitive. The transport cost from here to Kolkata, the main port for Nepal, is to the tune of 14 to 40 per cent of the cost of material. With such high cost how can we compete in the international market? Documentation barriers are also severe as the documentation process takes months and that further hinders the export. Internally too, we have constraints in trade facilitation. In Indian ports too, there are numerous problems like unavailability of ships and lengthy procedures. Such non-tariff barriers added to the tariff barriers are hindering our export. Though India has provided customs free export from Nepal to India in certain goods it levies special duties on them. Sometimes, state governments in India levy additional duties according to their local rule. A complaint on such case gets lost in the Indian bureaucracy and as a result, Nepal’s exporters face harassment.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Nepal also has severe supply side constraints. How can they be removed?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">It is true. Though various bilateral, regional trade agreements like SAFTA and multilateral trade arrangements like WTO have been providing us access to different markets through manner similar to reduced customs duties, we are not able to benefit form that. Under SAFTA, hundreds of items can enjoy concessional entry into other countries. WTO has the philosophy of liberalisation of trade by reducing tariffs. Compared to the last decade, the customs duties have declined even for entry into India. The trade access we got through bilateral, regional and multilateral agreements have not been fully utilised due to supply side constraints. What can we export when we can’t produce goods here? There is no investment environment and the cost of production is high while labour productivity is very low. There are problems with lengthy documentation, labour issues, peace and security and increased interest rate. If we do not have any supply side constraints, our export would definitely increase. </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Industrial and trade policies are not translated into acts and regulations. Even if they are enacted, they are overlapping and contradictory. Labour issues are never settled. Quality of infrastructure like transport, power supply etc is very poor. The ADB report of 2009 says the syndicate system of trucks is common in the country and the transport cost has increased as high as 55 per cent. Research and development aspect has been largely neglected. Technologies are outdated and innovation is non-existent. Institutions in particular are weak and ineffective. Private sector is not properly promoted by the government. Unless we can correct ourselves on these counts, supply side constraints will prevail. </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Nepal enjoys numerous facilities under WTO regime as well as being an LDC. How can we utilise such advantages?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">WTO believes in MFN (Most Favoured Nation) treatment. There should not be any discrimination under this system for any country. There was a Ministerial meeting held in Doha where it was decided that WTO would provide various technical assistance to strengthen the supply side of the LDCs to increase their export potential. Little has been done on that front and that is insufficient. WTO’s provision of differential treatment to the LDCs has not been effectively implemented. Facilities like ‘Aid for Trade’ are just for name. We have not received any sufficient amount on this account. There is a need for strong and effective negotiation from LDCs as a group which is lacking so far.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Our government through our embassies abroad should strengthen economic diplomacy to promote trade to respective nations by identifying suitable products. We have failed to do so. There are a few products that we can export to India. For example, Nepal can take huge benefit if producers concentrate on exporting vegetable ghee, cardamom, GI pipe and noodles to India. Tea and ginger are exported to India but it re-exports them. From our side, it is better to export our products directly to the final destination. Nepal should identify the negative net trade of a particular country and work on exporting such goods to those countries. We have failed to move ahead in this direction. </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Investors are reluctant to increase investment citing unfavourable investment environment. How can trade be enhanced amid such problems?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">The main reason behind investments remaining stagnant is political instability, frequent changes in policy, labour issues and security problems. Foreign investors seek easy exit if they do not see profits. There is difficulty in such exits and liquidation procedure takes years. Foreign investors can’t wait that long. Nepali raw material based industries would be sustainable in terms of export trade. However, that concept is not necessary to apply in international trade in the course of industrialisation. Hong Kong and Singapore are examples of countries that do not have their own big manufacturing units, but have benefited by exporting assembled products. However, if we can export goods by processing our own raw materials, we would have more comparative advantage and we would not have to spend foreign currency in importing raw materials. A study shows that Nepal’s products that have highest potential of export in the long run are tourism and hydropower. However, remittance is the biggest source of foreign exchange earnings currently. At the moment, around 80 per cent of foreign exchange earnings is through remittance. Tourism ranks second. Hydropower projects are capital intensive. Nepali capital is hardly enough to run even one Tamakoshi project. </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">The government should be proactive in providing all facilities mentioned in industrial and trade policies to increase production and promoting exports. However, private sector should also run businesses on the basis of corporate culture with new technology and increase their competitiveness. On an average, it takes about 31 days to clear seven procedures to do business in Nepal. This process time is the longest among the SAARC countries. Similarly, it requires 41 days to export products out of Nepal. Thus, the businessmen are suffering from over regulations, corruption, dishonesty, lack of transparency and political interference. According to WEF report of 2010, Nepal ranks the lowest among all SAARC countries in quality institutions. Therefore, the expectation is that the private sector will increase production and export in spite of the weak government. They have the initiative and the mission while the government is indifferent as well as inefficient.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>A total of 19 goods and services are selected by the NTIS as priority products. How realistic is this selection?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.05pt;">They have selected 19 goods and services following a lot of studies. Among them, seven are from the service sector like IT, health, education and tourism among others. I feel we can do better in these service sectors and have the potential if there is good working environment. There are agro based products too but I don’t think they are sufficient. Since our production depends on imported technology, we must select products that generate high profit in low volume items. If we can focus in the coming decades on these 19 products by creating favourable environment for investment that would certainly benefit our trade prospects. </span></div>',
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			'description' => 'An NRB source says that in the first five months of FY 2009-10, export of goods has declined by 16.8 per cent while import of goods has increased by 30.4 per cent. This has created huge trade deficit of 48.6 per cent. Volume of trade deficit with India is higher than with the rest  of the world.',
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			'id' => '341',
			'article_category_id' => '40',
			'title' => '‘Aid For Trade Can Do Nothing About Our Governance Problem’',
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			'content' => '<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 120%; vertical-align: middle;">
	<span style="color: rgb(178, 34, 34);"><b><span style="font-size: 8pt; line-height: 120%;"><img align="left" alt="" border="2" height="226" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/ratnakar.jpg" vspace="2" width="200" />Ratnakar Adhikari</span></b></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 120%; vertical-align: middle;">
	<span style="color: rgb(178, 34, 34);"><span style="font-size: 7pt; line-height: 120%;">General Secretary </span></span></div>
<div style="text-align: justify;">
	<span style="color: rgb(178, 34, 34);"><span style="font-size: 7pt; line-height: 115%;">South Asia Watch on Trade, Economics and Environment (SAWTEE)</span></span></div>
<div style="text-align: justify;">
	<span style="color: rgb(178, 34, 34);">It is our right to be able to protect our industrial sector. If you open up the industrial sector completely then it could result in industrial depression and loss of employment. So, it is necessary to protect the industrial sector but not to the extent of providing incentive to &nbsp;inefficient industries.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>The trade policy of Nepal is more liberal than some other developing countries. Why then has trade failed to contribute to our national economy and development?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Having a liberal trade policy alone is not sufficient to increase export potential. Second, Nepal is still not more liberal than Sri Lanka and Bangladesh. Other countries have become more liberal, not only in terms of tariff and non tariff barriers but also in terms of trade to GDP ratio. If you see that the trade to GDP ratio is increasing, you can conclude that the country is more integrated into the global market. Theoretically, we have to be in a position to gain because we are liberalised. That is the classical theory of anti-export bias produced by Bhagwati and Kreuger in 1978. They say that if you protect your domestic industry, you will be raising the barrier for export because protection of domestic industry through tariff will in a way raise the price of import which will be used in the export processing sector. Eventually, your export will suffer. However, theories apart, in today’s world, having a liberal economy is no guarantee that you will be able to export too. </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>There is a heated debate under the Doha Round between the developed and developing countries. How justified are the arguments of the developing countries?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Agriculture is our livelihood and we should be in a position to protect our agriculture sector when required. The special safeguard measures proposed by the developing countries are useful. If you open up the entire agriculture sector in which the protection is already lower compared to industrial products, there could be other problems like food security, livelihood, social tension and others. In agriculture, I fully agree with the position of the developing countries. In terms of industrial products, most of the developing countries which are liberal today and most of the OECD or developed countries had protected their industrial sector during their respective process of economic transformation. So, it is our right to be able to protect our industrial sector. If you open up the industrial sector completely then it could result in industrial depression and loss of employment. So, it is necessary to protect the industrial sector but not to the extent of providing incentive to inefficient industries. You have to allow a certain degree of competitive atmosphere. If you think that they will be able to do better in the long run, then you have to provide protection for a limited period of time.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">On non tariff barriers, there are two things that we have to understand. The first is that certain non tariff barriers are related to environment, consumer preferences and health and safety of the consumers. Such conditions on the basis of scientific evidence are imposed in the form of non-tariff measures. For example, if Aflatoxin causes cancer and we export certain agricultural products containing Aflatoxin which is at a level higher than globally accepted, then our product gets rejected. It’s not the fault of the importing country. We have to be able to improve our infrastructure, laboratory system, human resources and legislative arrangements in order to be able to fulfil the requirements. But there are certain non-tariff barriers which are protectionist in nature. We oppose these protectionist barriers. In terms of services, the developing countries are demanding the liberalisation of labour movement from one country to another. It has been proved that three per cent increase in labour force from the developing countries would result in global welfare gain of 300 billion dollars. This is something that needs to be pondered upon.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Finally, on trade remedy measures, developing countries do not have a serious position except saying that the developed countries are using trade remedy measures as a protectionist device. That may not necessarily be the case. So, on the whole, their position in the Doha Round is quite justified given the socio, economic and political situation of these countries.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>LDCs find it difficult to implement some of their WTO commitments. How would ‘Aid for Trade’ help to implement such commitments?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Aid for Trade (AFT) does provide necessary help to the developing countries and LDCs to implement some of the WTO commitments including drafting of legislations, preparing of regulations and putting in place the institutional mechanism that are required to take advantage of the export opportunities offered by the WTO.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>How can ‘Aid for Trade’ help overcome supply side constraints?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Supply side constraints need to be divided into two different categories. One is supply- side constraints that results from our fluid political situation. The strikes and various political demonstrations make us unable to ship our goods on time. AFT cannot do anything about this. Then, there are supply side constraints that are resulting from our lack of resources or our inability to utilise resources properly in certain areas like infrastructure, development of roads, transportation, electricity and skills. People do not have the necessary skills to produce goods in a competitive manner. We have customs infrastructure which does not even measure up to regional standards. That needs to be improved. Besides, we do not use the required technology to be more productive and competitive in the international market. </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Some people interpret ‘Aid for Trade’ as the same money from the same window as human rights aid. What is your take on it?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">That is not true. AFT includes only six components. The first is the economic infrastructure which is the money provided for road, electricity, and communication. The second category is the money provided for building productive capacity in agriculture, industries and services sectors. The third is a trade development category which is basically the money provided for export promotion and development of trade. The fourth category is trade policy and regulations for helping countries to implement their WTO commitments, including enactment of legislations and capacity building of various institutions in the country. The fifth one is called trade related adjustment which is basically the money provided to countries to implement trade liberalisation measures and protect the country from negative affects of trade liberalisation. It involves retraining people who lose their job because of trade liberalisation and finding alternative employment opportunities for them. The sixth category is ‘others’. Others could be anything if the donors and recipients agree to call a particular aid as AFT. The other way of looking at this is: AFT is Overseas Development Assistance (ODA) minus the money provided for various areas, for example, health, education, environmental conservation, human rights, women empowerment and peace and conflict. Human Rights is of course a separate area altogether.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Do you think ‘Aid for Trade’ will succeed in Nepal as many other aid programmes have failed to generate the desired output?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">There is no evidence to say that aid has not helped Nepal’s economic growth. The opinion is divided here. As a researcher, I would be reluctant to say that aid hasn’t helped. At the same time, I wouldn’t vouch that foreign aid has helped tremendously. However, it has certainly helped in meeting the saving and investment gap. If the foreign aid was not provided in some areas, for example, the health sector, it is difficult to say whether we would be able to do something. In the case of AFT, I am not very excited. If there is real additional money coming as AFT, that would definitely be helpful, but not if it is repackaging of money diverted from other areas. Next, it has to be predictable. If certain donor countries are going to provide certain amount of money, they have to guarantee the fund for a multi-year period.&nbsp;It is also the issue of sustainability which is not only about donors providing money on time. It should be taken into account whether the government is ready to take charge of the projects once the donor funding ceases. If a donor provides money for three years, you can’t ask the donor to provide money for the entire period of the project even if the results are good. If you can operate the project on a commercial basis, the private sector will take over. If you are not working on the commercial basis, then government should step in and provide sustainability to the project. The final issue is the effectiveness of the aid. The Paris declaration of aid effectiveness should be the guiding principles for enhancing the effectiveness of AFT. These criteria would actually determine the success of the project. If these criteria are met, the chances of AFT working for the country are fairly good. </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Experts say we lack basic trade infrastructure. What kind of problems and challenges do you see that hinder Nepal’s sustainable trade development? What should be done?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Basic infrastructure is necessary for the country to be able to expand its export on a sustainable basis. A study shows that if a shipment is delayed by one day because of lousy infrastructure, it is equivalent to adding 0.8 per cent to the total tariff that you pay to the importing country. Another study says that if export is delayed by one day, the total export potential will be reduced by one per cent. Infrastructure should be the number one priority for Nepal to be able to trade on a sustainable basis. AFT is not going to be enough because we have our own governance problems to tackle. Governance issue is equally important. </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Experts opine that international community should not only provide market access but also help LDCs in enhancing their trade capacity. If everything is to be done by other countries, what should LDCs like Nepal prioritise in their agenda?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Nepal should fully mainstream trade in national development strategy first. In the new Plan document that is going to be prepared, it has to be included. Apart from that, mainstreaming has to be done at the sectoral level too. For example, if tea export is to be increased, then its priority has to be mainstreamed not only at the level of the Ministry of Industry but also at the Ministry of Agriculture which is responsible for promotion and growth of tea. So, all these ministries and sectors have to take into account the fact that mainstreaming is vital. The second issue is that we have to address supply-side constraints through effective governance reform as well as utilisation of AFT. But there are two aspects we have to ensure ourselves besides the sustainability issue. First, we have to improve our absorptive capacity. The government is unable to even spend the budget amount that has been allocated. How would it spend the money allocated by an external agency? However, we have seen some gradual improvement in our absorbing capacity but it needs to be enhanced further. Another critical issue is that of coordination.&nbsp;There must be coordination on how much money is coming, how it is being utilised and which sector is being prioritised. There has to be a coordination mechanism between the ministries of commerce, industry, tourism, agriculture and other related ministries that have a role in promoting trade so that there is better coordination and effective utilisation of resources.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>LDCs are worried that the current intellectual property protection regime does not recognise their contributions. How can countries like ours raise their voice to eliminate the danger of losing patent rights to compete in the international market?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Some of our properties of genetic resources and traditional knowledge are taken away by some multinational companies and universities. But in order to address that kind of problem, we have to keep our house in order. We need to pass the legislation on access and beneficiary by the parliament which is pending for six years now. The draft was prepared in 2004-05 but has not been adopted as a law. We need to ensure this as it will take care of three aspects. First, it will guide us on regulating access to our genetic resources and traditional knowledge. Second, it would make sure that when the access is provided, it is done on the basis of a prior informed consent of the local communities who are involved in conserving those resources. Third, it would ensure that those communities are appropriately remunerated. They would be appropriately remunerated for the job they have done so far to conserve the resources. With that kind of legislation, many countries have protected their bio diversity, genetic resources. It’s our fault that we have failed to follow suit. Global regime is unfair, however, we have not been able to create a mechanism at the local level to counter the unfair tendency of some global rules. </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Being an LDC, Nepal enjoys numerous benefits like zero tariff. How should Nepal utilise such concessions to gain optimum benefits?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Yes, we do have zero tariff access in selected markets. The European Union is definitely among them but we don’t have zero tariff access in the US market. The process for the same has begun but it will take a long time before such access is provided. Even if you have zero tariff access, you still have to fulfil the rules of origin (ROO) requirement. Once you fulfil the ROO, you are back to the supply-side issues because you have to create backward linkages. If a shirt has to be exported, it’s better to have the fabric manufactured in Nepal itself rather than relying on countries like China and India for the supply of materials. If we continue to get the materials from these countries, we will not be able to fulfil the ROO criteria. We have the full potential for export In some areas where ROO is not a problem. One such example is coffee which can be exported to European, Japanese or any other market in desired quantity without having to fulfil the ROO criteria because it’s an indigenous product and there could be more than 90 per cent value addition and processing in our country itself. However, we cannot export if we are not able to produce in desired quantity. Apart from production, we also have the problem of competitiveness. Even if our cost of production is lower than other countries in the world, our products will cost more by the time it reaches the final market. Let me give you an example. Imagine a situation in Gulmi where you have to organise a few farmers in the form of cooperatives while trying to export coffee to Japan. You collect 12 tonnes of total consignment and put it on the truck and try to send it. But there is a strike so you are stuck there for two days. Finally, you manage somehow and reach Birgunj customs. In order to clear the export consignment, it takes two days. Once cleared, the consignment moves to Kolkata port. It should normally take a maximum of two days to reach Kolkata port but sometimes it takes six days because there is a strike in Bihar or West Bengal which falls on the way. Once at Kolkata port, the consignment is not enough to reserve the entire ship. Now, it takes four days for the ship to fill up. Eventually, it moves from Kolkata. Kolkata is not a deep sea port but a shallow port so it can’t go directly to Japan. Therefore, the consignment on board the ship travels to Visakhapatnam, Colombo or Singapore. The consignment is transferred to the mother vessel at one of these ports and then it goes to Tokyo. In the process, you lose so much of time that you will not be competitive in the global market. So, it is not only the question of productivity and production, but also the question of being competitive in export trading. </span></div>
<div style="text-align: justify;">
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			'id' => '340',
			'article_category_id' => '34',
			'title' => 'Natural Gas Remains Untapped',
			'sub_title' => '',
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			'content' => '<div style="margin-bottom: 0.0001pt; vertical-align: middle; text-align: justify;">
	<span style="font-size: 14px;">T</span><span style="font-size: 9.5pt;">hough three decades have passed since natural gas was found below the grounds in Kathmandu , nothing has been done yet to bring it to the kitchen of the people. Negligence of the government and technical complications have made gas extraction a far cry. Officials at the Department of Mines and Geology say there is no possibility to extract natural gas for utilisation anytime soon.</span></div>
<div style="margin-bottom: 0.0001pt; line-height: 11pt; vertical-align: middle; text-align: justify;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle; text-align: justify;">
	<span style="font-size: 9.5pt;">The department has failed to even to evaluate the proposals of two companies that sought permission to extract gas. The proposals are lying with the department for the last two years. Continental Trading Enterprises and Rajavardhan Construction, a company under KL Dugar Group had submitted those proposals. </span></div>
<div style="margin-bottom: 0.0001pt; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle; text-align: justify;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle; text-align: justify;">
	<span style="font-size: 9.5pt;">Sarbajit Prasad Mahato, the Director General of the department accepts the weaknesses of the department but blames it to various complications. He said that more studies are needed to go ahead on this. </span></div>
<div style="margin-bottom: 0.0001pt; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle; text-align: justify;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle; text-align: justify;">
	<span style="font-size: 9.5pt;">Studies have revealed that the area of 26 square kilometres from Teku to where the office of the Nepal Herbs Corporation is located contains natural gas. Studies by the department carried out at different times during the last 17 years show the possibility of a natural gas reserve of 310 million cubic metres. This amount can meet the need of 20,000 households for 30 years.&nbsp;The study conducted in 1996 says that extraction work would cost Rs 437.7 million. The extracted gas cannot be liquefied and filled into the cylinder directly. Therefore, it should be supplied directly to the households through pipelines. This is said to have become costly now because of the concrete constructions stretching the length and breadth of Kathmandu valley. However, such gas can be used to generate electricity thorugh thermal power station. The department has identified 14 places from where the gas can be mined. </span></div>
<div style="margin-bottom: 0.0001pt; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<span style="font-size: 9.5pt; line-height: 115%;">The department has put forward an option to conduct fresh studies as the environment has changed much since the time of the previous studies. </span></div>',
			'published' => true,
			'created' => '2011-06-03',
			'modified' => '0000-00-00',
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			'description' => 'Though three decades have passed since natural gas was found below the grounds in Kathmandu , nothing has been done yet to bring it to the kitchen of the people. Negligence of the government and technical complications have made gas extraction a far cry.',
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			'article_category_id' => '34',
			'title' => 'Clean Chit For Kansakar',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-indent: 0in; text-align: justify;">
	<span style="font-size: 12pt;">T</span>he Special Court has given clean chit to suspended Executive Chairman of Nepal Airlines Corporation (NAC) Sugat Ratna Kansakar and six other officials. In a case filed against them at Special Court, the Commission for the Investigation of Abuse of Authority (CIAA) had alleged that the six had committed corruption by sending lock-up money to Airbus company for buying a jet aircraft though neither a formal decision was made for this purpose nor the necessary finance was&nbsp;arranged to pay for the purchase.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	The court comprising three justices Gauri Bahadur Karki, Om Prakash Mishra and Kedar Prasad Chalise issued the clean verdict on April 19.</div>
<div style="text-align: justify;">
	 </div>',
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			'title' => 'Rahughat Construction Begins',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="margin-bottom: 0.0001pt; line-height: 11pt; vertical-align: middle; text-align: justify;">
	<span style="font-size: 8pt;">T</span><span style="font-size: 9.5pt;">he first phase of the construction at the Rahughat hydroelectricity project has started with the survey for the 11.7 km road to be constructed from the powerhouse to the reservoir. The 30 MW project site is in the Myagdi district. </span></div>
<div style="margin-bottom: 0.0001pt; line-height: 11pt; vertical-align: middle; text-align: justify;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle; text-align: justify;">
	<span style="font-size: 9.5pt;">Meanwhile, also the construction of the residential building at Rakhu Piple has begun, according to the project officials. The building will be complete within one-and-a-half year. The first phase also includes the construction of tunnel reservoir to the powerhouse. The reservoir will be at the border of Jhi and Dagnam VDCs. The powerhouse will be situated at Tilkenichaur, six kilometres away from the dam.</span></div>
<div style="margin-bottom: 0.0001pt; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle; text-align: justify;">
	 </div>
<p style="text-align: justify;">
	<span style="font-size: 9.5pt; line-height: 115%;">&nbsp;The project is being constructed with a loan from the Indian Government and a joint investment of Nepal Government and Nepal Electricity Authority (NEA). The construction cost is expected to be anything between Rs 3.5 billion to Rs 4 billion, according to a study of Nepal Government. The project is expected to be complete by 2017. </span></p>',
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			'title' => 'Developers Need To Be Transparent To Win Public Confidence(june 2011)',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 120%; vertical-align: middle;">
	<span style="font-size: 14px;"><b><span style="line-height: 120%;">Ashoke SJB Rana</span></b></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 120%; vertical-align: middle;">
	<span style="font-size: 7pt; line-height: 120%;">President</span></div>
<div style="text-align: justify;">
	<span style="font-size: 7pt; line-height: 115%;">Nepal Bankers’ Association</span></div>
<div style="text-align: justify;">
	The home loan is based on the repayment capacity of the borrower. This depends on the borrower’s income. The borrower’s income should be sufficient to pay the EMI (Equated Monthly Instalment). Under this system, the bank can quickly notice if a borrower defaults on his or her scheduled payment.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>How does the banking community look at the overall prospect of the housing industry?</strong></div>
<div style="text-align: justify;">
	When we interact with Nepal Land and Housing Developer’s Association (NLHDA), they put forth their arguments why the housing developers should be encouraged. Their point is that it promotes infrastructure development that the government has failed to provide such as water, electricity and other facilities that come along with housing standards mentioned in the building code. So, I think this is very positive. It is only the speculative side we need to be wary of.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>How much have the banks invested in this sector?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: 0.1pt;">Our estimate is that the banks have invested in average of 25 percent of their loan portfolio into this sector. However, this is an average only. I think that the NRB has put the cap at the right time to prevent the bubble from bursting. We were afraid that the share of housing industry in the total loan portfolio of the banking system might go higher because of the asset price bubble expanding till last year. If you can get regular income and recover your investments in 15 to 20 years, it’s good to invest in this sector. But when the price of the property and the development cost increases and the return comes around in 50 to 60 years that is not economically viable. The mortgage in the west is done usually for 15 to 20 years. </span></div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>How will the banking sector benefit with the improvement in housing industry?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: 0.1pt;">One of the major aspects of the housing industry is infrastructure development. The NRB has welcomed this because that means value addition but it also wanted to control the speculative part. People were buying property on credit or with loan hoping the price would go up and they would he able to sell it for profit even before paying the entire price. And that was the dangerous part of the entire chain.</span></div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>A lot of housing and apartment units are unsold. In this market situation how confident are you of the banks recovering the loans they have given to this sector?</strong></div>
<div style="text-align: justify;">
	The NRB has recently changed its directive and allowed&nbsp;home loans of up to Rs 6 million to be considered as normal loan. This means people who want to buy a house can borrow up to Rs 6 million from the bank and manage the rest from the equity. High-end apartments cost around Rs 10 to 15 million. So, this loan amount is sufficient. There should not be any problem to recover such loans.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>As an investor, what kind of policy reforms do you think are required to improve this industry?</strong></div>
<div style="text-align: justify;">
	I think a little bit of transparency on the part of developers has to come. Just like the banks disclose about their capital, deposit, liquidity ratio and investment, the real estate developers too need to make certain disclosures to the public. The big fear is that the investors might be putting in money where the developers have not put any. It could be all borrowed. Investors want to know the strength of the developers. I think some kind of transparency and disclosure from developers can give confidence to the banks and the individual buyers.<br />
	<br />
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0.15pt;">Till recently there was a rule which made it compulsory that all payments exceeding Rs. 5 million in a real estate transaction be made through a bank. Recently the Supreme Court declared that such a rule was illegal. What is your comment on it?</span></strong></div>
<div style="text-align: justify;">
	That provision was there because banks felt that dealing in cash is an expensive proposition. We try to encourage use of cheques. It has been now ruled out and it is unfortunate. I don’t think that the real problem was with payment through bank. The problem was with the disclosure of income source. Even if someone comes with cash, they still have to disclose the income source to the Land Revenue office while getting the transaction registered. I don’t think it is a meaningful ruling.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>What are the requirements for granting loans to individual buyers of apartments? What is the current trend?</strong></div>
<div style="text-align: justify;">
	The home loan is based on the repayment capacity of the borrower. This depends on the borrower’s income. The borrower’s income should be sufficient to pay the EMI (Equated Monthly Instalment). Under this system, the bank can quickly notice if a borrower defaults on his or her scheduled payment. It’s not a project loan where there may be an implementation risk that the borrower may not implement the project in time. It’s about buying a home that the developer constructs. The bank has to properly evaluate the developer to minimise the implementation risk. So, I think the housing loan is a very structured product. I think that for the banks, it is an easier loan to recover.<br />
	<br />
	 </div>
<div style="text-align: justify;">
	The risk is only when an institution is exposed high on the speculative side of real estate business. If the exposure is not high, the institution may be stuck with a project or two for sometime, but that will not impact much in the overall health of the bank.</div>
<div style="text-align: justify;">
	<br />
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>What is your suggestion to the real estate developers?</strong></div>
<p style="text-align: justify;">
	<span style="font-size: 11pt; line-height: 115%;">We need to separate the good developers from the others, some of them may not be financially sound. The public should find out who the serious developers are and distinguish them from the inexperienced ones. There are developers who have no engineering knowledge and only believe that it is like a real estate transaction. If there are people who are trained engineers and have business plans like the ones from CE construction, it gives confidence to the entire sector. I think we need to support these people and ignore the others. <br />
	</span></p>
<p style="text-align: justify;">
	 </p>
<p style="text-align: justify;">
	<span style="font-size: 11pt; line-height: 115%;"><br />
	</span></p>',
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			'description' => 'The home loan is based on the repayment capacity of the borrower. This depends on the borrower’s income. The borrower’s income should be sufficient to pay the EMI (Equated Monthly.......',
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			'id' => '372',
			'article_category_id' => '40',
			'title' => 'Real Estate Sector Must Develop Professionally (june 2011)',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-align: justify; text-indent: 0in;">
	<span style="font-size: 14px;"><b><span style="line-height: 120%;">Bhaskar Mani Gyawali</span></b></span></div>
<div style="text-align: justify; text-indent: 0in;">
	<span style="font-size: 11px;"><span style="line-height: 120%;">Executive Director-Banks and Financial Institutions Regulation Department</span></span></div>
<div style="text-align: justify; text-indent: 0in;">
	<span style="font-size: 11px;"><span style="line-height: 120%;">Nepal Rastra Bank</span></span></div>
<div style="text-align: justify;">
	<span style="font-size: 11px;"><br />
	</span></div>
<div style="text-align: justify;">
	The banks should invest in the housing industry because real estate sector too must develop. This is required to ensure the right of the people to live in their own houses. There must be investments in this sector and this sector must develop but all this has to be transparent and healthy.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>What actually does NRB want in the investment of commercial banks in the housing industry?</strong></div>
<div style="text-align: justify;">
	The NRB wants real estate and housing business to develop as a true industry. In this sector currently, a huge amount is invested from the banks, the developers and the general people. Concentration of such a huge amount in a single sector affects other sectors too.&nbsp;The NRB wants this sector to surge professionally. There will be investment as required and the transparency and honesty has to be maintained at the highest degree.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>Is the investment in the housing industry feasible for the banks in Nepal?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: 0.15pt;">The banks should invest in the housing industry because real estate sector too must develop. This is required to ensure the right of the people to live in their own house. But we thought the trend of unnatural price hike driven by the investment for profit from money borrowed from the bank wouldn't be sustainable. Therefore, the NRB has put a limit for bank investment in this sector. However, it does not mean that the banks should not invest in this sector. There must be investments in this sector and this sector must develop but all this has to be transparent and healthy. </span></div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>The NRB recently relaxed the cap it had imposed on bank lending in the real estate sector. Why was the NRB late in realising this sector's potential as an industry?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: 0.15pt;">What was happening in the past was: people were buying land with the help of bank borrowing and selling the same land to others for profit who in turn, were borrowing from the bank to pay for the purchase and selling the same land further for profit. It formed a never-ending chain that resulted in land prices being unnaturally hiked. The NRB is against such practice. We believe the real estate sector should develop in a professional way.&nbsp;Lending for purchasing real estate properties meant for personal use should not be stopped if the buyer of such property has enough income to service the loan obligations.&nbsp;Such real estate lending is to buy land for constructing personal residence, to construct a residential house on&nbsp;the borrower's land and to buy houses or flats in the community housing projects. So, we recently issued a directive to remove loans up to Rs 6 million from the category of the real estate loan. If the banks do not invest in houses and apartments, the people's right to have their own house will be a mere dream. In the long run, old houses will need to be replaced and with the increase in population, more people will need houses. We have not tried to discourage investment into this sector and that is why we relaxed the lending.</span></div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>How can you say that the real estate loan provided to under a new name 'home loan' would not result in similar adverse consequences as in the past?</strong></div>
<div style="text-align: justify;">
	The loans up to Rs 6 million have been removed from the category of real estate loan. This loan is provided by banks depending on the borrower's ability to pay back the instalments. Previously, the real estate loans went mostly for the speculative business of land plotting that created undesired consequences. But the home loan is not speculative and will not create problems.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>&nbsp;The developers complain that the NRB has been hurting their business by introducing adverse policies. What do you have to say about it?</strong></div>
<div style="text-align: justify;">
	Well, considering the demand of the real estate developers, we removed the loans of up to Rs 6 million for the purchase of apartments and houses from the category of 'real estate loan'. But the developers are demanding that this limit has to be lifted further. We believe that Rs 6 million is a huge amount of money and higher than required by an average Nepali to purchase a house. So, it is not possible to lift this limitation any further.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>The Supreme Court recently nullified the earlier rule that required all the real estate transactions exceeding Rs. 5 million in value to be through a bank. What is the view of NRB on it?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: 0.15pt;">The verdict of the Supreme Court is equivalent to law and we respect the decision. Cheques, cash or any other methods are just the instruments of payment. Looking at the international practice of making payments, it is difficult to say that payments through cheques would create problems and cash wouldn't.&nbsp;We recommend that transactions should be made through any other method other than cash. And a cheque is safer, simpler and easier. This is the intention of the banking system around the world and the NRB's wish is no different.<br />
	<br />
	</span></div>
<div style="text-align: justify;">
	<strong>What are the possible measures that the NRB can initiate or facilitate for the smooth growth of the housing industry?</strong></div>
<div style="text-align: justify;">
	We have now brought the home loans of up to Rs 6 million under the category of personal loan. This indicates that the NRB wants this business to develop and move ahead in a healthy way. With the time and demand, there will always be room for necessary amendments.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>What is the current status on loan recovery from the housing industry?</strong></div>
<div style="text-align: justify;">
	The banks have to recover any lending within the stipulated time period. We have received information that the loans are being repaid.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>What is the total investment of the banking industry in this sector? Do you see further investments coming into this sector in the coming years despite its present precarious position?</strong></div>
<p style="text-align: justify;">
	<span style="font-size: 11pt; line-height: 115%;">Currently, the total investment in this sector is Rs 97 billion which is 18.9 per cent of the total investments made by commercial banks. The real estate and housing sector is a growing business and there must be further investments in in this sector also in the future. The past practice of using bank's money to speculate on the real estate should not be there. However, to fulfil the people's need for houses and apartments, there must be further investments pumped into this sector.</span></p>',
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			'summary' => null,
			'content' => '<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;"><strong><span style="line-height: 120%;"><br />
	Shivahari Sharma</span></strong></span><span style="font-size: 7pt; line-height: 120%;"><br />
	Deputy Director General</span><span style="font-size: 7pt; line-height: 115%;"><br />
	Department of Urban Development and Building Construction<br />
	<br />
	<br />
	</span><strong><span style="font-size: 9.5pt;"><br />
	How safe are the buildings constructed by housing developers in Kathmandu?<br />
	</span></strong><span style="font-size: 8.5pt;"><br />
	The housing companies that want to construct community housing get license only after fulfilling a few procedures. First, the developer should get a planning permit from the Town Development Committee (TDC) based on regulations and by-laws. Next, the developers plan and design buildings and apartments which are later approved by the Department of U</span><span style="font-size: 8.5pt;">rban Development and Building Construction (DUDBC). The approval is subject to fulfilling the requirements of the National Building Code on safety, power supply, fire hazards, other possible disasters and structural design. Following that, the project, if big one, must pass Environmental Impact Assessment (EIA). If it is small one, it must pass the Initial Environmental Examination (IEE). EIA is approved by the Ministry of Environment and IEE from the Ministry of Physical Planning and Works. Then the site map is passed by the concerned municipality or VDC. The housing and apartment complexes have been properly designed and approved. So I don't think they are unsafe. We have our monitoring mechanism in place. But we feel it is not adequate. So, we are in the process of strengthening it. We have planned a third party monitoring system which means outsourcing the job as we have human resource constraint.&nbsp;The pace of urbanisation in the last decade in the capital has been tremendous because of the conflict. However, the growth is largely a haphazard one and urban infrastructure development has failed to keep pace with that of urbanisation. I feel infrastructure development in the city must be able to meet the pressures of migration and rapid urbanisation and such infrastructure development should be carried out by the metropolitan city and local bodies.&nbsp;</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<br />
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 9.5pt;">Could you tell us more about your monitoring mechanism that ensures the housing companies adhere to safety standards? <br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 8.5pt;">We do have our own in-house monitoring mechanism. However, monitoring of the environmental compliance has to be done by the concerned ministry as well. Similarly, adherence to the planning permit is evaluated by the TDC. The size of open space, size and number of units, ground coverage and some others aspects are specified in the planning permit. The monitoring by the division office of DUDBC has not been extensive due to resource scarcity.&nbsp;So, we are instituting a system of third party monitoring next year to evaluate the level of compliance. This will make the process more transparent.&nbsp;We have found cases where constructions have begun even before the approval.&nbsp;However, it has been tightened now and we have taken actions against such practices. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<br />
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 9.5pt;">Do you have plans to limit the number of projects that come to you for approval?<br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 8.5pt;">With the fast pace of urbanisation, there is a huge demand for housing.&nbsp;The competition is still not adequate in community living and group housing. The target buyers of such housing should be the middle and lower income groups. But at present, the housing companies have targeted only the higher income groups. The main reason behind this is the high land price and complex land management system.&nbsp;Unless the land price comes down, this market cannot become competitive. Rather than controlling, this sector needs regulation through set standards. There are flaws that need to be corrected so that this industry will improve. The demand was affected after tightening of the housing loan. Last year’ inflation in the land price also affected a number of housing projects. In 2007-08 and 2008-09, there were a lot of new projects which took license but now we hardly have any takers.&nbsp;At present, the average cost of apartments is around Rs 6.5 to 9 million. However, some companies have recently introduced flats for around Rs 1.7 million. When the price comes down to around Rs 0.8 to 1 million, we can have housing for the masses.<br />
	<br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 8.5pt;">After the recent relaxation by Nepal Rastra Bank in the control in housing loan, we can expect that the number of new projects may increase. Until 26 October 2010, 59 projects were given license and now there are 18 new projects in the process of acquiring licenses. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<br />
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 9.5pt;">It has been observed that the process of issuing licence is rather lengthy and the companies need to visit numerous authorities in this connection. What is being done to simplify it?<br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 8.5pt;">This is also a big issue raised by the private sector. We have discussed about the one-door licensing process in the ministry. The process can be simplified but for now, they must visit four different authorities.&nbsp;EIA and IEE fall under the purview of a separate unit. Planning permit and map approval can be brought under one unit. They are currently under the purview of municipalities and TDC offices. But the existing law has to be amended first for such changes to take place.&nbsp;Developers have also demanded a change in the parameters for EIA and IEE. Their view is that the housing projects facilitate managed urbanisation and do not harm the environment much. We have discussed that too in the ministry and sent a proposal to the Ministry of Environment for consideration on this. It is true that the current procedure is time consuming but if all the requirements are met by the developers, it won't take much time.&nbsp;</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<br />
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 9.5pt;">The geologists say the geology of Kathmandu is not suitable for constructing high rise buildings. Why then has the department given licenses to construct tall apartment buildings?<br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 8.5pt;">Nepal lies in 11th most risky area of the world in terms of earthquake. Kathmandu is located in one of the world's most seismically active zones. But let's not forget that despite frequent earthquakes in Japan, they have so many skyscrapers. Therefore, high rise apartments will not pose a major threat if appropriate design is made, the building code requirements are fulfilled, soil tests and geological studies are conducted properly and quality constructions materials are used. The important thing is that the specific local conditions of the construction area have to be considered while giving planning permit.<br />
	<br />
	<br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 9.5pt;">People are concerned about the safety of the apartment buildings that are approved by the department. What is your evaluation of the safety in these apartment buildings?<br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 8.5pt;">&nbsp;Going by the designs that are presented to us, I don't think people should be wary. The private sector has invested a lot of money in their projects. If something goes wrong with one particular project, it is bound to affect other projects as well. With the kind of massive investment they have put in, they wouldn't want to make it unsafe. With the current speed of urbanisation, there won't be an alternative to high rise apartments in the near future.&nbsp;So, it's imperative that the safety measures are of the highest standard to win the confidence of the general public. We have checked the designs for the apartment buildings and feel that they are safe enough. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<br />
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 9.5pt;">Why isn't there an inter-departmental coordination for developing infrastructure like electricity supply, road, sewage and drinking water?<br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 8.5pt;">Somewhere along the line, the inter-departmental and inter-ministerial coordination is missing. But the scenario has definitely improved now and there is no haphazard digging like in the past. If a maintenance work has to be done, prior approval from the road department must be taken. The problem is that one department does not trust the other's work. And a lack of discussion about the matter hampers the cause further. We also don't have a regulation unit for urban infrastructure in cities. We have proposed a town development corporation which will look at the local bodies and the planning unit in Kathmandu. However, the proposed bill is yet to be passed by the parliament. The proposed bill has proposed the formation of Kathmandu Valley City Development Corporation which will include five municipalities of the valley as well as the VDCs in the suburbs. We believe that if such an authority existed, coordination would definitely be improved.</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<br />
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 9.5pt;">By when do you think the city development mechanism will come through? How long will people have to continue to bear unmanaged and haphazard urbanisation? <br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 8.5pt;">There are plans for Kathmandu but they have not been implemented yet. A clear policy regarding land use is not there. After the formation of the national urban and housing policies, we prepared the draft of the bill and sent it to the relevant ministry. The policies are there but it does not have ownership in the absence of the physical development act. First of all, the land must be managed in order to ensure urban planning. For example, if someone decides to build a house in the middle of a field he would want to take the road, electricity and other infrastructure to the house. If there is a physical development act, it will prohibit the construction of a building in the farmland and deny the basic infrastructure for such land. We have also prepared the draft for an act on real estate business and regulation and sent it to the parliamentary committee. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 8.5pt; line-height: 115%;"><br />
	If that gets passed, the buying and selling of property can generate revenue for the government besides providing security to the buyers. The present haphazard situation is due to the absence of a proper law that would ensure a proper control mechanism. We want that the growing cities should not suffer the same fate as Kathmandu. There should be decentralisation of services and opportunities so that development can be spread throughout the country in a balanced proportion. The government is working towards it and we can certainly hope that there will be positive changes soon. </span></div>',
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The housing companies that want to construct community housing get license only after .....',
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			'title' => 'You Train Animals But You Educate People',
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			'content' => '<div style="text-indent: 0in; text-align: justify;">
	<span style="color: rgb(178, 34, 34);"><span style="font-size: 12px;"><img align="left" alt="" border="3" height="285" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/william.jpg" style="width: 250px; height: 285px;margin:10px;padding:10px;" vspace="2" width="250" /><br />
	William Westgate is the Director of Studies at London College of Management and Leadership. After completing his degree at University of British Columbia in Vancouver, Canada, he moved to London and started on the Midland Bank graduate training programme in 1984. Over the next 20 years, he rose to become Senior Vice President at HSBC Securities and Vice President and Director at Toronto Dominion Bank. He retired from investment banking in 2004 to take up a post lecturing in Business and Economics at Woodhouse College, one of the UK's top performing state colleges. Westgate is a founding partner in the London College of Management and Leadership and brings his knowledge of industry, enthusiasm for teaching and vast resources to the training sessions he delivers. He visited Kathmandu recently for the preliminary preparation of Finance &amp; Management Training scheduled for August this year&nbsp; targeted towards senior and middle level bank employees in Nepal. During his visit, he met the CEOs from major banks and financial institutions as part of his preparation. In an interview with <i>New Business Age</i>, Westgate shared his views on the overall banking industry in the country and the upcoming training programme. Excerpts:</span></span></div>
<div style="text-align: justify;">
	<span style="font-size: 12px;"><br />
	</span></div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0pt;">How do you assess the banking industry in Nepal during this short visit of yours?</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	It's ahead of the curve and banking has to be so. People do say that there are too many banks given the current economic level. When you are talking about a new Nepal, you have to develop the infrastructure, resources, processes, technologies and training people to a level where the economy is going to be. If you don't have the vision, you are left in the dust. Some of the bankers I have met recently do have a vision.</div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-indent: 0in; text-align: justify;">
	Finance and banking is not just another industry. It's integral to economic development, right from micro lending to massive project financing, ATMs, consumer products you name it. You cannot make economic progress without a functioning banking system. The banking system in Nepal has a lot of ground to cover though. There are billions of rupees that need to be brought into the formal banking system. You must also get rid of a practice like hundi because that's not good for the economy. We need transparency as these are big social issues.</div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-indent: 0in; text-align: justify;">
	<strong><span style="font-size: 9.5pt;">What is this Finance &amp; Management Training all about?<br />
	<br />
	</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	Well, I don't pretend that I am going to solve all the issues. Banking is a complex industry. In my experiences as a banker, there are a lot of things to know. But there are certain things that you have to know. So, it's a situation of nice-to-know vis-Ã&nbsp;-vis need-to-know We have designed this course based on what the bankers here really need-to-know. Cost of capital, time value of money, sales and distribution of financial products etc are essential for the people in the banking corporations, irrespective of their positions, to know. So, those are the aspects we hope to bring to our training.</div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0pt;">How did your preparation go towards the training programme?<br />
	<br />
	</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	Prior to coming here, I did a lot of research. But nothing matches meeting face-to-face the people who matter. I would say that it has given me invaluable education and encouragement. The conversations I have had here have given me a lot of good practice as well as ideas. I have met some of the most capable people running the banking industry here, however, they are restrained by current conditions. What we hope to do is bring fresh air new western thinking. But we have to tweak it to suit the Nepali market. Because what works for selling bonds in Wall Street is not going to work for selling a loan in Kathmandu. But the principles always stay the same; there are certain things that never change. We are hoping to adjust and adapt tactics as per local requirements.</div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0pt;">You had a lucrative investment banking career going well for you. What is it that stimulated your transition to lecturing and training?<br />
	<br />
	</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	Yes, I had a fantastic career as a banker. But for me, banking is more than just the money. I reached an age of my life where I didn't wish to remain a banker anymore. I love to explain things to people and making presentations using technology. I am an enthusiastic person and like to engage other people. It was more about aspiration and I wanted to move on to what I really enjoy doing.</div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0pt;">What was the idea behind founding the London College of Management and Leadership? How do you think you have made a difference?<br />
	<br />
	</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	We set ourselves apart because we bring a combination of real practical experiences with academic rigour. All my life, I have collected notes mentally and physically wondering I wish I knew that and why didn't someone tell me that earlier. In our teaching, we focus on what the students need-to-know For example, while doing an MBA, the students don't need to know half the MBA because they will never use it. We make sure that the students pay real attention to what they would be practicing in the course of their work careers. Doing so helps us earn a lot of trust from the students. I admire good training and I hate bad training. Inspirational training is something I have always loved and therefore, bring it into practice.</div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0pt;">How exactly will the training programme benefit Nepal's banking professionals?<br />
	<br />
	</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	<span style="letter-spacing: -0.1pt;">As I have already said, the training will bring in fresh air, thinking and new ideas. People starting their careers in banking now are a lot more fortunate compared to 20 years ago. Today, there is technology available to make training sessions very engaging process. They say that you train animals but you educate people. The programme will follow a holistic approach. Banking has many components and when we put them all together; the participants will better understand their roles, departments, banks, the industry and the economy. It will allow them to have a creative and original thought about banking. It will also help them think out of their respective work briefs and cubicles and expand their horizons. </span></div>',
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			'title' => 'Communicate The Customer’s Way',
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			'content' => '<div style="text-indent: 0in; text-align: justify;">
	<span style="color: rgb(178, 34, 34);"><span style="font-size: 12px;"><img align="left" alt="" border="3" height="312" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/stephen.jpg" style="width: 255px; height: 312px;margin:10px;padding:10px;" vspace="2" width="255" /><br />
	Stephen Reynolds is the Founder and CEO of Stephen Reynolds Seminars (SRS) International, a leading provider of corporate training in Thailand and Asia. His website describes him as an Expert in Psychology of Sales and Marketing as well as creator and trainer on THE ONE Advanced Sales System and Magic WORDS Communication Systems. A well-known speaker on Leadership, Communication and Sales, Reynolds has trained leaders from over 60 companies in Thailand, Philippines and Malaysia in the past three years. He has over 27 years of experience, which he leverages to make his seminars, training and public speaking engagements bursting with information, guidance and direction that is both practical and relevant. He was in Kathmandu recently, on the invitation of National Banking Training Institute (NBTI), to impart two-day training to Nepali professionals. In an interview with <i>New Business Age</i>, Reynolds shares the tools and techniques that he teaches to make positive changes. Excerpts:</span></span></div>
<div style="text-align: justify;">
	<span style="font-size: 12px;"><br />
	<br />
	</span></div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0.2pt;">How do you assess the participants of this programme?<br />
	<br />
	</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	<span style="letter-spacing: 0.15pt;">The commonality among the trainees of this programme is that most of them had no sales background at all. Except for one participant, this was their first sales seminar. I tell people that what I am teaching is the most powerful sales technique in the world. It's usually helpful for them to go through other sales trainings as well so that they can contrast different trainings. Then they know what I am saying is true. But if they have never been to any other sales training, how can they compare. </span></div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-indent: 0in; text-align: justify;">
	<span style="letter-spacing: 0.15pt;">Having said that, I think the training was incredibly fruitful. The participants were smart, involved and committed. They were hungry for the knowledge. It happens often in corporate training that the participants sent by their bosses are apathetic towards training as they don't want to be there. But it was an exception here in Nepal. The people were charming and needless to say, I was very happy. </span></div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0.2pt;">What's The One psychology of Sales and Marketing all about?</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	<span style="letter-spacing: 0.15pt;">The One I believe, is the most powerful and effective sales technique in the world. Sales is very complicated. There are many sales systems that are based on as many as 500 techniques but this is the only sales system in the world based on one technique. We are trying to take something very complicated and make it much simpler and easier to apply. </span></div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-indent: 0in; text-align: justify;">
	<span style="letter-spacing: 0.15pt;">We start with the relatively new psychology of Neuro-linguistic programming. It is an approach to psychotherapy and organisational change based on a model of interpersonal communication chiefly concerned with the relationship between successful patterns of behaviour and the subjective experiences underlying them and a system of alternative therapy based on this which seeks to educate people in self-awareness and effective communication, and to change their patterns of mental and emotional behaviour </span></div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0.2pt;">How can communication techniques be made more effective for sales?<br />
	<br />
	</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	<span style="letter-spacing: -0.15pt;">There is no point in my inundating trainees with too much information that they can neither remember nor use. It's important to focus on a particular aspect which will make a difference. That is the challenge with sales. I go with the most powerful psychology and go right to the heart-of-the-matter how to sell face-to-face. ˜The One technique helps immensely as it is applicable for leadership, communication, negotiation etc. </span></div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0.2pt;">How do you define advanced psychological linking?<br />
	<br />
	</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	<span style="letter-spacing: -0.15pt;">It is when you take your products and link them together with the values of the person you are talking to. Basically, we are communicating the customer's way according to their values and vocabulary. The One focuses the entire sales process on the highest values of the person you are dealing with. It is a completely customised process. Sales is not just talking, you have to start seeing the psychology behind the word. </span></div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0.2pt;">Are you confident the trainees will be able to effectively apply the technique taught by you?<br />
	<br />
	</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	<span style="letter-spacing: 0.15pt;">Well, I hope so. Or else, my effort will amount to nothing. In two days, I have given them a real foundation. They should be able to walk out and start to communicate better and instantly be able to see an increase in their sales.What they have learnt during the course of the training should also help them improve their communication at their workplaces. They should now be able to communicate better with their bosses,&nbsp; subordinates and customers. Sales is communication and vice versa. </span></div>',
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			'summary' => null,
			'content' => '<div style="text-indent: 0in; text-align: justify;">
	<span style="color: rgb(255, 0, 0);"><span style="font-size: 12px;"><img align="left" alt="" border="3" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/kevin.jpg" style="width: 223px; height: 231px;" vspace="2" />Dr Kevin McCrohan is a Professor of Marketing – School of Management at George Mason University in Virginia, United States. A PhD from City University of New York, his research interests include marketing and efficient functioning of profit and non-profit organisations, competitive intelligence, information security, methods of marketing compliance for fiscal and philanthropic organisations and economic measurement to fill gaps in administrative data sets. Dr McCrohan has been a Senior Fulbright Scholar at the School of Management, Kathmandu University, Nepal as well as at Trinity College in Dublin, Ireland. During his recent visit to Kathmandu, he delivered a talk on ‘Customer Satisfaction in E-Commerce: Issues and Solutions’ and its implications for Nepal as the main theme under ‘SAIM Lecture Series’ initiated by South Asian Institute of Management, Lalitpur. In an interview with <i>New Business Age</i>, Dr McCrohan shared his views on the importance of customer satisfaction in e-commerce from Nepal’s perspective. Excerpts:</span></span></div>
<div style="text-align: justify;">
	<span style="font-size: 12px;"><br />
	</span></div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0pt;">How does customer satisfaction work in an e-commerce scenario?</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	We have a relationship between the firm and the customer in which they trust each other over the course of a transaction. It is of overriding importance that all the participants that deal with that transaction online can be trusted upon, particularly with personal and financial information.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0pt;">What was the focus of the talk programme today?</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	It was to make people aware of the fact that the firms have the best of intention out in the cyber world, while dealing with customers online. Of course, there are scores of mischievous elements who are trying to steal money. In the bargain, it breaks the trust between the consumer and the firm. As a result, the consumers stop dealing with the firm. &nbsp;I was totally fascinated with the programme today. It was delightful and certainly a privilege to be here.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0pt;">It is very hard to monitor customer satisfaction on the web as you don’t physically see the customer. How do you overcome this challenge and ensure they are satisfied?</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	You can contact them after the purchase through e-mail and find out if they are satisfied and if the product is working out for them as promised. You could also do surveys with your online customers by asking questions pertaining to their satisfaction level with respect to your firm and its products. I must point out that when people complain, paying attention to those complaints is critical. Marketing is about word-of-mouth. In today’s age of online blogs, a bad experience is posted and gets conveyed to n-number of people.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-indent: 0in; text-align: justify;">
	You need to benchmark yourself. In the western world like the European countries and the United States, there are customer satisfaction surveys that pop up online highlighting firms and organisations. The response thus generated can be tracked by the firms. For small firms, the best way is to design a questionnaire and occasionally contact the customers and try to determine how they can better serve them.&nbsp;They can appreciate the consumers for their valued feedback and thank them for helping them in their endeavour for ensuring improved customer service.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0pt;">To reduce customer apprehension and assure customers of legitimacy, how important is it to post “Customer Certified Ratings” on the web site?</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	If you can quote an online source, that’s even better. But if you can quote your own survey, that is still good. You can thank them and apprise them of your growth over a period of time. By doing that, you let the customer know you are monitoring customer satisfaction as it is important to you. You also convey a message that you are paying attention to what the customers tell you.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0pt;">Online retail sales still make up only a small portion of overall retail sales in the US but satisfied consumers are expanding their purchases online. How do you view this?</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	It’s neither good nor bad. In late 1990s and early 2000s, a lot of research projected that the growth rate for e-commerce would reach unprecedented heights and everything will be online. But there was a vital element missing from those surveys. In a country like the United States for example, shopping is recreation. A lot of people are what we can refer to as, full-contact shoppers – they love to shop.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-indent: 0in; text-align: justify;">
	There is no way that e-commerce is going to replace the actual experience of going to the store with family and friends, feeling the goods and shop in person. Almost everybody compare the shops online but still end up at the store to buy products first-hand. The real challenge for large e-retailers is to somehow convince more people to actually buy online. I have a statistic that tells me 25-30 per cent of amazon.com’s purchases are left in the cart – people go through the process of selecting goods and are ready to buy but eventually end up not buying.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0pt;">Customer satisfaction is non-existent in any kind of business in the third world countries. Except for the developed countries, do you see any potential whatsoever, for e-commerce in such countries?</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	<span style="letter-spacing: 0.05pt;">Exactly. One of the points I was trying to make during my presentation was that the concept of customer satisfaction does not exist in a country like Nepal. The market is in the United States and European countries. The beautiful carpets and woodworks that Nepali craftsmen make are phenomenal. The only way to reach the customers all around the world is to tell them about these products. In the US, a friend of mine wanted to buy a khukuri for his son. It took him five months in 1999 to contact the firm here. The only way he knew about khukuri was that I gave him one after one of my visits to Nepal. Now, all that can be done online.</span></div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-indent: 0in; text-align: justify;">
	It is not an issue that customer satisfaction does not exist in Nepal. What matters is that it exists where you have to sell. Customer satisfaction only exists where there is oversupply. The tragedy of the world is that people in a lot of countries have so little to spare but those in the United States, Europe and Japan have a lot of money. That’s the kind of consumers you have to reach. If some Nepali product needs to find a presence in the United States, for example, it has to be either word-of-mouth or online. So, a website showcasing local products to a worldwide audience will certainly help.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-indent: 0in; text-align: justify;">
	<span style="letter-spacing: -0.15pt;">People in rich countries are looking to buy something new and different. The products made in Nepal are certainly new, different and beautiful. You need to sell them to the people in these affluent countries. But then, if left unsatisfied, these people will go online and badmouth not just the product but the firm and the country as well. They will also go to the extent of recommending and advising others against dealing with the country they are disappointed with. That’s where the customer satisfaction impacts, not in your country but in the market you are catering to.</span></div>',
			'published' => true,
			'created' => '2011-07-20',
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			'description' => 'Dr Kevin McCrohan is a Professor of Marketing – School of Management at George Mason University in Virginia, United States. A PhD from City University....',
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	(int) 6 => array(
		'Article' => array(
			'id' => '354',
			'article_category_id' => '31',
			'title' => '‘Dealers Grow Confident With Exposure To New And Innovative Products’',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-indent: 0in; text-align: justify;">
	<span style="font-size: 12px;"><img align="left" alt="" border="3" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/boby.jpg" style="width: 220px; height: 255px;" vspace="2" /><span style="color: rgb(178, 34, 34);">Boby Johnson is the Senior Customer Marketing Manager (Export) - Asia Pacific, Philips Consumer Lifestyle. He was in Kathmandu recently for the Asia Pacific Region’s Dealers’ Meet. He also launched Fidelio Docking Speakers for Apple products, 3D Television, LED Televisions, Home Theatre System, Air Fryer, Grooming products, Garment Care and Floor Care products for the Nepali market, during his visit. In an interview with <i>New Business Age</i>, Johnson shared his views on the prospect for Philips products in Nepal. Excerpts:</span></span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>How will this event help enhance the sales and market expansion of Philips products in Nepal?</strong></div>
<div style="text-indent: 0in; text-align: justify;">
	To start with, we have received tremendous print and broadcast media coverage for this event, which I think, is fantastic.&nbsp;This should help us get a lot of brand awareness and generate sales.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Are there any special packages for the dealers to facilitate market penetration?</strong></div>
<div style="text-indent: 0in; text-align: justify;">
	We organise dealers’ meet every year and it energises our dealers. After each conference, the dealers grow confident because they have been exposed to new and innovative products. These meets give them the added belief that they can sell. I am certain that the dealers are very happy with the new introductions that we are going to bring to the market this year. This would rejuvenate them and help them sell even more this year.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>About a month ago, one of your competitors launched similar products. Don’t you think you were a bit late?</strong></div>
<div style="text-indent: 0in; text-align: justify;">
	I don’t think so because this is nothing new. Sometimes, we launch earlier and at others, it’s them who are earlier. It depends mainly on when you are ready for sales. I think what is important is how confident you are on your products. We are very confident with what we have.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>How do you view the market potential of these products in Nepal?</strong></div>
<div style="text-indent: 0in; text-align: justify;">
	Going by the reaction of the people I have met here, Air Fryer is one product that can register good sales in Nepal. Apart from that, 3D TV should do well. We also have very nice audio products like Fidelio range for Apple products which are very popular in Nepal. We are confident about all the products that we have here including kitchen appliances and beauty care products.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>There are similar products of premium brands in the market. How fierce would be the competition?</strong></div>
<div style="text-indent: 0in; text-align: justify;">
	I think the competition is good. Philips has been around for more than 100 years now. To be in existence for such a long period, you must be doing something very good.&nbsp;We are number one in so many categories worldwide, for example, shavers (male grooming), juicers, blenders and garment care. As a company, we are confident about innovation power and what we bring to the market. We do keep an eye on what our competitors do. However, we are also confident about our own innovation and position in the market.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>How are these products doing in the Asia Pacific Market?</strong></div>
<div style="text-indent: 0in; text-align: justify;">
	They are doing pretty well. Air Fryer, which is made in Singapore, is doing extremely well there. In Asia, all our products are doing very well.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What are your plans for the Nepali market?</strong></div>
<div style="text-indent: 0in; text-align: justify;">
	We have a very strong and good distributor in Nepal taking care of all business operations on behalf of Philips. Syakar Company is doing a great job. One of the reasons why we came to Nepal is to show our solidarity to encourage their dealers, distributors and sub distributors. I believe this will really help them grow the business further in Nepal. There are a lot of opportunities for business in this country. We are confident that we can do a good job in Nepal. We hope that besides the business, we establish Philips as a major brand in Nepal and distinguish it from other brands in the market.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What, according to you, are the problems and challenges in this market?</strong></div>
<p style="text-align: justify;">
	<span style="font-size: 12px;"><span style="line-height: 115%;">Wherever there are opportunities, there are challenges.&nbsp;We hope that the stability in the country will be ensured in the future. Besides political challenges which we all know about, I think the main challenge is the prevailing economic situation. The global economy is on the recovery path and we hope that it continues. We must stay positive and grab the opportunities in the market as they come our way.</span><br />
	</span></p>',
			'published' => true,
			'created' => '2011-07-20',
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			'keywords' => '',
			'description' => 'Boby Johnson is the Senior Customer Marketing Manager (Export) - Asia Pacific, Philips Consumer Lifestyle. He was in Kathmandu recently for the Asia Pacific....',
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	(int) 7 => array(
		'Article' => array(
			'id' => '350',
			'article_category_id' => '52',
			'title' => 'Hope And Fear Of Merger',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-indent: 0in; text-align: justify;">
	<span style="font-size: 13.5pt;">T</span>he trend of announcing merger plans by the banks and financial institutions (BFIs) has gathered pace in recent weeks. Media reports about the merger processes initiated between Everest and Kumari Banks, NMB and Clean Energy Development Banks, NCC and NB Banks, Bageshwori and Shangrila Development Banks, Kasthamandap Development Bank and Shikhar Finance, and Himchuli Development Bank and Birgunj Finance are testimonies to this fact. Not to mention several failures of Nepal Rastra Bank's (NRB) monetary policy operation of this year, but in the particular regard to mergers, it is gradually tasting success. The Bank not only had announced all possible facilitation to merger through the monetary policy of this fiscal year, it also introduced several packages of rebates, discounts, waivers and facilities to the BFIs opting for mergers. The NRB threat to force merger of the BFIs that particularly have poor corporate governance has seemingly reawakened several BFIs.</div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<span style="font-size: 13.5pt;"><img align="left" alt="from the editor" border="1" height="297" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/img1(1).jpg" style="width: 223px; height: 297px;margin:10px;padding:10px;" vspace="10" width="223" /></span><span style="letter-spacing: 0.2pt;">Apparently, the universal objectives of the merger or acquisition are to consolidate the capital, reduce operational expenses, expand business and maximise the profits. However, in our case, mergers of three distinct natures now seem to be in the offing. First, relatively large institutions are planning to create a larger capital base so they could compete with global players who would potentially begin their operation owing to WTO arrangements. Second type of merger would be compulsive of sort as the NRB has asked the BFIs belonging to the same business house to integrate without any ifs and buts. The third types are those who fear the complete meltdown if they fail to merge sooner than later to consolidate resources, introduce corporate best practices and reduce expenses. </span></div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	Nevertheless, irrespective of the reasons compelling BFIs to merge, it was the momentum of absolute imperative but long due. And every individual process to complete smoothly is another task uphill. Even if the process is unimpeded, it takes relatively long time of two to three years depending on the size of the institutions. Nepal does not have structural backing and institutional culture of transparency to allay fears of lay-offs among staff, sense of insecurity in the depositors and apprehensions losing the investment among the shareholders.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	In view of these several crucial stages, right from the expression of intent of merger, choice of the party, preliminary dialogues, due diligence assessment of the institutions, legal and regulatory processes and above all retaining the customer confidence, a dedicated structure that facilitates and provides expert services is indispensable. This could be set up by NRB, Bankers Association or by both combining the skills, needs and expertise. If the merger tempo evident today is not managed properly, none of them are likely to succeed to create another healthier institution. The fear and mismanagement of the process will acquire the hopes. And mergers will continue to be a mirage.&nbsp;</div>
<div style="text-align: justify;">
	<br />
	<br />
	 </div>',
			'published' => true,
			'created' => '2011-07-18',
			'modified' => '2012-08-28',
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			'description' => 'The trend of announcing merger plans by the banks and financial institutions (BFIs) has gathered pace in recent weeks. Media reports about the merger processes....',
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	(int) 8 => array(
		'Article' => array(
			'id' => '344',
			'article_category_id' => '40',
			'title' => 'Nepal’s Trade Ratcheting Imports',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-indent: 0in; text-align: justify;">
	<span style="color: rgb(178, 34, 34);"><i>By Pinaki Roy</i></span></div>
<div style="text-align: justify;">
	<span style="font-size: 6.5pt; color: rgb(237, 28, 36);">*</span> The Annual Report of the World Trade Organisation (WTO) states that worldwide exports during 2010 registered a growth of 14.5 per cent, the highest since 1950. It also expects this trend to continue to improve in 2011.</div>
<div style="text-align: justify;">
	<span style="font-size: 6.5pt; color: rgb(237, 28, 36);">*</span> Nepal signed the Trade and Investment Framework Agreement (TIFA) with the United States recently which paves way for the promotion of more comprehensive trade agreements between Nepal and the US in the future.</div>
<div style="text-align: justify;">
	<span style="font-size: 6.5pt; line-height: 115%; color: rgb(237, 28, 36);">*</span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The second meeting of Nepal-Tibet Trade Facilitation Committee (NTTFC) – a bilateral talks forum – is being held in Kathmandu from May 8 to 10. The main focus of the talks will be to cut the ballooning trade deficit with China by taking maximum advantage of zero tariff on imports from Nepal offered by China.</div>
<div style="text-align: justify;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">While these developments may sound all good, analysing the state of Nepal’s foreign trade over the last <img align="left" alt="" border="2" height="450" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/cover1.jpg" vspace="1" width="350" />decade or so presents a bleak picture. It’s unfortunate that Nepal has very few products at present that hold any promise of competing in the international market. Add to it the dismal environment of domestic business in the country and the chances of reaping tangible benefits from any agreement in the near future look extremely slim. Nepal’s faltering export scenario has been unable to check an unsustainable trade deficit. The eternal power shortage, fragile law and order situation and transportation woes are among the main impediments to the development of export-oriented sector. These erode the confidence of the private sector. With dwindling confidence of the investors, let alone foreign direct investments, Nepal can’t expect to see domestic investment in the foreseeable future either. In short, Nepal’s economy is in dire straits with grim hope of the growth of export-oriented industries. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin: 11pt 0in 0.0001pt; vertical-align: middle; text-align: justify;">
	<strong><span style="font-size: 11.5pt;">Escalating Trade Balance</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">During the first eight months of the current fiscal year 2010-11, exports have increased to Rs 43.24 billion, an improvement by Rs 2.99 billion over the same period last fiscal year. Meanwhile, imports increased to Rs 252.88 billion, an increase by Rs 4.61 billion over the same period. The trade deficit amounted to Rs 209.64 billion, an increase by Rs 1.61 billion. Imports are expected to continue to increase in more or less the same pattern it is following so far. This indicates that trade deficit is expected to further widen in 2012. Due to some major foreign currencies getting weaker, Nepal’s exchange rate is expected to appreciate which will make exports costlier abroad. Besides, the impact of rising inflation rate in Nepal is likely to make exports more uncompetitive in the next year. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">The agriculture sector in Nepal has remained under-developed, with a very low productivity level. At the same time, the industrial sector suffers from a host of uncertainties. The inefficient structures of these important sectors of the economy have not only reduced the competitiveness of the economy but also resulted in a limited production base. It is far below the consumption needs of the people. As a result, Nepal depends heavily on import trade for meeting its large and varied needs. Despite a marginal increase in exports, the painfully slow growth of imports during the last decade doesn’t augur well for the country. Besides, most imports are confined to non productive and consumable items like vehicles, petroleum products and gold that does not directly contribute to economic activities. Therefore, it is an alarming situation and a challenge for the policy makers.</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin: 11pt 0in 0.0001pt; vertical-align: middle; text-align: justify;">
	<strong><span style="font-size: 11.5pt;">Infrastructural Bottlenecks</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">The export sector is still plagued by the same problems that have adversely affected the entire economy. Supply-side constraints such as intermittent blockades, labour disputes, access to technology and credit, virtual absence of trade facilitation measures, lack of human capital, power outages and road transport among other infrastructural bottlenecks are eroding Nepal’s competitiveness in the international market. These factors also result in preventing diversification of its export basket. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">Large gaps exist in trade efficiency based on indicators such as the cost incurred for the trade and number of days taken to close the deal. Infrastructures like roads, ports, information technology and communications network and other logistics, transit facilities, cross-border connectivity and customs facilities are also in short supply. Nepal is yet to enhance the capacities for trade strategies and negotiations, trade and investment finance and other capabilities related to export. The trade-related institutional, human resource and supply-side limitations constrain Nepal to take advantage from trade by meaningfully participating in multilateral and regional trading systems. Considering the problems, the new initiatives on Aid for Trade (AFT) could help overcome the problems and open up new trade opportunities for Nepal. But again, the said constraints could also impede the country from qualifying for such Aid. Structural reforms and infrastructure investments to reduce transportation and transactions costs are the key to improving the external competitiveness of Nepali products.</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin: 11pt 0in 0.0001pt; vertical-align: middle; text-align: justify;">
	<strong><span style="font-size: 11.5pt;">Limited Export Items</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">Another feature of Nepali export is its limited items of export. As major export items like carpets, garments, pashmina and handicrafts are produced mainly in labour-intensive industries, the impact of trade on employment is considered significant. Vegetable ghee along with the products mentioned above constitute a significant part of Nepal’s total export. This indicates high dependency of export on very few products. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">In the second half of the 1990s, the growth of export was higher than the growth of import reflecting a positive impact of adopting the liberal economic policies. However, this trend did not continue for long and experts attribute this primarily to the impact of the decade long conflict. Though the competitiveness of the export sector had increased in the early days of the liberalisation period, the policies were rendered ineffective during the conflict and the post conflict transition. As a result, the share of import to GDP has been far greater than that of export for the last decade. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">The progress in export has been slow due to a number of national and international events and circumstances. The 10th Plan had emphasised on identifying new exportable products of comparative advantage and improving their quality and export volume. It advocated rectifying the procedural hindrances to product-wise and country-wise diversification of foreign trade. It also looked at enhancing the competitiveness of the trade sector in harmony with the regional and multilateral agreements. The Plan envisaged strengthening institutional capacity of the government, non-government and the private sectors to enhance collection, processing and dissemination of information relating to export promotion. To make foreign trade simpler, more reliable and cost effective reforms were recommended in the areas of laws, regulations, policies, procedures and facilitation. It also recommended that organisational and managerial efforts be strengthened and export promotion prioritised in a coordinated manner. The Plan also talked about mobilising Nepali diplomatic network abroad in promoting foreign direct investment (FDI), export, and the economic interests of the nation so as to accelerate the industrial development and the expansion of export trade. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin: 11pt 0in 0.0001pt; vertical-align: middle; text-align: justify;">
	<strong><span style="font-size: 11.5pt;">Quality Certification</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">Nepal already imports almost seven times more than it exports. The growth prospect of exports and the industrial sector look as gloomy as ever. Most constraints that we face today are non-economic ones. It has been increasingly realised that market access alone does not guarantee flourishing of international trade. Nepal, like any other LDC, lags in trade capacity due to non-availability of sufficient number of exportable products on the one hand and the quantity and quality of available products to meet standards of the importing countries, on the other. Nepal’s trade is faced with constraints on supply side in terms of development of testing and certification facilities, accreditation of laboratories and mutual recognition of test and certification in facilitating trade. The improvement of laboratories and testing facilities in Nepal has, for example, remained an important agenda in Nepal’s trade with India, its largest trading partner. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin: 11pt 0in 0.0001pt; vertical-align: middle; text-align: justify;">
	<strong><span style="font-size: 11.5pt;">Trade Barriers</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">Nepal still pays a very high tariff to access major markets on the one hand and on the other, duty-free and quota-free initiatives have yet to prove fruitful due to hurdles imposed by non-tariff barriers. Non-tariff barriers (NTBs) in the form of regulatory requirements, quota restrictions, administrative procedures and rules of origin (ROO) are of major concern. Due to their technical complexity and non-transparent nature, they are the most difficult barriers to overcome. Standards-related NTBs such as sanitary and phyto-sanitary (SPS) restrictions act as major impediments to Nepal’s exports. Several instances have shown that process of discussions amongst the exporters and importers which results in better information sharing can itself help address more than half of such problems. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">Despite Nepal gaining enhanced market access into the developed countries, it cannot take advantage from it until the government and the private sector join hands to expand and diversify the country’s exports. Trade is governed, to a large extent, by trade regulations and related administrative procedures. More often than not, the entry and exit from the market as well as the volume of trade rely on the transparent and simplicity of trade and administrative procedures. A study reveals that submission of unnecessary documents, administrative hassles at custom offices, additional detention charges and untimely delivery of goods increase the cost of transaction in formal trade. These activities and procedures enormously affect the trade affairs. Ultimately, it discourages the business fraternity in carrying out their businesses freely and fairly. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin: 11pt 0in 0.0001pt; vertical-align: middle; text-align: justify;">
	<strong><span style="font-size: 11.5pt;">WTO Challenges</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">The WTO membership has brought both opportunities and challenges to Nepal. The main challenges before Nepal are to fulfill WTO commitments that need strengthening existing external trade institutions and legal mechanism, removal of supply side constraints to transform available market access into trade opportunities and restructuring of industrial sector to make it more competent and contemporary. In total, the benefits of membership depends on Nepal’s ability to identify and take advantage of trading opportunities, fulfill multilateral trade obligations, formulate and pursue development strategies within those framework and above all, defend its economic, financial and trade needs. Nepal could benefit from World Trade Organisation (WTO) only if it increases internal strength and quality of export items.</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">Nepal finds it difficult to implement some of its WTO commitments. Since the benefits accruing from the implementation of these agreements are much lower than the associated cost of implementation, the resource-strapped Nepali economy cannot take this additional burden. Quite naturally, it is demanding support from its development partners to implement such commitments. The basic objectives of technical assistance for Nepal lies in promoting activities which add value to its production, help export diversification and most crucially to reduce its transport and other infrastructure costs thereby making it easier for businesses to operate. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin: 11pt 0in 0.0001pt; vertical-align: middle; text-align: justify;">
	<strong><span style="font-size: 11.5pt;">Evolving Global Trade</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">The nature of trade is evolving globally. This is reflected in the changing composition of trade, from merchandise to services. This dynamic is largely driven by technological revolutions. While the transport revolution reduced transport costs and facilitated trade in merchandise goods, the information technology revolution has resulted in decreasing communication costs and increasing quality levels, thereby causing trade in services to be the fastest-growing component of global trade. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">In addition to natural advantages, the three services sectors – health, education and high-end retail services hold immense export potential from Nepal’s perspective. Nepal has comparative advantages for the export of these sectors which are generally found to be cost effective. The attraction of these services is also due, in part, to a high level of market integration with northern India, if it can take advantage of the open border in the south. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">In spite of liberalising the economy and changing trade and investment related laws, Nepal hasn’t been able to derive expected benefits. Trade is a technical subject. The deficiencies in knowledge concerning markets, access to distribution networks and use of the ICT, complicated regulatory procedures of shipments, weak transportation infrastructure and services and insufficient trade financing are major constraining factors. Addressing these problems would involve financial resources, time, efforts, proper management, and technical expertise. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin: 11pt 0in 0.0001pt; vertical-align: middle; text-align: justify;">
	<strong><span style="font-size: 11.5pt;">Aid For Trade</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">The new initiative of the Aid for Trade could be a prime source of funding to enhance competitiveness. However, there is a gap between commitment and disbursement of AFT. Pledges are made through international forums for aid for trade initiatives but the pace of implementation and the disbursement rate is very slow.&nbsp;</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">Developed countries and development partners coming forward to support product development programmes, development of trade infrastructure like inland clearance depots, container freight stations, special economic zones, roads and other forms of transportation in order to enhance Nepal’s trade capacity is of prime importance. Other possible areas of cooperation include enhancing the quality of infrastructure for test and certification of products, capacity building for trade negotiations and institutional development. All these require adequate technical as well as financial assistance. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin: 11pt 0in 0.0001pt; vertical-align: middle; text-align: justify;">
	<strong><span style="font-size: 11.5pt;">Prosperous Neighbours</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">The multilateral trading system has contributed significantly to the growth in exports that has been aptly exploited by countries like China and India. With respect to the markets created by these neighbouring countries, the disadvantage of Nepal as a land-locked country is significantly reduced because these two are after all, proximate markets. The economies of both the neighbouring countries are increasing enormously and Nepal can benefit or should be able to do so because of this. Despite increased industrialisation and trade activities in China and India, Nepal has failed to benefit from their economic growth.</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">Nepal’s internal problems such as poor trade policy and implementation, lack of business-friendly labour laws and other rules and regulations, political instability, frequently changing trade and industrial policies, social unrest and chaos, frequent strikes, lockouts and load-shedding are also equally responsible for poor export. The reasons behind the fall in export can also be attributed to erosion of preferences for Nepali goods due to the decreased MFN (Most Favoured Nation) tariff in India. The Government of India has signed several free trade agreements with various countries. It has committed to lower customs duty as a non-LDC member of SAFTA and BIMSTEC free trade area and also announced the Duty Free Tariff Preferences (DFTP) scheme as part of commitments made in the Hong Kong ministerial meeting of WTO. The irony of Nepal’s trade is eminent in respect of decreasing tariff in Nepal. It is obvious that Nepal will continue losing export volume and find itself in a precarious situation in the absence of concrete measures to check and reverse the process of decreasing export. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">Nepal’s export to India is increasing at a snail’s pace. The growth rate of export is highly fluctuating. At the same time, import from India is far stable. It implies that import from India is in a better position than export. As the gap between export and import increases, trade deficit soars. The trade deficit with India was Rs 66.4 billion in FY 2005-06 but it has rocketed to Rs 174.4 billion in FY 2009-10. It is alarmingly high for Nepali economy. The major reason for the unfavourable balance of trade on Nepal’s part can be blamed on not finding proper markets for manufactured goods in Nepal, in India. The prominent factors include the inability to compete in the Indian market on the grounds of quality, price, supply capability etc. From a trading point of view, it could be quantitative restrictions and product disqualifications. It is understandable that unless a sizable export of manufactured products fail to find market, the trade balance proportion cannot be reduced. Therefore, finding a proper segment in the Indian market for Nepali products is critical.&nbsp;</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin: 11pt 0in 0.0001pt; vertical-align: middle; text-align: justify;">
	<strong><span style="font-size: 11.5pt;">Service Sector Emphasis</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">The Government of Nepal launched Nepal Trade Integration Strategy (NTIS)-2010 last year which seeks to identify and develop key essential products and services to build its export base in a sustainable way. A total of 19 items were selected for driving export promotion. The 12 products and seven services were identified after careful scrutiny of potentiality for development along the value chains and their linkages with poverty alleviation. These products possess immense potentialities of backward linkages within the country. To sustain trade in the future, contributing to overall economic development by making trade more inclusive, increasing employment and government revenue is important. The seven services identified are namely Tourism, Labour Services, IT and BPO Services, Health, Education, Engineering and Hydro Electricity. It has been unanimously felt that Nepal has the potential to perform better in these service sectors provided there is an encouraging working environment. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin: 11pt 0in 0.0001pt; vertical-align: middle; text-align: justify;">
	<strong><span style="font-size: 11.5pt;">Trade Facilitation</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">Trade treaty is only a means and not an end in itself towards enhancing greater market access. The growth of trade basically depends upon the conditions that are created within the national boundary in respect to measures related to investment promotion and improvement in governance. Speedy trade facilitation is the key to success. Trade facilitation at its core aims at developing competitive advantage. Work on trade facilitation like simplification of customs procedures, criteria for procedures of transit and standards verification and transforming policies and rules in accordance with those of its major trading partners India and China, are of immense importance. Improving productivity and strengthening supply capacity remain the basic consideration guiding the development of the commercial sector of the country. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin: 11pt 0in 0.0001pt; vertical-align: middle; text-align: justify;">
	<strong><span style="font-size: 11.5pt;">Internal Preparations</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">Nepal is a country with major potential that needs to be realised and enhanced through various policies and related initiatives. At the same time, it has to address a number of difficulties linked to its logistical, financial and stability related concerns. The multilateral trading system can contribute towards Nepal’s potential gain in many ways. Trade-related aspirations to diversify trade and production bases into dynamic new products and services, integrating trade and trade capacity building policies into national development strategies, maximising benefits through development of effective labour market standards and institutions and striving for an ambitious, comprehensive, balanced, equitable and development-oriented outcome, are vital. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="text-align: justify;">
	<span style="font-size: 9.5pt; line-height: 115%;">To realise the benefits of the trade agenda, having hassle free market access through reduction of tariff and non tariff barriers, facilitation measures through increased connectivity, customs harmonisation, simplification of trade rules and procedures and efficient trade logistics and the enhancement of supply side capacity, are crucial. With the help of all the benefits – present and potential – Nepal will be in a better position to address the supply-side constraints, achieve better market access and help raise its domestic growth with greater equity. This assures help to increase above 4 per cent growth rate which Nepal has been stuck with, for some time. To increase export, there must be an increment in investment for production, both domestic and foreign, that can positively affect the investment and thereby exports. </span></div>',
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			'created' => '2011-06-03',
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			'keywords' => '',
			'description' => 'The Annual Report of the World Trade Organisation (WTO) states that worldwide exports during 2010 registered a growth of 14.5 per cent, the highest since 1950. It also expects this trend to continue to improve in 2011.',
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	(int) 9 => array(
		'Article' => array(
			'id' => '343',
			'article_category_id' => '40',
			'title' => '‘We Are Mainstreaming Trade Into National Development Programme’',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 120%; vertical-align: middle;">
	<span style="color: rgb(178, 34, 34);"><b><span style="font-size: 8pt; line-height: 120%;"><img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/purushottam ojha.jpg" style="width: 182px; height: 185px;" vspace="1" />Purushottam Ojha</span></b></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 120%; vertical-align: middle;">
	<span style="color: rgb(178, 34, 34);"><span style="font-size: 7pt; line-height: 120%;">Secretary</span></span></div>
<div style="text-align: justify;">
	<span style="color: rgb(178, 34, 34);"><span style="font-size: 7pt; line-height: 115%;">Ministry of Commerce and Supplies</span></span></div>
<div style="text-align: justify;">
	<span style="color: rgb(178, 34, 34);">Production and development of the right product at the right time and capacity to supply it to the destination market in an efficient manner are crucial to enhance supply side capacity. Therefore, identification, selection and development of products in which Nepal has comparative and competitive advantage is the major issue in the development of Nepal’s trade.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>A total of 19 goods and services are identified as priority items for trade by NTIS (Nepal Trade Integration Strategy). How sustainable are these 19 products?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Yes&nbsp;12 goods and seven services are identified. They have been identified after careful scrutiny of their potential for development along the value chain and their linkages with poverty alleviation. These products possess immense potentialities of backward linkages within the country. These are products and services in which Nepal has comparative and competitive advantages. To sustain trade in the future, contributing to overall economic development by making trade more inclusive, it is important to increase employment and government revenue. Identification and selection alone cannot meet our objectives. We have to create necessary environment in the country to develop these products in a manner that will ensure sustainable trade in the future. Most of these products are related to agriculture. It is important to enhance the productivity, productive capacity and product quality in them. For this, we have to go on adopting good agricultural practices, integrated pest management and quality control mechanism. At the same time, we need to focus on improving the quality of infrastructure, for example in tests and certifications to ensure acceptance of the products in the international market.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>It is said that improved supply-side performance is the key to achieving sustained economic growth. What is hindering the improvement in supply side capacity?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Over the years, we have been enjoying increased market access in various destinations as tariff barriers are being lowered. However, there are certain non-tariff barriers that are hindering the export from the least developed countries (LDC) like Nepal. We have to address these issues as well. Production and development of the right product at the right time and capacity to supply it to the destination market in an efficient manner are crucial to enhance supply side capacity. Therefore, identification, selection and development of products in which Nepal has comparative and competitive advantage is the major issue in the development of Nepal’s trade. The causes for the hindrance in improving&nbsp;the supply side capacity include lack of adequate infrastructure - particularly transport infrastructure, energy supply, rising problems of labour unrest and law and order situation.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>How can we overcome these supply side constraints?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.1pt;">There are certain barriers for increasing our trade capacity as I mentioned earlier. We need to address these important issues to attract more investment and improve investment climate that will eventually help overcome supply side constraints. It is essential to bring more investment in the production as well as service sector. But it largely depends on political stability, law and order situation, industrial relations and adequacy of infrastructures. These need to be addressed in a coherent manner. We also need to increase our collaboration with development partners to get more support in the areas of economic cooperation and trade development. Enhancement of market access is crucial from the perspective of LDCs like Nepal since non-tariff barriers are being raised by importing countries in the name of plant and animal health, food safety, environmental concern and labour rights. Nepal is raising the voice against such barriers in bilateral, regional and multilateral forums.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Why hasn’t Nepal been able to benefit from trade despite having huge markets in the north and the south?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">It is true that the economies of both our neighbouring countries are increasing by leaps and bounds. The GDP growth rate of China is almost in the double digits and India’s GDP is increasing by eight per cent annually. Statistics show that trade between India and China is also increasing and has reached US$ 60 billion. They are aiming at increasing it to US$ 100 billion in the next five years. Despite such increased industrialisation and trade activities in neighbouring countries, we have failed to benefit from this. We need to adopt appropriate policies within the country to link our trade and economic relations to get the spill-over benefit from our neighbouring countries. We also have functioning trade agreements with both these countries but we have not been able to harness the potential benefit of exporting our goods and services. There are certain inherent problems associated with it. There are several non-tariff barriers to our exports in India and China. We need to enhance our efforts to remove these barriers. We have entered into an agreement with the Government of PR China in April 2010 to provide duty free access to 4,721 products in six digits customs tariff line. However, our industries and exporters have not been able to fully utilise this opportunity. We have initiated the process for assessing the situation and the reasons behind non utilisation of market access opportunities. This would require a constructive dialogue and deliberation between the government and businesses on both sides. Besides, we need increased engagement with our neighbouring partners in the area of economic cooperation for enhancing productive capacity in sectors like agriculture, manufacturing, export trade and infrastructure.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Why hasn’t Nepali economy benefited from trade?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">It is not true that Nepali economy is not benefiting from trade. But the question is about the level of benefit that we are harnessing.&nbsp;For this, we have to follow the path to sustainable and inclusive trade development. Trade is the output of total economic activities of the country. Trade cannot operate in isolation. Until and unless we develop our agriculture, forest, manufacturing and the service areas, trade cannot happen. All sectors of the economy should move towards the same direction and work in harmony so that there will be value addition in the export. Such a situation will help create employment, increase revenue to the government and bring more foreign currency. It will ultimately lead to the improvement in the macroeconomic situation of the country.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Why do you think Nepal has not been able to capitalise on WTO membership?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">The WTO membership has brought both opportunities and challenges to Nepal. Opportunities - because we have market access to all member countries and we can engage in constructive dialogue in the international trade forum through WTO. At the WTO, we can raise our voice together with likeminded countries to get more support from developed countries to remove market entry barriers and enhance our trade capacities. Besides, there are challenges. Ever since the liberalisation of tariff under multilateral trading system, our products have to compete with products from other countries particularly in big markets like the EU, the US and even in India. Since the tariff rate is going down, other competing countries are finding it easier to enter into these markets. This has proved to be a major challenge to maintain our market share in these markets. We have lost the export of some products like carpet, garments and pashmina in the international market and vegetable fats in Indian market during the last decade due to this reason.&nbsp;Accession to multilateral trading system and regional trade arrangement is not the panacea to remove the problems of trade. Rather, we need to develop our capacity to face increased competition on one side and utilise the opportunities available under regional and multilateral trading system on the other.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Nepal currently has a huge trade deficit. How can this be lowered?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">It is true that we are facing a huge trade deficit. During the last couple of years, exports have not increased and imports are galloping. In the last fiscal year, we had the record trade gap of around Rs 315 billion. Most imports are consumption items like petroleum, cars and gold. The gold does not directly contribute to enhance the economic activities. So, it is an alarming situation and a challenge for the policy makers. In the midst of such a precarious situation, the Government of Nepal has launched Nepal Trade Integration Strategy (NTIS)-2010 which seeks to identify and develop some key essential products and services to build our export base in a sustainable way. We must correct the deficiency which is hampering the growth of economy and the investment climate. We have to improve law and order situation, industrial relations and management of government-owned industries. We also need to develop adequate infrastructure and improve the regulatory regime so as to help in building confidence among investors. Similarly, streamlining of the transit procedure, incentives for industries like tax rebate, monetary and non-monetary incentives and improving governance systems are among the suggested reforms. Until and unless we improve our investment climate, it will be difficult to motivate and convince potential investors to invest in the industries or in any other sectors. Unless we have investment, we can improve neither international trade nor the supply situation within the country.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>The relatively stronger trade sector of the past has diminished gradually over the last decade. What can be done to revitalise trading sector again?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">During 1990s, we saw the growth of industries and trade in terms of export to India and other countries. But the industries we were nurturing during this period were not found sustainable. Carpet, garment and pashmina are no longer our niche products as many countries export similar goods. We were unable to improve the capacities of our industries in terms of economies of scale, quality and design of the products. The enhancement of productive capacities would require several steps as behind-the-border measures. One case in point is the development of Special Economic Zones (SEZ) for relocation of industries by providing one-stop services to industries in such zones combined with flexibility in labour regulations and tax rebates.&nbsp;The project for establishing special economic zones in the country was started some 12 years back but it is still in an indeterminate state as the development of physical infrastructure and creation of necessary legislation for regulating the zone is stagnant. Similarly, there is need to revisit laws related to the regulation of trade and investment regime, particularly the Industrial Enterprises Act and Foreign Investment and Technology Transfer Act (FITTA)-1992. The revival of Nepali trade will largely depend upon right choices of products and services in order to become sustainable. Efforts are to be made for maximising domestic value addition optimising the utilisation of human capital as well as other factors of production including land and natural resources which will culminate into healthy growth of economy. The growth of trade during 1990s was largely based on tariff arbitrage. When that arbitrage opportunity diminished, many such industries could not sustain. The Government of Nepal is now realigning trade through the manifestation made in NTIS-2010, Trade Policy-2009 and the current Three-Years Interim Plan (TYIP).&nbsp;Now, the challenge is to implement them in true spirit. </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>There are special privileges like zero tariffs &nbsp;for LDCs. How can we benefit from that?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Nepal enjoys zero tariffs in many countries that belong to the Organisation for Economic Cooperation and Development (OECD). The European Union provides duty free access to the products from LDCs under the Everything but Arms (EBA) initiative. Countries like USA, Canada and Japan provide Generalised System of Preferences (GSP) facilities to many products from countries like Nepal.&nbsp;Besides, Nepali products also enjoy zero tariff facilities in Indian and Chinese markets. Therefore, it is not the problem of market as such. Nepal, together with other least developed countries around the world, is pleading duty-free quota-free (DFQF) market access in developed and developing countries right from Geneva to Washington DC.&nbsp;The most important aspect is to increase our supply side capacity and competitiveness. Since zero tariff is available to all LDCs, only those can export to these markets who are more competitive. This would require revisiting the trade and export policy with a focus on choices of right products, improvement in quality and diversification of design and reduction in the cost along the value chain.&nbsp;Being a landlocked country, the transit transport cost is generally higher. Simplification of transit procedures and reduction of cost of transit is vital for Nepali trade.&nbsp;</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>A new concept ‘Aid for Trade’ has been gaining currency. What kind of reforms should Nepal make to get optimum benefit from it?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.05pt;">Aid for Trade is a new concept that emerged during the last decade. There is consensus and commitment among developed countries to support LDCs for trade development. There is a notion that LDCs need trade and not aid and this view is often expressed in various international forums. Developed countries and development partners should come forward to support product development programmes, development of trade infrastructure like inland clearance depot, container freight station, special economic zones, roads and other forms of transportation in order to enhance the trade capacity of the LDCs. Other possible areas of cooperation include enhancing the quality of infrastructure for test and certification of products, capacity building for trade negotiations and institutional development. All these require adequate technical as well as financial assistance. Pledges are made through international forums for aid for trade initiatives. However, the pace of implementation and the rate of disbursement are very slow.&nbsp;Some donors have played a tricky game just by renaming the regular official development assistance (ODA) as the aid for trade allocations which is not the spirit of these initiatives.&nbsp;Aid for trade is another stream of foreign assistance besides the regular allocation of ODA. In Nepal, we are considering creating a Fund for trade development in consultation with various development partners. An inter-ministerial task force is working on devising necessary regulatory framework for the administration of the Fund.&nbsp;&nbsp; </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.05pt;">The Government of Nepal has already taken steps for mainstreaming trade into national development agenda. Trade cannot be looked in isolation and is not a concern for the ministry of trade only. There are several entities and ministries associated with it. We have to bring them together to promote trade in goods and services. We are also aiming at getting adequate support from development partners to complement the national effort. If some products and services are important from trade perspective, they should get immediate attention for development and promotion. Support must go to the grassroots level, i.e. the enterprise level and the farm level so that benefits from export trickle down to the producers and growers. The assistance under aid for trade initiatives encompasses various sectors that contribute to trade development and thus various ministries and private sector entities have a role to play. The Ministry of Commerce and Supplies will work as the national focal point and coordinator for creating synergies of this effort. </span></div>',
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			'description' => 'Production and development of the right product at the right time and capacity to supply it to the destination market in an efficient manner are crucial to enhance supply side capacity. Therefore, identification,...',
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		'Article' => array(
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			'title' => '‘Dealing With Supply Side Constraints Will Help Our Export Prospects’',
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			'content' => '<div style="text-align: justify; text-indent: 0in;">
	<span style="color: rgb(178, 34, 34);"><b><span style="font-size: 8pt; line-height: 120%;"><img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/vidya nath nepal.jpg" style="width: 189px; height: 213px;" vspace="1" />Vidya Nath Nepal</span></b></span></div>
<div style="text-align: justify; text-indent: 0in;">
	<span style="color: rgb(178, 34, 34);"><span style="font-size: 7pt; line-height: 120%;">President </span></span></div>
<div style="text-align: justify; text-indent: 0in;">
	<span style="color: rgb(178, 34, 34);"><span style="font-size: 7pt; line-height: 120%;">Centre for Public Policy Dialogue and Former Special Secretary of Commerce</span></span></div>
<div style="text-align: justify;">
	<span style="color: rgb(178, 34, 34);">An NRB source says that in the first five months of FY 2009-10, export of goods has declined by 16.8 per cent while import of goods has increased by 30.4 per cent. This has created huge trade deficit of 48.6 per cent. Volume of trade deficit with India is higher than with the rest &nbsp;of the world.</span></div>
<div style="text-align: justify;">
	<span style="color: rgb(178, 34, 34);"><br />
	</span></div>
<div style="text-align: justify;">
	<strong>How do you evaluate the current trade situation of Nepal?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">I have been observing the economy and policies for the last four decades. But the trade deficit was never this bad. Today, the deficit is in billions of rupees which is a painful situation. The import growth has spiralled while the exports have dwindled. Nepal’s value of exports for the year 2001-02 was more than Rs 45,000 million which reduced to only about Rs 41,000 million in 2007-08. On the other hand, imports in the same period increased from about Rs 103,000 million to Rs 154,000 million. Export to India remained almost stable while export to other countries decreased sharply. During this period, about 63 per cent of Nepal’s total exports went to India while about 59 per cent of its total imports were from India. Thus, Nepal’s total trade with India was about 60 per cent. The increased import has been largely for consumption materials rather than for raw material or industrial inputs. For example, gold and many other goods are imported into Nepal considering the Indian fiscal policy. Our liberal trade policy does not allow controlling imports. According to our law, we cannot prohibit any business, we can only restrict only a few items. Nepal is the most liberal country in entire South Asia in terms of its trade policy. We don’t have any import restriction and quantitative restriction. We have very small negative list for imports.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>How do you compare the current situation with the past?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Current trade situation has grown very weak when compared to the past. Increasing trade deficit is evident. An NRB source says that in the first five months of FY 2009-10, export of goods has declined by 16.8 per cent while import of goods has increased by 30.4 per cent. This has created huge trade deficit of 48.6 per cent. Volume of trade deficit with India is higher than with the rest of the world. There is very little attention towards production of exportable goods. There is no favourable environment for that. Therefore the trade situation has worsened now. In 1996, a trade treaty was signed with India. In that treaty there were very little restrictions on export to India, the negative list was shorter and the rule of origin was not so strict. The treaty renewal in 2002 retracted such liberal provisions. The rule of origin was made tougher. Similarly, India exerted quantitative restrictions on some products. That disrupted our export. The political turmoil after 2002 and the resultant current transitional phase has led to poor trade situation compared to that of the past. </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What are the main reasons for poor development of Nepali trade?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Trade has to be looked on the basis of import and export. The import is continuously increasing but that is not a reason to rejoice. To increase export, there must be an increment in investment for production. Investment can be both domestic and foreign. Forget about the foreign investment, even the domestic investors are not encouraged to invest. The main reason is the volatile and unstable political situation. Because of this, there are no new investment and production of exportable items. Apart from that, there are issues of labour, peace and security, industrial security and unstable policies that have put investors at bay. A policy must last for at least five to 10 years to attract investment. But in Nepal that is not the case. Government is changing frequently, and every change of government brings change in the policy too. Since last year, also the interest rate has sky rocketed due to liquidity crunch in the financial institutions. That has also affected the investment and thereby exports.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Nepal faces non-tariff barriers with its trading partners. How can such barriers be removed?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">We are the member of WTO, SAFTA and BIMSTEC along with our trade partners like China and India. WTO’s policy states that the non-tariff barriers must not be exerted unless it is justified. There should be certain tariff barriers but very little. The trade must be gradually made free by removing the restrictions. The facility given to one country must be provided to other country too. In spite of this, agriculture based products’ export to India face a lot of non-tariff barriers. For example, when some agro-products have to be exported to India from either Sunauli or Birgunj, quarantine tests have to be carried out at a far away laboratory. That adds huge cost for exports. One of the main problems with export trade of Nepal is transit cost which is usually prohibitive. The transport cost from here to Kolkata, the main port for Nepal, is to the tune of 14 to 40 per cent of the cost of material. With such high cost how can we compete in the international market? Documentation barriers are also severe as the documentation process takes months and that further hinders the export. Internally too, we have constraints in trade facilitation. In Indian ports too, there are numerous problems like unavailability of ships and lengthy procedures. Such non-tariff barriers added to the tariff barriers are hindering our export. Though India has provided customs free export from Nepal to India in certain goods it levies special duties on them. Sometimes, state governments in India levy additional duties according to their local rule. A complaint on such case gets lost in the Indian bureaucracy and as a result, Nepal’s exporters face harassment.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Nepal also has severe supply side constraints. How can they be removed?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">It is true. Though various bilateral, regional trade agreements like SAFTA and multilateral trade arrangements like WTO have been providing us access to different markets through manner similar to reduced customs duties, we are not able to benefit form that. Under SAFTA, hundreds of items can enjoy concessional entry into other countries. WTO has the philosophy of liberalisation of trade by reducing tariffs. Compared to the last decade, the customs duties have declined even for entry into India. The trade access we got through bilateral, regional and multilateral agreements have not been fully utilised due to supply side constraints. What can we export when we can’t produce goods here? There is no investment environment and the cost of production is high while labour productivity is very low. There are problems with lengthy documentation, labour issues, peace and security and increased interest rate. If we do not have any supply side constraints, our export would definitely increase. </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Industrial and trade policies are not translated into acts and regulations. Even if they are enacted, they are overlapping and contradictory. Labour issues are never settled. Quality of infrastructure like transport, power supply etc is very poor. The ADB report of 2009 says the syndicate system of trucks is common in the country and the transport cost has increased as high as 55 per cent. Research and development aspect has been largely neglected. Technologies are outdated and innovation is non-existent. Institutions in particular are weak and ineffective. Private sector is not properly promoted by the government. Unless we can correct ourselves on these counts, supply side constraints will prevail. </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Nepal enjoys numerous facilities under WTO regime as well as being an LDC. How can we utilise such advantages?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">WTO believes in MFN (Most Favoured Nation) treatment. There should not be any discrimination under this system for any country. There was a Ministerial meeting held in Doha where it was decided that WTO would provide various technical assistance to strengthen the supply side of the LDCs to increase their export potential. Little has been done on that front and that is insufficient. WTO’s provision of differential treatment to the LDCs has not been effectively implemented. Facilities like ‘Aid for Trade’ are just for name. We have not received any sufficient amount on this account. There is a need for strong and effective negotiation from LDCs as a group which is lacking so far.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Our government through our embassies abroad should strengthen economic diplomacy to promote trade to respective nations by identifying suitable products. We have failed to do so. There are a few products that we can export to India. For example, Nepal can take huge benefit if producers concentrate on exporting vegetable ghee, cardamom, GI pipe and noodles to India. Tea and ginger are exported to India but it re-exports them. From our side, it is better to export our products directly to the final destination. Nepal should identify the negative net trade of a particular country and work on exporting such goods to those countries. We have failed to move ahead in this direction. </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Investors are reluctant to increase investment citing unfavourable investment environment. How can trade be enhanced amid such problems?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">The main reason behind investments remaining stagnant is political instability, frequent changes in policy, labour issues and security problems. Foreign investors seek easy exit if they do not see profits. There is difficulty in such exits and liquidation procedure takes years. Foreign investors can’t wait that long. Nepali raw material based industries would be sustainable in terms of export trade. However, that concept is not necessary to apply in international trade in the course of industrialisation. Hong Kong and Singapore are examples of countries that do not have their own big manufacturing units, but have benefited by exporting assembled products. However, if we can export goods by processing our own raw materials, we would have more comparative advantage and we would not have to spend foreign currency in importing raw materials. A study shows that Nepal’s products that have highest potential of export in the long run are tourism and hydropower. However, remittance is the biggest source of foreign exchange earnings currently. At the moment, around 80 per cent of foreign exchange earnings is through remittance. Tourism ranks second. Hydropower projects are capital intensive. Nepali capital is hardly enough to run even one Tamakoshi project. </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">The government should be proactive in providing all facilities mentioned in industrial and trade policies to increase production and promoting exports. However, private sector should also run businesses on the basis of corporate culture with new technology and increase their competitiveness. On an average, it takes about 31 days to clear seven procedures to do business in Nepal. This process time is the longest among the SAARC countries. Similarly, it requires 41 days to export products out of Nepal. Thus, the businessmen are suffering from over regulations, corruption, dishonesty, lack of transparency and political interference. According to WEF report of 2010, Nepal ranks the lowest among all SAARC countries in quality institutions. Therefore, the expectation is that the private sector will increase production and export in spite of the weak government. They have the initiative and the mission while the government is indifferent as well as inefficient.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>A total of 19 goods and services are selected by the NTIS as priority products. How realistic is this selection?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.05pt;">They have selected 19 goods and services following a lot of studies. Among them, seven are from the service sector like IT, health, education and tourism among others. I feel we can do better in these service sectors and have the potential if there is good working environment. There are agro based products too but I don’t think they are sufficient. Since our production depends on imported technology, we must select products that generate high profit in low volume items. If we can focus in the coming decades on these 19 products by creating favourable environment for investment that would certainly benefit our trade prospects. </span></div>',
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			'description' => 'An NRB source says that in the first five months of FY 2009-10, export of goods has declined by 16.8 per cent while import of goods has increased by 30.4 per cent. This has created huge trade deficit of 48.6 per cent. Volume of trade deficit with India is higher than with the rest  of the world.',
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	(int) 11 => array(
		'Article' => array(
			'id' => '341',
			'article_category_id' => '40',
			'title' => '‘Aid For Trade Can Do Nothing About Our Governance Problem’',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 120%; vertical-align: middle;">
	<span style="color: rgb(178, 34, 34);"><b><span style="font-size: 8pt; line-height: 120%;"><img align="left" alt="" border="2" height="226" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/ratnakar.jpg" vspace="2" width="200" />Ratnakar Adhikari</span></b></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 120%; vertical-align: middle;">
	<span style="color: rgb(178, 34, 34);"><span style="font-size: 7pt; line-height: 120%;">General Secretary </span></span></div>
<div style="text-align: justify;">
	<span style="color: rgb(178, 34, 34);"><span style="font-size: 7pt; line-height: 115%;">South Asia Watch on Trade, Economics and Environment (SAWTEE)</span></span></div>
<div style="text-align: justify;">
	<span style="color: rgb(178, 34, 34);">It is our right to be able to protect our industrial sector. If you open up the industrial sector completely then it could result in industrial depression and loss of employment. So, it is necessary to protect the industrial sector but not to the extent of providing incentive to &nbsp;inefficient industries.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>The trade policy of Nepal is more liberal than some other developing countries. Why then has trade failed to contribute to our national economy and development?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Having a liberal trade policy alone is not sufficient to increase export potential. Second, Nepal is still not more liberal than Sri Lanka and Bangladesh. Other countries have become more liberal, not only in terms of tariff and non tariff barriers but also in terms of trade to GDP ratio. If you see that the trade to GDP ratio is increasing, you can conclude that the country is more integrated into the global market. Theoretically, we have to be in a position to gain because we are liberalised. That is the classical theory of anti-export bias produced by Bhagwati and Kreuger in 1978. They say that if you protect your domestic industry, you will be raising the barrier for export because protection of domestic industry through tariff will in a way raise the price of import which will be used in the export processing sector. Eventually, your export will suffer. However, theories apart, in today’s world, having a liberal economy is no guarantee that you will be able to export too. </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>There is a heated debate under the Doha Round between the developed and developing countries. How justified are the arguments of the developing countries?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Agriculture is our livelihood and we should be in a position to protect our agriculture sector when required. The special safeguard measures proposed by the developing countries are useful. If you open up the entire agriculture sector in which the protection is already lower compared to industrial products, there could be other problems like food security, livelihood, social tension and others. In agriculture, I fully agree with the position of the developing countries. In terms of industrial products, most of the developing countries which are liberal today and most of the OECD or developed countries had protected their industrial sector during their respective process of economic transformation. So, it is our right to be able to protect our industrial sector. If you open up the industrial sector completely then it could result in industrial depression and loss of employment. So, it is necessary to protect the industrial sector but not to the extent of providing incentive to inefficient industries. You have to allow a certain degree of competitive atmosphere. If you think that they will be able to do better in the long run, then you have to provide protection for a limited period of time.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">On non tariff barriers, there are two things that we have to understand. The first is that certain non tariff barriers are related to environment, consumer preferences and health and safety of the consumers. Such conditions on the basis of scientific evidence are imposed in the form of non-tariff measures. For example, if Aflatoxin causes cancer and we export certain agricultural products containing Aflatoxin which is at a level higher than globally accepted, then our product gets rejected. It’s not the fault of the importing country. We have to be able to improve our infrastructure, laboratory system, human resources and legislative arrangements in order to be able to fulfil the requirements. But there are certain non-tariff barriers which are protectionist in nature. We oppose these protectionist barriers. In terms of services, the developing countries are demanding the liberalisation of labour movement from one country to another. It has been proved that three per cent increase in labour force from the developing countries would result in global welfare gain of 300 billion dollars. This is something that needs to be pondered upon.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Finally, on trade remedy measures, developing countries do not have a serious position except saying that the developed countries are using trade remedy measures as a protectionist device. That may not necessarily be the case. So, on the whole, their position in the Doha Round is quite justified given the socio, economic and political situation of these countries.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>LDCs find it difficult to implement some of their WTO commitments. How would ‘Aid for Trade’ help to implement such commitments?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Aid for Trade (AFT) does provide necessary help to the developing countries and LDCs to implement some of the WTO commitments including drafting of legislations, preparing of regulations and putting in place the institutional mechanism that are required to take advantage of the export opportunities offered by the WTO.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>How can ‘Aid for Trade’ help overcome supply side constraints?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Supply side constraints need to be divided into two different categories. One is supply- side constraints that results from our fluid political situation. The strikes and various political demonstrations make us unable to ship our goods on time. AFT cannot do anything about this. Then, there are supply side constraints that are resulting from our lack of resources or our inability to utilise resources properly in certain areas like infrastructure, development of roads, transportation, electricity and skills. People do not have the necessary skills to produce goods in a competitive manner. We have customs infrastructure which does not even measure up to regional standards. That needs to be improved. Besides, we do not use the required technology to be more productive and competitive in the international market. </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Some people interpret ‘Aid for Trade’ as the same money from the same window as human rights aid. What is your take on it?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">That is not true. AFT includes only six components. The first is the economic infrastructure which is the money provided for road, electricity, and communication. The second category is the money provided for building productive capacity in agriculture, industries and services sectors. The third is a trade development category which is basically the money provided for export promotion and development of trade. The fourth category is trade policy and regulations for helping countries to implement their WTO commitments, including enactment of legislations and capacity building of various institutions in the country. The fifth one is called trade related adjustment which is basically the money provided to countries to implement trade liberalisation measures and protect the country from negative affects of trade liberalisation. It involves retraining people who lose their job because of trade liberalisation and finding alternative employment opportunities for them. The sixth category is ‘others’. Others could be anything if the donors and recipients agree to call a particular aid as AFT. The other way of looking at this is: AFT is Overseas Development Assistance (ODA) minus the money provided for various areas, for example, health, education, environmental conservation, human rights, women empowerment and peace and conflict. Human Rights is of course a separate area altogether.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Do you think ‘Aid for Trade’ will succeed in Nepal as many other aid programmes have failed to generate the desired output?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">There is no evidence to say that aid has not helped Nepal’s economic growth. The opinion is divided here. As a researcher, I would be reluctant to say that aid hasn’t helped. At the same time, I wouldn’t vouch that foreign aid has helped tremendously. However, it has certainly helped in meeting the saving and investment gap. If the foreign aid was not provided in some areas, for example, the health sector, it is difficult to say whether we would be able to do something. In the case of AFT, I am not very excited. If there is real additional money coming as AFT, that would definitely be helpful, but not if it is repackaging of money diverted from other areas. Next, it has to be predictable. If certain donor countries are going to provide certain amount of money, they have to guarantee the fund for a multi-year period.&nbsp;It is also the issue of sustainability which is not only about donors providing money on time. It should be taken into account whether the government is ready to take charge of the projects once the donor funding ceases. If a donor provides money for three years, you can’t ask the donor to provide money for the entire period of the project even if the results are good. If you can operate the project on a commercial basis, the private sector will take over. If you are not working on the commercial basis, then government should step in and provide sustainability to the project. The final issue is the effectiveness of the aid. The Paris declaration of aid effectiveness should be the guiding principles for enhancing the effectiveness of AFT. These criteria would actually determine the success of the project. If these criteria are met, the chances of AFT working for the country are fairly good. </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Experts say we lack basic trade infrastructure. What kind of problems and challenges do you see that hinder Nepal’s sustainable trade development? What should be done?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Basic infrastructure is necessary for the country to be able to expand its export on a sustainable basis. A study shows that if a shipment is delayed by one day because of lousy infrastructure, it is equivalent to adding 0.8 per cent to the total tariff that you pay to the importing country. Another study says that if export is delayed by one day, the total export potential will be reduced by one per cent. Infrastructure should be the number one priority for Nepal to be able to trade on a sustainable basis. AFT is not going to be enough because we have our own governance problems to tackle. Governance issue is equally important. </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Experts opine that international community should not only provide market access but also help LDCs in enhancing their trade capacity. If everything is to be done by other countries, what should LDCs like Nepal prioritise in their agenda?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Nepal should fully mainstream trade in national development strategy first. In the new Plan document that is going to be prepared, it has to be included. Apart from that, mainstreaming has to be done at the sectoral level too. For example, if tea export is to be increased, then its priority has to be mainstreamed not only at the level of the Ministry of Industry but also at the Ministry of Agriculture which is responsible for promotion and growth of tea. So, all these ministries and sectors have to take into account the fact that mainstreaming is vital. The second issue is that we have to address supply-side constraints through effective governance reform as well as utilisation of AFT. But there are two aspects we have to ensure ourselves besides the sustainability issue. First, we have to improve our absorptive capacity. The government is unable to even spend the budget amount that has been allocated. How would it spend the money allocated by an external agency? However, we have seen some gradual improvement in our absorbing capacity but it needs to be enhanced further. Another critical issue is that of coordination.&nbsp;There must be coordination on how much money is coming, how it is being utilised and which sector is being prioritised. There has to be a coordination mechanism between the ministries of commerce, industry, tourism, agriculture and other related ministries that have a role in promoting trade so that there is better coordination and effective utilisation of resources.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>LDCs are worried that the current intellectual property protection regime does not recognise their contributions. How can countries like ours raise their voice to eliminate the danger of losing patent rights to compete in the international market?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Some of our properties of genetic resources and traditional knowledge are taken away by some multinational companies and universities. But in order to address that kind of problem, we have to keep our house in order. We need to pass the legislation on access and beneficiary by the parliament which is pending for six years now. The draft was prepared in 2004-05 but has not been adopted as a law. We need to ensure this as it will take care of three aspects. First, it will guide us on regulating access to our genetic resources and traditional knowledge. Second, it would make sure that when the access is provided, it is done on the basis of a prior informed consent of the local communities who are involved in conserving those resources. Third, it would ensure that those communities are appropriately remunerated. They would be appropriately remunerated for the job they have done so far to conserve the resources. With that kind of legislation, many countries have protected their bio diversity, genetic resources. It’s our fault that we have failed to follow suit. Global regime is unfair, however, we have not been able to create a mechanism at the local level to counter the unfair tendency of some global rules. </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Being an LDC, Nepal enjoys numerous benefits like zero tariff. How should Nepal utilise such concessions to gain optimum benefits?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Yes, we do have zero tariff access in selected markets. The European Union is definitely among them but we don’t have zero tariff access in the US market. The process for the same has begun but it will take a long time before such access is provided. Even if you have zero tariff access, you still have to fulfil the rules of origin (ROO) requirement. Once you fulfil the ROO, you are back to the supply-side issues because you have to create backward linkages. If a shirt has to be exported, it’s better to have the fabric manufactured in Nepal itself rather than relying on countries like China and India for the supply of materials. If we continue to get the materials from these countries, we will not be able to fulfil the ROO criteria. We have the full potential for export In some areas where ROO is not a problem. One such example is coffee which can be exported to European, Japanese or any other market in desired quantity without having to fulfil the ROO criteria because it’s an indigenous product and there could be more than 90 per cent value addition and processing in our country itself. However, we cannot export if we are not able to produce in desired quantity. Apart from production, we also have the problem of competitiveness. Even if our cost of production is lower than other countries in the world, our products will cost more by the time it reaches the final market. Let me give you an example. Imagine a situation in Gulmi where you have to organise a few farmers in the form of cooperatives while trying to export coffee to Japan. You collect 12 tonnes of total consignment and put it on the truck and try to send it. But there is a strike so you are stuck there for two days. Finally, you manage somehow and reach Birgunj customs. In order to clear the export consignment, it takes two days. Once cleared, the consignment moves to Kolkata port. It should normally take a maximum of two days to reach Kolkata port but sometimes it takes six days because there is a strike in Bihar or West Bengal which falls on the way. Once at Kolkata port, the consignment is not enough to reserve the entire ship. Now, it takes four days for the ship to fill up. Eventually, it moves from Kolkata. Kolkata is not a deep sea port but a shallow port so it can’t go directly to Japan. Therefore, the consignment on board the ship travels to Visakhapatnam, Colombo or Singapore. The consignment is transferred to the mother vessel at one of these ports and then it goes to Tokyo. In the process, you lose so much of time that you will not be competitive in the global market. So, it is not only the question of productivity and production, but also the question of being competitive in export trading. </span></div>
<div style="text-align: justify;">
	 </div>',
			'published' => true,
			'created' => '2011-06-03',
			'modified' => '2011-06-04',
			'keywords' => '',
			'description' => 'It is our right to be able to protect our industrial sector. If you open up the industrial sector completely then it could result in industrial depression and loss of employment. So, it is necessary to protect the industrial sector but not to the extent of providing incentive to  inefficient industries.',
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		'Article' => array(
			'id' => '340',
			'article_category_id' => '34',
			'title' => 'Natural Gas Remains Untapped',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="margin-bottom: 0.0001pt; vertical-align: middle; text-align: justify;">
	<span style="font-size: 14px;">T</span><span style="font-size: 9.5pt;">hough three decades have passed since natural gas was found below the grounds in Kathmandu , nothing has been done yet to bring it to the kitchen of the people. Negligence of the government and technical complications have made gas extraction a far cry. Officials at the Department of Mines and Geology say there is no possibility to extract natural gas for utilisation anytime soon.</span></div>
<div style="margin-bottom: 0.0001pt; line-height: 11pt; vertical-align: middle; text-align: justify;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle; text-align: justify;">
	<span style="font-size: 9.5pt;">The department has failed to even to evaluate the proposals of two companies that sought permission to extract gas. The proposals are lying with the department for the last two years. Continental Trading Enterprises and Rajavardhan Construction, a company under KL Dugar Group had submitted those proposals. </span></div>
<div style="margin-bottom: 0.0001pt; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle; text-align: justify;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle; text-align: justify;">
	<span style="font-size: 9.5pt;">Sarbajit Prasad Mahato, the Director General of the department accepts the weaknesses of the department but blames it to various complications. He said that more studies are needed to go ahead on this. </span></div>
<div style="margin-bottom: 0.0001pt; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle; text-align: justify;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle; text-align: justify;">
	<span style="font-size: 9.5pt;">Studies have revealed that the area of 26 square kilometres from Teku to where the office of the Nepal Herbs Corporation is located contains natural gas. Studies by the department carried out at different times during the last 17 years show the possibility of a natural gas reserve of 310 million cubic metres. This amount can meet the need of 20,000 households for 30 years.&nbsp;The study conducted in 1996 says that extraction work would cost Rs 437.7 million. The extracted gas cannot be liquefied and filled into the cylinder directly. Therefore, it should be supplied directly to the households through pipelines. This is said to have become costly now because of the concrete constructions stretching the length and breadth of Kathmandu valley. However, such gas can be used to generate electricity thorugh thermal power station. The department has identified 14 places from where the gas can be mined. </span></div>
<div style="margin-bottom: 0.0001pt; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<span style="font-size: 9.5pt; line-height: 115%;">The department has put forward an option to conduct fresh studies as the environment has changed much since the time of the previous studies. </span></div>',
			'published' => true,
			'created' => '2011-06-03',
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			'description' => 'Though three decades have passed since natural gas was found below the grounds in Kathmandu , nothing has been done yet to bring it to the kitchen of the people. Negligence of the government and technical complications have made gas extraction a far cry.',
			'sortorder' => '263',
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			'article_category_id' => '34',
			'title' => 'Clean Chit For Kansakar',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-indent: 0in; text-align: justify;">
	<span style="font-size: 12pt;">T</span>he Special Court has given clean chit to suspended Executive Chairman of Nepal Airlines Corporation (NAC) Sugat Ratna Kansakar and six other officials. In a case filed against them at Special Court, the Commission for the Investigation of Abuse of Authority (CIAA) had alleged that the six had committed corruption by sending lock-up money to Airbus company for buying a jet aircraft though neither a formal decision was made for this purpose nor the necessary finance was&nbsp;arranged to pay for the purchase.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	The court comprising three justices Gauri Bahadur Karki, Om Prakash Mishra and Kedar Prasad Chalise issued the clean verdict on April 19.</div>
<div style="text-align: justify;">
	 </div>',
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			'created' => '2011-06-03',
			'modified' => '0000-00-00',
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			'article_category_id' => '34',
			'title' => 'Rahughat Construction Begins',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="margin-bottom: 0.0001pt; line-height: 11pt; vertical-align: middle; text-align: justify;">
	<span style="font-size: 8pt;">T</span><span style="font-size: 9.5pt;">he first phase of the construction at the Rahughat hydroelectricity project has started with the survey for the 11.7 km road to be constructed from the powerhouse to the reservoir. The 30 MW project site is in the Myagdi district. </span></div>
<div style="margin-bottom: 0.0001pt; line-height: 11pt; vertical-align: middle; text-align: justify;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle; text-align: justify;">
	<span style="font-size: 9.5pt;">Meanwhile, also the construction of the residential building at Rakhu Piple has begun, according to the project officials. The building will be complete within one-and-a-half year. The first phase also includes the construction of tunnel reservoir to the powerhouse. The reservoir will be at the border of Jhi and Dagnam VDCs. The powerhouse will be situated at Tilkenichaur, six kilometres away from the dam.</span></div>
<div style="margin-bottom: 0.0001pt; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle; text-align: justify;">
	 </div>
<p style="text-align: justify;">
	<span style="font-size: 9.5pt; line-height: 115%;">&nbsp;The project is being constructed with a loan from the Indian Government and a joint investment of Nepal Government and Nepal Electricity Authority (NEA). The construction cost is expected to be anything between Rs 3.5 billion to Rs 4 billion, according to a study of Nepal Government. The project is expected to be complete by 2017. </span></p>',
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		'Article' => array(
			'id' => '373',
			'article_category_id' => '40',
			'title' => 'Developers Need To Be Transparent To Win Public Confidence(june 2011)',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 120%; vertical-align: middle;">
	<span style="font-size: 14px;"><b><span style="line-height: 120%;">Ashoke SJB Rana</span></b></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 120%; vertical-align: middle;">
	<span style="font-size: 7pt; line-height: 120%;">President</span></div>
<div style="text-align: justify;">
	<span style="font-size: 7pt; line-height: 115%;">Nepal Bankers’ Association</span></div>
<div style="text-align: justify;">
	The home loan is based on the repayment capacity of the borrower. This depends on the borrower’s income. The borrower’s income should be sufficient to pay the EMI (Equated Monthly Instalment). Under this system, the bank can quickly notice if a borrower defaults on his or her scheduled payment.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>How does the banking community look at the overall prospect of the housing industry?</strong></div>
<div style="text-align: justify;">
	When we interact with Nepal Land and Housing Developer’s Association (NLHDA), they put forth their arguments why the housing developers should be encouraged. Their point is that it promotes infrastructure development that the government has failed to provide such as water, electricity and other facilities that come along with housing standards mentioned in the building code. So, I think this is very positive. It is only the speculative side we need to be wary of.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>How much have the banks invested in this sector?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: 0.1pt;">Our estimate is that the banks have invested in average of 25 percent of their loan portfolio into this sector. However, this is an average only. I think that the NRB has put the cap at the right time to prevent the bubble from bursting. We were afraid that the share of housing industry in the total loan portfolio of the banking system might go higher because of the asset price bubble expanding till last year. If you can get regular income and recover your investments in 15 to 20 years, it’s good to invest in this sector. But when the price of the property and the development cost increases and the return comes around in 50 to 60 years that is not economically viable. The mortgage in the west is done usually for 15 to 20 years. </span></div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>How will the banking sector benefit with the improvement in housing industry?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: 0.1pt;">One of the major aspects of the housing industry is infrastructure development. The NRB has welcomed this because that means value addition but it also wanted to control the speculative part. People were buying property on credit or with loan hoping the price would go up and they would he able to sell it for profit even before paying the entire price. And that was the dangerous part of the entire chain.</span></div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>A lot of housing and apartment units are unsold. In this market situation how confident are you of the banks recovering the loans they have given to this sector?</strong></div>
<div style="text-align: justify;">
	The NRB has recently changed its directive and allowed&nbsp;home loans of up to Rs 6 million to be considered as normal loan. This means people who want to buy a house can borrow up to Rs 6 million from the bank and manage the rest from the equity. High-end apartments cost around Rs 10 to 15 million. So, this loan amount is sufficient. There should not be any problem to recover such loans.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>As an investor, what kind of policy reforms do you think are required to improve this industry?</strong></div>
<div style="text-align: justify;">
	I think a little bit of transparency on the part of developers has to come. Just like the banks disclose about their capital, deposit, liquidity ratio and investment, the real estate developers too need to make certain disclosures to the public. The big fear is that the investors might be putting in money where the developers have not put any. It could be all borrowed. Investors want to know the strength of the developers. I think some kind of transparency and disclosure from developers can give confidence to the banks and the individual buyers.<br />
	<br />
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0.15pt;">Till recently there was a rule which made it compulsory that all payments exceeding Rs. 5 million in a real estate transaction be made through a bank. Recently the Supreme Court declared that such a rule was illegal. What is your comment on it?</span></strong></div>
<div style="text-align: justify;">
	That provision was there because banks felt that dealing in cash is an expensive proposition. We try to encourage use of cheques. It has been now ruled out and it is unfortunate. I don’t think that the real problem was with payment through bank. The problem was with the disclosure of income source. Even if someone comes with cash, they still have to disclose the income source to the Land Revenue office while getting the transaction registered. I don’t think it is a meaningful ruling.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>What are the requirements for granting loans to individual buyers of apartments? What is the current trend?</strong></div>
<div style="text-align: justify;">
	The home loan is based on the repayment capacity of the borrower. This depends on the borrower’s income. The borrower’s income should be sufficient to pay the EMI (Equated Monthly Instalment). Under this system, the bank can quickly notice if a borrower defaults on his or her scheduled payment. It’s not a project loan where there may be an implementation risk that the borrower may not implement the project in time. It’s about buying a home that the developer constructs. The bank has to properly evaluate the developer to minimise the implementation risk. So, I think the housing loan is a very structured product. I think that for the banks, it is an easier loan to recover.<br />
	<br />
	 </div>
<div style="text-align: justify;">
	The risk is only when an institution is exposed high on the speculative side of real estate business. If the exposure is not high, the institution may be stuck with a project or two for sometime, but that will not impact much in the overall health of the bank.</div>
<div style="text-align: justify;">
	<br />
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>What is your suggestion to the real estate developers?</strong></div>
<p style="text-align: justify;">
	<span style="font-size: 11pt; line-height: 115%;">We need to separate the good developers from the others, some of them may not be financially sound. The public should find out who the serious developers are and distinguish them from the inexperienced ones. There are developers who have no engineering knowledge and only believe that it is like a real estate transaction. If there are people who are trained engineers and have business plans like the ones from CE construction, it gives confidence to the entire sector. I think we need to support these people and ignore the others. <br />
	</span></p>
<p style="text-align: justify;">
	 </p>
<p style="text-align: justify;">
	<span style="font-size: 11pt; line-height: 115%;"><br />
	</span></p>',
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			'id' => '372',
			'article_category_id' => '40',
			'title' => 'Real Estate Sector Must Develop Professionally (june 2011)',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-align: justify; text-indent: 0in;">
	<span style="font-size: 14px;"><b><span style="line-height: 120%;">Bhaskar Mani Gyawali</span></b></span></div>
<div style="text-align: justify; text-indent: 0in;">
	<span style="font-size: 11px;"><span style="line-height: 120%;">Executive Director-Banks and Financial Institutions Regulation Department</span></span></div>
<div style="text-align: justify; text-indent: 0in;">
	<span style="font-size: 11px;"><span style="line-height: 120%;">Nepal Rastra Bank</span></span></div>
<div style="text-align: justify;">
	<span style="font-size: 11px;"><br />
	</span></div>
<div style="text-align: justify;">
	The banks should invest in the housing industry because real estate sector too must develop. This is required to ensure the right of the people to live in their own houses. There must be investments in this sector and this sector must develop but all this has to be transparent and healthy.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>What actually does NRB want in the investment of commercial banks in the housing industry?</strong></div>
<div style="text-align: justify;">
	The NRB wants real estate and housing business to develop as a true industry. In this sector currently, a huge amount is invested from the banks, the developers and the general people. Concentration of such a huge amount in a single sector affects other sectors too.&nbsp;The NRB wants this sector to surge professionally. There will be investment as required and the transparency and honesty has to be maintained at the highest degree.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>Is the investment in the housing industry feasible for the banks in Nepal?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: 0.15pt;">The banks should invest in the housing industry because real estate sector too must develop. This is required to ensure the right of the people to live in their own house. But we thought the trend of unnatural price hike driven by the investment for profit from money borrowed from the bank wouldn't be sustainable. Therefore, the NRB has put a limit for bank investment in this sector. However, it does not mean that the banks should not invest in this sector. There must be investments in this sector and this sector must develop but all this has to be transparent and healthy. </span></div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>The NRB recently relaxed the cap it had imposed on bank lending in the real estate sector. Why was the NRB late in realising this sector's potential as an industry?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: 0.15pt;">What was happening in the past was: people were buying land with the help of bank borrowing and selling the same land to others for profit who in turn, were borrowing from the bank to pay for the purchase and selling the same land further for profit. It formed a never-ending chain that resulted in land prices being unnaturally hiked. The NRB is against such practice. We believe the real estate sector should develop in a professional way.&nbsp;Lending for purchasing real estate properties meant for personal use should not be stopped if the buyer of such property has enough income to service the loan obligations.&nbsp;Such real estate lending is to buy land for constructing personal residence, to construct a residential house on&nbsp;the borrower's land and to buy houses or flats in the community housing projects. So, we recently issued a directive to remove loans up to Rs 6 million from the category of the real estate loan. If the banks do not invest in houses and apartments, the people's right to have their own house will be a mere dream. In the long run, old houses will need to be replaced and with the increase in population, more people will need houses. We have not tried to discourage investment into this sector and that is why we relaxed the lending.</span></div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>How can you say that the real estate loan provided to under a new name 'home loan' would not result in similar adverse consequences as in the past?</strong></div>
<div style="text-align: justify;">
	The loans up to Rs 6 million have been removed from the category of real estate loan. This loan is provided by banks depending on the borrower's ability to pay back the instalments. Previously, the real estate loans went mostly for the speculative business of land plotting that created undesired consequences. But the home loan is not speculative and will not create problems.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>&nbsp;The developers complain that the NRB has been hurting their business by introducing adverse policies. What do you have to say about it?</strong></div>
<div style="text-align: justify;">
	Well, considering the demand of the real estate developers, we removed the loans of up to Rs 6 million for the purchase of apartments and houses from the category of 'real estate loan'. But the developers are demanding that this limit has to be lifted further. We believe that Rs 6 million is a huge amount of money and higher than required by an average Nepali to purchase a house. So, it is not possible to lift this limitation any further.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>The Supreme Court recently nullified the earlier rule that required all the real estate transactions exceeding Rs. 5 million in value to be through a bank. What is the view of NRB on it?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: 0.15pt;">The verdict of the Supreme Court is equivalent to law and we respect the decision. Cheques, cash or any other methods are just the instruments of payment. Looking at the international practice of making payments, it is difficult to say that payments through cheques would create problems and cash wouldn't.&nbsp;We recommend that transactions should be made through any other method other than cash. And a cheque is safer, simpler and easier. This is the intention of the banking system around the world and the NRB's wish is no different.<br />
	<br />
	</span></div>
<div style="text-align: justify;">
	<strong>What are the possible measures that the NRB can initiate or facilitate for the smooth growth of the housing industry?</strong></div>
<div style="text-align: justify;">
	We have now brought the home loans of up to Rs 6 million under the category of personal loan. This indicates that the NRB wants this business to develop and move ahead in a healthy way. With the time and demand, there will always be room for necessary amendments.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>What is the current status on loan recovery from the housing industry?</strong></div>
<div style="text-align: justify;">
	The banks have to recover any lending within the stipulated time period. We have received information that the loans are being repaid.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>What is the total investment of the banking industry in this sector? Do you see further investments coming into this sector in the coming years despite its present precarious position?</strong></div>
<p style="text-align: justify;">
	<span style="font-size: 11pt; line-height: 115%;">Currently, the total investment in this sector is Rs 97 billion which is 18.9 per cent of the total investments made by commercial banks. The real estate and housing sector is a growing business and there must be further investments in in this sector also in the future. The past practice of using bank's money to speculate on the real estate should not be there. However, to fulfil the people's need for houses and apartments, there must be further investments pumped into this sector.</span></p>',
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			'id' => '371',
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			'title' => 'Urban Infrastructure Development Has Failed To Keep Pace With Urbanisation (june 2011)',
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			'content' => '<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;"><strong><span style="line-height: 120%;"><br />
	Shivahari Sharma</span></strong></span><span style="font-size: 7pt; line-height: 120%;"><br />
	Deputy Director General</span><span style="font-size: 7pt; line-height: 115%;"><br />
	Department of Urban Development and Building Construction<br />
	<br />
	<br />
	</span><strong><span style="font-size: 9.5pt;"><br />
	How safe are the buildings constructed by housing developers in Kathmandu?<br />
	</span></strong><span style="font-size: 8.5pt;"><br />
	The housing companies that want to construct community housing get license only after fulfilling a few procedures. First, the developer should get a planning permit from the Town Development Committee (TDC) based on regulations and by-laws. Next, the developers plan and design buildings and apartments which are later approved by the Department of U</span><span style="font-size: 8.5pt;">rban Development and Building Construction (DUDBC). The approval is subject to fulfilling the requirements of the National Building Code on safety, power supply, fire hazards, other possible disasters and structural design. Following that, the project, if big one, must pass Environmental Impact Assessment (EIA). If it is small one, it must pass the Initial Environmental Examination (IEE). EIA is approved by the Ministry of Environment and IEE from the Ministry of Physical Planning and Works. Then the site map is passed by the concerned municipality or VDC. The housing and apartment complexes have been properly designed and approved. So I don't think they are unsafe. We have our monitoring mechanism in place. But we feel it is not adequate. So, we are in the process of strengthening it. We have planned a third party monitoring system which means outsourcing the job as we have human resource constraint.&nbsp;The pace of urbanisation in the last decade in the capital has been tremendous because of the conflict. However, the growth is largely a haphazard one and urban infrastructure development has failed to keep pace with that of urbanisation. I feel infrastructure development in the city must be able to meet the pressures of migration and rapid urbanisation and such infrastructure development should be carried out by the metropolitan city and local bodies.&nbsp;</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<br />
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 9.5pt;">Could you tell us more about your monitoring mechanism that ensures the housing companies adhere to safety standards? <br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 8.5pt;">We do have our own in-house monitoring mechanism. However, monitoring of the environmental compliance has to be done by the concerned ministry as well. Similarly, adherence to the planning permit is evaluated by the TDC. The size of open space, size and number of units, ground coverage and some others aspects are specified in the planning permit. The monitoring by the division office of DUDBC has not been extensive due to resource scarcity.&nbsp;So, we are instituting a system of third party monitoring next year to evaluate the level of compliance. This will make the process more transparent.&nbsp;We have found cases where constructions have begun even before the approval.&nbsp;However, it has been tightened now and we have taken actions against such practices. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<br />
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 9.5pt;">Do you have plans to limit the number of projects that come to you for approval?<br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 8.5pt;">With the fast pace of urbanisation, there is a huge demand for housing.&nbsp;The competition is still not adequate in community living and group housing. The target buyers of such housing should be the middle and lower income groups. But at present, the housing companies have targeted only the higher income groups. The main reason behind this is the high land price and complex land management system.&nbsp;Unless the land price comes down, this market cannot become competitive. Rather than controlling, this sector needs regulation through set standards. There are flaws that need to be corrected so that this industry will improve. The demand was affected after tightening of the housing loan. Last year’ inflation in the land price also affected a number of housing projects. In 2007-08 and 2008-09, there were a lot of new projects which took license but now we hardly have any takers.&nbsp;At present, the average cost of apartments is around Rs 6.5 to 9 million. However, some companies have recently introduced flats for around Rs 1.7 million. When the price comes down to around Rs 0.8 to 1 million, we can have housing for the masses.<br />
	<br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 8.5pt;">After the recent relaxation by Nepal Rastra Bank in the control in housing loan, we can expect that the number of new projects may increase. Until 26 October 2010, 59 projects were given license and now there are 18 new projects in the process of acquiring licenses. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<br />
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 9.5pt;">It has been observed that the process of issuing licence is rather lengthy and the companies need to visit numerous authorities in this connection. What is being done to simplify it?<br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 8.5pt;">This is also a big issue raised by the private sector. We have discussed about the one-door licensing process in the ministry. The process can be simplified but for now, they must visit four different authorities.&nbsp;EIA and IEE fall under the purview of a separate unit. Planning permit and map approval can be brought under one unit. They are currently under the purview of municipalities and TDC offices. But the existing law has to be amended first for such changes to take place.&nbsp;Developers have also demanded a change in the parameters for EIA and IEE. Their view is that the housing projects facilitate managed urbanisation and do not harm the environment much. We have discussed that too in the ministry and sent a proposal to the Ministry of Environment for consideration on this. It is true that the current procedure is time consuming but if all the requirements are met by the developers, it won't take much time.&nbsp;</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<br />
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 9.5pt;">The geologists say the geology of Kathmandu is not suitable for constructing high rise buildings. Why then has the department given licenses to construct tall apartment buildings?<br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 8.5pt;">Nepal lies in 11th most risky area of the world in terms of earthquake. Kathmandu is located in one of the world's most seismically active zones. But let's not forget that despite frequent earthquakes in Japan, they have so many skyscrapers. Therefore, high rise apartments will not pose a major threat if appropriate design is made, the building code requirements are fulfilled, soil tests and geological studies are conducted properly and quality constructions materials are used. The important thing is that the specific local conditions of the construction area have to be considered while giving planning permit.<br />
	<br />
	<br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 9.5pt;">People are concerned about the safety of the apartment buildings that are approved by the department. What is your evaluation of the safety in these apartment buildings?<br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 8.5pt;">&nbsp;Going by the designs that are presented to us, I don't think people should be wary. The private sector has invested a lot of money in their projects. If something goes wrong with one particular project, it is bound to affect other projects as well. With the kind of massive investment they have put in, they wouldn't want to make it unsafe. With the current speed of urbanisation, there won't be an alternative to high rise apartments in the near future.&nbsp;So, it's imperative that the safety measures are of the highest standard to win the confidence of the general public. We have checked the designs for the apartment buildings and feel that they are safe enough. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<br />
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 9.5pt;">Why isn't there an inter-departmental coordination for developing infrastructure like electricity supply, road, sewage and drinking water?<br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 8.5pt;">Somewhere along the line, the inter-departmental and inter-ministerial coordination is missing. But the scenario has definitely improved now and there is no haphazard digging like in the past. If a maintenance work has to be done, prior approval from the road department must be taken. The problem is that one department does not trust the other's work. And a lack of discussion about the matter hampers the cause further. We also don't have a regulation unit for urban infrastructure in cities. We have proposed a town development corporation which will look at the local bodies and the planning unit in Kathmandu. However, the proposed bill is yet to be passed by the parliament. The proposed bill has proposed the formation of Kathmandu Valley City Development Corporation which will include five municipalities of the valley as well as the VDCs in the suburbs. We believe that if such an authority existed, coordination would definitely be improved.</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<br />
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 9.5pt;">By when do you think the city development mechanism will come through? How long will people have to continue to bear unmanaged and haphazard urbanisation? <br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 8.5pt;">There are plans for Kathmandu but they have not been implemented yet. A clear policy regarding land use is not there. After the formation of the national urban and housing policies, we prepared the draft of the bill and sent it to the relevant ministry. The policies are there but it does not have ownership in the absence of the physical development act. First of all, the land must be managed in order to ensure urban planning. For example, if someone decides to build a house in the middle of a field he would want to take the road, electricity and other infrastructure to the house. If there is a physical development act, it will prohibit the construction of a building in the farmland and deny the basic infrastructure for such land. We have also prepared the draft for an act on real estate business and regulation and sent it to the parliamentary committee. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 8.5pt; line-height: 115%;"><br />
	If that gets passed, the buying and selling of property can generate revenue for the government besides providing security to the buyers. The present haphazard situation is due to the absence of a proper law that would ensure a proper control mechanism. We want that the growing cities should not suffer the same fate as Kathmandu. There should be decentralisation of services and opportunities so that development can be spread throughout the country in a balanced proportion. The government is working towards it and we can certainly hope that there will be positive changes soon. </span></div>',
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The housing companies that want to construct community housing get license only after .....',
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			'article_category_id' => '31',
			'title' => 'You Train Animals But You Educate People',
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	<span style="color: rgb(178, 34, 34);"><span style="font-size: 12px;"><img align="left" alt="" border="3" height="285" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/william.jpg" style="width: 250px; height: 285px;margin:10px;padding:10px;" vspace="2" width="250" /><br />
	William Westgate is the Director of Studies at London College of Management and Leadership. After completing his degree at University of British Columbia in Vancouver, Canada, he moved to London and started on the Midland Bank graduate training programme in 1984. Over the next 20 years, he rose to become Senior Vice President at HSBC Securities and Vice President and Director at Toronto Dominion Bank. He retired from investment banking in 2004 to take up a post lecturing in Business and Economics at Woodhouse College, one of the UK's top performing state colleges. Westgate is a founding partner in the London College of Management and Leadership and brings his knowledge of industry, enthusiasm for teaching and vast resources to the training sessions he delivers. He visited Kathmandu recently for the preliminary preparation of Finance &amp; Management Training scheduled for August this year&nbsp; targeted towards senior and middle level bank employees in Nepal. During his visit, he met the CEOs from major banks and financial institutions as part of his preparation. In an interview with <i>New Business Age</i>, Westgate shared his views on the overall banking industry in the country and the upcoming training programme. Excerpts:</span></span></div>
<div style="text-align: justify;">
	<span style="font-size: 12px;"><br />
	</span></div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0pt;">How do you assess the banking industry in Nepal during this short visit of yours?</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	It's ahead of the curve and banking has to be so. People do say that there are too many banks given the current economic level. When you are talking about a new Nepal, you have to develop the infrastructure, resources, processes, technologies and training people to a level where the economy is going to be. If you don't have the vision, you are left in the dust. Some of the bankers I have met recently do have a vision.</div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-indent: 0in; text-align: justify;">
	Finance and banking is not just another industry. It's integral to economic development, right from micro lending to massive project financing, ATMs, consumer products you name it. You cannot make economic progress without a functioning banking system. The banking system in Nepal has a lot of ground to cover though. There are billions of rupees that need to be brought into the formal banking system. You must also get rid of a practice like hundi because that's not good for the economy. We need transparency as these are big social issues.</div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-indent: 0in; text-align: justify;">
	<strong><span style="font-size: 9.5pt;">What is this Finance &amp; Management Training all about?<br />
	<br />
	</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	Well, I don't pretend that I am going to solve all the issues. Banking is a complex industry. In my experiences as a banker, there are a lot of things to know. But there are certain things that you have to know. So, it's a situation of nice-to-know vis-Ã&nbsp;-vis need-to-know We have designed this course based on what the bankers here really need-to-know. Cost of capital, time value of money, sales and distribution of financial products etc are essential for the people in the banking corporations, irrespective of their positions, to know. So, those are the aspects we hope to bring to our training.</div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0pt;">How did your preparation go towards the training programme?<br />
	<br />
	</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	Prior to coming here, I did a lot of research. But nothing matches meeting face-to-face the people who matter. I would say that it has given me invaluable education and encouragement. The conversations I have had here have given me a lot of good practice as well as ideas. I have met some of the most capable people running the banking industry here, however, they are restrained by current conditions. What we hope to do is bring fresh air new western thinking. But we have to tweak it to suit the Nepali market. Because what works for selling bonds in Wall Street is not going to work for selling a loan in Kathmandu. But the principles always stay the same; there are certain things that never change. We are hoping to adjust and adapt tactics as per local requirements.</div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0pt;">You had a lucrative investment banking career going well for you. What is it that stimulated your transition to lecturing and training?<br />
	<br />
	</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	Yes, I had a fantastic career as a banker. But for me, banking is more than just the money. I reached an age of my life where I didn't wish to remain a banker anymore. I love to explain things to people and making presentations using technology. I am an enthusiastic person and like to engage other people. It was more about aspiration and I wanted to move on to what I really enjoy doing.</div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0pt;">What was the idea behind founding the London College of Management and Leadership? How do you think you have made a difference?<br />
	<br />
	</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	We set ourselves apart because we bring a combination of real practical experiences with academic rigour. All my life, I have collected notes mentally and physically wondering I wish I knew that and why didn't someone tell me that earlier. In our teaching, we focus on what the students need-to-know For example, while doing an MBA, the students don't need to know half the MBA because they will never use it. We make sure that the students pay real attention to what they would be practicing in the course of their work careers. Doing so helps us earn a lot of trust from the students. I admire good training and I hate bad training. Inspirational training is something I have always loved and therefore, bring it into practice.</div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0pt;">How exactly will the training programme benefit Nepal's banking professionals?<br />
	<br />
	</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	<span style="letter-spacing: -0.1pt;">As I have already said, the training will bring in fresh air, thinking and new ideas. People starting their careers in banking now are a lot more fortunate compared to 20 years ago. Today, there is technology available to make training sessions very engaging process. They say that you train animals but you educate people. The programme will follow a holistic approach. Banking has many components and when we put them all together; the participants will better understand their roles, departments, banks, the industry and the economy. It will allow them to have a creative and original thought about banking. It will also help them think out of their respective work briefs and cubicles and expand their horizons. </span></div>',
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			'id' => '356',
			'article_category_id' => '31',
			'title' => 'Communicate The Customer’s Way',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-indent: 0in; text-align: justify;">
	<span style="color: rgb(178, 34, 34);"><span style="font-size: 12px;"><img align="left" alt="" border="3" height="312" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/stephen.jpg" style="width: 255px; height: 312px;margin:10px;padding:10px;" vspace="2" width="255" /><br />
	Stephen Reynolds is the Founder and CEO of Stephen Reynolds Seminars (SRS) International, a leading provider of corporate training in Thailand and Asia. His website describes him as an Expert in Psychology of Sales and Marketing as well as creator and trainer on THE ONE Advanced Sales System and Magic WORDS Communication Systems. A well-known speaker on Leadership, Communication and Sales, Reynolds has trained leaders from over 60 companies in Thailand, Philippines and Malaysia in the past three years. He has over 27 years of experience, which he leverages to make his seminars, training and public speaking engagements bursting with information, guidance and direction that is both practical and relevant. He was in Kathmandu recently, on the invitation of National Banking Training Institute (NBTI), to impart two-day training to Nepali professionals. In an interview with <i>New Business Age</i>, Reynolds shares the tools and techniques that he teaches to make positive changes. Excerpts:</span></span></div>
<div style="text-align: justify;">
	<span style="font-size: 12px;"><br />
	<br />
	</span></div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0.2pt;">How do you assess the participants of this programme?<br />
	<br />
	</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	<span style="letter-spacing: 0.15pt;">The commonality among the trainees of this programme is that most of them had no sales background at all. Except for one participant, this was their first sales seminar. I tell people that what I am teaching is the most powerful sales technique in the world. It's usually helpful for them to go through other sales trainings as well so that they can contrast different trainings. Then they know what I am saying is true. But if they have never been to any other sales training, how can they compare. </span></div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-indent: 0in; text-align: justify;">
	<span style="letter-spacing: 0.15pt;">Having said that, I think the training was incredibly fruitful. The participants were smart, involved and committed. They were hungry for the knowledge. It happens often in corporate training that the participants sent by their bosses are apathetic towards training as they don't want to be there. But it was an exception here in Nepal. The people were charming and needless to say, I was very happy. </span></div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0.2pt;">What's The One psychology of Sales and Marketing all about?</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	<span style="letter-spacing: 0.15pt;">The One I believe, is the most powerful and effective sales technique in the world. Sales is very complicated. There are many sales systems that are based on as many as 500 techniques but this is the only sales system in the world based on one technique. We are trying to take something very complicated and make it much simpler and easier to apply. </span></div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-indent: 0in; text-align: justify;">
	<span style="letter-spacing: 0.15pt;">We start with the relatively new psychology of Neuro-linguistic programming. It is an approach to psychotherapy and organisational change based on a model of interpersonal communication chiefly concerned with the relationship between successful patterns of behaviour and the subjective experiences underlying them and a system of alternative therapy based on this which seeks to educate people in self-awareness and effective communication, and to change their patterns of mental and emotional behaviour </span></div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0.2pt;">How can communication techniques be made more effective for sales?<br />
	<br />
	</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	<span style="letter-spacing: -0.15pt;">There is no point in my inundating trainees with too much information that they can neither remember nor use. It's important to focus on a particular aspect which will make a difference. That is the challenge with sales. I go with the most powerful psychology and go right to the heart-of-the-matter how to sell face-to-face. ˜The One technique helps immensely as it is applicable for leadership, communication, negotiation etc. </span></div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0.2pt;">How do you define advanced psychological linking?<br />
	<br />
	</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	<span style="letter-spacing: -0.15pt;">It is when you take your products and link them together with the values of the person you are talking to. Basically, we are communicating the customer's way according to their values and vocabulary. The One focuses the entire sales process on the highest values of the person you are dealing with. It is a completely customised process. Sales is not just talking, you have to start seeing the psychology behind the word. </span></div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0.2pt;">Are you confident the trainees will be able to effectively apply the technique taught by you?<br />
	<br />
	</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	<span style="letter-spacing: 0.15pt;">Well, I hope so. Or else, my effort will amount to nothing. In two days, I have given them a real foundation. They should be able to walk out and start to communicate better and instantly be able to see an increase in their sales.What they have learnt during the course of the training should also help them improve their communication at their workplaces. They should now be able to communicate better with their bosses,&nbsp; subordinates and customers. Sales is communication and vice versa. </span></div>',
			'published' => true,
			'created' => '2011-07-20',
			'modified' => '2012-10-31',
			'keywords' => '',
			'description' => 'Stephen Reynolds is the Founder and CEO of Stephen Reynolds Seminars (SRS) International, a leading provider of corporate training in Thailand and Asia. His....',
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	(int) 5 => array(
		'Article' => array(
			'id' => '355',
			'article_category_id' => '31',
			'title' => '‘Customer Satisfaction Only Exists Where There Is Oversupply’',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-indent: 0in; text-align: justify;">
	<span style="color: rgb(255, 0, 0);"><span style="font-size: 12px;"><img align="left" alt="" border="3" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/kevin.jpg" style="width: 223px; height: 231px;" vspace="2" />Dr Kevin McCrohan is a Professor of Marketing – School of Management at George Mason University in Virginia, United States. A PhD from City University of New York, his research interests include marketing and efficient functioning of profit and non-profit organisations, competitive intelligence, information security, methods of marketing compliance for fiscal and philanthropic organisations and economic measurement to fill gaps in administrative data sets. Dr McCrohan has been a Senior Fulbright Scholar at the School of Management, Kathmandu University, Nepal as well as at Trinity College in Dublin, Ireland. During his recent visit to Kathmandu, he delivered a talk on ‘Customer Satisfaction in E-Commerce: Issues and Solutions’ and its implications for Nepal as the main theme under ‘SAIM Lecture Series’ initiated by South Asian Institute of Management, Lalitpur. In an interview with <i>New Business Age</i>, Dr McCrohan shared his views on the importance of customer satisfaction in e-commerce from Nepal’s perspective. Excerpts:</span></span></div>
<div style="text-align: justify;">
	<span style="font-size: 12px;"><br />
	</span></div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0pt;">How does customer satisfaction work in an e-commerce scenario?</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	We have a relationship between the firm and the customer in which they trust each other over the course of a transaction. It is of overriding importance that all the participants that deal with that transaction online can be trusted upon, particularly with personal and financial information.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0pt;">What was the focus of the talk programme today?</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	It was to make people aware of the fact that the firms have the best of intention out in the cyber world, while dealing with customers online. Of course, there are scores of mischievous elements who are trying to steal money. In the bargain, it breaks the trust between the consumer and the firm. As a result, the consumers stop dealing with the firm. &nbsp;I was totally fascinated with the programme today. It was delightful and certainly a privilege to be here.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0pt;">It is very hard to monitor customer satisfaction on the web as you don’t physically see the customer. How do you overcome this challenge and ensure they are satisfied?</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	You can contact them after the purchase through e-mail and find out if they are satisfied and if the product is working out for them as promised. You could also do surveys with your online customers by asking questions pertaining to their satisfaction level with respect to your firm and its products. I must point out that when people complain, paying attention to those complaints is critical. Marketing is about word-of-mouth. In today’s age of online blogs, a bad experience is posted and gets conveyed to n-number of people.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-indent: 0in; text-align: justify;">
	You need to benchmark yourself. In the western world like the European countries and the United States, there are customer satisfaction surveys that pop up online highlighting firms and organisations. The response thus generated can be tracked by the firms. For small firms, the best way is to design a questionnaire and occasionally contact the customers and try to determine how they can better serve them.&nbsp;They can appreciate the consumers for their valued feedback and thank them for helping them in their endeavour for ensuring improved customer service.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0pt;">To reduce customer apprehension and assure customers of legitimacy, how important is it to post “Customer Certified Ratings” on the web site?</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	If you can quote an online source, that’s even better. But if you can quote your own survey, that is still good. You can thank them and apprise them of your growth over a period of time. By doing that, you let the customer know you are monitoring customer satisfaction as it is important to you. You also convey a message that you are paying attention to what the customers tell you.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0pt;">Online retail sales still make up only a small portion of overall retail sales in the US but satisfied consumers are expanding their purchases online. How do you view this?</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	It’s neither good nor bad. In late 1990s and early 2000s, a lot of research projected that the growth rate for e-commerce would reach unprecedented heights and everything will be online. But there was a vital element missing from those surveys. In a country like the United States for example, shopping is recreation. A lot of people are what we can refer to as, full-contact shoppers – they love to shop.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-indent: 0in; text-align: justify;">
	There is no way that e-commerce is going to replace the actual experience of going to the store with family and friends, feeling the goods and shop in person. Almost everybody compare the shops online but still end up at the store to buy products first-hand. The real challenge for large e-retailers is to somehow convince more people to actually buy online. I have a statistic that tells me 25-30 per cent of amazon.com’s purchases are left in the cart – people go through the process of selecting goods and are ready to buy but eventually end up not buying.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0pt;">Customer satisfaction is non-existent in any kind of business in the third world countries. Except for the developed countries, do you see any potential whatsoever, for e-commerce in such countries?</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	<span style="letter-spacing: 0.05pt;">Exactly. One of the points I was trying to make during my presentation was that the concept of customer satisfaction does not exist in a country like Nepal. The market is in the United States and European countries. The beautiful carpets and woodworks that Nepali craftsmen make are phenomenal. The only way to reach the customers all around the world is to tell them about these products. In the US, a friend of mine wanted to buy a khukuri for his son. It took him five months in 1999 to contact the firm here. The only way he knew about khukuri was that I gave him one after one of my visits to Nepal. Now, all that can be done online.</span></div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-indent: 0in; text-align: justify;">
	It is not an issue that customer satisfaction does not exist in Nepal. What matters is that it exists where you have to sell. Customer satisfaction only exists where there is oversupply. The tragedy of the world is that people in a lot of countries have so little to spare but those in the United States, Europe and Japan have a lot of money. That’s the kind of consumers you have to reach. If some Nepali product needs to find a presence in the United States, for example, it has to be either word-of-mouth or online. So, a website showcasing local products to a worldwide audience will certainly help.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-indent: 0in; text-align: justify;">
	<span style="letter-spacing: -0.15pt;">People in rich countries are looking to buy something new and different. The products made in Nepal are certainly new, different and beautiful. You need to sell them to the people in these affluent countries. But then, if left unsatisfied, these people will go online and badmouth not just the product but the firm and the country as well. They will also go to the extent of recommending and advising others against dealing with the country they are disappointed with. That’s where the customer satisfaction impacts, not in your country but in the market you are catering to.</span></div>',
			'published' => true,
			'created' => '2011-07-20',
			'modified' => '2012-10-31',
			'keywords' => '',
			'description' => 'Dr Kevin McCrohan is a Professor of Marketing – School of Management at George Mason University in Virginia, United States. A PhD from City University....',
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	(int) 6 => array(
		'Article' => array(
			'id' => '354',
			'article_category_id' => '31',
			'title' => '‘Dealers Grow Confident With Exposure To New And Innovative Products’',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-indent: 0in; text-align: justify;">
	<span style="font-size: 12px;"><img align="left" alt="" border="3" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/boby.jpg" style="width: 220px; height: 255px;" vspace="2" /><span style="color: rgb(178, 34, 34);">Boby Johnson is the Senior Customer Marketing Manager (Export) - Asia Pacific, Philips Consumer Lifestyle. He was in Kathmandu recently for the Asia Pacific Region’s Dealers’ Meet. He also launched Fidelio Docking Speakers for Apple products, 3D Television, LED Televisions, Home Theatre System, Air Fryer, Grooming products, Garment Care and Floor Care products for the Nepali market, during his visit. In an interview with <i>New Business Age</i>, Johnson shared his views on the prospect for Philips products in Nepal. Excerpts:</span></span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>How will this event help enhance the sales and market expansion of Philips products in Nepal?</strong></div>
<div style="text-indent: 0in; text-align: justify;">
	To start with, we have received tremendous print and broadcast media coverage for this event, which I think, is fantastic.&nbsp;This should help us get a lot of brand awareness and generate sales.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Are there any special packages for the dealers to facilitate market penetration?</strong></div>
<div style="text-indent: 0in; text-align: justify;">
	We organise dealers’ meet every year and it energises our dealers. After each conference, the dealers grow confident because they have been exposed to new and innovative products. These meets give them the added belief that they can sell. I am certain that the dealers are very happy with the new introductions that we are going to bring to the market this year. This would rejuvenate them and help them sell even more this year.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>About a month ago, one of your competitors launched similar products. Don’t you think you were a bit late?</strong></div>
<div style="text-indent: 0in; text-align: justify;">
	I don’t think so because this is nothing new. Sometimes, we launch earlier and at others, it’s them who are earlier. It depends mainly on when you are ready for sales. I think what is important is how confident you are on your products. We are very confident with what we have.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>How do you view the market potential of these products in Nepal?</strong></div>
<div style="text-indent: 0in; text-align: justify;">
	Going by the reaction of the people I have met here, Air Fryer is one product that can register good sales in Nepal. Apart from that, 3D TV should do well. We also have very nice audio products like Fidelio range for Apple products which are very popular in Nepal. We are confident about all the products that we have here including kitchen appliances and beauty care products.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>There are similar products of premium brands in the market. How fierce would be the competition?</strong></div>
<div style="text-indent: 0in; text-align: justify;">
	I think the competition is good. Philips has been around for more than 100 years now. To be in existence for such a long period, you must be doing something very good.&nbsp;We are number one in so many categories worldwide, for example, shavers (male grooming), juicers, blenders and garment care. As a company, we are confident about innovation power and what we bring to the market. We do keep an eye on what our competitors do. However, we are also confident about our own innovation and position in the market.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>How are these products doing in the Asia Pacific Market?</strong></div>
<div style="text-indent: 0in; text-align: justify;">
	They are doing pretty well. Air Fryer, which is made in Singapore, is doing extremely well there. In Asia, all our products are doing very well.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What are your plans for the Nepali market?</strong></div>
<div style="text-indent: 0in; text-align: justify;">
	We have a very strong and good distributor in Nepal taking care of all business operations on behalf of Philips. Syakar Company is doing a great job. One of the reasons why we came to Nepal is to show our solidarity to encourage their dealers, distributors and sub distributors. I believe this will really help them grow the business further in Nepal. There are a lot of opportunities for business in this country. We are confident that we can do a good job in Nepal. We hope that besides the business, we establish Philips as a major brand in Nepal and distinguish it from other brands in the market.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What, according to you, are the problems and challenges in this market?</strong></div>
<p style="text-align: justify;">
	<span style="font-size: 12px;"><span style="line-height: 115%;">Wherever there are opportunities, there are challenges.&nbsp;We hope that the stability in the country will be ensured in the future. Besides political challenges which we all know about, I think the main challenge is the prevailing economic situation. The global economy is on the recovery path and we hope that it continues. We must stay positive and grab the opportunities in the market as they come our way.</span><br />
	</span></p>',
			'published' => true,
			'created' => '2011-07-20',
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			'keywords' => '',
			'description' => 'Boby Johnson is the Senior Customer Marketing Manager (Export) - Asia Pacific, Philips Consumer Lifestyle. He was in Kathmandu recently for the Asia Pacific....',
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	(int) 7 => array(
		'Article' => array(
			'id' => '350',
			'article_category_id' => '52',
			'title' => 'Hope And Fear Of Merger',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-indent: 0in; text-align: justify;">
	<span style="font-size: 13.5pt;">T</span>he trend of announcing merger plans by the banks and financial institutions (BFIs) has gathered pace in recent weeks. Media reports about the merger processes initiated between Everest and Kumari Banks, NMB and Clean Energy Development Banks, NCC and NB Banks, Bageshwori and Shangrila Development Banks, Kasthamandap Development Bank and Shikhar Finance, and Himchuli Development Bank and Birgunj Finance are testimonies to this fact. Not to mention several failures of Nepal Rastra Bank's (NRB) monetary policy operation of this year, but in the particular regard to mergers, it is gradually tasting success. The Bank not only had announced all possible facilitation to merger through the monetary policy of this fiscal year, it also introduced several packages of rebates, discounts, waivers and facilities to the BFIs opting for mergers. The NRB threat to force merger of the BFIs that particularly have poor corporate governance has seemingly reawakened several BFIs.</div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<span style="font-size: 13.5pt;"><img align="left" alt="from the editor" border="1" height="297" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/img1(1).jpg" style="width: 223px; height: 297px;margin:10px;padding:10px;" vspace="10" width="223" /></span><span style="letter-spacing: 0.2pt;">Apparently, the universal objectives of the merger or acquisition are to consolidate the capital, reduce operational expenses, expand business and maximise the profits. However, in our case, mergers of three distinct natures now seem to be in the offing. First, relatively large institutions are planning to create a larger capital base so they could compete with global players who would potentially begin their operation owing to WTO arrangements. Second type of merger would be compulsive of sort as the NRB has asked the BFIs belonging to the same business house to integrate without any ifs and buts. The third types are those who fear the complete meltdown if they fail to merge sooner than later to consolidate resources, introduce corporate best practices and reduce expenses. </span></div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	Nevertheless, irrespective of the reasons compelling BFIs to merge, it was the momentum of absolute imperative but long due. And every individual process to complete smoothly is another task uphill. Even if the process is unimpeded, it takes relatively long time of two to three years depending on the size of the institutions. Nepal does not have structural backing and institutional culture of transparency to allay fears of lay-offs among staff, sense of insecurity in the depositors and apprehensions losing the investment among the shareholders.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	In view of these several crucial stages, right from the expression of intent of merger, choice of the party, preliminary dialogues, due diligence assessment of the institutions, legal and regulatory processes and above all retaining the customer confidence, a dedicated structure that facilitates and provides expert services is indispensable. This could be set up by NRB, Bankers Association or by both combining the skills, needs and expertise. If the merger tempo evident today is not managed properly, none of them are likely to succeed to create another healthier institution. The fear and mismanagement of the process will acquire the hopes. And mergers will continue to be a mirage.&nbsp;</div>
<div style="text-align: justify;">
	<br />
	<br />
	 </div>',
			'published' => true,
			'created' => '2011-07-18',
			'modified' => '2012-08-28',
			'keywords' => '',
			'description' => 'The trend of announcing merger plans by the banks and financial institutions (BFIs) has gathered pace in recent weeks. Media reports about the merger processes....',
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	(int) 8 => array(
		'Article' => array(
			'id' => '344',
			'article_category_id' => '40',
			'title' => 'Nepal’s Trade Ratcheting Imports',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-indent: 0in; text-align: justify;">
	<span style="color: rgb(178, 34, 34);"><i>By Pinaki Roy</i></span></div>
<div style="text-align: justify;">
	<span style="font-size: 6.5pt; color: rgb(237, 28, 36);">*</span> The Annual Report of the World Trade Organisation (WTO) states that worldwide exports during 2010 registered a growth of 14.5 per cent, the highest since 1950. It also expects this trend to continue to improve in 2011.</div>
<div style="text-align: justify;">
	<span style="font-size: 6.5pt; color: rgb(237, 28, 36);">*</span> Nepal signed the Trade and Investment Framework Agreement (TIFA) with the United States recently which paves way for the promotion of more comprehensive trade agreements between Nepal and the US in the future.</div>
<div style="text-align: justify;">
	<span style="font-size: 6.5pt; line-height: 115%; color: rgb(237, 28, 36);">*</span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The second meeting of Nepal-Tibet Trade Facilitation Committee (NTTFC) – a bilateral talks forum – is being held in Kathmandu from May 8 to 10. The main focus of the talks will be to cut the ballooning trade deficit with China by taking maximum advantage of zero tariff on imports from Nepal offered by China.</div>
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	<span style="font-size: 9.5pt;">While these developments may sound all good, analysing the state of Nepal’s foreign trade over the last <img align="left" alt="" border="2" height="450" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/cover1.jpg" vspace="1" width="350" />decade or so presents a bleak picture. It’s unfortunate that Nepal has very few products at present that hold any promise of competing in the international market. Add to it the dismal environment of domestic business in the country and the chances of reaping tangible benefits from any agreement in the near future look extremely slim. Nepal’s faltering export scenario has been unable to check an unsustainable trade deficit. The eternal power shortage, fragile law and order situation and transportation woes are among the main impediments to the development of export-oriented sector. These erode the confidence of the private sector. With dwindling confidence of the investors, let alone foreign direct investments, Nepal can’t expect to see domestic investment in the foreseeable future either. In short, Nepal’s economy is in dire straits with grim hope of the growth of export-oriented industries. </span></div>
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	<strong><span style="font-size: 11.5pt;">Escalating Trade Balance</span></strong></div>
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	<span style="font-size: 9.5pt;">During the first eight months of the current fiscal year 2010-11, exports have increased to Rs 43.24 billion, an improvement by Rs 2.99 billion over the same period last fiscal year. Meanwhile, imports increased to Rs 252.88 billion, an increase by Rs 4.61 billion over the same period. The trade deficit amounted to Rs 209.64 billion, an increase by Rs 1.61 billion. Imports are expected to continue to increase in more or less the same pattern it is following so far. This indicates that trade deficit is expected to further widen in 2012. Due to some major foreign currencies getting weaker, Nepal’s exchange rate is expected to appreciate which will make exports costlier abroad. Besides, the impact of rising inflation rate in Nepal is likely to make exports more uncompetitive in the next year. </span></div>
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	<span style="font-size: 9.5pt;">The agriculture sector in Nepal has remained under-developed, with a very low productivity level. At the same time, the industrial sector suffers from a host of uncertainties. The inefficient structures of these important sectors of the economy have not only reduced the competitiveness of the economy but also resulted in a limited production base. It is far below the consumption needs of the people. As a result, Nepal depends heavily on import trade for meeting its large and varied needs. Despite a marginal increase in exports, the painfully slow growth of imports during the last decade doesn’t augur well for the country. Besides, most imports are confined to non productive and consumable items like vehicles, petroleum products and gold that does not directly contribute to economic activities. Therefore, it is an alarming situation and a challenge for the policy makers.</span></div>
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	<strong><span style="font-size: 11.5pt;">Infrastructural Bottlenecks</span></strong></div>
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	<span style="font-size: 9.5pt;">The export sector is still plagued by the same problems that have adversely affected the entire economy. Supply-side constraints such as intermittent blockades, labour disputes, access to technology and credit, virtual absence of trade facilitation measures, lack of human capital, power outages and road transport among other infrastructural bottlenecks are eroding Nepal’s competitiveness in the international market. These factors also result in preventing diversification of its export basket. </span></div>
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	<span style="font-size: 9.5pt;">Large gaps exist in trade efficiency based on indicators such as the cost incurred for the trade and number of days taken to close the deal. Infrastructures like roads, ports, information technology and communications network and other logistics, transit facilities, cross-border connectivity and customs facilities are also in short supply. Nepal is yet to enhance the capacities for trade strategies and negotiations, trade and investment finance and other capabilities related to export. The trade-related institutional, human resource and supply-side limitations constrain Nepal to take advantage from trade by meaningfully participating in multilateral and regional trading systems. Considering the problems, the new initiatives on Aid for Trade (AFT) could help overcome the problems and open up new trade opportunities for Nepal. But again, the said constraints could also impede the country from qualifying for such Aid. Structural reforms and infrastructure investments to reduce transportation and transactions costs are the key to improving the external competitiveness of Nepali products.</span></div>
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	<strong><span style="font-size: 11.5pt;">Limited Export Items</span></strong></div>
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	<span style="font-size: 9.5pt;">Another feature of Nepali export is its limited items of export. As major export items like carpets, garments, pashmina and handicrafts are produced mainly in labour-intensive industries, the impact of trade on employment is considered significant. Vegetable ghee along with the products mentioned above constitute a significant part of Nepal’s total export. This indicates high dependency of export on very few products. </span></div>
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	<span style="font-size: 9.5pt;">In the second half of the 1990s, the growth of export was higher than the growth of import reflecting a positive impact of adopting the liberal economic policies. However, this trend did not continue for long and experts attribute this primarily to the impact of the decade long conflict. Though the competitiveness of the export sector had increased in the early days of the liberalisation period, the policies were rendered ineffective during the conflict and the post conflict transition. As a result, the share of import to GDP has been far greater than that of export for the last decade. </span></div>
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	<span style="font-size: 9.5pt;">The progress in export has been slow due to a number of national and international events and circumstances. The 10th Plan had emphasised on identifying new exportable products of comparative advantage and improving their quality and export volume. It advocated rectifying the procedural hindrances to product-wise and country-wise diversification of foreign trade. It also looked at enhancing the competitiveness of the trade sector in harmony with the regional and multilateral agreements. The Plan envisaged strengthening institutional capacity of the government, non-government and the private sectors to enhance collection, processing and dissemination of information relating to export promotion. To make foreign trade simpler, more reliable and cost effective reforms were recommended in the areas of laws, regulations, policies, procedures and facilitation. It also recommended that organisational and managerial efforts be strengthened and export promotion prioritised in a coordinated manner. The Plan also talked about mobilising Nepali diplomatic network abroad in promoting foreign direct investment (FDI), export, and the economic interests of the nation so as to accelerate the industrial development and the expansion of export trade. </span></div>
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	<strong><span style="font-size: 11.5pt;">Quality Certification</span></strong></div>
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	<span style="font-size: 9.5pt;">Nepal already imports almost seven times more than it exports. The growth prospect of exports and the industrial sector look as gloomy as ever. Most constraints that we face today are non-economic ones. It has been increasingly realised that market access alone does not guarantee flourishing of international trade. Nepal, like any other LDC, lags in trade capacity due to non-availability of sufficient number of exportable products on the one hand and the quantity and quality of available products to meet standards of the importing countries, on the other. Nepal’s trade is faced with constraints on supply side in terms of development of testing and certification facilities, accreditation of laboratories and mutual recognition of test and certification in facilitating trade. The improvement of laboratories and testing facilities in Nepal has, for example, remained an important agenda in Nepal’s trade with India, its largest trading partner. </span></div>
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	<strong><span style="font-size: 11.5pt;">Trade Barriers</span></strong></div>
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	<span style="font-size: 9.5pt;">Nepal still pays a very high tariff to access major markets on the one hand and on the other, duty-free and quota-free initiatives have yet to prove fruitful due to hurdles imposed by non-tariff barriers. Non-tariff barriers (NTBs) in the form of regulatory requirements, quota restrictions, administrative procedures and rules of origin (ROO) are of major concern. Due to their technical complexity and non-transparent nature, they are the most difficult barriers to overcome. Standards-related NTBs such as sanitary and phyto-sanitary (SPS) restrictions act as major impediments to Nepal’s exports. Several instances have shown that process of discussions amongst the exporters and importers which results in better information sharing can itself help address more than half of such problems. </span></div>
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	<span style="font-size: 9.5pt;">Despite Nepal gaining enhanced market access into the developed countries, it cannot take advantage from it until the government and the private sector join hands to expand and diversify the country’s exports. Trade is governed, to a large extent, by trade regulations and related administrative procedures. More often than not, the entry and exit from the market as well as the volume of trade rely on the transparent and simplicity of trade and administrative procedures. A study reveals that submission of unnecessary documents, administrative hassles at custom offices, additional detention charges and untimely delivery of goods increase the cost of transaction in formal trade. These activities and procedures enormously affect the trade affairs. Ultimately, it discourages the business fraternity in carrying out their businesses freely and fairly. </span></div>
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	<strong><span style="font-size: 11.5pt;">WTO Challenges</span></strong></div>
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	<span style="font-size: 9.5pt;">The WTO membership has brought both opportunities and challenges to Nepal. The main challenges before Nepal are to fulfill WTO commitments that need strengthening existing external trade institutions and legal mechanism, removal of supply side constraints to transform available market access into trade opportunities and restructuring of industrial sector to make it more competent and contemporary. In total, the benefits of membership depends on Nepal’s ability to identify and take advantage of trading opportunities, fulfill multilateral trade obligations, formulate and pursue development strategies within those framework and above all, defend its economic, financial and trade needs. Nepal could benefit from World Trade Organisation (WTO) only if it increases internal strength and quality of export items.</span></div>
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	<span style="font-size: 9.5pt;">Nepal finds it difficult to implement some of its WTO commitments. Since the benefits accruing from the implementation of these agreements are much lower than the associated cost of implementation, the resource-strapped Nepali economy cannot take this additional burden. Quite naturally, it is demanding support from its development partners to implement such commitments. The basic objectives of technical assistance for Nepal lies in promoting activities which add value to its production, help export diversification and most crucially to reduce its transport and other infrastructure costs thereby making it easier for businesses to operate. </span></div>
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	<strong><span style="font-size: 11.5pt;">Evolving Global Trade</span></strong></div>
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	<span style="font-size: 9.5pt;">The nature of trade is evolving globally. This is reflected in the changing composition of trade, from merchandise to services. This dynamic is largely driven by technological revolutions. While the transport revolution reduced transport costs and facilitated trade in merchandise goods, the information technology revolution has resulted in decreasing communication costs and increasing quality levels, thereby causing trade in services to be the fastest-growing component of global trade. </span></div>
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	<span style="font-size: 9.5pt;">In addition to natural advantages, the three services sectors – health, education and high-end retail services hold immense export potential from Nepal’s perspective. Nepal has comparative advantages for the export of these sectors which are generally found to be cost effective. The attraction of these services is also due, in part, to a high level of market integration with northern India, if it can take advantage of the open border in the south. </span></div>
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<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">In spite of liberalising the economy and changing trade and investment related laws, Nepal hasn’t been able to derive expected benefits. Trade is a technical subject. The deficiencies in knowledge concerning markets, access to distribution networks and use of the ICT, complicated regulatory procedures of shipments, weak transportation infrastructure and services and insufficient trade financing are major constraining factors. Addressing these problems would involve financial resources, time, efforts, proper management, and technical expertise. </span></div>
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	<strong><span style="font-size: 11.5pt;">Aid For Trade</span></strong></div>
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	<span style="font-size: 9.5pt;">The new initiative of the Aid for Trade could be a prime source of funding to enhance competitiveness. However, there is a gap between commitment and disbursement of AFT. Pledges are made through international forums for aid for trade initiatives but the pace of implementation and the disbursement rate is very slow.&nbsp;</span></div>
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	<span style="font-size: 9.5pt;">Developed countries and development partners coming forward to support product development programmes, development of trade infrastructure like inland clearance depots, container freight stations, special economic zones, roads and other forms of transportation in order to enhance Nepal’s trade capacity is of prime importance. Other possible areas of cooperation include enhancing the quality of infrastructure for test and certification of products, capacity building for trade negotiations and institutional development. All these require adequate technical as well as financial assistance. </span></div>
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	<strong><span style="font-size: 11.5pt;">Prosperous Neighbours</span></strong></div>
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	<span style="font-size: 9.5pt;">The multilateral trading system has contributed significantly to the growth in exports that has been aptly exploited by countries like China and India. With respect to the markets created by these neighbouring countries, the disadvantage of Nepal as a land-locked country is significantly reduced because these two are after all, proximate markets. The economies of both the neighbouring countries are increasing enormously and Nepal can benefit or should be able to do so because of this. Despite increased industrialisation and trade activities in China and India, Nepal has failed to benefit from their economic growth.</span></div>
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<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">Nepal’s internal problems such as poor trade policy and implementation, lack of business-friendly labour laws and other rules and regulations, political instability, frequently changing trade and industrial policies, social unrest and chaos, frequent strikes, lockouts and load-shedding are also equally responsible for poor export. The reasons behind the fall in export can also be attributed to erosion of preferences for Nepali goods due to the decreased MFN (Most Favoured Nation) tariff in India. The Government of India has signed several free trade agreements with various countries. It has committed to lower customs duty as a non-LDC member of SAFTA and BIMSTEC free trade area and also announced the Duty Free Tariff Preferences (DFTP) scheme as part of commitments made in the Hong Kong ministerial meeting of WTO. The irony of Nepal’s trade is eminent in respect of decreasing tariff in Nepal. It is obvious that Nepal will continue losing export volume and find itself in a precarious situation in the absence of concrete measures to check and reverse the process of decreasing export. </span></div>
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<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">Nepal’s export to India is increasing at a snail’s pace. The growth rate of export is highly fluctuating. At the same time, import from India is far stable. It implies that import from India is in a better position than export. As the gap between export and import increases, trade deficit soars. The trade deficit with India was Rs 66.4 billion in FY 2005-06 but it has rocketed to Rs 174.4 billion in FY 2009-10. It is alarmingly high for Nepali economy. The major reason for the unfavourable balance of trade on Nepal’s part can be blamed on not finding proper markets for manufactured goods in Nepal, in India. The prominent factors include the inability to compete in the Indian market on the grounds of quality, price, supply capability etc. From a trading point of view, it could be quantitative restrictions and product disqualifications. It is understandable that unless a sizable export of manufactured products fail to find market, the trade balance proportion cannot be reduced. Therefore, finding a proper segment in the Indian market for Nepali products is critical.&nbsp;</span></div>
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	<strong><span style="font-size: 11.5pt;">Service Sector Emphasis</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">The Government of Nepal launched Nepal Trade Integration Strategy (NTIS)-2010 last year which seeks to identify and develop key essential products and services to build its export base in a sustainable way. A total of 19 items were selected for driving export promotion. The 12 products and seven services were identified after careful scrutiny of potentiality for development along the value chains and their linkages with poverty alleviation. These products possess immense potentialities of backward linkages within the country. To sustain trade in the future, contributing to overall economic development by making trade more inclusive, increasing employment and government revenue is important. The seven services identified are namely Tourism, Labour Services, IT and BPO Services, Health, Education, Engineering and Hydro Electricity. It has been unanimously felt that Nepal has the potential to perform better in these service sectors provided there is an encouraging working environment. </span></div>
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	<strong><span style="font-size: 11.5pt;">Trade Facilitation</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">Trade treaty is only a means and not an end in itself towards enhancing greater market access. The growth of trade basically depends upon the conditions that are created within the national boundary in respect to measures related to investment promotion and improvement in governance. Speedy trade facilitation is the key to success. Trade facilitation at its core aims at developing competitive advantage. Work on trade facilitation like simplification of customs procedures, criteria for procedures of transit and standards verification and transforming policies and rules in accordance with those of its major trading partners India and China, are of immense importance. Improving productivity and strengthening supply capacity remain the basic consideration guiding the development of the commercial sector of the country. </span></div>
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	<strong><span style="font-size: 11.5pt;">Internal Preparations</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">Nepal is a country with major potential that needs to be realised and enhanced through various policies and related initiatives. At the same time, it has to address a number of difficulties linked to its logistical, financial and stability related concerns. The multilateral trading system can contribute towards Nepal’s potential gain in many ways. Trade-related aspirations to diversify trade and production bases into dynamic new products and services, integrating trade and trade capacity building policies into national development strategies, maximising benefits through development of effective labour market standards and institutions and striving for an ambitious, comprehensive, balanced, equitable and development-oriented outcome, are vital. </span></div>
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<div style="text-align: justify;">
	<span style="font-size: 9.5pt; line-height: 115%;">To realise the benefits of the trade agenda, having hassle free market access through reduction of tariff and non tariff barriers, facilitation measures through increased connectivity, customs harmonisation, simplification of trade rules and procedures and efficient trade logistics and the enhancement of supply side capacity, are crucial. With the help of all the benefits – present and potential – Nepal will be in a better position to address the supply-side constraints, achieve better market access and help raise its domestic growth with greater equity. This assures help to increase above 4 per cent growth rate which Nepal has been stuck with, for some time. To increase export, there must be an increment in investment for production, both domestic and foreign, that can positively affect the investment and thereby exports. </span></div>',
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			'description' => 'The Annual Report of the World Trade Organisation (WTO) states that worldwide exports during 2010 registered a growth of 14.5 per cent, the highest since 1950. It also expects this trend to continue to improve in 2011.',
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		'Article' => array(
			'id' => '343',
			'article_category_id' => '40',
			'title' => '‘We Are Mainstreaming Trade Into National Development Programme’',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 120%; vertical-align: middle;">
	<span style="color: rgb(178, 34, 34);"><b><span style="font-size: 8pt; line-height: 120%;"><img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/purushottam ojha.jpg" style="width: 182px; height: 185px;" vspace="1" />Purushottam Ojha</span></b></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 120%; vertical-align: middle;">
	<span style="color: rgb(178, 34, 34);"><span style="font-size: 7pt; line-height: 120%;">Secretary</span></span></div>
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	<span style="color: rgb(178, 34, 34);"><span style="font-size: 7pt; line-height: 115%;">Ministry of Commerce and Supplies</span></span></div>
<div style="text-align: justify;">
	<span style="color: rgb(178, 34, 34);">Production and development of the right product at the right time and capacity to supply it to the destination market in an efficient manner are crucial to enhance supply side capacity. Therefore, identification, selection and development of products in which Nepal has comparative and competitive advantage is the major issue in the development of Nepal’s trade.</span></div>
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	<strong>A total of 19 goods and services are identified as priority items for trade by NTIS (Nepal Trade Integration Strategy). How sustainable are these 19 products?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Yes&nbsp;12 goods and seven services are identified. They have been identified after careful scrutiny of their potential for development along the value chain and their linkages with poverty alleviation. These products possess immense potentialities of backward linkages within the country. These are products and services in which Nepal has comparative and competitive advantages. To sustain trade in the future, contributing to overall economic development by making trade more inclusive, it is important to increase employment and government revenue. Identification and selection alone cannot meet our objectives. We have to create necessary environment in the country to develop these products in a manner that will ensure sustainable trade in the future. Most of these products are related to agriculture. It is important to enhance the productivity, productive capacity and product quality in them. For this, we have to go on adopting good agricultural practices, integrated pest management and quality control mechanism. At the same time, we need to focus on improving the quality of infrastructure, for example in tests and certifications to ensure acceptance of the products in the international market.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>It is said that improved supply-side performance is the key to achieving sustained economic growth. What is hindering the improvement in supply side capacity?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Over the years, we have been enjoying increased market access in various destinations as tariff barriers are being lowered. However, there are certain non-tariff barriers that are hindering the export from the least developed countries (LDC) like Nepal. We have to address these issues as well. Production and development of the right product at the right time and capacity to supply it to the destination market in an efficient manner are crucial to enhance supply side capacity. Therefore, identification, selection and development of products in which Nepal has comparative and competitive advantage is the major issue in the development of Nepal’s trade. The causes for the hindrance in improving&nbsp;the supply side capacity include lack of adequate infrastructure - particularly transport infrastructure, energy supply, rising problems of labour unrest and law and order situation.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>How can we overcome these supply side constraints?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.1pt;">There are certain barriers for increasing our trade capacity as I mentioned earlier. We need to address these important issues to attract more investment and improve investment climate that will eventually help overcome supply side constraints. It is essential to bring more investment in the production as well as service sector. But it largely depends on political stability, law and order situation, industrial relations and adequacy of infrastructures. These need to be addressed in a coherent manner. We also need to increase our collaboration with development partners to get more support in the areas of economic cooperation and trade development. Enhancement of market access is crucial from the perspective of LDCs like Nepal since non-tariff barriers are being raised by importing countries in the name of plant and animal health, food safety, environmental concern and labour rights. Nepal is raising the voice against such barriers in bilateral, regional and multilateral forums.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Why hasn’t Nepal been able to benefit from trade despite having huge markets in the north and the south?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">It is true that the economies of both our neighbouring countries are increasing by leaps and bounds. The GDP growth rate of China is almost in the double digits and India’s GDP is increasing by eight per cent annually. Statistics show that trade between India and China is also increasing and has reached US$ 60 billion. They are aiming at increasing it to US$ 100 billion in the next five years. Despite such increased industrialisation and trade activities in neighbouring countries, we have failed to benefit from this. We need to adopt appropriate policies within the country to link our trade and economic relations to get the spill-over benefit from our neighbouring countries. We also have functioning trade agreements with both these countries but we have not been able to harness the potential benefit of exporting our goods and services. There are certain inherent problems associated with it. There are several non-tariff barriers to our exports in India and China. We need to enhance our efforts to remove these barriers. We have entered into an agreement with the Government of PR China in April 2010 to provide duty free access to 4,721 products in six digits customs tariff line. However, our industries and exporters have not been able to fully utilise this opportunity. We have initiated the process for assessing the situation and the reasons behind non utilisation of market access opportunities. This would require a constructive dialogue and deliberation between the government and businesses on both sides. Besides, we need increased engagement with our neighbouring partners in the area of economic cooperation for enhancing productive capacity in sectors like agriculture, manufacturing, export trade and infrastructure.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Why hasn’t Nepali economy benefited from trade?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">It is not true that Nepali economy is not benefiting from trade. But the question is about the level of benefit that we are harnessing.&nbsp;For this, we have to follow the path to sustainable and inclusive trade development. Trade is the output of total economic activities of the country. Trade cannot operate in isolation. Until and unless we develop our agriculture, forest, manufacturing and the service areas, trade cannot happen. All sectors of the economy should move towards the same direction and work in harmony so that there will be value addition in the export. Such a situation will help create employment, increase revenue to the government and bring more foreign currency. It will ultimately lead to the improvement in the macroeconomic situation of the country.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Why do you think Nepal has not been able to capitalise on WTO membership?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">The WTO membership has brought both opportunities and challenges to Nepal. Opportunities - because we have market access to all member countries and we can engage in constructive dialogue in the international trade forum through WTO. At the WTO, we can raise our voice together with likeminded countries to get more support from developed countries to remove market entry barriers and enhance our trade capacities. Besides, there are challenges. Ever since the liberalisation of tariff under multilateral trading system, our products have to compete with products from other countries particularly in big markets like the EU, the US and even in India. Since the tariff rate is going down, other competing countries are finding it easier to enter into these markets. This has proved to be a major challenge to maintain our market share in these markets. We have lost the export of some products like carpet, garments and pashmina in the international market and vegetable fats in Indian market during the last decade due to this reason.&nbsp;Accession to multilateral trading system and regional trade arrangement is not the panacea to remove the problems of trade. Rather, we need to develop our capacity to face increased competition on one side and utilise the opportunities available under regional and multilateral trading system on the other.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Nepal currently has a huge trade deficit. How can this be lowered?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">It is true that we are facing a huge trade deficit. During the last couple of years, exports have not increased and imports are galloping. In the last fiscal year, we had the record trade gap of around Rs 315 billion. Most imports are consumption items like petroleum, cars and gold. The gold does not directly contribute to enhance the economic activities. So, it is an alarming situation and a challenge for the policy makers. In the midst of such a precarious situation, the Government of Nepal has launched Nepal Trade Integration Strategy (NTIS)-2010 which seeks to identify and develop some key essential products and services to build our export base in a sustainable way. We must correct the deficiency which is hampering the growth of economy and the investment climate. We have to improve law and order situation, industrial relations and management of government-owned industries. We also need to develop adequate infrastructure and improve the regulatory regime so as to help in building confidence among investors. Similarly, streamlining of the transit procedure, incentives for industries like tax rebate, monetary and non-monetary incentives and improving governance systems are among the suggested reforms. Until and unless we improve our investment climate, it will be difficult to motivate and convince potential investors to invest in the industries or in any other sectors. Unless we have investment, we can improve neither international trade nor the supply situation within the country.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>The relatively stronger trade sector of the past has diminished gradually over the last decade. What can be done to revitalise trading sector again?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">During 1990s, we saw the growth of industries and trade in terms of export to India and other countries. But the industries we were nurturing during this period were not found sustainable. Carpet, garment and pashmina are no longer our niche products as many countries export similar goods. We were unable to improve the capacities of our industries in terms of economies of scale, quality and design of the products. The enhancement of productive capacities would require several steps as behind-the-border measures. One case in point is the development of Special Economic Zones (SEZ) for relocation of industries by providing one-stop services to industries in such zones combined with flexibility in labour regulations and tax rebates.&nbsp;The project for establishing special economic zones in the country was started some 12 years back but it is still in an indeterminate state as the development of physical infrastructure and creation of necessary legislation for regulating the zone is stagnant. Similarly, there is need to revisit laws related to the regulation of trade and investment regime, particularly the Industrial Enterprises Act and Foreign Investment and Technology Transfer Act (FITTA)-1992. The revival of Nepali trade will largely depend upon right choices of products and services in order to become sustainable. Efforts are to be made for maximising domestic value addition optimising the utilisation of human capital as well as other factors of production including land and natural resources which will culminate into healthy growth of economy. The growth of trade during 1990s was largely based on tariff arbitrage. When that arbitrage opportunity diminished, many such industries could not sustain. The Government of Nepal is now realigning trade through the manifestation made in NTIS-2010, Trade Policy-2009 and the current Three-Years Interim Plan (TYIP).&nbsp;Now, the challenge is to implement them in true spirit. </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>There are special privileges like zero tariffs &nbsp;for LDCs. How can we benefit from that?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Nepal enjoys zero tariffs in many countries that belong to the Organisation for Economic Cooperation and Development (OECD). The European Union provides duty free access to the products from LDCs under the Everything but Arms (EBA) initiative. Countries like USA, Canada and Japan provide Generalised System of Preferences (GSP) facilities to many products from countries like Nepal.&nbsp;Besides, Nepali products also enjoy zero tariff facilities in Indian and Chinese markets. Therefore, it is not the problem of market as such. Nepal, together with other least developed countries around the world, is pleading duty-free quota-free (DFQF) market access in developed and developing countries right from Geneva to Washington DC.&nbsp;The most important aspect is to increase our supply side capacity and competitiveness. Since zero tariff is available to all LDCs, only those can export to these markets who are more competitive. This would require revisiting the trade and export policy with a focus on choices of right products, improvement in quality and diversification of design and reduction in the cost along the value chain.&nbsp;Being a landlocked country, the transit transport cost is generally higher. Simplification of transit procedures and reduction of cost of transit is vital for Nepali trade.&nbsp;</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>A new concept ‘Aid for Trade’ has been gaining currency. What kind of reforms should Nepal make to get optimum benefit from it?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.05pt;">Aid for Trade is a new concept that emerged during the last decade. There is consensus and commitment among developed countries to support LDCs for trade development. There is a notion that LDCs need trade and not aid and this view is often expressed in various international forums. Developed countries and development partners should come forward to support product development programmes, development of trade infrastructure like inland clearance depot, container freight station, special economic zones, roads and other forms of transportation in order to enhance the trade capacity of the LDCs. Other possible areas of cooperation include enhancing the quality of infrastructure for test and certification of products, capacity building for trade negotiations and institutional development. All these require adequate technical as well as financial assistance. Pledges are made through international forums for aid for trade initiatives. However, the pace of implementation and the rate of disbursement are very slow.&nbsp;Some donors have played a tricky game just by renaming the regular official development assistance (ODA) as the aid for trade allocations which is not the spirit of these initiatives.&nbsp;Aid for trade is another stream of foreign assistance besides the regular allocation of ODA. In Nepal, we are considering creating a Fund for trade development in consultation with various development partners. An inter-ministerial task force is working on devising necessary regulatory framework for the administration of the Fund.&nbsp;&nbsp; </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.05pt;">The Government of Nepal has already taken steps for mainstreaming trade into national development agenda. Trade cannot be looked in isolation and is not a concern for the ministry of trade only. There are several entities and ministries associated with it. We have to bring them together to promote trade in goods and services. We are also aiming at getting adequate support from development partners to complement the national effort. If some products and services are important from trade perspective, they should get immediate attention for development and promotion. Support must go to the grassroots level, i.e. the enterprise level and the farm level so that benefits from export trickle down to the producers and growers. The assistance under aid for trade initiatives encompasses various sectors that contribute to trade development and thus various ministries and private sector entities have a role to play. The Ministry of Commerce and Supplies will work as the national focal point and coordinator for creating synergies of this effort. </span></div>',
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			'title' => '‘Dealing With Supply Side Constraints Will Help Our Export Prospects’',
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			'content' => '<div style="text-align: justify; text-indent: 0in;">
	<span style="color: rgb(178, 34, 34);"><b><span style="font-size: 8pt; line-height: 120%;"><img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/vidya nath nepal.jpg" style="width: 189px; height: 213px;" vspace="1" />Vidya Nath Nepal</span></b></span></div>
<div style="text-align: justify; text-indent: 0in;">
	<span style="color: rgb(178, 34, 34);"><span style="font-size: 7pt; line-height: 120%;">President </span></span></div>
<div style="text-align: justify; text-indent: 0in;">
	<span style="color: rgb(178, 34, 34);"><span style="font-size: 7pt; line-height: 120%;">Centre for Public Policy Dialogue and Former Special Secretary of Commerce</span></span></div>
<div style="text-align: justify;">
	<span style="color: rgb(178, 34, 34);">An NRB source says that in the first five months of FY 2009-10, export of goods has declined by 16.8 per cent while import of goods has increased by 30.4 per cent. This has created huge trade deficit of 48.6 per cent. Volume of trade deficit with India is higher than with the rest &nbsp;of the world.</span></div>
<div style="text-align: justify;">
	<span style="color: rgb(178, 34, 34);"><br />
	</span></div>
<div style="text-align: justify;">
	<strong>How do you evaluate the current trade situation of Nepal?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">I have been observing the economy and policies for the last four decades. But the trade deficit was never this bad. Today, the deficit is in billions of rupees which is a painful situation. The import growth has spiralled while the exports have dwindled. Nepal’s value of exports for the year 2001-02 was more than Rs 45,000 million which reduced to only about Rs 41,000 million in 2007-08. On the other hand, imports in the same period increased from about Rs 103,000 million to Rs 154,000 million. Export to India remained almost stable while export to other countries decreased sharply. During this period, about 63 per cent of Nepal’s total exports went to India while about 59 per cent of its total imports were from India. Thus, Nepal’s total trade with India was about 60 per cent. The increased import has been largely for consumption materials rather than for raw material or industrial inputs. For example, gold and many other goods are imported into Nepal considering the Indian fiscal policy. Our liberal trade policy does not allow controlling imports. According to our law, we cannot prohibit any business, we can only restrict only a few items. Nepal is the most liberal country in entire South Asia in terms of its trade policy. We don’t have any import restriction and quantitative restriction. We have very small negative list for imports.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>How do you compare the current situation with the past?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Current trade situation has grown very weak when compared to the past. Increasing trade deficit is evident. An NRB source says that in the first five months of FY 2009-10, export of goods has declined by 16.8 per cent while import of goods has increased by 30.4 per cent. This has created huge trade deficit of 48.6 per cent. Volume of trade deficit with India is higher than with the rest of the world. There is very little attention towards production of exportable goods. There is no favourable environment for that. Therefore the trade situation has worsened now. In 1996, a trade treaty was signed with India. In that treaty there were very little restrictions on export to India, the negative list was shorter and the rule of origin was not so strict. The treaty renewal in 2002 retracted such liberal provisions. The rule of origin was made tougher. Similarly, India exerted quantitative restrictions on some products. That disrupted our export. The political turmoil after 2002 and the resultant current transitional phase has led to poor trade situation compared to that of the past. </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What are the main reasons for poor development of Nepali trade?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Trade has to be looked on the basis of import and export. The import is continuously increasing but that is not a reason to rejoice. To increase export, there must be an increment in investment for production. Investment can be both domestic and foreign. Forget about the foreign investment, even the domestic investors are not encouraged to invest. The main reason is the volatile and unstable political situation. Because of this, there are no new investment and production of exportable items. Apart from that, there are issues of labour, peace and security, industrial security and unstable policies that have put investors at bay. A policy must last for at least five to 10 years to attract investment. But in Nepal that is not the case. Government is changing frequently, and every change of government brings change in the policy too. Since last year, also the interest rate has sky rocketed due to liquidity crunch in the financial institutions. That has also affected the investment and thereby exports.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Nepal faces non-tariff barriers with its trading partners. How can such barriers be removed?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">We are the member of WTO, SAFTA and BIMSTEC along with our trade partners like China and India. WTO’s policy states that the non-tariff barriers must not be exerted unless it is justified. There should be certain tariff barriers but very little. The trade must be gradually made free by removing the restrictions. The facility given to one country must be provided to other country too. In spite of this, agriculture based products’ export to India face a lot of non-tariff barriers. For example, when some agro-products have to be exported to India from either Sunauli or Birgunj, quarantine tests have to be carried out at a far away laboratory. That adds huge cost for exports. One of the main problems with export trade of Nepal is transit cost which is usually prohibitive. The transport cost from here to Kolkata, the main port for Nepal, is to the tune of 14 to 40 per cent of the cost of material. With such high cost how can we compete in the international market? Documentation barriers are also severe as the documentation process takes months and that further hinders the export. Internally too, we have constraints in trade facilitation. In Indian ports too, there are numerous problems like unavailability of ships and lengthy procedures. Such non-tariff barriers added to the tariff barriers are hindering our export. Though India has provided customs free export from Nepal to India in certain goods it levies special duties on them. Sometimes, state governments in India levy additional duties according to their local rule. A complaint on such case gets lost in the Indian bureaucracy and as a result, Nepal’s exporters face harassment.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Nepal also has severe supply side constraints. How can they be removed?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">It is true. Though various bilateral, regional trade agreements like SAFTA and multilateral trade arrangements like WTO have been providing us access to different markets through manner similar to reduced customs duties, we are not able to benefit form that. Under SAFTA, hundreds of items can enjoy concessional entry into other countries. WTO has the philosophy of liberalisation of trade by reducing tariffs. Compared to the last decade, the customs duties have declined even for entry into India. The trade access we got through bilateral, regional and multilateral agreements have not been fully utilised due to supply side constraints. What can we export when we can’t produce goods here? There is no investment environment and the cost of production is high while labour productivity is very low. There are problems with lengthy documentation, labour issues, peace and security and increased interest rate. If we do not have any supply side constraints, our export would definitely increase. </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Industrial and trade policies are not translated into acts and regulations. Even if they are enacted, they are overlapping and contradictory. Labour issues are never settled. Quality of infrastructure like transport, power supply etc is very poor. The ADB report of 2009 says the syndicate system of trucks is common in the country and the transport cost has increased as high as 55 per cent. Research and development aspect has been largely neglected. Technologies are outdated and innovation is non-existent. Institutions in particular are weak and ineffective. Private sector is not properly promoted by the government. Unless we can correct ourselves on these counts, supply side constraints will prevail. </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Nepal enjoys numerous facilities under WTO regime as well as being an LDC. How can we utilise such advantages?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">WTO believes in MFN (Most Favoured Nation) treatment. There should not be any discrimination under this system for any country. There was a Ministerial meeting held in Doha where it was decided that WTO would provide various technical assistance to strengthen the supply side of the LDCs to increase their export potential. Little has been done on that front and that is insufficient. WTO’s provision of differential treatment to the LDCs has not been effectively implemented. Facilities like ‘Aid for Trade’ are just for name. We have not received any sufficient amount on this account. There is a need for strong and effective negotiation from LDCs as a group which is lacking so far.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Our government through our embassies abroad should strengthen economic diplomacy to promote trade to respective nations by identifying suitable products. We have failed to do so. There are a few products that we can export to India. For example, Nepal can take huge benefit if producers concentrate on exporting vegetable ghee, cardamom, GI pipe and noodles to India. Tea and ginger are exported to India but it re-exports them. From our side, it is better to export our products directly to the final destination. Nepal should identify the negative net trade of a particular country and work on exporting such goods to those countries. We have failed to move ahead in this direction. </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Investors are reluctant to increase investment citing unfavourable investment environment. How can trade be enhanced amid such problems?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">The main reason behind investments remaining stagnant is political instability, frequent changes in policy, labour issues and security problems. Foreign investors seek easy exit if they do not see profits. There is difficulty in such exits and liquidation procedure takes years. Foreign investors can’t wait that long. Nepali raw material based industries would be sustainable in terms of export trade. However, that concept is not necessary to apply in international trade in the course of industrialisation. Hong Kong and Singapore are examples of countries that do not have their own big manufacturing units, but have benefited by exporting assembled products. However, if we can export goods by processing our own raw materials, we would have more comparative advantage and we would not have to spend foreign currency in importing raw materials. A study shows that Nepal’s products that have highest potential of export in the long run are tourism and hydropower. However, remittance is the biggest source of foreign exchange earnings currently. At the moment, around 80 per cent of foreign exchange earnings is through remittance. Tourism ranks second. Hydropower projects are capital intensive. Nepali capital is hardly enough to run even one Tamakoshi project. </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">The government should be proactive in providing all facilities mentioned in industrial and trade policies to increase production and promoting exports. However, private sector should also run businesses on the basis of corporate culture with new technology and increase their competitiveness. On an average, it takes about 31 days to clear seven procedures to do business in Nepal. This process time is the longest among the SAARC countries. Similarly, it requires 41 days to export products out of Nepal. Thus, the businessmen are suffering from over regulations, corruption, dishonesty, lack of transparency and political interference. According to WEF report of 2010, Nepal ranks the lowest among all SAARC countries in quality institutions. Therefore, the expectation is that the private sector will increase production and export in spite of the weak government. They have the initiative and the mission while the government is indifferent as well as inefficient.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>A total of 19 goods and services are selected by the NTIS as priority products. How realistic is this selection?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.05pt;">They have selected 19 goods and services following a lot of studies. Among them, seven are from the service sector like IT, health, education and tourism among others. I feel we can do better in these service sectors and have the potential if there is good working environment. There are agro based products too but I don’t think they are sufficient. Since our production depends on imported technology, we must select products that generate high profit in low volume items. If we can focus in the coming decades on these 19 products by creating favourable environment for investment that would certainly benefit our trade prospects. </span></div>',
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			'description' => 'An NRB source says that in the first five months of FY 2009-10, export of goods has declined by 16.8 per cent while import of goods has increased by 30.4 per cent. This has created huge trade deficit of 48.6 per cent. Volume of trade deficit with India is higher than with the rest  of the world.',
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	(int) 11 => array(
		'Article' => array(
			'id' => '341',
			'article_category_id' => '40',
			'title' => '‘Aid For Trade Can Do Nothing About Our Governance Problem’',
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			'content' => '<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 120%; vertical-align: middle;">
	<span style="color: rgb(178, 34, 34);"><b><span style="font-size: 8pt; line-height: 120%;"><img align="left" alt="" border="2" height="226" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/ratnakar.jpg" vspace="2" width="200" />Ratnakar Adhikari</span></b></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 120%; vertical-align: middle;">
	<span style="color: rgb(178, 34, 34);"><span style="font-size: 7pt; line-height: 120%;">General Secretary </span></span></div>
<div style="text-align: justify;">
	<span style="color: rgb(178, 34, 34);"><span style="font-size: 7pt; line-height: 115%;">South Asia Watch on Trade, Economics and Environment (SAWTEE)</span></span></div>
<div style="text-align: justify;">
	<span style="color: rgb(178, 34, 34);">It is our right to be able to protect our industrial sector. If you open up the industrial sector completely then it could result in industrial depression and loss of employment. So, it is necessary to protect the industrial sector but not to the extent of providing incentive to &nbsp;inefficient industries.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>The trade policy of Nepal is more liberal than some other developing countries. Why then has trade failed to contribute to our national economy and development?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Having a liberal trade policy alone is not sufficient to increase export potential. Second, Nepal is still not more liberal than Sri Lanka and Bangladesh. Other countries have become more liberal, not only in terms of tariff and non tariff barriers but also in terms of trade to GDP ratio. If you see that the trade to GDP ratio is increasing, you can conclude that the country is more integrated into the global market. Theoretically, we have to be in a position to gain because we are liberalised. That is the classical theory of anti-export bias produced by Bhagwati and Kreuger in 1978. They say that if you protect your domestic industry, you will be raising the barrier for export because protection of domestic industry through tariff will in a way raise the price of import which will be used in the export processing sector. Eventually, your export will suffer. However, theories apart, in today’s world, having a liberal economy is no guarantee that you will be able to export too. </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>There is a heated debate under the Doha Round between the developed and developing countries. How justified are the arguments of the developing countries?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Agriculture is our livelihood and we should be in a position to protect our agriculture sector when required. The special safeguard measures proposed by the developing countries are useful. If you open up the entire agriculture sector in which the protection is already lower compared to industrial products, there could be other problems like food security, livelihood, social tension and others. In agriculture, I fully agree with the position of the developing countries. In terms of industrial products, most of the developing countries which are liberal today and most of the OECD or developed countries had protected their industrial sector during their respective process of economic transformation. So, it is our right to be able to protect our industrial sector. If you open up the industrial sector completely then it could result in industrial depression and loss of employment. So, it is necessary to protect the industrial sector but not to the extent of providing incentive to inefficient industries. You have to allow a certain degree of competitive atmosphere. If you think that they will be able to do better in the long run, then you have to provide protection for a limited period of time.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">On non tariff barriers, there are two things that we have to understand. The first is that certain non tariff barriers are related to environment, consumer preferences and health and safety of the consumers. Such conditions on the basis of scientific evidence are imposed in the form of non-tariff measures. For example, if Aflatoxin causes cancer and we export certain agricultural products containing Aflatoxin which is at a level higher than globally accepted, then our product gets rejected. It’s not the fault of the importing country. We have to be able to improve our infrastructure, laboratory system, human resources and legislative arrangements in order to be able to fulfil the requirements. But there are certain non-tariff barriers which are protectionist in nature. We oppose these protectionist barriers. In terms of services, the developing countries are demanding the liberalisation of labour movement from one country to another. It has been proved that three per cent increase in labour force from the developing countries would result in global welfare gain of 300 billion dollars. This is something that needs to be pondered upon.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Finally, on trade remedy measures, developing countries do not have a serious position except saying that the developed countries are using trade remedy measures as a protectionist device. That may not necessarily be the case. So, on the whole, their position in the Doha Round is quite justified given the socio, economic and political situation of these countries.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>LDCs find it difficult to implement some of their WTO commitments. How would ‘Aid for Trade’ help to implement such commitments?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Aid for Trade (AFT) does provide necessary help to the developing countries and LDCs to implement some of the WTO commitments including drafting of legislations, preparing of regulations and putting in place the institutional mechanism that are required to take advantage of the export opportunities offered by the WTO.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>How can ‘Aid for Trade’ help overcome supply side constraints?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Supply side constraints need to be divided into two different categories. One is supply- side constraints that results from our fluid political situation. The strikes and various political demonstrations make us unable to ship our goods on time. AFT cannot do anything about this. Then, there are supply side constraints that are resulting from our lack of resources or our inability to utilise resources properly in certain areas like infrastructure, development of roads, transportation, electricity and skills. People do not have the necessary skills to produce goods in a competitive manner. We have customs infrastructure which does not even measure up to regional standards. That needs to be improved. Besides, we do not use the required technology to be more productive and competitive in the international market. </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Some people interpret ‘Aid for Trade’ as the same money from the same window as human rights aid. What is your take on it?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">That is not true. AFT includes only six components. The first is the economic infrastructure which is the money provided for road, electricity, and communication. The second category is the money provided for building productive capacity in agriculture, industries and services sectors. The third is a trade development category which is basically the money provided for export promotion and development of trade. The fourth category is trade policy and regulations for helping countries to implement their WTO commitments, including enactment of legislations and capacity building of various institutions in the country. The fifth one is called trade related adjustment which is basically the money provided to countries to implement trade liberalisation measures and protect the country from negative affects of trade liberalisation. It involves retraining people who lose their job because of trade liberalisation and finding alternative employment opportunities for them. The sixth category is ‘others’. Others could be anything if the donors and recipients agree to call a particular aid as AFT. The other way of looking at this is: AFT is Overseas Development Assistance (ODA) minus the money provided for various areas, for example, health, education, environmental conservation, human rights, women empowerment and peace and conflict. Human Rights is of course a separate area altogether.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Do you think ‘Aid for Trade’ will succeed in Nepal as many other aid programmes have failed to generate the desired output?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">There is no evidence to say that aid has not helped Nepal’s economic growth. The opinion is divided here. As a researcher, I would be reluctant to say that aid hasn’t helped. At the same time, I wouldn’t vouch that foreign aid has helped tremendously. However, it has certainly helped in meeting the saving and investment gap. If the foreign aid was not provided in some areas, for example, the health sector, it is difficult to say whether we would be able to do something. In the case of AFT, I am not very excited. If there is real additional money coming as AFT, that would definitely be helpful, but not if it is repackaging of money diverted from other areas. Next, it has to be predictable. If certain donor countries are going to provide certain amount of money, they have to guarantee the fund for a multi-year period.&nbsp;It is also the issue of sustainability which is not only about donors providing money on time. It should be taken into account whether the government is ready to take charge of the projects once the donor funding ceases. If a donor provides money for three years, you can’t ask the donor to provide money for the entire period of the project even if the results are good. If you can operate the project on a commercial basis, the private sector will take over. If you are not working on the commercial basis, then government should step in and provide sustainability to the project. The final issue is the effectiveness of the aid. The Paris declaration of aid effectiveness should be the guiding principles for enhancing the effectiveness of AFT. These criteria would actually determine the success of the project. If these criteria are met, the chances of AFT working for the country are fairly good. </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Experts say we lack basic trade infrastructure. What kind of problems and challenges do you see that hinder Nepal’s sustainable trade development? What should be done?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Basic infrastructure is necessary for the country to be able to expand its export on a sustainable basis. A study shows that if a shipment is delayed by one day because of lousy infrastructure, it is equivalent to adding 0.8 per cent to the total tariff that you pay to the importing country. Another study says that if export is delayed by one day, the total export potential will be reduced by one per cent. Infrastructure should be the number one priority for Nepal to be able to trade on a sustainable basis. AFT is not going to be enough because we have our own governance problems to tackle. Governance issue is equally important. </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Experts opine that international community should not only provide market access but also help LDCs in enhancing their trade capacity. If everything is to be done by other countries, what should LDCs like Nepal prioritise in their agenda?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Nepal should fully mainstream trade in national development strategy first. In the new Plan document that is going to be prepared, it has to be included. Apart from that, mainstreaming has to be done at the sectoral level too. For example, if tea export is to be increased, then its priority has to be mainstreamed not only at the level of the Ministry of Industry but also at the Ministry of Agriculture which is responsible for promotion and growth of tea. So, all these ministries and sectors have to take into account the fact that mainstreaming is vital. The second issue is that we have to address supply-side constraints through effective governance reform as well as utilisation of AFT. But there are two aspects we have to ensure ourselves besides the sustainability issue. First, we have to improve our absorptive capacity. The government is unable to even spend the budget amount that has been allocated. How would it spend the money allocated by an external agency? However, we have seen some gradual improvement in our absorbing capacity but it needs to be enhanced further. Another critical issue is that of coordination.&nbsp;There must be coordination on how much money is coming, how it is being utilised and which sector is being prioritised. There has to be a coordination mechanism between the ministries of commerce, industry, tourism, agriculture and other related ministries that have a role in promoting trade so that there is better coordination and effective utilisation of resources.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>LDCs are worried that the current intellectual property protection regime does not recognise their contributions. How can countries like ours raise their voice to eliminate the danger of losing patent rights to compete in the international market?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Some of our properties of genetic resources and traditional knowledge are taken away by some multinational companies and universities. But in order to address that kind of problem, we have to keep our house in order. We need to pass the legislation on access and beneficiary by the parliament which is pending for six years now. The draft was prepared in 2004-05 but has not been adopted as a law. We need to ensure this as it will take care of three aspects. First, it will guide us on regulating access to our genetic resources and traditional knowledge. Second, it would make sure that when the access is provided, it is done on the basis of a prior informed consent of the local communities who are involved in conserving those resources. Third, it would ensure that those communities are appropriately remunerated. They would be appropriately remunerated for the job they have done so far to conserve the resources. With that kind of legislation, many countries have protected their bio diversity, genetic resources. It’s our fault that we have failed to follow suit. Global regime is unfair, however, we have not been able to create a mechanism at the local level to counter the unfair tendency of some global rules. </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Being an LDC, Nepal enjoys numerous benefits like zero tariff. How should Nepal utilise such concessions to gain optimum benefits?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Yes, we do have zero tariff access in selected markets. The European Union is definitely among them but we don’t have zero tariff access in the US market. The process for the same has begun but it will take a long time before such access is provided. Even if you have zero tariff access, you still have to fulfil the rules of origin (ROO) requirement. Once you fulfil the ROO, you are back to the supply-side issues because you have to create backward linkages. If a shirt has to be exported, it’s better to have the fabric manufactured in Nepal itself rather than relying on countries like China and India for the supply of materials. If we continue to get the materials from these countries, we will not be able to fulfil the ROO criteria. We have the full potential for export In some areas where ROO is not a problem. One such example is coffee which can be exported to European, Japanese or any other market in desired quantity without having to fulfil the ROO criteria because it’s an indigenous product and there could be more than 90 per cent value addition and processing in our country itself. However, we cannot export if we are not able to produce in desired quantity. Apart from production, we also have the problem of competitiveness. Even if our cost of production is lower than other countries in the world, our products will cost more by the time it reaches the final market. Let me give you an example. Imagine a situation in Gulmi where you have to organise a few farmers in the form of cooperatives while trying to export coffee to Japan. You collect 12 tonnes of total consignment and put it on the truck and try to send it. But there is a strike so you are stuck there for two days. Finally, you manage somehow and reach Birgunj customs. In order to clear the export consignment, it takes two days. Once cleared, the consignment moves to Kolkata port. It should normally take a maximum of two days to reach Kolkata port but sometimes it takes six days because there is a strike in Bihar or West Bengal which falls on the way. Once at Kolkata port, the consignment is not enough to reserve the entire ship. Now, it takes four days for the ship to fill up. Eventually, it moves from Kolkata. Kolkata is not a deep sea port but a shallow port so it can’t go directly to Japan. Therefore, the consignment on board the ship travels to Visakhapatnam, Colombo or Singapore. The consignment is transferred to the mother vessel at one of these ports and then it goes to Tokyo. In the process, you lose so much of time that you will not be competitive in the global market. So, it is not only the question of productivity and production, but also the question of being competitive in export trading. </span></div>
<div style="text-align: justify;">
	 </div>',
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			'description' => 'It is our right to be able to protect our industrial sector. If you open up the industrial sector completely then it could result in industrial depression and loss of employment. So, it is necessary to protect the industrial sector but not to the extent of providing incentive to  inefficient industries.',
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			'id' => '340',
			'article_category_id' => '34',
			'title' => 'Natural Gas Remains Untapped',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="margin-bottom: 0.0001pt; vertical-align: middle; text-align: justify;">
	<span style="font-size: 14px;">T</span><span style="font-size: 9.5pt;">hough three decades have passed since natural gas was found below the grounds in Kathmandu , nothing has been done yet to bring it to the kitchen of the people. Negligence of the government and technical complications have made gas extraction a far cry. Officials at the Department of Mines and Geology say there is no possibility to extract natural gas for utilisation anytime soon.</span></div>
<div style="margin-bottom: 0.0001pt; line-height: 11pt; vertical-align: middle; text-align: justify;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle; text-align: justify;">
	<span style="font-size: 9.5pt;">The department has failed to even to evaluate the proposals of two companies that sought permission to extract gas. The proposals are lying with the department for the last two years. Continental Trading Enterprises and Rajavardhan Construction, a company under KL Dugar Group had submitted those proposals. </span></div>
<div style="margin-bottom: 0.0001pt; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle; text-align: justify;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle; text-align: justify;">
	<span style="font-size: 9.5pt;">Sarbajit Prasad Mahato, the Director General of the department accepts the weaknesses of the department but blames it to various complications. He said that more studies are needed to go ahead on this. </span></div>
<div style="margin-bottom: 0.0001pt; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle; text-align: justify;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle; text-align: justify;">
	<span style="font-size: 9.5pt;">Studies have revealed that the area of 26 square kilometres from Teku to where the office of the Nepal Herbs Corporation is located contains natural gas. Studies by the department carried out at different times during the last 17 years show the possibility of a natural gas reserve of 310 million cubic metres. This amount can meet the need of 20,000 households for 30 years.&nbsp;The study conducted in 1996 says that extraction work would cost Rs 437.7 million. The extracted gas cannot be liquefied and filled into the cylinder directly. Therefore, it should be supplied directly to the households through pipelines. This is said to have become costly now because of the concrete constructions stretching the length and breadth of Kathmandu valley. However, such gas can be used to generate electricity thorugh thermal power station. The department has identified 14 places from where the gas can be mined. </span></div>
<div style="margin-bottom: 0.0001pt; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<span style="font-size: 9.5pt; line-height: 115%;">The department has put forward an option to conduct fresh studies as the environment has changed much since the time of the previous studies. </span></div>',
			'published' => true,
			'created' => '2011-06-03',
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			'description' => 'Though three decades have passed since natural gas was found below the grounds in Kathmandu , nothing has been done yet to bring it to the kitchen of the people. Negligence of the government and technical complications have made gas extraction a far cry.',
			'sortorder' => '263',
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			'article_category_id' => '34',
			'title' => 'Clean Chit For Kansakar',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-indent: 0in; text-align: justify;">
	<span style="font-size: 12pt;">T</span>he Special Court has given clean chit to suspended Executive Chairman of Nepal Airlines Corporation (NAC) Sugat Ratna Kansakar and six other officials. In a case filed against them at Special Court, the Commission for the Investigation of Abuse of Authority (CIAA) had alleged that the six had committed corruption by sending lock-up money to Airbus company for buying a jet aircraft though neither a formal decision was made for this purpose nor the necessary finance was&nbsp;arranged to pay for the purchase.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	The court comprising three justices Gauri Bahadur Karki, Om Prakash Mishra and Kedar Prasad Chalise issued the clean verdict on April 19.</div>
<div style="text-align: justify;">
	 </div>',
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			'title' => 'Rahughat Construction Begins',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="margin-bottom: 0.0001pt; line-height: 11pt; vertical-align: middle; text-align: justify;">
	<span style="font-size: 8pt;">T</span><span style="font-size: 9.5pt;">he first phase of the construction at the Rahughat hydroelectricity project has started with the survey for the 11.7 km road to be constructed from the powerhouse to the reservoir. The 30 MW project site is in the Myagdi district. </span></div>
<div style="margin-bottom: 0.0001pt; line-height: 11pt; vertical-align: middle; text-align: justify;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle; text-align: justify;">
	<span style="font-size: 9.5pt;">Meanwhile, also the construction of the residential building at Rakhu Piple has begun, according to the project officials. The building will be complete within one-and-a-half year. The first phase also includes the construction of tunnel reservoir to the powerhouse. The reservoir will be at the border of Jhi and Dagnam VDCs. The powerhouse will be situated at Tilkenichaur, six kilometres away from the dam.</span></div>
<div style="margin-bottom: 0.0001pt; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle; text-align: justify;">
	 </div>
<p style="text-align: justify;">
	<span style="font-size: 9.5pt; line-height: 115%;">&nbsp;The project is being constructed with a loan from the Indian Government and a joint investment of Nepal Government and Nepal Electricity Authority (NEA). The construction cost is expected to be anything between Rs 3.5 billion to Rs 4 billion, according to a study of Nepal Government. The project is expected to be complete by 2017. </span></p>',
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			'title' => 'Developers Need To Be Transparent To Win Public Confidence(june 2011)',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 120%; vertical-align: middle;">
	<span style="font-size: 14px;"><b><span style="line-height: 120%;">Ashoke SJB Rana</span></b></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 120%; vertical-align: middle;">
	<span style="font-size: 7pt; line-height: 120%;">President</span></div>
<div style="text-align: justify;">
	<span style="font-size: 7pt; line-height: 115%;">Nepal Bankers’ Association</span></div>
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	The home loan is based on the repayment capacity of the borrower. This depends on the borrower’s income. The borrower’s income should be sufficient to pay the EMI (Equated Monthly Instalment). Under this system, the bank can quickly notice if a borrower defaults on his or her scheduled payment.</div>
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	<br />
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<div style="text-align: justify;">
	<strong>How does the banking community look at the overall prospect of the housing industry?</strong></div>
<div style="text-align: justify;">
	When we interact with Nepal Land and Housing Developer’s Association (NLHDA), they put forth their arguments why the housing developers should be encouraged. Their point is that it promotes infrastructure development that the government has failed to provide such as water, electricity and other facilities that come along with housing standards mentioned in the building code. So, I think this is very positive. It is only the speculative side we need to be wary of.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>How much have the banks invested in this sector?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: 0.1pt;">Our estimate is that the banks have invested in average of 25 percent of their loan portfolio into this sector. However, this is an average only. I think that the NRB has put the cap at the right time to prevent the bubble from bursting. We were afraid that the share of housing industry in the total loan portfolio of the banking system might go higher because of the asset price bubble expanding till last year. If you can get regular income and recover your investments in 15 to 20 years, it’s good to invest in this sector. But when the price of the property and the development cost increases and the return comes around in 50 to 60 years that is not economically viable. The mortgage in the west is done usually for 15 to 20 years. </span></div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>How will the banking sector benefit with the improvement in housing industry?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: 0.1pt;">One of the major aspects of the housing industry is infrastructure development. The NRB has welcomed this because that means value addition but it also wanted to control the speculative part. People were buying property on credit or with loan hoping the price would go up and they would he able to sell it for profit even before paying the entire price. And that was the dangerous part of the entire chain.</span></div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>A lot of housing and apartment units are unsold. In this market situation how confident are you of the banks recovering the loans they have given to this sector?</strong></div>
<div style="text-align: justify;">
	The NRB has recently changed its directive and allowed&nbsp;home loans of up to Rs 6 million to be considered as normal loan. This means people who want to buy a house can borrow up to Rs 6 million from the bank and manage the rest from the equity. High-end apartments cost around Rs 10 to 15 million. So, this loan amount is sufficient. There should not be any problem to recover such loans.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>As an investor, what kind of policy reforms do you think are required to improve this industry?</strong></div>
<div style="text-align: justify;">
	I think a little bit of transparency on the part of developers has to come. Just like the banks disclose about their capital, deposit, liquidity ratio and investment, the real estate developers too need to make certain disclosures to the public. The big fear is that the investors might be putting in money where the developers have not put any. It could be all borrowed. Investors want to know the strength of the developers. I think some kind of transparency and disclosure from developers can give confidence to the banks and the individual buyers.<br />
	<br />
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0.15pt;">Till recently there was a rule which made it compulsory that all payments exceeding Rs. 5 million in a real estate transaction be made through a bank. Recently the Supreme Court declared that such a rule was illegal. What is your comment on it?</span></strong></div>
<div style="text-align: justify;">
	That provision was there because banks felt that dealing in cash is an expensive proposition. We try to encourage use of cheques. It has been now ruled out and it is unfortunate. I don’t think that the real problem was with payment through bank. The problem was with the disclosure of income source. Even if someone comes with cash, they still have to disclose the income source to the Land Revenue office while getting the transaction registered. I don’t think it is a meaningful ruling.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>What are the requirements for granting loans to individual buyers of apartments? What is the current trend?</strong></div>
<div style="text-align: justify;">
	The home loan is based on the repayment capacity of the borrower. This depends on the borrower’s income. The borrower’s income should be sufficient to pay the EMI (Equated Monthly Instalment). Under this system, the bank can quickly notice if a borrower defaults on his or her scheduled payment. It’s not a project loan where there may be an implementation risk that the borrower may not implement the project in time. It’s about buying a home that the developer constructs. The bank has to properly evaluate the developer to minimise the implementation risk. So, I think the housing loan is a very structured product. I think that for the banks, it is an easier loan to recover.<br />
	<br />
	 </div>
<div style="text-align: justify;">
	The risk is only when an institution is exposed high on the speculative side of real estate business. If the exposure is not high, the institution may be stuck with a project or two for sometime, but that will not impact much in the overall health of the bank.</div>
<div style="text-align: justify;">
	<br />
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>What is your suggestion to the real estate developers?</strong></div>
<p style="text-align: justify;">
	<span style="font-size: 11pt; line-height: 115%;">We need to separate the good developers from the others, some of them may not be financially sound. The public should find out who the serious developers are and distinguish them from the inexperienced ones. There are developers who have no engineering knowledge and only believe that it is like a real estate transaction. If there are people who are trained engineers and have business plans like the ones from CE construction, it gives confidence to the entire sector. I think we need to support these people and ignore the others. <br />
	</span></p>
<p style="text-align: justify;">
	 </p>
<p style="text-align: justify;">
	<span style="font-size: 11pt; line-height: 115%;"><br />
	</span></p>',
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			'title' => 'Real Estate Sector Must Develop Professionally (june 2011)',
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			'content' => '<div style="text-align: justify; text-indent: 0in;">
	<span style="font-size: 14px;"><b><span style="line-height: 120%;">Bhaskar Mani Gyawali</span></b></span></div>
<div style="text-align: justify; text-indent: 0in;">
	<span style="font-size: 11px;"><span style="line-height: 120%;">Executive Director-Banks and Financial Institutions Regulation Department</span></span></div>
<div style="text-align: justify; text-indent: 0in;">
	<span style="font-size: 11px;"><span style="line-height: 120%;">Nepal Rastra Bank</span></span></div>
<div style="text-align: justify;">
	<span style="font-size: 11px;"><br />
	</span></div>
<div style="text-align: justify;">
	The banks should invest in the housing industry because real estate sector too must develop. This is required to ensure the right of the people to live in their own houses. There must be investments in this sector and this sector must develop but all this has to be transparent and healthy.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>What actually does NRB want in the investment of commercial banks in the housing industry?</strong></div>
<div style="text-align: justify;">
	The NRB wants real estate and housing business to develop as a true industry. In this sector currently, a huge amount is invested from the banks, the developers and the general people. Concentration of such a huge amount in a single sector affects other sectors too.&nbsp;The NRB wants this sector to surge professionally. There will be investment as required and the transparency and honesty has to be maintained at the highest degree.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>Is the investment in the housing industry feasible for the banks in Nepal?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: 0.15pt;">The banks should invest in the housing industry because real estate sector too must develop. This is required to ensure the right of the people to live in their own house. But we thought the trend of unnatural price hike driven by the investment for profit from money borrowed from the bank wouldn't be sustainable. Therefore, the NRB has put a limit for bank investment in this sector. However, it does not mean that the banks should not invest in this sector. There must be investments in this sector and this sector must develop but all this has to be transparent and healthy. </span></div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>The NRB recently relaxed the cap it had imposed on bank lending in the real estate sector. Why was the NRB late in realising this sector's potential as an industry?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: 0.15pt;">What was happening in the past was: people were buying land with the help of bank borrowing and selling the same land to others for profit who in turn, were borrowing from the bank to pay for the purchase and selling the same land further for profit. It formed a never-ending chain that resulted in land prices being unnaturally hiked. The NRB is against such practice. We believe the real estate sector should develop in a professional way.&nbsp;Lending for purchasing real estate properties meant for personal use should not be stopped if the buyer of such property has enough income to service the loan obligations.&nbsp;Such real estate lending is to buy land for constructing personal residence, to construct a residential house on&nbsp;the borrower's land and to buy houses or flats in the community housing projects. So, we recently issued a directive to remove loans up to Rs 6 million from the category of the real estate loan. If the banks do not invest in houses and apartments, the people's right to have their own house will be a mere dream. In the long run, old houses will need to be replaced and with the increase in population, more people will need houses. We have not tried to discourage investment into this sector and that is why we relaxed the lending.</span></div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>How can you say that the real estate loan provided to under a new name 'home loan' would not result in similar adverse consequences as in the past?</strong></div>
<div style="text-align: justify;">
	The loans up to Rs 6 million have been removed from the category of real estate loan. This loan is provided by banks depending on the borrower's ability to pay back the instalments. Previously, the real estate loans went mostly for the speculative business of land plotting that created undesired consequences. But the home loan is not speculative and will not create problems.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>&nbsp;The developers complain that the NRB has been hurting their business by introducing adverse policies. What do you have to say about it?</strong></div>
<div style="text-align: justify;">
	Well, considering the demand of the real estate developers, we removed the loans of up to Rs 6 million for the purchase of apartments and houses from the category of 'real estate loan'. But the developers are demanding that this limit has to be lifted further. We believe that Rs 6 million is a huge amount of money and higher than required by an average Nepali to purchase a house. So, it is not possible to lift this limitation any further.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>The Supreme Court recently nullified the earlier rule that required all the real estate transactions exceeding Rs. 5 million in value to be through a bank. What is the view of NRB on it?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: 0.15pt;">The verdict of the Supreme Court is equivalent to law and we respect the decision. Cheques, cash or any other methods are just the instruments of payment. Looking at the international practice of making payments, it is difficult to say that payments through cheques would create problems and cash wouldn't.&nbsp;We recommend that transactions should be made through any other method other than cash. And a cheque is safer, simpler and easier. This is the intention of the banking system around the world and the NRB's wish is no different.<br />
	<br />
	</span></div>
<div style="text-align: justify;">
	<strong>What are the possible measures that the NRB can initiate or facilitate for the smooth growth of the housing industry?</strong></div>
<div style="text-align: justify;">
	We have now brought the home loans of up to Rs 6 million under the category of personal loan. This indicates that the NRB wants this business to develop and move ahead in a healthy way. With the time and demand, there will always be room for necessary amendments.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>What is the current status on loan recovery from the housing industry?</strong></div>
<div style="text-align: justify;">
	The banks have to recover any lending within the stipulated time period. We have received information that the loans are being repaid.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>What is the total investment of the banking industry in this sector? Do you see further investments coming into this sector in the coming years despite its present precarious position?</strong></div>
<p style="text-align: justify;">
	<span style="font-size: 11pt; line-height: 115%;">Currently, the total investment in this sector is Rs 97 billion which is 18.9 per cent of the total investments made by commercial banks. The real estate and housing sector is a growing business and there must be further investments in in this sector also in the future. The past practice of using bank's money to speculate on the real estate should not be there. However, to fulfil the people's need for houses and apartments, there must be further investments pumped into this sector.</span></p>',
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			'title' => 'Urban Infrastructure Development Has Failed To Keep Pace With Urbanisation (june 2011)',
			'sub_title' => '',
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			'content' => '<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 12px;"><strong><span style="line-height: 120%;"><br />
	Shivahari Sharma</span></strong></span><span style="font-size: 7pt; line-height: 120%;"><br />
	Deputy Director General</span><span style="font-size: 7pt; line-height: 115%;"><br />
	Department of Urban Development and Building Construction<br />
	<br />
	<br />
	</span><strong><span style="font-size: 9.5pt;"><br />
	How safe are the buildings constructed by housing developers in Kathmandu?<br />
	</span></strong><span style="font-size: 8.5pt;"><br />
	The housing companies that want to construct community housing get license only after fulfilling a few procedures. First, the developer should get a planning permit from the Town Development Committee (TDC) based on regulations and by-laws. Next, the developers plan and design buildings and apartments which are later approved by the Department of U</span><span style="font-size: 8.5pt;">rban Development and Building Construction (DUDBC). The approval is subject to fulfilling the requirements of the National Building Code on safety, power supply, fire hazards, other possible disasters and structural design. Following that, the project, if big one, must pass Environmental Impact Assessment (EIA). If it is small one, it must pass the Initial Environmental Examination (IEE). EIA is approved by the Ministry of Environment and IEE from the Ministry of Physical Planning and Works. Then the site map is passed by the concerned municipality or VDC. The housing and apartment complexes have been properly designed and approved. So I don't think they are unsafe. We have our monitoring mechanism in place. But we feel it is not adequate. So, we are in the process of strengthening it. We have planned a third party monitoring system which means outsourcing the job as we have human resource constraint.&nbsp;The pace of urbanisation in the last decade in the capital has been tremendous because of the conflict. However, the growth is largely a haphazard one and urban infrastructure development has failed to keep pace with that of urbanisation. I feel infrastructure development in the city must be able to meet the pressures of migration and rapid urbanisation and such infrastructure development should be carried out by the metropolitan city and local bodies.&nbsp;</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<br />
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 9.5pt;">Could you tell us more about your monitoring mechanism that ensures the housing companies adhere to safety standards? <br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 8.5pt;">We do have our own in-house monitoring mechanism. However, monitoring of the environmental compliance has to be done by the concerned ministry as well. Similarly, adherence to the planning permit is evaluated by the TDC. The size of open space, size and number of units, ground coverage and some others aspects are specified in the planning permit. The monitoring by the division office of DUDBC has not been extensive due to resource scarcity.&nbsp;So, we are instituting a system of third party monitoring next year to evaluate the level of compliance. This will make the process more transparent.&nbsp;We have found cases where constructions have begun even before the approval.&nbsp;However, it has been tightened now and we have taken actions against such practices. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<br />
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 9.5pt;">Do you have plans to limit the number of projects that come to you for approval?<br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 8.5pt;">With the fast pace of urbanisation, there is a huge demand for housing.&nbsp;The competition is still not adequate in community living and group housing. The target buyers of such housing should be the middle and lower income groups. But at present, the housing companies have targeted only the higher income groups. The main reason behind this is the high land price and complex land management system.&nbsp;Unless the land price comes down, this market cannot become competitive. Rather than controlling, this sector needs regulation through set standards. There are flaws that need to be corrected so that this industry will improve. The demand was affected after tightening of the housing loan. Last year’ inflation in the land price also affected a number of housing projects. In 2007-08 and 2008-09, there were a lot of new projects which took license but now we hardly have any takers.&nbsp;At present, the average cost of apartments is around Rs 6.5 to 9 million. However, some companies have recently introduced flats for around Rs 1.7 million. When the price comes down to around Rs 0.8 to 1 million, we can have housing for the masses.<br />
	<br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 8.5pt;">After the recent relaxation by Nepal Rastra Bank in the control in housing loan, we can expect that the number of new projects may increase. Until 26 October 2010, 59 projects were given license and now there are 18 new projects in the process of acquiring licenses. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<br />
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 9.5pt;">It has been observed that the process of issuing licence is rather lengthy and the companies need to visit numerous authorities in this connection. What is being done to simplify it?<br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 8.5pt;">This is also a big issue raised by the private sector. We have discussed about the one-door licensing process in the ministry. The process can be simplified but for now, they must visit four different authorities.&nbsp;EIA and IEE fall under the purview of a separate unit. Planning permit and map approval can be brought under one unit. They are currently under the purview of municipalities and TDC offices. But the existing law has to be amended first for such changes to take place.&nbsp;Developers have also demanded a change in the parameters for EIA and IEE. Their view is that the housing projects facilitate managed urbanisation and do not harm the environment much. We have discussed that too in the ministry and sent a proposal to the Ministry of Environment for consideration on this. It is true that the current procedure is time consuming but if all the requirements are met by the developers, it won't take much time.&nbsp;</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<br />
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 9.5pt;">The geologists say the geology of Kathmandu is not suitable for constructing high rise buildings. Why then has the department given licenses to construct tall apartment buildings?<br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 8.5pt;">Nepal lies in 11th most risky area of the world in terms of earthquake. Kathmandu is located in one of the world's most seismically active zones. But let's not forget that despite frequent earthquakes in Japan, they have so many skyscrapers. Therefore, high rise apartments will not pose a major threat if appropriate design is made, the building code requirements are fulfilled, soil tests and geological studies are conducted properly and quality constructions materials are used. The important thing is that the specific local conditions of the construction area have to be considered while giving planning permit.<br />
	<br />
	<br />
	</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 9.5pt;">People are concerned about the safety of the apartment buildings that are approved by the department. What is your evaluation of the safety in these apartment buildings?<br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 8.5pt;">&nbsp;Going by the designs that are presented to us, I don't think people should be wary. The private sector has invested a lot of money in their projects. If something goes wrong with one particular project, it is bound to affect other projects as well. With the kind of massive investment they have put in, they wouldn't want to make it unsafe. With the current speed of urbanisation, there won't be an alternative to high rise apartments in the near future.&nbsp;So, it's imperative that the safety measures are of the highest standard to win the confidence of the general public. We have checked the designs for the apartment buildings and feel that they are safe enough. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<br />
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 9.5pt;">Why isn't there an inter-departmental coordination for developing infrastructure like electricity supply, road, sewage and drinking water?<br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 8.5pt;">Somewhere along the line, the inter-departmental and inter-ministerial coordination is missing. But the scenario has definitely improved now and there is no haphazard digging like in the past. If a maintenance work has to be done, prior approval from the road department must be taken. The problem is that one department does not trust the other's work. And a lack of discussion about the matter hampers the cause further. We also don't have a regulation unit for urban infrastructure in cities. We have proposed a town development corporation which will look at the local bodies and the planning unit in Kathmandu. However, the proposed bill is yet to be passed by the parliament. The proposed bill has proposed the formation of Kathmandu Valley City Development Corporation which will include five municipalities of the valley as well as the VDCs in the suburbs. We believe that if such an authority existed, coordination would definitely be improved.</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<br />
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 11pt; vertical-align: middle;">
	<strong><span style="font-size: 9.5pt;">By when do you think the city development mechanism will come through? How long will people have to continue to bear unmanaged and haphazard urbanisation? <br />
	<br />
	</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 8.5pt;">There are plans for Kathmandu but they have not been implemented yet. A clear policy regarding land use is not there. After the formation of the national urban and housing policies, we prepared the draft of the bill and sent it to the relevant ministry. The policies are there but it does not have ownership in the absence of the physical development act. First of all, the land must be managed in order to ensure urban planning. For example, if someone decides to build a house in the middle of a field he would want to take the road, electricity and other infrastructure to the house. If there is a physical development act, it will prohibit the construction of a building in the farmland and deny the basic infrastructure for such land. We have also prepared the draft for an act on real estate business and regulation and sent it to the parliamentary committee. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 8.5pt; line-height: 115%;"><br />
	If that gets passed, the buying and selling of property can generate revenue for the government besides providing security to the buyers. The present haphazard situation is due to the absence of a proper law that would ensure a proper control mechanism. We want that the growing cities should not suffer the same fate as Kathmandu. There should be decentralisation of services and opportunities so that development can be spread throughout the country in a balanced proportion. The government is working towards it and we can certainly hope that there will be positive changes soon. </span></div>',
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			'id' => '357',
			'article_category_id' => '31',
			'title' => 'You Train Animals But You Educate People',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-indent: 0in; text-align: justify;">
	<span style="color: rgb(178, 34, 34);"><span style="font-size: 12px;"><img align="left" alt="" border="3" height="285" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/william.jpg" style="width: 250px; height: 285px;margin:10px;padding:10px;" vspace="2" width="250" /><br />
	William Westgate is the Director of Studies at London College of Management and Leadership. After completing his degree at University of British Columbia in Vancouver, Canada, he moved to London and started on the Midland Bank graduate training programme in 1984. Over the next 20 years, he rose to become Senior Vice President at HSBC Securities and Vice President and Director at Toronto Dominion Bank. He retired from investment banking in 2004 to take up a post lecturing in Business and Economics at Woodhouse College, one of the UK's top performing state colleges. Westgate is a founding partner in the London College of Management and Leadership and brings his knowledge of industry, enthusiasm for teaching and vast resources to the training sessions he delivers. He visited Kathmandu recently for the preliminary preparation of Finance &amp; Management Training scheduled for August this year&nbsp; targeted towards senior and middle level bank employees in Nepal. During his visit, he met the CEOs from major banks and financial institutions as part of his preparation. In an interview with <i>New Business Age</i>, Westgate shared his views on the overall banking industry in the country and the upcoming training programme. Excerpts:</span></span></div>
<div style="text-align: justify;">
	<span style="font-size: 12px;"><br />
	</span></div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0pt;">How do you assess the banking industry in Nepal during this short visit of yours?</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	It's ahead of the curve and banking has to be so. People do say that there are too many banks given the current economic level. When you are talking about a new Nepal, you have to develop the infrastructure, resources, processes, technologies and training people to a level where the economy is going to be. If you don't have the vision, you are left in the dust. Some of the bankers I have met recently do have a vision.</div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-indent: 0in; text-align: justify;">
	Finance and banking is not just another industry. It's integral to economic development, right from micro lending to massive project financing, ATMs, consumer products you name it. You cannot make economic progress without a functioning banking system. The banking system in Nepal has a lot of ground to cover though. There are billions of rupees that need to be brought into the formal banking system. You must also get rid of a practice like hundi because that's not good for the economy. We need transparency as these are big social issues.</div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-indent: 0in; text-align: justify;">
	<strong><span style="font-size: 9.5pt;">What is this Finance &amp; Management Training all about?<br />
	<br />
	</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	Well, I don't pretend that I am going to solve all the issues. Banking is a complex industry. In my experiences as a banker, there are a lot of things to know. But there are certain things that you have to know. So, it's a situation of nice-to-know vis-Ã&nbsp;-vis need-to-know We have designed this course based on what the bankers here really need-to-know. Cost of capital, time value of money, sales and distribution of financial products etc are essential for the people in the banking corporations, irrespective of their positions, to know. So, those are the aspects we hope to bring to our training.</div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0pt;">How did your preparation go towards the training programme?<br />
	<br />
	</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	Prior to coming here, I did a lot of research. But nothing matches meeting face-to-face the people who matter. I would say that it has given me invaluable education and encouragement. The conversations I have had here have given me a lot of good practice as well as ideas. I have met some of the most capable people running the banking industry here, however, they are restrained by current conditions. What we hope to do is bring fresh air new western thinking. But we have to tweak it to suit the Nepali market. Because what works for selling bonds in Wall Street is not going to work for selling a loan in Kathmandu. But the principles always stay the same; there are certain things that never change. We are hoping to adjust and adapt tactics as per local requirements.</div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0pt;">You had a lucrative investment banking career going well for you. What is it that stimulated your transition to lecturing and training?<br />
	<br />
	</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	Yes, I had a fantastic career as a banker. But for me, banking is more than just the money. I reached an age of my life where I didn't wish to remain a banker anymore. I love to explain things to people and making presentations using technology. I am an enthusiastic person and like to engage other people. It was more about aspiration and I wanted to move on to what I really enjoy doing.</div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0pt;">What was the idea behind founding the London College of Management and Leadership? How do you think you have made a difference?<br />
	<br />
	</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	We set ourselves apart because we bring a combination of real practical experiences with academic rigour. All my life, I have collected notes mentally and physically wondering I wish I knew that and why didn't someone tell me that earlier. In our teaching, we focus on what the students need-to-know For example, while doing an MBA, the students don't need to know half the MBA because they will never use it. We make sure that the students pay real attention to what they would be practicing in the course of their work careers. Doing so helps us earn a lot of trust from the students. I admire good training and I hate bad training. Inspirational training is something I have always loved and therefore, bring it into practice.</div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0pt;">How exactly will the training programme benefit Nepal's banking professionals?<br />
	<br />
	</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	<span style="letter-spacing: -0.1pt;">As I have already said, the training will bring in fresh air, thinking and new ideas. People starting their careers in banking now are a lot more fortunate compared to 20 years ago. Today, there is technology available to make training sessions very engaging process. They say that you train animals but you educate people. The programme will follow a holistic approach. Banking has many components and when we put them all together; the participants will better understand their roles, departments, banks, the industry and the economy. It will allow them to have a creative and original thought about banking. It will also help them think out of their respective work briefs and cubicles and expand their horizons. </span></div>',
			'published' => true,
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			'description' => 'William Westgate is the Director of Studies at London College of Management and Leadership. After completing his degree at University of British Columbia in....',
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			'id' => '356',
			'article_category_id' => '31',
			'title' => 'Communicate The Customer’s Way',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-indent: 0in; text-align: justify;">
	<span style="color: rgb(178, 34, 34);"><span style="font-size: 12px;"><img align="left" alt="" border="3" height="312" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/stephen.jpg" style="width: 255px; height: 312px;margin:10px;padding:10px;" vspace="2" width="255" /><br />
	Stephen Reynolds is the Founder and CEO of Stephen Reynolds Seminars (SRS) International, a leading provider of corporate training in Thailand and Asia. His website describes him as an Expert in Psychology of Sales and Marketing as well as creator and trainer on THE ONE Advanced Sales System and Magic WORDS Communication Systems. A well-known speaker on Leadership, Communication and Sales, Reynolds has trained leaders from over 60 companies in Thailand, Philippines and Malaysia in the past three years. He has over 27 years of experience, which he leverages to make his seminars, training and public speaking engagements bursting with information, guidance and direction that is both practical and relevant. He was in Kathmandu recently, on the invitation of National Banking Training Institute (NBTI), to impart two-day training to Nepali professionals. In an interview with <i>New Business Age</i>, Reynolds shares the tools and techniques that he teaches to make positive changes. Excerpts:</span></span></div>
<div style="text-align: justify;">
	<span style="font-size: 12px;"><br />
	<br />
	</span></div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0.2pt;">How do you assess the participants of this programme?<br />
	<br />
	</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	<span style="letter-spacing: 0.15pt;">The commonality among the trainees of this programme is that most of them had no sales background at all. Except for one participant, this was their first sales seminar. I tell people that what I am teaching is the most powerful sales technique in the world. It's usually helpful for them to go through other sales trainings as well so that they can contrast different trainings. Then they know what I am saying is true. But if they have never been to any other sales training, how can they compare. </span></div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-indent: 0in; text-align: justify;">
	<span style="letter-spacing: 0.15pt;">Having said that, I think the training was incredibly fruitful. The participants were smart, involved and committed. They were hungry for the knowledge. It happens often in corporate training that the participants sent by their bosses are apathetic towards training as they don't want to be there. But it was an exception here in Nepal. The people were charming and needless to say, I was very happy. </span></div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0.2pt;">What's The One psychology of Sales and Marketing all about?</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	<span style="letter-spacing: 0.15pt;">The One I believe, is the most powerful and effective sales technique in the world. Sales is very complicated. There are many sales systems that are based on as many as 500 techniques but this is the only sales system in the world based on one technique. We are trying to take something very complicated and make it much simpler and easier to apply. </span></div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-indent: 0in; text-align: justify;">
	<span style="letter-spacing: 0.15pt;">We start with the relatively new psychology of Neuro-linguistic programming. It is an approach to psychotherapy and organisational change based on a model of interpersonal communication chiefly concerned with the relationship between successful patterns of behaviour and the subjective experiences underlying them and a system of alternative therapy based on this which seeks to educate people in self-awareness and effective communication, and to change their patterns of mental and emotional behaviour </span></div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0.2pt;">How can communication techniques be made more effective for sales?<br />
	<br />
	</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	<span style="letter-spacing: -0.15pt;">There is no point in my inundating trainees with too much information that they can neither remember nor use. It's important to focus on a particular aspect which will make a difference. That is the challenge with sales. I go with the most powerful psychology and go right to the heart-of-the-matter how to sell face-to-face. ˜The One technique helps immensely as it is applicable for leadership, communication, negotiation etc. </span></div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0.2pt;">How do you define advanced psychological linking?<br />
	<br />
	</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	<span style="letter-spacing: -0.15pt;">It is when you take your products and link them together with the values of the person you are talking to. Basically, we are communicating the customer's way according to their values and vocabulary. The One focuses the entire sales process on the highest values of the person you are dealing with. It is a completely customised process. Sales is not just talking, you have to start seeing the psychology behind the word. </span></div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0.2pt;">Are you confident the trainees will be able to effectively apply the technique taught by you?<br />
	<br />
	</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	<span style="letter-spacing: 0.15pt;">Well, I hope so. Or else, my effort will amount to nothing. In two days, I have given them a real foundation. They should be able to walk out and start to communicate better and instantly be able to see an increase in their sales.What they have learnt during the course of the training should also help them improve their communication at their workplaces. They should now be able to communicate better with their bosses,&nbsp; subordinates and customers. Sales is communication and vice versa. </span></div>',
			'published' => true,
			'created' => '2011-07-20',
			'modified' => '2012-10-31',
			'keywords' => '',
			'description' => 'Stephen Reynolds is the Founder and CEO of Stephen Reynolds Seminars (SRS) International, a leading provider of corporate training in Thailand and Asia. His....',
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	(int) 5 => array(
		'Article' => array(
			'id' => '355',
			'article_category_id' => '31',
			'title' => '‘Customer Satisfaction Only Exists Where There Is Oversupply’',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-indent: 0in; text-align: justify;">
	<span style="color: rgb(255, 0, 0);"><span style="font-size: 12px;"><img align="left" alt="" border="3" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/kevin.jpg" style="width: 223px; height: 231px;" vspace="2" />Dr Kevin McCrohan is a Professor of Marketing – School of Management at George Mason University in Virginia, United States. A PhD from City University of New York, his research interests include marketing and efficient functioning of profit and non-profit organisations, competitive intelligence, information security, methods of marketing compliance for fiscal and philanthropic organisations and economic measurement to fill gaps in administrative data sets. Dr McCrohan has been a Senior Fulbright Scholar at the School of Management, Kathmandu University, Nepal as well as at Trinity College in Dublin, Ireland. During his recent visit to Kathmandu, he delivered a talk on ‘Customer Satisfaction in E-Commerce: Issues and Solutions’ and its implications for Nepal as the main theme under ‘SAIM Lecture Series’ initiated by South Asian Institute of Management, Lalitpur. In an interview with <i>New Business Age</i>, Dr McCrohan shared his views on the importance of customer satisfaction in e-commerce from Nepal’s perspective. Excerpts:</span></span></div>
<div style="text-align: justify;">
	<span style="font-size: 12px;"><br />
	</span></div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0pt;">How does customer satisfaction work in an e-commerce scenario?</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	We have a relationship between the firm and the customer in which they trust each other over the course of a transaction. It is of overriding importance that all the participants that deal with that transaction online can be trusted upon, particularly with personal and financial information.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0pt;">What was the focus of the talk programme today?</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	It was to make people aware of the fact that the firms have the best of intention out in the cyber world, while dealing with customers online. Of course, there are scores of mischievous elements who are trying to steal money. In the bargain, it breaks the trust between the consumer and the firm. As a result, the consumers stop dealing with the firm. &nbsp;I was totally fascinated with the programme today. It was delightful and certainly a privilege to be here.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0pt;">It is very hard to monitor customer satisfaction on the web as you don’t physically see the customer. How do you overcome this challenge and ensure they are satisfied?</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	You can contact them after the purchase through e-mail and find out if they are satisfied and if the product is working out for them as promised. You could also do surveys with your online customers by asking questions pertaining to their satisfaction level with respect to your firm and its products. I must point out that when people complain, paying attention to those complaints is critical. Marketing is about word-of-mouth. In today’s age of online blogs, a bad experience is posted and gets conveyed to n-number of people.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-indent: 0in; text-align: justify;">
	You need to benchmark yourself. In the western world like the European countries and the United States, there are customer satisfaction surveys that pop up online highlighting firms and organisations. The response thus generated can be tracked by the firms. For small firms, the best way is to design a questionnaire and occasionally contact the customers and try to determine how they can better serve them.&nbsp;They can appreciate the consumers for their valued feedback and thank them for helping them in their endeavour for ensuring improved customer service.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0pt;">To reduce customer apprehension and assure customers of legitimacy, how important is it to post “Customer Certified Ratings” on the web site?</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	If you can quote an online source, that’s even better. But if you can quote your own survey, that is still good. You can thank them and apprise them of your growth over a period of time. By doing that, you let the customer know you are monitoring customer satisfaction as it is important to you. You also convey a message that you are paying attention to what the customers tell you.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0pt;">Online retail sales still make up only a small portion of overall retail sales in the US but satisfied consumers are expanding their purchases online. How do you view this?</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	It’s neither good nor bad. In late 1990s and early 2000s, a lot of research projected that the growth rate for e-commerce would reach unprecedented heights and everything will be online. But there was a vital element missing from those surveys. In a country like the United States for example, shopping is recreation. A lot of people are what we can refer to as, full-contact shoppers – they love to shop.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-indent: 0in; text-align: justify;">
	There is no way that e-commerce is going to replace the actual experience of going to the store with family and friends, feeling the goods and shop in person. Almost everybody compare the shops online but still end up at the store to buy products first-hand. The real challenge for large e-retailers is to somehow convince more people to actually buy online. I have a statistic that tells me 25-30 per cent of amazon.com’s purchases are left in the cart – people go through the process of selecting goods and are ready to buy but eventually end up not buying.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong><span style="letter-spacing: 0pt;">Customer satisfaction is non-existent in any kind of business in the third world countries. Except for the developed countries, do you see any potential whatsoever, for e-commerce in such countries?</span></strong></div>
<div style="text-indent: 0in; text-align: justify;">
	<span style="letter-spacing: 0.05pt;">Exactly. One of the points I was trying to make during my presentation was that the concept of customer satisfaction does not exist in a country like Nepal. The market is in the United States and European countries. The beautiful carpets and woodworks that Nepali craftsmen make are phenomenal. The only way to reach the customers all around the world is to tell them about these products. In the US, a friend of mine wanted to buy a khukuri for his son. It took him five months in 1999 to contact the firm here. The only way he knew about khukuri was that I gave him one after one of my visits to Nepal. Now, all that can be done online.</span></div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-indent: 0in; text-align: justify;">
	It is not an issue that customer satisfaction does not exist in Nepal. What matters is that it exists where you have to sell. Customer satisfaction only exists where there is oversupply. The tragedy of the world is that people in a lot of countries have so little to spare but those in the United States, Europe and Japan have a lot of money. That’s the kind of consumers you have to reach. If some Nepali product needs to find a presence in the United States, for example, it has to be either word-of-mouth or online. So, a website showcasing local products to a worldwide audience will certainly help.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-indent: 0in; text-align: justify;">
	<span style="letter-spacing: -0.15pt;">People in rich countries are looking to buy something new and different. The products made in Nepal are certainly new, different and beautiful. You need to sell them to the people in these affluent countries. But then, if left unsatisfied, these people will go online and badmouth not just the product but the firm and the country as well. They will also go to the extent of recommending and advising others against dealing with the country they are disappointed with. That’s where the customer satisfaction impacts, not in your country but in the market you are catering to.</span></div>',
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	(int) 6 => array(
		'Article' => array(
			'id' => '354',
			'article_category_id' => '31',
			'title' => '‘Dealers Grow Confident With Exposure To New And Innovative Products’',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-indent: 0in; text-align: justify;">
	<span style="font-size: 12px;"><img align="left" alt="" border="3" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/boby.jpg" style="width: 220px; height: 255px;" vspace="2" /><span style="color: rgb(178, 34, 34);">Boby Johnson is the Senior Customer Marketing Manager (Export) - Asia Pacific, Philips Consumer Lifestyle. He was in Kathmandu recently for the Asia Pacific Region’s Dealers’ Meet. He also launched Fidelio Docking Speakers for Apple products, 3D Television, LED Televisions, Home Theatre System, Air Fryer, Grooming products, Garment Care and Floor Care products for the Nepali market, during his visit. In an interview with <i>New Business Age</i>, Johnson shared his views on the prospect for Philips products in Nepal. Excerpts:</span></span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>How will this event help enhance the sales and market expansion of Philips products in Nepal?</strong></div>
<div style="text-indent: 0in; text-align: justify;">
	To start with, we have received tremendous print and broadcast media coverage for this event, which I think, is fantastic.&nbsp;This should help us get a lot of brand awareness and generate sales.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Are there any special packages for the dealers to facilitate market penetration?</strong></div>
<div style="text-indent: 0in; text-align: justify;">
	We organise dealers’ meet every year and it energises our dealers. After each conference, the dealers grow confident because they have been exposed to new and innovative products. These meets give them the added belief that they can sell. I am certain that the dealers are very happy with the new introductions that we are going to bring to the market this year. This would rejuvenate them and help them sell even more this year.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>About a month ago, one of your competitors launched similar products. Don’t you think you were a bit late?</strong></div>
<div style="text-indent: 0in; text-align: justify;">
	I don’t think so because this is nothing new. Sometimes, we launch earlier and at others, it’s them who are earlier. It depends mainly on when you are ready for sales. I think what is important is how confident you are on your products. We are very confident with what we have.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>How do you view the market potential of these products in Nepal?</strong></div>
<div style="text-indent: 0in; text-align: justify;">
	Going by the reaction of the people I have met here, Air Fryer is one product that can register good sales in Nepal. Apart from that, 3D TV should do well. We also have very nice audio products like Fidelio range for Apple products which are very popular in Nepal. We are confident about all the products that we have here including kitchen appliances and beauty care products.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>There are similar products of premium brands in the market. How fierce would be the competition?</strong></div>
<div style="text-indent: 0in; text-align: justify;">
	I think the competition is good. Philips has been around for more than 100 years now. To be in existence for such a long period, you must be doing something very good.&nbsp;We are number one in so many categories worldwide, for example, shavers (male grooming), juicers, blenders and garment care. As a company, we are confident about innovation power and what we bring to the market. We do keep an eye on what our competitors do. However, we are also confident about our own innovation and position in the market.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>How are these products doing in the Asia Pacific Market?</strong></div>
<div style="text-indent: 0in; text-align: justify;">
	They are doing pretty well. Air Fryer, which is made in Singapore, is doing extremely well there. In Asia, all our products are doing very well.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What are your plans for the Nepali market?</strong></div>
<div style="text-indent: 0in; text-align: justify;">
	We have a very strong and good distributor in Nepal taking care of all business operations on behalf of Philips. Syakar Company is doing a great job. One of the reasons why we came to Nepal is to show our solidarity to encourage their dealers, distributors and sub distributors. I believe this will really help them grow the business further in Nepal. There are a lot of opportunities for business in this country. We are confident that we can do a good job in Nepal. We hope that besides the business, we establish Philips as a major brand in Nepal and distinguish it from other brands in the market.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What, according to you, are the problems and challenges in this market?</strong></div>
<p style="text-align: justify;">
	<span style="font-size: 12px;"><span style="line-height: 115%;">Wherever there are opportunities, there are challenges.&nbsp;We hope that the stability in the country will be ensured in the future. Besides political challenges which we all know about, I think the main challenge is the prevailing economic situation. The global economy is on the recovery path and we hope that it continues. We must stay positive and grab the opportunities in the market as they come our way.</span><br />
	</span></p>',
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			'description' => 'Boby Johnson is the Senior Customer Marketing Manager (Export) - Asia Pacific, Philips Consumer Lifestyle. He was in Kathmandu recently for the Asia Pacific....',
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	(int) 7 => array(
		'Article' => array(
			'id' => '350',
			'article_category_id' => '52',
			'title' => 'Hope And Fear Of Merger',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-indent: 0in; text-align: justify;">
	<span style="font-size: 13.5pt;">T</span>he trend of announcing merger plans by the banks and financial institutions (BFIs) has gathered pace in recent weeks. Media reports about the merger processes initiated between Everest and Kumari Banks, NMB and Clean Energy Development Banks, NCC and NB Banks, Bageshwori and Shangrila Development Banks, Kasthamandap Development Bank and Shikhar Finance, and Himchuli Development Bank and Birgunj Finance are testimonies to this fact. Not to mention several failures of Nepal Rastra Bank's (NRB) monetary policy operation of this year, but in the particular regard to mergers, it is gradually tasting success. The Bank not only had announced all possible facilitation to merger through the monetary policy of this fiscal year, it also introduced several packages of rebates, discounts, waivers and facilities to the BFIs opting for mergers. The NRB threat to force merger of the BFIs that particularly have poor corporate governance has seemingly reawakened several BFIs.</div>
<div style="text-indent: 0in; text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<span style="font-size: 13.5pt;"><img align="left" alt="from the editor" border="1" height="297" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/img1(1).jpg" style="width: 223px; height: 297px;margin:10px;padding:10px;" vspace="10" width="223" /></span><span style="letter-spacing: 0.2pt;">Apparently, the universal objectives of the merger or acquisition are to consolidate the capital, reduce operational expenses, expand business and maximise the profits. However, in our case, mergers of three distinct natures now seem to be in the offing. First, relatively large institutions are planning to create a larger capital base so they could compete with global players who would potentially begin their operation owing to WTO arrangements. Second type of merger would be compulsive of sort as the NRB has asked the BFIs belonging to the same business house to integrate without any ifs and buts. The third types are those who fear the complete meltdown if they fail to merge sooner than later to consolidate resources, introduce corporate best practices and reduce expenses. </span></div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	Nevertheless, irrespective of the reasons compelling BFIs to merge, it was the momentum of absolute imperative but long due. And every individual process to complete smoothly is another task uphill. Even if the process is unimpeded, it takes relatively long time of two to three years depending on the size of the institutions. Nepal does not have structural backing and institutional culture of transparency to allay fears of lay-offs among staff, sense of insecurity in the depositors and apprehensions losing the investment among the shareholders.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	In view of these several crucial stages, right from the expression of intent of merger, choice of the party, preliminary dialogues, due diligence assessment of the institutions, legal and regulatory processes and above all retaining the customer confidence, a dedicated structure that facilitates and provides expert services is indispensable. This could be set up by NRB, Bankers Association or by both combining the skills, needs and expertise. If the merger tempo evident today is not managed properly, none of them are likely to succeed to create another healthier institution. The fear and mismanagement of the process will acquire the hopes. And mergers will continue to be a mirage.&nbsp;</div>
<div style="text-align: justify;">
	<br />
	<br />
	 </div>',
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			'created' => '2011-07-18',
			'modified' => '2012-08-28',
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			'description' => 'The trend of announcing merger plans by the banks and financial institutions (BFIs) has gathered pace in recent weeks. Media reports about the merger processes....',
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	(int) 8 => array(
		'Article' => array(
			'id' => '344',
			'article_category_id' => '40',
			'title' => 'Nepal’s Trade Ratcheting Imports',
			'sub_title' => '',
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			'content' => '<div style="text-indent: 0in; text-align: justify;">
	<span style="color: rgb(178, 34, 34);"><i>By Pinaki Roy</i></span></div>
<div style="text-align: justify;">
	<span style="font-size: 6.5pt; color: rgb(237, 28, 36);">*</span> The Annual Report of the World Trade Organisation (WTO) states that worldwide exports during 2010 registered a growth of 14.5 per cent, the highest since 1950. It also expects this trend to continue to improve in 2011.</div>
<div style="text-align: justify;">
	<span style="font-size: 6.5pt; color: rgb(237, 28, 36);">*</span> Nepal signed the Trade and Investment Framework Agreement (TIFA) with the United States recently which paves way for the promotion of more comprehensive trade agreements between Nepal and the US in the future.</div>
<div style="text-align: justify;">
	<span style="font-size: 6.5pt; line-height: 115%; color: rgb(237, 28, 36);">*</span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The second meeting of Nepal-Tibet Trade Facilitation Committee (NTTFC) – a bilateral talks forum – is being held in Kathmandu from May 8 to 10. The main focus of the talks will be to cut the ballooning trade deficit with China by taking maximum advantage of zero tariff on imports from Nepal offered by China.</div>
<div style="text-align: justify;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">While these developments may sound all good, analysing the state of Nepal’s foreign trade over the last <img align="left" alt="" border="2" height="450" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/cover1.jpg" vspace="1" width="350" />decade or so presents a bleak picture. It’s unfortunate that Nepal has very few products at present that hold any promise of competing in the international market. Add to it the dismal environment of domestic business in the country and the chances of reaping tangible benefits from any agreement in the near future look extremely slim. Nepal’s faltering export scenario has been unable to check an unsustainable trade deficit. The eternal power shortage, fragile law and order situation and transportation woes are among the main impediments to the development of export-oriented sector. These erode the confidence of the private sector. With dwindling confidence of the investors, let alone foreign direct investments, Nepal can’t expect to see domestic investment in the foreseeable future either. In short, Nepal’s economy is in dire straits with grim hope of the growth of export-oriented industries. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin: 11pt 0in 0.0001pt; vertical-align: middle; text-align: justify;">
	<strong><span style="font-size: 11.5pt;">Escalating Trade Balance</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">During the first eight months of the current fiscal year 2010-11, exports have increased to Rs 43.24 billion, an improvement by Rs 2.99 billion over the same period last fiscal year. Meanwhile, imports increased to Rs 252.88 billion, an increase by Rs 4.61 billion over the same period. The trade deficit amounted to Rs 209.64 billion, an increase by Rs 1.61 billion. Imports are expected to continue to increase in more or less the same pattern it is following so far. This indicates that trade deficit is expected to further widen in 2012. Due to some major foreign currencies getting weaker, Nepal’s exchange rate is expected to appreciate which will make exports costlier abroad. Besides, the impact of rising inflation rate in Nepal is likely to make exports more uncompetitive in the next year. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">The agriculture sector in Nepal has remained under-developed, with a very low productivity level. At the same time, the industrial sector suffers from a host of uncertainties. The inefficient structures of these important sectors of the economy have not only reduced the competitiveness of the economy but also resulted in a limited production base. It is far below the consumption needs of the people. As a result, Nepal depends heavily on import trade for meeting its large and varied needs. Despite a marginal increase in exports, the painfully slow growth of imports during the last decade doesn’t augur well for the country. Besides, most imports are confined to non productive and consumable items like vehicles, petroleum products and gold that does not directly contribute to economic activities. Therefore, it is an alarming situation and a challenge for the policy makers.</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin: 11pt 0in 0.0001pt; vertical-align: middle; text-align: justify;">
	<strong><span style="font-size: 11.5pt;">Infrastructural Bottlenecks</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">The export sector is still plagued by the same problems that have adversely affected the entire economy. Supply-side constraints such as intermittent blockades, labour disputes, access to technology and credit, virtual absence of trade facilitation measures, lack of human capital, power outages and road transport among other infrastructural bottlenecks are eroding Nepal’s competitiveness in the international market. These factors also result in preventing diversification of its export basket. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">Large gaps exist in trade efficiency based on indicators such as the cost incurred for the trade and number of days taken to close the deal. Infrastructures like roads, ports, information technology and communications network and other logistics, transit facilities, cross-border connectivity and customs facilities are also in short supply. Nepal is yet to enhance the capacities for trade strategies and negotiations, trade and investment finance and other capabilities related to export. The trade-related institutional, human resource and supply-side limitations constrain Nepal to take advantage from trade by meaningfully participating in multilateral and regional trading systems. Considering the problems, the new initiatives on Aid for Trade (AFT) could help overcome the problems and open up new trade opportunities for Nepal. But again, the said constraints could also impede the country from qualifying for such Aid. Structural reforms and infrastructure investments to reduce transportation and transactions costs are the key to improving the external competitiveness of Nepali products.</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin: 11pt 0in 0.0001pt; vertical-align: middle; text-align: justify;">
	<strong><span style="font-size: 11.5pt;">Limited Export Items</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">Another feature of Nepali export is its limited items of export. As major export items like carpets, garments, pashmina and handicrafts are produced mainly in labour-intensive industries, the impact of trade on employment is considered significant. Vegetable ghee along with the products mentioned above constitute a significant part of Nepal’s total export. This indicates high dependency of export on very few products. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">In the second half of the 1990s, the growth of export was higher than the growth of import reflecting a positive impact of adopting the liberal economic policies. However, this trend did not continue for long and experts attribute this primarily to the impact of the decade long conflict. Though the competitiveness of the export sector had increased in the early days of the liberalisation period, the policies were rendered ineffective during the conflict and the post conflict transition. As a result, the share of import to GDP has been far greater than that of export for the last decade. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">The progress in export has been slow due to a number of national and international events and circumstances. The 10th Plan had emphasised on identifying new exportable products of comparative advantage and improving their quality and export volume. It advocated rectifying the procedural hindrances to product-wise and country-wise diversification of foreign trade. It also looked at enhancing the competitiveness of the trade sector in harmony with the regional and multilateral agreements. The Plan envisaged strengthening institutional capacity of the government, non-government and the private sectors to enhance collection, processing and dissemination of information relating to export promotion. To make foreign trade simpler, more reliable and cost effective reforms were recommended in the areas of laws, regulations, policies, procedures and facilitation. It also recommended that organisational and managerial efforts be strengthened and export promotion prioritised in a coordinated manner. The Plan also talked about mobilising Nepali diplomatic network abroad in promoting foreign direct investment (FDI), export, and the economic interests of the nation so as to accelerate the industrial development and the expansion of export trade. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin: 11pt 0in 0.0001pt; vertical-align: middle; text-align: justify;">
	<strong><span style="font-size: 11.5pt;">Quality Certification</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">Nepal already imports almost seven times more than it exports. The growth prospect of exports and the industrial sector look as gloomy as ever. Most constraints that we face today are non-economic ones. It has been increasingly realised that market access alone does not guarantee flourishing of international trade. Nepal, like any other LDC, lags in trade capacity due to non-availability of sufficient number of exportable products on the one hand and the quantity and quality of available products to meet standards of the importing countries, on the other. Nepal’s trade is faced with constraints on supply side in terms of development of testing and certification facilities, accreditation of laboratories and mutual recognition of test and certification in facilitating trade. The improvement of laboratories and testing facilities in Nepal has, for example, remained an important agenda in Nepal’s trade with India, its largest trading partner. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin: 11pt 0in 0.0001pt; vertical-align: middle; text-align: justify;">
	<strong><span style="font-size: 11.5pt;">Trade Barriers</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">Nepal still pays a very high tariff to access major markets on the one hand and on the other, duty-free and quota-free initiatives have yet to prove fruitful due to hurdles imposed by non-tariff barriers. Non-tariff barriers (NTBs) in the form of regulatory requirements, quota restrictions, administrative procedures and rules of origin (ROO) are of major concern. Due to their technical complexity and non-transparent nature, they are the most difficult barriers to overcome. Standards-related NTBs such as sanitary and phyto-sanitary (SPS) restrictions act as major impediments to Nepal’s exports. Several instances have shown that process of discussions amongst the exporters and importers which results in better information sharing can itself help address more than half of such problems. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">Despite Nepal gaining enhanced market access into the developed countries, it cannot take advantage from it until the government and the private sector join hands to expand and diversify the country’s exports. Trade is governed, to a large extent, by trade regulations and related administrative procedures. More often than not, the entry and exit from the market as well as the volume of trade rely on the transparent and simplicity of trade and administrative procedures. A study reveals that submission of unnecessary documents, administrative hassles at custom offices, additional detention charges and untimely delivery of goods increase the cost of transaction in formal trade. These activities and procedures enormously affect the trade affairs. Ultimately, it discourages the business fraternity in carrying out their businesses freely and fairly. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin: 11pt 0in 0.0001pt; vertical-align: middle; text-align: justify;">
	<strong><span style="font-size: 11.5pt;">WTO Challenges</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">The WTO membership has brought both opportunities and challenges to Nepal. The main challenges before Nepal are to fulfill WTO commitments that need strengthening existing external trade institutions and legal mechanism, removal of supply side constraints to transform available market access into trade opportunities and restructuring of industrial sector to make it more competent and contemporary. In total, the benefits of membership depends on Nepal’s ability to identify and take advantage of trading opportunities, fulfill multilateral trade obligations, formulate and pursue development strategies within those framework and above all, defend its economic, financial and trade needs. Nepal could benefit from World Trade Organisation (WTO) only if it increases internal strength and quality of export items.</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">Nepal finds it difficult to implement some of its WTO commitments. Since the benefits accruing from the implementation of these agreements are much lower than the associated cost of implementation, the resource-strapped Nepali economy cannot take this additional burden. Quite naturally, it is demanding support from its development partners to implement such commitments. The basic objectives of technical assistance for Nepal lies in promoting activities which add value to its production, help export diversification and most crucially to reduce its transport and other infrastructure costs thereby making it easier for businesses to operate. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin: 11pt 0in 0.0001pt; vertical-align: middle; text-align: justify;">
	<strong><span style="font-size: 11.5pt;">Evolving Global Trade</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">The nature of trade is evolving globally. This is reflected in the changing composition of trade, from merchandise to services. This dynamic is largely driven by technological revolutions. While the transport revolution reduced transport costs and facilitated trade in merchandise goods, the information technology revolution has resulted in decreasing communication costs and increasing quality levels, thereby causing trade in services to be the fastest-growing component of global trade. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">In addition to natural advantages, the three services sectors – health, education and high-end retail services hold immense export potential from Nepal’s perspective. Nepal has comparative advantages for the export of these sectors which are generally found to be cost effective. The attraction of these services is also due, in part, to a high level of market integration with northern India, if it can take advantage of the open border in the south. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">In spite of liberalising the economy and changing trade and investment related laws, Nepal hasn’t been able to derive expected benefits. Trade is a technical subject. The deficiencies in knowledge concerning markets, access to distribution networks and use of the ICT, complicated regulatory procedures of shipments, weak transportation infrastructure and services and insufficient trade financing are major constraining factors. Addressing these problems would involve financial resources, time, efforts, proper management, and technical expertise. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin: 11pt 0in 0.0001pt; vertical-align: middle; text-align: justify;">
	<strong><span style="font-size: 11.5pt;">Aid For Trade</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">The new initiative of the Aid for Trade could be a prime source of funding to enhance competitiveness. However, there is a gap between commitment and disbursement of AFT. Pledges are made through international forums for aid for trade initiatives but the pace of implementation and the disbursement rate is very slow.&nbsp;</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">Developed countries and development partners coming forward to support product development programmes, development of trade infrastructure like inland clearance depots, container freight stations, special economic zones, roads and other forms of transportation in order to enhance Nepal’s trade capacity is of prime importance. Other possible areas of cooperation include enhancing the quality of infrastructure for test and certification of products, capacity building for trade negotiations and institutional development. All these require adequate technical as well as financial assistance. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin: 11pt 0in 0.0001pt; vertical-align: middle; text-align: justify;">
	<strong><span style="font-size: 11.5pt;">Prosperous Neighbours</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">The multilateral trading system has contributed significantly to the growth in exports that has been aptly exploited by countries like China and India. With respect to the markets created by these neighbouring countries, the disadvantage of Nepal as a land-locked country is significantly reduced because these two are after all, proximate markets. The economies of both the neighbouring countries are increasing enormously and Nepal can benefit or should be able to do so because of this. Despite increased industrialisation and trade activities in China and India, Nepal has failed to benefit from their economic growth.</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">Nepal’s internal problems such as poor trade policy and implementation, lack of business-friendly labour laws and other rules and regulations, political instability, frequently changing trade and industrial policies, social unrest and chaos, frequent strikes, lockouts and load-shedding are also equally responsible for poor export. The reasons behind the fall in export can also be attributed to erosion of preferences for Nepali goods due to the decreased MFN (Most Favoured Nation) tariff in India. The Government of India has signed several free trade agreements with various countries. It has committed to lower customs duty as a non-LDC member of SAFTA and BIMSTEC free trade area and also announced the Duty Free Tariff Preferences (DFTP) scheme as part of commitments made in the Hong Kong ministerial meeting of WTO. The irony of Nepal’s trade is eminent in respect of decreasing tariff in Nepal. It is obvious that Nepal will continue losing export volume and find itself in a precarious situation in the absence of concrete measures to check and reverse the process of decreasing export. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">Nepal’s export to India is increasing at a snail’s pace. The growth rate of export is highly fluctuating. At the same time, import from India is far stable. It implies that import from India is in a better position than export. As the gap between export and import increases, trade deficit soars. The trade deficit with India was Rs 66.4 billion in FY 2005-06 but it has rocketed to Rs 174.4 billion in FY 2009-10. It is alarmingly high for Nepali economy. The major reason for the unfavourable balance of trade on Nepal’s part can be blamed on not finding proper markets for manufactured goods in Nepal, in India. The prominent factors include the inability to compete in the Indian market on the grounds of quality, price, supply capability etc. From a trading point of view, it could be quantitative restrictions and product disqualifications. It is understandable that unless a sizable export of manufactured products fail to find market, the trade balance proportion cannot be reduced. Therefore, finding a proper segment in the Indian market for Nepali products is critical.&nbsp;</span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin: 11pt 0in 0.0001pt; vertical-align: middle; text-align: justify;">
	<strong><span style="font-size: 11.5pt;">Service Sector Emphasis</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">The Government of Nepal launched Nepal Trade Integration Strategy (NTIS)-2010 last year which seeks to identify and develop key essential products and services to build its export base in a sustainable way. A total of 19 items were selected for driving export promotion. The 12 products and seven services were identified after careful scrutiny of potentiality for development along the value chains and their linkages with poverty alleviation. These products possess immense potentialities of backward linkages within the country. To sustain trade in the future, contributing to overall economic development by making trade more inclusive, increasing employment and government revenue is important. The seven services identified are namely Tourism, Labour Services, IT and BPO Services, Health, Education, Engineering and Hydro Electricity. It has been unanimously felt that Nepal has the potential to perform better in these service sectors provided there is an encouraging working environment. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin: 11pt 0in 0.0001pt; vertical-align: middle; text-align: justify;">
	<strong><span style="font-size: 11.5pt;">Trade Facilitation</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">Trade treaty is only a means and not an end in itself towards enhancing greater market access. The growth of trade basically depends upon the conditions that are created within the national boundary in respect to measures related to investment promotion and improvement in governance. Speedy trade facilitation is the key to success. Trade facilitation at its core aims at developing competitive advantage. Work on trade facilitation like simplification of customs procedures, criteria for procedures of transit and standards verification and transforming policies and rules in accordance with those of its major trading partners India and China, are of immense importance. Improving productivity and strengthening supply capacity remain the basic consideration guiding the development of the commercial sector of the country. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="margin: 11pt 0in 0.0001pt; vertical-align: middle; text-align: justify;">
	<strong><span style="font-size: 11.5pt;">Internal Preparations</span></strong></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	<span style="font-size: 9.5pt;">Nepal is a country with major potential that needs to be realised and enhanced through various policies and related initiatives. At the same time, it has to address a number of difficulties linked to its logistical, financial and stability related concerns. The multilateral trading system can contribute towards Nepal’s potential gain in many ways. Trade-related aspirations to diversify trade and production bases into dynamic new products and services, integrating trade and trade capacity building policies into national development strategies, maximising benefits through development of effective labour market standards and institutions and striving for an ambitious, comprehensive, balanced, equitable and development-oriented outcome, are vital. </span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle;">
	 </div>
<div style="text-align: justify;">
	<span style="font-size: 9.5pt; line-height: 115%;">To realise the benefits of the trade agenda, having hassle free market access through reduction of tariff and non tariff barriers, facilitation measures through increased connectivity, customs harmonisation, simplification of trade rules and procedures and efficient trade logistics and the enhancement of supply side capacity, are crucial. With the help of all the benefits – present and potential – Nepal will be in a better position to address the supply-side constraints, achieve better market access and help raise its domestic growth with greater equity. This assures help to increase above 4 per cent growth rate which Nepal has been stuck with, for some time. To increase export, there must be an increment in investment for production, both domestic and foreign, that can positively affect the investment and thereby exports. </span></div>',
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			'description' => 'The Annual Report of the World Trade Organisation (WTO) states that worldwide exports during 2010 registered a growth of 14.5 per cent, the highest since 1950. It also expects this trend to continue to improve in 2011.',
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			'title' => '‘We Are Mainstreaming Trade Into National Development Programme’',
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			'content' => '<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 120%; vertical-align: middle;">
	<span style="color: rgb(178, 34, 34);"><b><span style="font-size: 8pt; line-height: 120%;"><img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/purushottam ojha.jpg" style="width: 182px; height: 185px;" vspace="1" />Purushottam Ojha</span></b></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 120%; vertical-align: middle;">
	<span style="color: rgb(178, 34, 34);"><span style="font-size: 7pt; line-height: 120%;">Secretary</span></span></div>
<div style="text-align: justify;">
	<span style="color: rgb(178, 34, 34);"><span style="font-size: 7pt; line-height: 115%;">Ministry of Commerce and Supplies</span></span></div>
<div style="text-align: justify;">
	<span style="color: rgb(178, 34, 34);">Production and development of the right product at the right time and capacity to supply it to the destination market in an efficient manner are crucial to enhance supply side capacity. Therefore, identification, selection and development of products in which Nepal has comparative and competitive advantage is the major issue in the development of Nepal’s trade.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>A total of 19 goods and services are identified as priority items for trade by NTIS (Nepal Trade Integration Strategy). How sustainable are these 19 products?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Yes&nbsp;12 goods and seven services are identified. They have been identified after careful scrutiny of their potential for development along the value chain and their linkages with poverty alleviation. These products possess immense potentialities of backward linkages within the country. These are products and services in which Nepal has comparative and competitive advantages. To sustain trade in the future, contributing to overall economic development by making trade more inclusive, it is important to increase employment and government revenue. Identification and selection alone cannot meet our objectives. We have to create necessary environment in the country to develop these products in a manner that will ensure sustainable trade in the future. Most of these products are related to agriculture. It is important to enhance the productivity, productive capacity and product quality in them. For this, we have to go on adopting good agricultural practices, integrated pest management and quality control mechanism. At the same time, we need to focus on improving the quality of infrastructure, for example in tests and certifications to ensure acceptance of the products in the international market.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>It is said that improved supply-side performance is the key to achieving sustained economic growth. What is hindering the improvement in supply side capacity?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Over the years, we have been enjoying increased market access in various destinations as tariff barriers are being lowered. However, there are certain non-tariff barriers that are hindering the export from the least developed countries (LDC) like Nepal. We have to address these issues as well. Production and development of the right product at the right time and capacity to supply it to the destination market in an efficient manner are crucial to enhance supply side capacity. Therefore, identification, selection and development of products in which Nepal has comparative and competitive advantage is the major issue in the development of Nepal’s trade. The causes for the hindrance in improving&nbsp;the supply side capacity include lack of adequate infrastructure - particularly transport infrastructure, energy supply, rising problems of labour unrest and law and order situation.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>How can we overcome these supply side constraints?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.1pt;">There are certain barriers for increasing our trade capacity as I mentioned earlier. We need to address these important issues to attract more investment and improve investment climate that will eventually help overcome supply side constraints. It is essential to bring more investment in the production as well as service sector. But it largely depends on political stability, law and order situation, industrial relations and adequacy of infrastructures. These need to be addressed in a coherent manner. We also need to increase our collaboration with development partners to get more support in the areas of economic cooperation and trade development. Enhancement of market access is crucial from the perspective of LDCs like Nepal since non-tariff barriers are being raised by importing countries in the name of plant and animal health, food safety, environmental concern and labour rights. Nepal is raising the voice against such barriers in bilateral, regional and multilateral forums.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Why hasn’t Nepal been able to benefit from trade despite having huge markets in the north and the south?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">It is true that the economies of both our neighbouring countries are increasing by leaps and bounds. The GDP growth rate of China is almost in the double digits and India’s GDP is increasing by eight per cent annually. Statistics show that trade between India and China is also increasing and has reached US$ 60 billion. They are aiming at increasing it to US$ 100 billion in the next five years. Despite such increased industrialisation and trade activities in neighbouring countries, we have failed to benefit from this. We need to adopt appropriate policies within the country to link our trade and economic relations to get the spill-over benefit from our neighbouring countries. We also have functioning trade agreements with both these countries but we have not been able to harness the potential benefit of exporting our goods and services. There are certain inherent problems associated with it. There are several non-tariff barriers to our exports in India and China. We need to enhance our efforts to remove these barriers. We have entered into an agreement with the Government of PR China in April 2010 to provide duty free access to 4,721 products in six digits customs tariff line. However, our industries and exporters have not been able to fully utilise this opportunity. We have initiated the process for assessing the situation and the reasons behind non utilisation of market access opportunities. This would require a constructive dialogue and deliberation between the government and businesses on both sides. Besides, we need increased engagement with our neighbouring partners in the area of economic cooperation for enhancing productive capacity in sectors like agriculture, manufacturing, export trade and infrastructure.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Why hasn’t Nepali economy benefited from trade?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">It is not true that Nepali economy is not benefiting from trade. But the question is about the level of benefit that we are harnessing.&nbsp;For this, we have to follow the path to sustainable and inclusive trade development. Trade is the output of total economic activities of the country. Trade cannot operate in isolation. Until and unless we develop our agriculture, forest, manufacturing and the service areas, trade cannot happen. All sectors of the economy should move towards the same direction and work in harmony so that there will be value addition in the export. Such a situation will help create employment, increase revenue to the government and bring more foreign currency. It will ultimately lead to the improvement in the macroeconomic situation of the country.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Why do you think Nepal has not been able to capitalise on WTO membership?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">The WTO membership has brought both opportunities and challenges to Nepal. Opportunities - because we have market access to all member countries and we can engage in constructive dialogue in the international trade forum through WTO. At the WTO, we can raise our voice together with likeminded countries to get more support from developed countries to remove market entry barriers and enhance our trade capacities. Besides, there are challenges. Ever since the liberalisation of tariff under multilateral trading system, our products have to compete with products from other countries particularly in big markets like the EU, the US and even in India. Since the tariff rate is going down, other competing countries are finding it easier to enter into these markets. This has proved to be a major challenge to maintain our market share in these markets. We have lost the export of some products like carpet, garments and pashmina in the international market and vegetable fats in Indian market during the last decade due to this reason.&nbsp;Accession to multilateral trading system and regional trade arrangement is not the panacea to remove the problems of trade. Rather, we need to develop our capacity to face increased competition on one side and utilise the opportunities available under regional and multilateral trading system on the other.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Nepal currently has a huge trade deficit. How can this be lowered?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">It is true that we are facing a huge trade deficit. During the last couple of years, exports have not increased and imports are galloping. In the last fiscal year, we had the record trade gap of around Rs 315 billion. Most imports are consumption items like petroleum, cars and gold. The gold does not directly contribute to enhance the economic activities. So, it is an alarming situation and a challenge for the policy makers. In the midst of such a precarious situation, the Government of Nepal has launched Nepal Trade Integration Strategy (NTIS)-2010 which seeks to identify and develop some key essential products and services to build our export base in a sustainable way. We must correct the deficiency which is hampering the growth of economy and the investment climate. We have to improve law and order situation, industrial relations and management of government-owned industries. We also need to develop adequate infrastructure and improve the regulatory regime so as to help in building confidence among investors. Similarly, streamlining of the transit procedure, incentives for industries like tax rebate, monetary and non-monetary incentives and improving governance systems are among the suggested reforms. Until and unless we improve our investment climate, it will be difficult to motivate and convince potential investors to invest in the industries or in any other sectors. Unless we have investment, we can improve neither international trade nor the supply situation within the country.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>The relatively stronger trade sector of the past has diminished gradually over the last decade. What can be done to revitalise trading sector again?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">During 1990s, we saw the growth of industries and trade in terms of export to India and other countries. But the industries we were nurturing during this period were not found sustainable. Carpet, garment and pashmina are no longer our niche products as many countries export similar goods. We were unable to improve the capacities of our industries in terms of economies of scale, quality and design of the products. The enhancement of productive capacities would require several steps as behind-the-border measures. One case in point is the development of Special Economic Zones (SEZ) for relocation of industries by providing one-stop services to industries in such zones combined with flexibility in labour regulations and tax rebates.&nbsp;The project for establishing special economic zones in the country was started some 12 years back but it is still in an indeterminate state as the development of physical infrastructure and creation of necessary legislation for regulating the zone is stagnant. Similarly, there is need to revisit laws related to the regulation of trade and investment regime, particularly the Industrial Enterprises Act and Foreign Investment and Technology Transfer Act (FITTA)-1992. The revival of Nepali trade will largely depend upon right choices of products and services in order to become sustainable. Efforts are to be made for maximising domestic value addition optimising the utilisation of human capital as well as other factors of production including land and natural resources which will culminate into healthy growth of economy. The growth of trade during 1990s was largely based on tariff arbitrage. When that arbitrage opportunity diminished, many such industries could not sustain. The Government of Nepal is now realigning trade through the manifestation made in NTIS-2010, Trade Policy-2009 and the current Three-Years Interim Plan (TYIP).&nbsp;Now, the challenge is to implement them in true spirit. </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>There are special privileges like zero tariffs &nbsp;for LDCs. How can we benefit from that?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Nepal enjoys zero tariffs in many countries that belong to the Organisation for Economic Cooperation and Development (OECD). The European Union provides duty free access to the products from LDCs under the Everything but Arms (EBA) initiative. Countries like USA, Canada and Japan provide Generalised System of Preferences (GSP) facilities to many products from countries like Nepal.&nbsp;Besides, Nepali products also enjoy zero tariff facilities in Indian and Chinese markets. Therefore, it is not the problem of market as such. Nepal, together with other least developed countries around the world, is pleading duty-free quota-free (DFQF) market access in developed and developing countries right from Geneva to Washington DC.&nbsp;The most important aspect is to increase our supply side capacity and competitiveness. Since zero tariff is available to all LDCs, only those can export to these markets who are more competitive. This would require revisiting the trade and export policy with a focus on choices of right products, improvement in quality and diversification of design and reduction in the cost along the value chain.&nbsp;Being a landlocked country, the transit transport cost is generally higher. Simplification of transit procedures and reduction of cost of transit is vital for Nepali trade.&nbsp;</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>A new concept ‘Aid for Trade’ has been gaining currency. What kind of reforms should Nepal make to get optimum benefit from it?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.05pt;">Aid for Trade is a new concept that emerged during the last decade. There is consensus and commitment among developed countries to support LDCs for trade development. There is a notion that LDCs need trade and not aid and this view is often expressed in various international forums. Developed countries and development partners should come forward to support product development programmes, development of trade infrastructure like inland clearance depot, container freight station, special economic zones, roads and other forms of transportation in order to enhance the trade capacity of the LDCs. Other possible areas of cooperation include enhancing the quality of infrastructure for test and certification of products, capacity building for trade negotiations and institutional development. All these require adequate technical as well as financial assistance. Pledges are made through international forums for aid for trade initiatives. However, the pace of implementation and the rate of disbursement are very slow.&nbsp;Some donors have played a tricky game just by renaming the regular official development assistance (ODA) as the aid for trade allocations which is not the spirit of these initiatives.&nbsp;Aid for trade is another stream of foreign assistance besides the regular allocation of ODA. In Nepal, we are considering creating a Fund for trade development in consultation with various development partners. An inter-ministerial task force is working on devising necessary regulatory framework for the administration of the Fund.&nbsp;&nbsp; </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.05pt;">The Government of Nepal has already taken steps for mainstreaming trade into national development agenda. Trade cannot be looked in isolation and is not a concern for the ministry of trade only. There are several entities and ministries associated with it. We have to bring them together to promote trade in goods and services. We are also aiming at getting adequate support from development partners to complement the national effort. If some products and services are important from trade perspective, they should get immediate attention for development and promotion. Support must go to the grassroots level, i.e. the enterprise level and the farm level so that benefits from export trickle down to the producers and growers. The assistance under aid for trade initiatives encompasses various sectors that contribute to trade development and thus various ministries and private sector entities have a role to play. The Ministry of Commerce and Supplies will work as the national focal point and coordinator for creating synergies of this effort. </span></div>',
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			'title' => '‘Dealing With Supply Side Constraints Will Help Our Export Prospects’',
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			'content' => '<div style="text-align: justify; text-indent: 0in;">
	<span style="color: rgb(178, 34, 34);"><b><span style="font-size: 8pt; line-height: 120%;"><img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/vidya nath nepal.jpg" style="width: 189px; height: 213px;" vspace="1" />Vidya Nath Nepal</span></b></span></div>
<div style="text-align: justify; text-indent: 0in;">
	<span style="color: rgb(178, 34, 34);"><span style="font-size: 7pt; line-height: 120%;">President </span></span></div>
<div style="text-align: justify; text-indent: 0in;">
	<span style="color: rgb(178, 34, 34);"><span style="font-size: 7pt; line-height: 120%;">Centre for Public Policy Dialogue and Former Special Secretary of Commerce</span></span></div>
<div style="text-align: justify;">
	<span style="color: rgb(178, 34, 34);">An NRB source says that in the first five months of FY 2009-10, export of goods has declined by 16.8 per cent while import of goods has increased by 30.4 per cent. This has created huge trade deficit of 48.6 per cent. Volume of trade deficit with India is higher than with the rest &nbsp;of the world.</span></div>
<div style="text-align: justify;">
	<span style="color: rgb(178, 34, 34);"><br />
	</span></div>
<div style="text-align: justify;">
	<strong>How do you evaluate the current trade situation of Nepal?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">I have been observing the economy and policies for the last four decades. But the trade deficit was never this bad. Today, the deficit is in billions of rupees which is a painful situation. The import growth has spiralled while the exports have dwindled. Nepal’s value of exports for the year 2001-02 was more than Rs 45,000 million which reduced to only about Rs 41,000 million in 2007-08. On the other hand, imports in the same period increased from about Rs 103,000 million to Rs 154,000 million. Export to India remained almost stable while export to other countries decreased sharply. During this period, about 63 per cent of Nepal’s total exports went to India while about 59 per cent of its total imports were from India. Thus, Nepal’s total trade with India was about 60 per cent. The increased import has been largely for consumption materials rather than for raw material or industrial inputs. For example, gold and many other goods are imported into Nepal considering the Indian fiscal policy. Our liberal trade policy does not allow controlling imports. According to our law, we cannot prohibit any business, we can only restrict only a few items. Nepal is the most liberal country in entire South Asia in terms of its trade policy. We don’t have any import restriction and quantitative restriction. We have very small negative list for imports.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>How do you compare the current situation with the past?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Current trade situation has grown very weak when compared to the past. Increasing trade deficit is evident. An NRB source says that in the first five months of FY 2009-10, export of goods has declined by 16.8 per cent while import of goods has increased by 30.4 per cent. This has created huge trade deficit of 48.6 per cent. Volume of trade deficit with India is higher than with the rest of the world. There is very little attention towards production of exportable goods. There is no favourable environment for that. Therefore the trade situation has worsened now. In 1996, a trade treaty was signed with India. In that treaty there were very little restrictions on export to India, the negative list was shorter and the rule of origin was not so strict. The treaty renewal in 2002 retracted such liberal provisions. The rule of origin was made tougher. Similarly, India exerted quantitative restrictions on some products. That disrupted our export. The political turmoil after 2002 and the resultant current transitional phase has led to poor trade situation compared to that of the past. </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What are the main reasons for poor development of Nepali trade?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Trade has to be looked on the basis of import and export. The import is continuously increasing but that is not a reason to rejoice. To increase export, there must be an increment in investment for production. Investment can be both domestic and foreign. Forget about the foreign investment, even the domestic investors are not encouraged to invest. The main reason is the volatile and unstable political situation. Because of this, there are no new investment and production of exportable items. Apart from that, there are issues of labour, peace and security, industrial security and unstable policies that have put investors at bay. A policy must last for at least five to 10 years to attract investment. But in Nepal that is not the case. Government is changing frequently, and every change of government brings change in the policy too. Since last year, also the interest rate has sky rocketed due to liquidity crunch in the financial institutions. That has also affected the investment and thereby exports.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Nepal faces non-tariff barriers with its trading partners. How can such barriers be removed?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">We are the member of WTO, SAFTA and BIMSTEC along with our trade partners like China and India. WTO’s policy states that the non-tariff barriers must not be exerted unless it is justified. There should be certain tariff barriers but very little. The trade must be gradually made free by removing the restrictions. The facility given to one country must be provided to other country too. In spite of this, agriculture based products’ export to India face a lot of non-tariff barriers. For example, when some agro-products have to be exported to India from either Sunauli or Birgunj, quarantine tests have to be carried out at a far away laboratory. That adds huge cost for exports. One of the main problems with export trade of Nepal is transit cost which is usually prohibitive. The transport cost from here to Kolkata, the main port for Nepal, is to the tune of 14 to 40 per cent of the cost of material. With such high cost how can we compete in the international market? Documentation barriers are also severe as the documentation process takes months and that further hinders the export. Internally too, we have constraints in trade facilitation. In Indian ports too, there are numerous problems like unavailability of ships and lengthy procedures. Such non-tariff barriers added to the tariff barriers are hindering our export. Though India has provided customs free export from Nepal to India in certain goods it levies special duties on them. Sometimes, state governments in India levy additional duties according to their local rule. A complaint on such case gets lost in the Indian bureaucracy and as a result, Nepal’s exporters face harassment.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Nepal also has severe supply side constraints. How can they be removed?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">It is true. Though various bilateral, regional trade agreements like SAFTA and multilateral trade arrangements like WTO have been providing us access to different markets through manner similar to reduced customs duties, we are not able to benefit form that. Under SAFTA, hundreds of items can enjoy concessional entry into other countries. WTO has the philosophy of liberalisation of trade by reducing tariffs. Compared to the last decade, the customs duties have declined even for entry into India. The trade access we got through bilateral, regional and multilateral agreements have not been fully utilised due to supply side constraints. What can we export when we can’t produce goods here? There is no investment environment and the cost of production is high while labour productivity is very low. There are problems with lengthy documentation, labour issues, peace and security and increased interest rate. If we do not have any supply side constraints, our export would definitely increase. </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Industrial and trade policies are not translated into acts and regulations. Even if they are enacted, they are overlapping and contradictory. Labour issues are never settled. Quality of infrastructure like transport, power supply etc is very poor. The ADB report of 2009 says the syndicate system of trucks is common in the country and the transport cost has increased as high as 55 per cent. Research and development aspect has been largely neglected. Technologies are outdated and innovation is non-existent. Institutions in particular are weak and ineffective. Private sector is not properly promoted by the government. Unless we can correct ourselves on these counts, supply side constraints will prevail. </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Nepal enjoys numerous facilities under WTO regime as well as being an LDC. How can we utilise such advantages?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">WTO believes in MFN (Most Favoured Nation) treatment. There should not be any discrimination under this system for any country. There was a Ministerial meeting held in Doha where it was decided that WTO would provide various technical assistance to strengthen the supply side of the LDCs to increase their export potential. Little has been done on that front and that is insufficient. WTO’s provision of differential treatment to the LDCs has not been effectively implemented. Facilities like ‘Aid for Trade’ are just for name. We have not received any sufficient amount on this account. There is a need for strong and effective negotiation from LDCs as a group which is lacking so far.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Our government through our embassies abroad should strengthen economic diplomacy to promote trade to respective nations by identifying suitable products. We have failed to do so. There are a few products that we can export to India. For example, Nepal can take huge benefit if producers concentrate on exporting vegetable ghee, cardamom, GI pipe and noodles to India. Tea and ginger are exported to India but it re-exports them. From our side, it is better to export our products directly to the final destination. Nepal should identify the negative net trade of a particular country and work on exporting such goods to those countries. We have failed to move ahead in this direction. </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Investors are reluctant to increase investment citing unfavourable investment environment. How can trade be enhanced amid such problems?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">The main reason behind investments remaining stagnant is political instability, frequent changes in policy, labour issues and security problems. Foreign investors seek easy exit if they do not see profits. There is difficulty in such exits and liquidation procedure takes years. Foreign investors can’t wait that long. Nepali raw material based industries would be sustainable in terms of export trade. However, that concept is not necessary to apply in international trade in the course of industrialisation. Hong Kong and Singapore are examples of countries that do not have their own big manufacturing units, but have benefited by exporting assembled products. However, if we can export goods by processing our own raw materials, we would have more comparative advantage and we would not have to spend foreign currency in importing raw materials. A study shows that Nepal’s products that have highest potential of export in the long run are tourism and hydropower. However, remittance is the biggest source of foreign exchange earnings currently. At the moment, around 80 per cent of foreign exchange earnings is through remittance. Tourism ranks second. Hydropower projects are capital intensive. Nepali capital is hardly enough to run even one Tamakoshi project. </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">The government should be proactive in providing all facilities mentioned in industrial and trade policies to increase production and promoting exports. However, private sector should also run businesses on the basis of corporate culture with new technology and increase their competitiveness. On an average, it takes about 31 days to clear seven procedures to do business in Nepal. This process time is the longest among the SAARC countries. Similarly, it requires 41 days to export products out of Nepal. Thus, the businessmen are suffering from over regulations, corruption, dishonesty, lack of transparency and political interference. According to WEF report of 2010, Nepal ranks the lowest among all SAARC countries in quality institutions. Therefore, the expectation is that the private sector will increase production and export in spite of the weak government. They have the initiative and the mission while the government is indifferent as well as inefficient.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>A total of 19 goods and services are selected by the NTIS as priority products. How realistic is this selection?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.05pt;">They have selected 19 goods and services following a lot of studies. Among them, seven are from the service sector like IT, health, education and tourism among others. I feel we can do better in these service sectors and have the potential if there is good working environment. There are agro based products too but I don’t think they are sufficient. Since our production depends on imported technology, we must select products that generate high profit in low volume items. If we can focus in the coming decades on these 19 products by creating favourable environment for investment that would certainly benefit our trade prospects. </span></div>',
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			'description' => 'An NRB source says that in the first five months of FY 2009-10, export of goods has declined by 16.8 per cent while import of goods has increased by 30.4 per cent. This has created huge trade deficit of 48.6 per cent. Volume of trade deficit with India is higher than with the rest  of the world.',
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		'Article' => array(
			'id' => '341',
			'article_category_id' => '40',
			'title' => '‘Aid For Trade Can Do Nothing About Our Governance Problem’',
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			'summary' => null,
			'content' => '<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 120%; vertical-align: middle;">
	<span style="color: rgb(178, 34, 34);"><b><span style="font-size: 8pt; line-height: 120%;"><img align="left" alt="" border="2" height="226" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/ratnakar.jpg" vspace="2" width="200" />Ratnakar Adhikari</span></b></span></div>
<div style="margin-bottom: 0.0001pt; text-align: justify; line-height: 120%; vertical-align: middle;">
	<span style="color: rgb(178, 34, 34);"><span style="font-size: 7pt; line-height: 120%;">General Secretary </span></span></div>
<div style="text-align: justify;">
	<span style="color: rgb(178, 34, 34);"><span style="font-size: 7pt; line-height: 115%;">South Asia Watch on Trade, Economics and Environment (SAWTEE)</span></span></div>
<div style="text-align: justify;">
	<span style="color: rgb(178, 34, 34);">It is our right to be able to protect our industrial sector. If you open up the industrial sector completely then it could result in industrial depression and loss of employment. So, it is necessary to protect the industrial sector but not to the extent of providing incentive to &nbsp;inefficient industries.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>The trade policy of Nepal is more liberal than some other developing countries. Why then has trade failed to contribute to our national economy and development?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Having a liberal trade policy alone is not sufficient to increase export potential. Second, Nepal is still not more liberal than Sri Lanka and Bangladesh. Other countries have become more liberal, not only in terms of tariff and non tariff barriers but also in terms of trade to GDP ratio. If you see that the trade to GDP ratio is increasing, you can conclude that the country is more integrated into the global market. Theoretically, we have to be in a position to gain because we are liberalised. That is the classical theory of anti-export bias produced by Bhagwati and Kreuger in 1978. They say that if you protect your domestic industry, you will be raising the barrier for export because protection of domestic industry through tariff will in a way raise the price of import which will be used in the export processing sector. Eventually, your export will suffer. However, theories apart, in today’s world, having a liberal economy is no guarantee that you will be able to export too. </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>There is a heated debate under the Doha Round between the developed and developing countries. How justified are the arguments of the developing countries?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Agriculture is our livelihood and we should be in a position to protect our agriculture sector when required. The special safeguard measures proposed by the developing countries are useful. If you open up the entire agriculture sector in which the protection is already lower compared to industrial products, there could be other problems like food security, livelihood, social tension and others. In agriculture, I fully agree with the position of the developing countries. In terms of industrial products, most of the developing countries which are liberal today and most of the OECD or developed countries had protected their industrial sector during their respective process of economic transformation. So, it is our right to be able to protect our industrial sector. If you open up the industrial sector completely then it could result in industrial depression and loss of employment. So, it is necessary to protect the industrial sector but not to the extent of providing incentive to inefficient industries. You have to allow a certain degree of competitive atmosphere. If you think that they will be able to do better in the long run, then you have to provide protection for a limited period of time.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">On non tariff barriers, there are two things that we have to understand. The first is that certain non tariff barriers are related to environment, consumer preferences and health and safety of the consumers. Such conditions on the basis of scientific evidence are imposed in the form of non-tariff measures. For example, if Aflatoxin causes cancer and we export certain agricultural products containing Aflatoxin which is at a level higher than globally accepted, then our product gets rejected. It’s not the fault of the importing country. We have to be able to improve our infrastructure, laboratory system, human resources and legislative arrangements in order to be able to fulfil the requirements. But there are certain non-tariff barriers which are protectionist in nature. We oppose these protectionist barriers. In terms of services, the developing countries are demanding the liberalisation of labour movement from one country to another. It has been proved that three per cent increase in labour force from the developing countries would result in global welfare gain of 300 billion dollars. This is something that needs to be pondered upon.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Finally, on trade remedy measures, developing countries do not have a serious position except saying that the developed countries are using trade remedy measures as a protectionist device. That may not necessarily be the case. So, on the whole, their position in the Doha Round is quite justified given the socio, economic and political situation of these countries.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>LDCs find it difficult to implement some of their WTO commitments. How would ‘Aid for Trade’ help to implement such commitments?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Aid for Trade (AFT) does provide necessary help to the developing countries and LDCs to implement some of the WTO commitments including drafting of legislations, preparing of regulations and putting in place the institutional mechanism that are required to take advantage of the export opportunities offered by the WTO.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>How can ‘Aid for Trade’ help overcome supply side constraints?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Supply side constraints need to be divided into two different categories. One is supply- side constraints that results from our fluid political situation. The strikes and various political demonstrations make us unable to ship our goods on time. AFT cannot do anything about this. Then, there are supply side constraints that are resulting from our lack of resources or our inability to utilise resources properly in certain areas like infrastructure, development of roads, transportation, electricity and skills. People do not have the necessary skills to produce goods in a competitive manner. We have customs infrastructure which does not even measure up to regional standards. That needs to be improved. Besides, we do not use the required technology to be more productive and competitive in the international market. </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Some people interpret ‘Aid for Trade’ as the same money from the same window as human rights aid. What is your take on it?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">That is not true. AFT includes only six components. The first is the economic infrastructure which is the money provided for road, electricity, and communication. The second category is the money provided for building productive capacity in agriculture, industries and services sectors. The third is a trade development category which is basically the money provided for export promotion and development of trade. The fourth category is trade policy and regulations for helping countries to implement their WTO commitments, including enactment of legislations and capacity building of various institutions in the country. The fifth one is called trade related adjustment which is basically the money provided to countries to implement trade liberalisation measures and protect the country from negative affects of trade liberalisation. It involves retraining people who lose their job because of trade liberalisation and finding alternative employment opportunities for them. The sixth category is ‘others’. Others could be anything if the donors and recipients agree to call a particular aid as AFT. The other way of looking at this is: AFT is Overseas Development Assistance (ODA) minus the money provided for various areas, for example, health, education, environmental conservation, human rights, women empowerment and peace and conflict. Human Rights is of course a separate area altogether.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Do you think ‘Aid for Trade’ will succeed in Nepal as many other aid programmes have failed to generate the desired output?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">There is no evidence to say that aid has not helped Nepal’s economic growth. The opinion is divided here. As a researcher, I would be reluctant to say that aid hasn’t helped. At the same time, I wouldn’t vouch that foreign aid has helped tremendously. However, it has certainly helped in meeting the saving and investment gap. If the foreign aid was not provided in some areas, for example, the health sector, it is difficult to say whether we would be able to do something. In the case of AFT, I am not very excited. If there is real additional money coming as AFT, that would definitely be helpful, but not if it is repackaging of money diverted from other areas. Next, it has to be predictable. If certain donor countries are going to provide certain amount of money, they have to guarantee the fund for a multi-year period.&nbsp;It is also the issue of sustainability which is not only about donors providing money on time. It should be taken into account whether the government is ready to take charge of the projects once the donor funding ceases. If a donor provides money for three years, you can’t ask the donor to provide money for the entire period of the project even if the results are good. If you can operate the project on a commercial basis, the private sector will take over. If you are not working on the commercial basis, then government should step in and provide sustainability to the project. The final issue is the effectiveness of the aid. The Paris declaration of aid effectiveness should be the guiding principles for enhancing the effectiveness of AFT. These criteria would actually determine the success of the project. If these criteria are met, the chances of AFT working for the country are fairly good. </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Experts say we lack basic trade infrastructure. What kind of problems and challenges do you see that hinder Nepal’s sustainable trade development? What should be done?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Basic infrastructure is necessary for the country to be able to expand its export on a sustainable basis. A study shows that if a shipment is delayed by one day because of lousy infrastructure, it is equivalent to adding 0.8 per cent to the total tariff that you pay to the importing country. Another study says that if export is delayed by one day, the total export potential will be reduced by one per cent. Infrastructure should be the number one priority for Nepal to be able to trade on a sustainable basis. AFT is not going to be enough because we have our own governance problems to tackle. Governance issue is equally important. </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Experts opine that international community should not only provide market access but also help LDCs in enhancing their trade capacity. If everything is to be done by other countries, what should LDCs like Nepal prioritise in their agenda?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Nepal should fully mainstream trade in national development strategy first. In the new Plan document that is going to be prepared, it has to be included. Apart from that, mainstreaming has to be done at the sectoral level too. For example, if tea export is to be increased, then its priority has to be mainstreamed not only at the level of the Ministry of Industry but also at the Ministry of Agriculture which is responsible for promotion and growth of tea. So, all these ministries and sectors have to take into account the fact that mainstreaming is vital. The second issue is that we have to address supply-side constraints through effective governance reform as well as utilisation of AFT. But there are two aspects we have to ensure ourselves besides the sustainability issue. First, we have to improve our absorptive capacity. The government is unable to even spend the budget amount that has been allocated. How would it spend the money allocated by an external agency? However, we have seen some gradual improvement in our absorbing capacity but it needs to be enhanced further. Another critical issue is that of coordination.&nbsp;There must be coordination on how much money is coming, how it is being utilised and which sector is being prioritised. There has to be a coordination mechanism between the ministries of commerce, industry, tourism, agriculture and other related ministries that have a role in promoting trade so that there is better coordination and effective utilisation of resources.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>LDCs are worried that the current intellectual property protection regime does not recognise their contributions. How can countries like ours raise their voice to eliminate the danger of losing patent rights to compete in the international market?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Some of our properties of genetic resources and traditional knowledge are taken away by some multinational companies and universities. But in order to address that kind of problem, we have to keep our house in order. We need to pass the legislation on access and beneficiary by the parliament which is pending for six years now. The draft was prepared in 2004-05 but has not been adopted as a law. We need to ensure this as it will take care of three aspects. First, it will guide us on regulating access to our genetic resources and traditional knowledge. Second, it would make sure that when the access is provided, it is done on the basis of a prior informed consent of the local communities who are involved in conserving those resources. Third, it would ensure that those communities are appropriately remunerated. They would be appropriately remunerated for the job they have done so far to conserve the resources. With that kind of legislation, many countries have protected their bio diversity, genetic resources. It’s our fault that we have failed to follow suit. Global regime is unfair, however, we have not been able to create a mechanism at the local level to counter the unfair tendency of some global rules. </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Being an LDC, Nepal enjoys numerous benefits like zero tariff. How should Nepal utilise such concessions to gain optimum benefits?</strong></div>
<div style="text-align: justify;">
	<span style="letter-spacing: -0.15pt;">Yes, we do have zero tariff access in selected markets. The European Union is definitely among them but we don’t have zero tariff access in the US market. The process for the same has begun but it will take a long time before such access is provided. Even if you have zero tariff access, you still have to fulfil the rules of origin (ROO) requirement. Once you fulfil the ROO, you are back to the supply-side issues because you have to create backward linkages. If a shirt has to be exported, it’s better to have the fabric manufactured in Nepal itself rather than relying on countries like China and India for the supply of materials. If we continue to get the materials from these countries, we will not be able to fulfil the ROO criteria. We have the full potential for export In some areas where ROO is not a problem. One such example is coffee which can be exported to European, Japanese or any other market in desired quantity without having to fulfil the ROO criteria because it’s an indigenous product and there could be more than 90 per cent value addition and processing in our country itself. However, we cannot export if we are not able to produce in desired quantity. Apart from production, we also have the problem of competitiveness. Even if our cost of production is lower than other countries in the world, our products will cost more by the time it reaches the final market. Let me give you an example. Imagine a situation in Gulmi where you have to organise a few farmers in the form of cooperatives while trying to export coffee to Japan. You collect 12 tonnes of total consignment and put it on the truck and try to send it. But there is a strike so you are stuck there for two days. Finally, you manage somehow and reach Birgunj customs. In order to clear the export consignment, it takes two days. Once cleared, the consignment moves to Kolkata port. It should normally take a maximum of two days to reach Kolkata port but sometimes it takes six days because there is a strike in Bihar or West Bengal which falls on the way. Once at Kolkata port, the consignment is not enough to reserve the entire ship. Now, it takes four days for the ship to fill up. Eventually, it moves from Kolkata. Kolkata is not a deep sea port but a shallow port so it can’t go directly to Japan. Therefore, the consignment on board the ship travels to Visakhapatnam, Colombo or Singapore. The consignment is transferred to the mother vessel at one of these ports and then it goes to Tokyo. In the process, you lose so much of time that you will not be competitive in the global market. So, it is not only the question of productivity and production, but also the question of being competitive in export trading. </span></div>
<div style="text-align: justify;">
	 </div>',
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			'description' => 'It is our right to be able to protect our industrial sector. If you open up the industrial sector completely then it could result in industrial depression and loss of employment. So, it is necessary to protect the industrial sector but not to the extent of providing incentive to  inefficient industries.',
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		'Article' => array(
			'id' => '340',
			'article_category_id' => '34',
			'title' => 'Natural Gas Remains Untapped',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="margin-bottom: 0.0001pt; vertical-align: middle; text-align: justify;">
	<span style="font-size: 14px;">T</span><span style="font-size: 9.5pt;">hough three decades have passed since natural gas was found below the grounds in Kathmandu , nothing has been done yet to bring it to the kitchen of the people. Negligence of the government and technical complications have made gas extraction a far cry. Officials at the Department of Mines and Geology say there is no possibility to extract natural gas for utilisation anytime soon.</span></div>
<div style="margin-bottom: 0.0001pt; line-height: 11pt; vertical-align: middle; text-align: justify;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle; text-align: justify;">
	<span style="font-size: 9.5pt;">The department has failed to even to evaluate the proposals of two companies that sought permission to extract gas. The proposals are lying with the department for the last two years. Continental Trading Enterprises and Rajavardhan Construction, a company under KL Dugar Group had submitted those proposals. </span></div>
<div style="margin-bottom: 0.0001pt; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle; text-align: justify;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle; text-align: justify;">
	<span style="font-size: 9.5pt;">Sarbajit Prasad Mahato, the Director General of the department accepts the weaknesses of the department but blames it to various complications. He said that more studies are needed to go ahead on this. </span></div>
<div style="margin-bottom: 0.0001pt; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle; text-align: justify;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle; text-align: justify;">
	<span style="font-size: 9.5pt;">Studies have revealed that the area of 26 square kilometres from Teku to where the office of the Nepal Herbs Corporation is located contains natural gas. Studies by the department carried out at different times during the last 17 years show the possibility of a natural gas reserve of 310 million cubic metres. This amount can meet the need of 20,000 households for 30 years.&nbsp;The study conducted in 1996 says that extraction work would cost Rs 437.7 million. The extracted gas cannot be liquefied and filled into the cylinder directly. Therefore, it should be supplied directly to the households through pipelines. This is said to have become costly now because of the concrete constructions stretching the length and breadth of Kathmandu valley. However, such gas can be used to generate electricity thorugh thermal power station. The department has identified 14 places from where the gas can be mined. </span></div>
<div style="margin-bottom: 0.0001pt; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<span style="font-size: 9.5pt; line-height: 115%;">The department has put forward an option to conduct fresh studies as the environment has changed much since the time of the previous studies. </span></div>',
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			'description' => 'Though three decades have passed since natural gas was found below the grounds in Kathmandu , nothing has been done yet to bring it to the kitchen of the people. Negligence of the government and technical complications have made gas extraction a far cry.',
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			'title' => 'Clean Chit For Kansakar',
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			'content' => '<div style="text-indent: 0in; text-align: justify;">
	<span style="font-size: 12pt;">T</span>he Special Court has given clean chit to suspended Executive Chairman of Nepal Airlines Corporation (NAC) Sugat Ratna Kansakar and six other officials. In a case filed against them at Special Court, the Commission for the Investigation of Abuse of Authority (CIAA) had alleged that the six had committed corruption by sending lock-up money to Airbus company for buying a jet aircraft though neither a formal decision was made for this purpose nor the necessary finance was&nbsp;arranged to pay for the purchase.</div>
<div style="text-indent: 0in; text-align: justify;">
	 </div>
<div style="text-align: justify;">
	The court comprising three justices Gauri Bahadur Karki, Om Prakash Mishra and Kedar Prasad Chalise issued the clean verdict on April 19.</div>
<div style="text-align: justify;">
	 </div>',
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			'id' => '338',
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			'title' => 'Rahughat Construction Begins',
			'sub_title' => '',
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			'content' => '<div style="margin-bottom: 0.0001pt; line-height: 11pt; vertical-align: middle; text-align: justify;">
	<span style="font-size: 8pt;">T</span><span style="font-size: 9.5pt;">he first phase of the construction at the Rahughat hydroelectricity project has started with the survey for the 11.7 km road to be constructed from the powerhouse to the reservoir. The 30 MW project site is in the Myagdi district. </span></div>
<div style="margin-bottom: 0.0001pt; line-height: 11pt; vertical-align: middle; text-align: justify;">
	 </div>
<div style="margin-bottom: 0.0001pt; text-indent: 14.15pt; line-height: 11pt; vertical-align: middle; text-align: justify;">
	<span style="font-size: 9.5pt;">Meanwhile, also the construction of the residential building at Rakhu Piple has begun, according to the project officials. The building will be complete within one-and-a-half year. The first phase also includes the construction of tunnel reservoir to the powerhouse. The reservoir will be at the border of Jhi and Dagnam VDCs. The powerhouse will be situated at Tilkenichaur, six kilometres away from the dam.</span></div>
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	 </div>
<p style="text-align: justify;">
	<span style="font-size: 9.5pt; line-height: 115%;">&nbsp;The project is being constructed with a loan from the Indian Government and a joint investment of Nepal Government and Nepal Electricity Authority (NEA). The construction cost is expected to be anything between Rs 3.5 billion to Rs 4 billion, according to a study of Nepal Government. The project is expected to be complete by 2017. </span></p>',
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			'created' => '2011-06-03',
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