Jobs key to sustained growth: FM

Kathmandu, July 30

The government has embraced the policy for the promotion of start-ups, commercial agriculture and small and medium enterprises to create jobs in the aftermath of the coronavirus pandemic, said Minister for Finance Dr. Yuba Raj Khatiwada.

"Start-ups, new business ideas and innovations have to be supported and informal activities should be formalised to create better employment opportunities in the country," he said while inaugurating 'Aba Deshmai Chha Rojgari' (Now employment is available in the country) campaign on Thursday.

He said that jobs were critical for sustained economic growth and development while skilled jobs were crucial for raising productivity and empowering people.

Maintaining that employment was the best form of social protection for those in working age and ability, Dr. Khatiwada said that therefore it was the top development agenda.

He also said that there was a challenge to develop entrepreneurship, self-employment and risk-taking capacity among the entrepreneurs in the country.

Since the private sector is the major job creator, the government is constantly making efforts to make the tax and financial policies conducive to businesses that create jobs, he said. "The government is ready to work with private sector and development partners in this regard."

According to him, reducing the cost of doing business for private sector, particularly institutional, regulatory and infrastructure related ones, has always been in government priority.

"We have about 4 million workers abroad and a large number of youth also go to India for seasonal works. With a view that their return should not create employment crisis at home, the budget for this year has prioritised jobs as the second most important agenda next to controlling the coronavirus and saving life," he said.

 

Dr. Khatiwada said that higher budget was earmarked for creation of more jobs, in both wage and self-employment areas.

"Skilling and re-skilling trainings, on the job trainings, labour market information bank, capital, insurance and interest rate subsidies to self-employment schemes, more resources to job creating organisations through monetary and fiscal transfers, expansion of contributory social security schemes, encouraging firms to use domestic workers through various incentives based or coercive measures are some of them," he said.

The 'Aba Deshmai Chha Rojgari' campaign is initiated by Rojgari Services Pvt. Ltd. and UKaid Skills for Employment Programme, and builds on earlier efforts to respond to the livelihood needs of migrant returnees and other economically disadvantaged and socially excluded groups.

Because of the loss in jobs in the wake of the COVID-19 pandemic, around 700,000 Nepali workers are expected to return from overseas over the next year alone.

Nepal needs to create over a million jobs to avoid an imminent unemployment crisis. “Our inability to respond to this crisis in time may have an adverse ripple effect across all sectors of the economy, reversing hard-won progress of recent decades,” said Baljit Vohra, Team Leader of UKaid SEP.

Rojgari Services will utilise its extensive platforms – website, mobile application, social media, Rojgari Pasals, Ghumti Rojgari Pasals, and collaborations – to connect and facilitate appropriate skilling, employment or self-employment pathways for registered returnee migrants.

Shailendra Raj Giri, founder of Rojgari Services and Mero Jobs, noted, “The campaign and our collective partnership, with UKaid SEP and others, can catalyse a collective movement to generate employments, enterprises, and facilitate growth for and by Nepal’s human resources.”

Published in The Rising Nepal daily on 31 July 2020. 

Govt stresses parliament support to expedite pride projects

Kathmandu, July 29

Minister for Finance Dr. Yuba Raj Khatiwada on Wednesday said that the Millennium Challenge Account (MCA) project should not be made a hostage of internal politics.

Seeking early decision of the parliament, he said that if the country doesn't want the project, let it be rejected, the government would implement it with its own resources.

"As the project is not ratified by the parliament as per the condition in the bilateral contract between Nepal and the United States of America, we haven't received the money for the project but we are spending the government money," he said at the meeting of the National Interest and Coordination Committee under the National Assembly at the Singha Durbar.

MCA is the most economic large-scale project to be implemented in the country, but it has not been ratified by the parliament even though it should have been started on June 30 this year.

MCA is a programme of US government’s Millennium Challenge Corporation in Nepal that is investing US$500 million in the cross-border transmission lines and road rehabilitation projects.

Responding to the queries of the lawmakers regarding the status and progress of the national pride projects, Dr. Khatiwada said that the government had announced the international airport at Nijgadh earlier than the actual work should have started.

Initially tagged as the second international airport (SIA), it has been delayed by many years and other two international airports – Gautam Buddha International Airport, Bhairahawa and Pokhara International Airport – would be completed within a couple of years. It means Nijgadh would be the fourth international airport in the country. GBIA in Bhairahawa will come into operation by the end of this year.

According to the Finance Minister, the Nijgadh Airport is facing multiple challenges such as legal case at the Supreme Court which had obstructed the government from announcing the tender for the project.

 

Government-parliament cooperation

Expressing concerns over time and cost overrun in most of the national pride projects, Dr. Khatiwada said that the government had ensured the allocation of additional budget and other facilitation to them if needed. “Despite our manifold efforts, some of the projects are not moving ahead at the desired speed. The government had registered a bill on expediting the large and pride projects at the parliament but it is stuck there for the last two years,” he said.

He sought government-parliament cooperation in the matters of development.

FM Dr. Khatiwada pointed towards the need of greater cooperation among the development ministries and agencies to ensure better management of road and other utilities in the urban areas.

“The electricity authority plans to put the cables underground in the third quarter of the year while the road department has a plan to blacktop the same road in the first quarter. This mismatch has affected the roads and pavements in the cities,” he said. He said that this was the weakness on the part of the government and urged for greater and pragmatic coordination among the ministries and line agencies.

 

Land acquisition major issue

Land acquisition has been a major challenge in implementing development projects across the country. Every large project – like the Budhigandaki Hydroelectricity Project, Kathmandu-Terai Expressway and Postal Highway – has been affected in one or other way from the acquisition issue.

Likewise, the conditions set by the donor agencies, and environmental issues also cause delay in the development of such projects.

However, Dr. Khatiwada said that the delay in the Postal Highway was the result of adjustment in the project. The project designed two decades ago was a single-lane agricultural infrastructure but it has been converted as a double-lane highway. Meanwhile, Nepal took the development responsibility of the road from India which is financing the road. The expansion of the width of the road has created land acquisition challenges at various locations.

 

No dearth of resources

Dr. Khatiwada assured the ministries and lawmakers that there would be no dearth of resources for the pride projects. “We respect the National Planning Commission (NPC)’s budget earmark for the pride projects. However, budget size of some projects that would be unable to utilise the budget, the amount is compromised in consultation with the respective ministries,” he said.

Vice-chairman of the NPC Prof. Dr. Puspa Raj Kandel said that the pride projects had not witnessed progress as expected even after the provision of enough resources and facilitation.

“Quality, time and cost have been compromised at all projects. Greater coordination among the ministries and monitoring is needed,” he said.

However, he maintained that most of the projects would be completed by the end of current five-year plan period.

Chairman of the committee Dil Kumari Rawal Thapa (Parbati) expressed her surprise at the dismal performance of the pride projects despite political stability and competent team at most of the development agencies.

The country has 21 pride projects falling under five ministries – Energy, Water Resources and Irrigation, Water Supply, Forest and Environment, Physical Infrastructure and Transport, and Culture, Tourism and Civil Aviation.

Published in The Rising Nepal daily on 30 July 2020. 

Employers, unions reach deal

Kathmandu, July 28

Private sector employers and trade unions have agreed to pay 50 per cent salary of the lockdown period to the workers and other staff members.  

Employer’s associations – Federation of Nepalese Chambers of Commerce and Industry, Confederation of Nepalese Industries, Nepal Chamber of Commerce, Federation of Nepalese Cottage and Small Industry – and trade unions affiliated to the Joint Trade Union Coordination Centre signed an agreement to settle the payment issues of the lockdown.

The FNCCI said in a statement that it was coordinating among the stakeholders to settle the long standing issue.

According to it, the agreement would be recommended to the government as the way out from the current payment problem gripping the business sector.

As per the agreement, the business and industries will pay the full salary for the month of Chiara 2076 (mid-March to mid-April) although the lockdown was executed from March 24, ten days after the beginning of the month. The workers will get the full salary of the closure period as well for this month.

Likewise, for the month of Baisakh 2077 (mid-April to mid-May), half of the salary would be paid, and for Jestha (mid-May to mid-June), full salary would be paid to the workers who attended the work while 50 per cent salary would be reimbursed to those not coming to the work.

Since the nature of all businesses and industries is not same, the employers and trade unions can further discuss on the matter for the mutual understanding, read the agreement.

Similarly, as the businesses have begun to come into operation the employers can call the workers on a turn basis, in different shifts, to the work and pay the salary and wages of the work days only.

The agreement maintains the assurance of jobs to all the workers associated with the business and industries.

The agreement is the result of more than two and a half months efforts by the government, employers and workers. The Ministry of Labour, Empoyment and Social Security had formed a trilateral task force to study on the matter and settle the issues.

Published in The Rising Nepal daily on 29 July 2020. 

Infra financing vital: Dr. Khatiwada

Kathmandu, July 28

Finance Minister Dr. Yubaraj Khatiwada has emphasised that financing need for infrastructure and economic recovery was more important than climate financing for Nepal.

“Climate financing is an urgent priority, but the unfolding COVID-19 and associated economic crisis and thus financing need for health infrastructure and economic recovery is even more urgent at the moment for low carbon and low income countries like Nepal,” he said at the fifth Annual Meeting of the Board of Governors of the Asian Infrastructure Investment Bank (AIIB) on Tuesday.

He said that it was necessary to protect the achievements made in the poverty reduction so far.

During the round table discussion as a lead speaker, Dr. Khatiwada urged that  the AIIB be more flexible to ensure concessional access to finance particularly to the low income countries, so that basic infrastructure projects would be financially viable.

“It implies to further flexibility in lending terms, also from the debt sustainability perspectives,” he said.

According to Dr. Khatiwada, the AIIB should come forward to further extensive collaboration with other international financial institutions to create synergy in long term financing in infrastructure so that large financing gaps in the low income countries could be met which is also so critical to achieve the SDGs.

He expressed his solidarity with the collective efforts to fight against the COVID-19.

The meeting was held virtually among the governors of the member countries of the AIIB. President of China Xi Jinping inaugurated the meeting and delivered the opening address.

The Finance Minister congratulated Jin Liqun on being reelected as the President of AIIB unanimously.

Published in The Rising Nepal daily on 29 July 2020. 

COVID-19 helps Nepal reduce trade deficit

Kathmandu, July 26

The coronavirus pandemic and its impact on the movement of goods across the border has resulted in a significant slump in Nepal's trade deficit.

Total trade deficit was improved Rs. 221 billion in the last fiscal 2019/20 against that of the previous year 2018/19, according to the latest statistics of the Department of Customs (DoC) published on Sunday.

The country's trade deficit is reduced by 16.71 per cent in FY 2019/20 compared to the previous fiscal 2018/19 with the trading of goods worth Rs. 1,100.6 billion and Rs. 1,321.4 billion respectively.

The size of deficit is even smaller than Rs. 1,163.7 billion of the FY 2017/18. It was the year when the country witnessed all time high export import ratio 1:15.3 with 6.1 per cent export's share in total trade.

However, the improvement in the foreign trade was not because of the increase in the exports of goods but of the significant reduction in the imports. The actual export of goods was reduced from Rs. 97.1 billion to Rs. 96.1 billion from 2018/19 to 2019/20 while there was a significant rise in the outward movement of goods compared to Rs. 81.3 billion of FY 2017/18.

The export trade had begun to witness an improvement from the beginning of the last fiscal year. Had the trend been continued the country was likely to meet the threshold of Rs. 100 billion exports for the first time in its history.

By the end of the eight months of the last fiscal, till 10 days before the government imposed the lockdown amidst the advent of the deadly COVID-19 pandemic, Nepal's export had risen by 22.3 per cent to Rs. 74.91 billion compared to the same period of the previous year.

However, pandemic slowed the speed of the inward and outward trade.

The decrease in imports has resulted in the growth of balance of payment and reduction in current account deficit. The balance of payment in the 11 months of the last fiscal was Rs. 179.37 billion while it was in Rs. 90.8 billion deficit in the previous year. Likewise, the current account deficit was Rs. 71.6 billion last year against Rs. 249.08 billion of the previous year.

The country has Rs. 1306.4 billion foreign exchange reserve sufficient to manage the import of goods and services for 11.7 months.

 

Trade Partners

India is the largest trade partner of Nepal with the import of Rs. 735 billion and Rs. 69 billion respectively. China, Indonesia, the United States of America and United Arab Emirates are the other top trade partners.

Nepal's largest export markets include India, USA, Germany, Turkey and the United Kingdom. Last year, the country exported goods worth Rs. 9.22 billion to the USA, Rs. 2.64 billion to Germany, Rs. 2.1 billion to Turkey and Rs. 2 billion to the UK.

Similarly, according to the DoC, major exports are the palm oil, soya bean oil, carpet, woolen cloth and jute while imports are diesel, half-refined iron and steel, petrol, cooking gas and rice. The agrarian country had imported rice worth Rs. 18.5 billion in the last fiscal. Likewise, Nepal had spent about Rs. 143 billion in importing the petroleum products.

Trade direction

S.N.	Indicators	FY 2018/19	FY 2019/20	Change (%)
1.	Imports (Rs.)	1,418.5 bn	1,196.8 bn	-15.63
2.	Exports (Rs.)	97.1 bn	96.1 bn	-0.98
3.	Trade Deficit (Rs.)	1,321.4 bn	1,100.6 bn	-16.71
4.	Export/import ratio	14.61%	12.45%	-14.8
5.	Export share in trade	6.41%	7.44%	16.07
6.	Import share in trade	93.6%	92.56%	-1.10

Source: Department of Customs

Published in The Rising Nepal daily on 27 July 2020. 

Gold dealers' assembly to be held in October By A Staff Reporter

Kathmandu, July 27

The Federation of Nepal Gold and Silver Dealers' Association (Fenegosida) has announced that it would organise its third general assembly on 11-12 October 2020 in Kathmandu.

A recent virtual meeting of the working committee of the business body has made the decision. About 400 representatives dealing in gold and silver are expected to attend the assembly.

The meeting has also decided to hold election of the provincial body of the Fenegosida as per its statute. The assembly of the provincial bodies would also be held on 28 September this year.

A main committee led by the organisation's Senior Vice-president Manik Ratna Shakya is formed to organise the events successfully while other sub-committees are also formed.

Meanwhile, the federation has decided to establish a gem laboratory to study diamond and other precious stones to cater to the consumer interests.

It has also formed a committee to fix the price of diamond and other precious stones.

Published in The Rising Nepal daily on 28 July 2020. 

Oppo launches A52 with quad rear camera

Kathmandu, July 27

Oppo has launched its new smartphone the Oppo A52 in the Nepali market.

The new handset is priced at Rs 29,990 and is available in two colour variants, twilight black and stream white. It is said to sport an 8.9mm thickness and 192 grams weight.

It packs a quad rear camera setup. Primary rear camera is of 12.0MP with f1.7 aperture and the secondary rear camera is of 8.0MP (wide) with f2.2 aperture.

There are two 2MP resolution sensors, where one is a macro lens and the other is a portrait lens both with f2.4 aperture. It comes with a touch-to-focus, phase detection AF autofocus technology. The rear camera is supported by a Dual LED flash. For selfies, it has 16.0MP front camera with f2.0 aperture.

The Oppo A52 is powered by a Qualcomm Snapdragon 665 chipset and is accompanied with a 4GB of RAM and 128GB of internal storage capacity. It will be running on the ColorOS 7.1 (Android 10). Users can expand the external storage upto 256GB via SSD.

It comes with a side-mounted fingerprint sensor and 5000mAh battery life with an 18W fast charging technology. 

Published in The Rising Nepal daily 28 July 2020.

Advertising industry loses Rs. 6 billion to COVID-19 pandemic

Kathmandu, July 25

The coronavirus pandemic and subsequent lockdown has severely hit the advertising business in the country with estimated losses of about Rs. 6 billion.

According to the Advertising Association of Nepal (AAN) total value of advertising market in the country, including the mass media and signage, has crossed Rs. 12 billion.

“The industry has lost about half of its total annual revenue due to the pandemic. The four-month lockdown has affected as much as 80 per cent of the total advertising business,” said Rabindra Kumar Rijal, President of AAN.

He said that advertising spending from the private sector as well as government agencies went down drastically and the trend was likely to continue until Dashain, the major festival in the country.

The advertising business tumbled as low as 20 per cent during the initial months of lockdown, said Santosh Shrestha, immediate past president of AAN.

The government imposed nationwide lockdown on 24 March and lifted it from 22 July.

Though apparently it seems being created and catered to the general masses, advertising is a lifeline to the media and bridge between the producers and media outlets, generally mediated by the advertising agencies.

As the lockdown forced majority of the industries and businesses to shut down for an indefinite period, the producers pulled off most of the promotion campaigns and advertising, said Shambhu Adhikari, Chief Executive Officer of Cosmos Advertising Agency.

Advertising budget was the first thing to cut when the companies applied austerity measures during the pandemic. Even the businesses like banks and financial institutions, and insurance companies significantly lowered their advertising and promotional campaigns.

Meanwhile, the pandemic wreaked havoc on mass media channels, newspapers and magazines couldn't be distributed and some continued only with their digital version of the publication while television reporting and programme diversity was significantly affected due to the difficulties in mobility and threat of infection.

Mainstream media lost about 90 per cent of the advertisement. Large publication houses have announced the closure of their magazines and laid off journalists en-masse. Two broadsheet dailies from Kathmandu and hundreds from the districts are still off print.

Advertising industry insiders say that the print media was almost bare in terms of advertisement while many television channels continued playing the commercials free of cost as they had to fill the time which had grown larger because of the constraints in production. 

 

Job loss

Lack of business caused the job losses of many advertising professionals including the creative writers and directors. Shrestha said that although there was no specific data, a significant number of advertising professionals and support staff have lost their jobs temporarily or permanently. He also said that the looming fear of job loss or salary cut has affected the creativity as well.

The largest source of advertising during the lockdown was the government welfare advertising. However, most of it was directly sent to the media by the government and the ad agencies were least benefitted by it. Only a negligible number of private sector businesses created welfare advertising or Public Service Announcement, and most of it was dealt directly with the media, said Adhikari.

Coronavirus has taken a heavy toll on the signage business, another important component of advertising. Most of the jobs in the sector were affected. Signage business has Rs. 7 billion investment, 3,500 entrepreneurs and 75,000 jobs.

Rijal said that 10-15 per cent jobs might be lost permanently. “We have been paying 50 per cent salary to the staff even for the lockdown period,” he said.

 

New Year missed

Producers of cement and iron bars were the largest advertisers in terms of the amount spent before the advent of the coronavirus pandemic. "Since most of the small infrastructure projects and individual construction was affected due to the lockdown, the producers pulled off most of the advertising," said Adhikari.

Likewise, the disturbance in the supply chain of products other than the food items and essential goods had shrunk their market and the producers cancelled their planned advertising campaigns and did not renew the contract with the media. Commercials of the FMCG (fast moving consumer goods) products were also reduced drastically.

Advertising business witnessed the largest losses as it missed the mega season during the Nepali New Year which is the biggest opportunity for advertisers, ad agencies, media and consumers equally as many producers and distributors announce discount on the price of goods and services and offer prizes.

The New Year and fiscal year close period were the two major business opportunities that they and the media channels missed during the lockdown.

 

Digital growth

The COVID-19 crisis has, however, created an opportunity for digital advertising. The access to internet and digital platforms as well as public's hunger to get the updates at the earliest has increased the popularity of the digital media, said Adhikari.

He said that many audiences of print media and television were gradually shifting to the digital one.

Shrestha also said that the digital trend in Nepal was started about a decade ago but the coronavirus had given a significant push to its growth and development. "Now the advertisers plan their campaign with mobile phone at the centre.”

Published in The Rising Nepal daily on 26 July 2020. 

Prez wishes speedy recovery of Saudi King

Kathmandu, July 24

 President Bidya Devi Bhandari has sent a message to King of Saudi Arabia Salman bin Adbul Aziz Al Saud wishing him speedy recovery and good health.

The monarch is the custodian of the two holy mosques in Saudi Arabia.

The 84-year old king had been admitted to a hospital and is under treatment for inflammation of the gall bladder, according to Aljazeera.

Published in The Rising Nepal daily on 25 July 2020. 

Dhakal objects office bearers' decision to postpone AGM

Kathmandu, July 24

 Vice-president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), who is vying for the post of senior vice-president, has objected to the decision of the emergency meeting of the office bearers the other day to postpone the general assembly of the organisation.

The emergency meeting on Thursday had decided to postpone the general assembly of the business body for indefinite period until the Cabinet allows for the organisation of mass meeting.

Although the lockdown was lifted by a Cabinet decision, it had sustained the restrictions on holding mass meetings and other gatherings. An office-bearers meeting was attended by the president, past presidents, senior VP and VPs.

Dhakal said that the office-bearers meeting was called despite having enough period to call a Working Committee meeting, it had set a wrong precedent in the organisation which would have severe repercussions on the organisational growth in the future.

The last WC meeting had decided to hold the assembly on 10-11 August this year.

"We had requested the government to facilitate in organising the assembly on that date. We are fully aware that without cooperation of the government such activities should not be organised especially during this period," he said at a programme organised on Friday.

His objection was based on the fact that the FNCCI did not even wait for the government's reply on the application.

"Halting the assembly and not announcing the next date of its organisation has weakened the moral foundation of the organisation. It is unfortunate that the FNCCI is being hostage of election tricks," said Dhakal.

According to him, as the lockdown was lifted, businesses are open and the life is gradually returning to normalcy with the application of health safety measures and social distancing. The assembly can also be held in the same way.

He said that at the time of crisis, the organisation was trying to escape from its responsibilities.

Published in The Rising Nepal daily on 25 July 2020. 

PM Oli, Deuba hold meeting

Kathmandu, July 23

Prime Minister KP Sharma Oli and president of the main opposition party Nepali Congress Sher Bahadur Deuba hold a meeting on Thursday and discussed the situation after the lifting of the lockdown.

Deuba drew the attention of the government regarding the steps to be taken against the floods and COVID-19 challenges.

He presented a 3-point demands and recommendations to create a strategy to face the challenges of the pandemic after the economic activities are open across the country.

He demanded a special and focused strategy to fight the pandemic saying that the number of infected people had reached about 20,000 even during the lockdown.

Deuba urged the government to apply the PCR to test the COVID-19 suspects and expressed objections to the government’s indifference in creating standard quarantine centres.

He also urged the PM to expedite the rescue of Nepali citizens from the foreign land and work in war footing to rescue people affected by the floods and landslides, and operate relief and rehabilitation programmes.

On the occasion, PM Oli told Deuba that the government would immediately initiate measures to address the issues raised during the meeting, according to the PM’s Press Advisor Surya Thapa.

The NC said that the party had drawn the attention of the PM to the issues created by the pandemic and raised by the people affected by it.

 Published in The Rising Nepal daily on 24 July 2020. 

World Bank suggests three-phase economic resilience model

Economy to grow by 2.1 per cent

Kathmandu, July 23

The World Bank has proposed a three-phase actions model to move the economy to resilience.

The relief, restructuring and resilient recovery phases are believed to support the government’s efforts in providing relief and building a resilient recovery.

Terming them ‘actionable measures for the government’, the multilateral donor in its Nepal Development Update 2020 published on Thursday said that the present crisis would require a multi-faceted response given the wide-ranging impact.

According to the report, the government should allow temporary social security, tax and rental and utility deferrals, provide wage subsidies and suspend import duties for critical supplies, and announce a time bound subsidised emergency financial package for priority sectors like tourism and agriculture in the relief phase.

It also recommended supporting local levels in the distribution of relief packages, including seeds and fertilizers to the farmers and centrally procure agriculture produce to respond to food security needs.

Expansion of the reach and coverage of mobile banking and digital financial services, promotion of digital literacy and establishment of information technology centres, simplification of investment approval process, and provision of fiscal incentives are suggested for medium term ‘restructuring’ phase.

Likewise, for the resilient recovery, policy measures like investment climate reforms including the foreign direct investment, increasing access to finance through digital services, long-term insolvency and out-of-court procedures, and guidelines to support environmental management are suggested.

While the government has adopted various relief measures to contain the pandemic, reduce the impact on households and provide economic support to the most vulnerable firms, the report highlights the importance of reforms to support a resilient recovery.

WB’s Senior Economist Dr. Kene Ezemenari said that for a resilient recovery and inclusive growth, economic support measures to firms and workers in the informal sector would be important.

“Incentives to agribusiness-based and forest-based small and medium enterprises (SMEs), with a focus on returnee migrants and youths, could help increase employment and food security. Inclusive growth could be further promoted through entrepreneurship support programmes and grants to small and medium enterprises,” the author of the update said in a web-launch programme of the report.

Speaking at the event, Finance Minister Dr. Yuba Raj Khatiwada said that the country needed to address the crisis with macroeconomic and sectoral policy focused on fiscal stability, financial sector stability, a digitally-oriented green economy and resilient public services.

He appreciated the rapid action taken by the development partners, including the World Bank, Asian Development Bank, IMF and others for providing Nepal with tangible resources and support to maintain our fiscal balance and accelerate growth and inclusive development.

The government through its budget for the current fiscal year 2020/21 and Nepal Rastra Bank through the Monetary Policy have laid out the plans to support the SMEs, agri-businesses and rehabilitate the industries severely hit by the COVID-19 pandemic.

WB’s Country Director for Maldives, Nepal and Sri Lanka Faris Hadad-Zervos said that for Nepal to emerge stronger from the crisis, it was important to adapt quickly to the new reality.

“We are encouraged to note the early start made by the government with the development of Nepal’s relief, restructuring and resilience plan and are committed to work together with multilateral development banks and development partners in helping the country build back greener and better,” he said.

 

Economy to grow by 2.1 pc

The World Bank estimated that the economy would contract sharply to 2.1 per cent in the current fiscal year against the government’s projection of 7 per cent.

The impact of COVID-19 pandemic and related lockdown will make a serious impact on the economy, despite efforts of the government to curb the economic fallout from the crisis, said the multilateral donor.

According to it, transitioning the economy from the relief stage through to restructuring and resilient recovery requires a strategic approach to get the country back on a sustainable and inclusive growth path.

As per the report, economic activity in the tourism sector will remain weak and remittances inflows will be moderate. Supply chain disruptions will keep industrial and agricultural production low.

“Low economic activity and oil prices will also keep imports low and below the pre-crisis levels, leading to a projected narrowing of the current account deficit to 6.5 per cent of GDP. Lower imports will continue to limit revenue collection,” read the report.

However, fiscal measures announced as part of the FY2021 budget, including a revision of custom duties, will provide some support to the budget as spending levels on relief and recovery efforts remain elevated, said the bank.

Published in The Rising Nepal daily on 24 July 2020. 

NC leaders back private schools’ demands

Kathmandu, July 22

The main opposition party in the Federal Parliament, the Nepali Congress, has expressed serious concerns over the challenges faced by the private schools during the COVID-19 pandemic and urged the government to support them.

In an interaction on the ‘impact of COVID-19 on private schools, status of investment and way forward’ with more than 50 private schools from the Kathmandu Valley, the NC said that the government should correct its perception towards the commercial education institutions.

Investment, Infrastructure and Employment Committee of the party has organised the interaction expressing its concerns over the plight of the school operators and their investments. Joint-coordinator of the committee Umesh Shrestha said that government had exhibited indifference to the businesses with Rs. 600 billion investment and 200,000 jobs.

“Since the government has not paid attention to the survival of the employees of the sector, the private schools should plan to run the classes with the implementation of health and safety protocols,” he said.

Coordinator of the committee and lawmaker Binod Chaudhary said that the private educational institutions had contributed to the development of human capital, even greater than the community schools. “It is sad that they are not allowed to run the online classes even during the COVID-19 pandemic,” he said.

Chaudhary stated that the private schools have developed into a service industry therefore there shouldn’t be any obstruction to their growth and development instead the community schools should be made competitive with the former.

“We demand the same treatment from the government to the education as it has pledged the hospitality sector,” he said.

The operators of the private schools blamed the government for the illiberal stance to them. “We were charging minimum tuition fees and operating online and television classes for our students but since the government barred us from charging any fee during the lockdown, we have terminated the facility,” they said.

They have stopped the online classes since July 16.

According to them, the jobs of teachers and support staff are in crisis. They asked the government to announce the date when they could open the admission.

President of Private and Boarding Schools Organisation Nepal Tika Ram Puri said that while the universities and colleges had also running online/digital classes, the government had barred the private schools for the same.

He said that the trade union in schools should be discouraged and demanded that the operators should have the right to fire the staff with appropriate compensation. “Students of private schools should also get the opportunity of government scholarships in higher education,” said Puri.

Likewise, President of Naional-Private and Boarding Schools Organisation Nepal Ritu Raj Sapkota said that the private schools were becoming unable to manage the rent of house and lent, cost of electricity and water, and salary of teachers and staff members.

“Barring us from running online classed by charging minimum tuition fee is an injustice,” he said.

Published in The Rising Nepal daily on 23 July 2020.

NRB announces refinancing procedures

Kathmandu, July 21

The Nepal Rastra Bank has set the period and ceiling of the refinancing facility to the businesses and industries affected by the COVID-19 pandemic.

Refinancing facility provided to the banks and financial institutions (BFIs) by the NRB would be repaid within a year’s period and would not be renewed, according to the Refinancing Procedures, 2020 published by the central bank on Tuesday.

The enterprises severely affected by the crisis should repay the loan obtained under the refinancing facility within a year while businesses affected moderately or minimum should clear it within six months. Such loans can be renewed as per the Nepal Rastra Bank Act, 2002.

Likewise, the BFIs can ask the central bank for as much as Rs. 50 million refinancing per client and the amount must not exceed 70 per cent of the total refinancing facility margin.

The BFIs can lend up to Rs. 200 million refinancing for each client but it should be just 20 per cent of the total eligibility while the class ‘D’ microfinance institutions can only offer 10 per cent of such finances.

In its Monetary Policy for the current fiscal year 2020/21, the central bank has categorised the refinancing facility under three topics: micro, cottage and small enterprise (MCSE) refinancing, special refinancing and general refinancing with 2 per cent, 1 per cent and 3 per cent interest rate to the BFIs. The clients will be charged the interest rate of 5 per cent, 3 per cent and 5 per cent respectively.

The MCSE refinancing is for the enterprises with Rs. 1.5 million loan that are in operation or shut down due to the pandemic or natural disaster but have potential to revive. It also applies to the loans mobilised to the foreign returnee entrepreneurs, agricultural products and processing industries, animal husbandry, hatchery and fisheries, and agricultural input production and distribution.

Similarly, special refinancing will be provided to the loans obtained by the export-oriented industries in operation, disabled, women, indigenous, Madhesi and Dalit entrepreneurs, foreign migrant workers, and sick industries or areas affected by the natural disasters.

General refinancing is for the loans for broader sectors like infrastructure projects such as hydroelectricity, aviation, manufacturing industries, tourism development, transportation and waste management. Enterprises in agriculture, livestock, fisheries, construction, pharmaceuticals and others are also eligible for this category.

Entrepreneurs seeking the facility should submit the documents including detailed financial reports while the BFIs should verify whether the financial report submitted to the bank matches with the one submitted to the Inland Revenue Offices, debt to equity ratio is as per the NRB standards, whether the business can contribute to the national economy and the refinancing could be repaid in time.

The clients must declare if they had obtained the refinancing facility before.

However, the companies that are declared sick by the bank, have not completed a year’s period after getting out of the sick category, and not fulfilled the minimum capital fund or paid-up capital provisions will not get the facility.

The facility can equally contribute to the revival of the industries affected by the coronavirus pandemic even in the remote areas as the procedure has made it mandatory for the banks that every branch of the bank must include at least five customers from each of its branch.

Likewise, the banks are also directed to make the list inclusive in terms of gender, geography, ethnicity and other parameters.

Published in The Rising Nepal daily on 22 July 2020. 

Central Banks changes name of its departments

Kathmandu, July 21

The Nepal Rastra Bank has changed the name of its seven departments from the beginning of the current fiscal year 2020/21.

The General Services Department is renamed as Assets and Service Management Department (ASMD), and Research Department as the Economic Research Department (ERD), according to a notice published by the NRB on Tuesday.

Microfinance Promotion and Supervision Department has got a new name Microfinance Institutions Supervision Department (MFISD) while Corporate Planning Department is changed into Corporate Planning and Risk Management Department (CPRMD).

Likewise, the banking sector regulator has rebranded the Banking Office as Banking Department (BD), Information Technology Department as Information Technology Division (ITD) while the offices outside the valley will be called Provincial Offices.

Spokesperson of the central bank Dr. Gunakar Bhatta said that the names were adjusted as per their nature of work.

“Some names sound too conventional so they have been changed as per the current duties and market demands,” he said.

Published in The Rising Nepal daily on 22 July 2020. 

iPhone SE 2020 launched in Nepal

Kathmandu, July 21,

Generation Next Communications, authorized distributor for Apple in Nepal, has officially launched iPhone SE 2020 in Nepal.

The sole distributor of Apple iPhones and Apple products in the country said that the phone is available in 64 GB, 128GB and 256 GB in Black, White and Red color options. The price of these three cellphones are set at Rs. 70,000, Rs. 79,500, and Rs. 96,000 respectively.

The company has urged the customers to buy genuine Apple products from authorized channels and ask for original VAT bill and 1 year warranty on all products.

“Be aware and make sure that you are paying only for original products to receive standard product warranty. Gray phones are illegally imported into country and are overpriced. It comes without warranty and moreover with low quality substituted internal parts,” is said.

Published in The Rising Nepal daily on 22 July 2020. 

FNCCI, CII stress on greater bilateral business cooperation

Kathmandu, July 21

The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has stressed on stronger collaboration and cooperation with the Confederation of Indian Industries (CII) in the aftermath of the COVID-19 crisis.

“The global economic outlook will see a revolutionary changes in the aftermath of the pandemic, therefore we must enhance our ties,” said Bhawani Rana, President of FNCCI, in a webinar on Business Meeting on Enhancing Trade and Investments between Nepal and India jointly organised by the two business bodies.

Saying that the young demographics and natural resources were the largest strengths of the two neighbours, she stressed on the maximum utilization of these resources to achieve economic growth and prosperity.

Kapidhwaja Pratap Singh, Second Secretary of Commerce and Commercial Representative at the Embassy of India, Kathmandu, pledged the support of the Indian mission in Nepal for the enhanced relations and cooperation between the FNCCI and CII.

Harvinder Manocha, Co-chair of CII South Asia Committee and Chief Operating Officer of Hudry Business of the GMR Group, said that to minimise impact of the coronavirus pandemic the business communities of the two countries must devise effective strategy for mutual economic cooperation, trade and investment.

EVP and Head of GMR Energy Ashok Kumar Prusty, President of Kalpataru Power Transmission Rakesh Gaur, Country Head of Nepal and Bhutan of Mahindra Chaitanya Kagalkar and Managing Director of Nepal SBI Bank Anukool Bhatanagar had expressed their views from the CII.

Likewise, Working Committee Member of FNCCI Ananda Bagaria, Senior Vice-president of the Federation of Contractors Associations of Nepal (FCAN) Nicholas Pandey, and President of Hotel Association of Nepal Srijana Rana talked on infrastructure, energy, agriclturue, manufactureing and service sector.

Published in The Rising Nepal daily on 22 July 2020. 

SEBON to devise 4-year plan to develop capital market

Policy and Programmes for Securities and Commodities Market

Kathmandu, Jul 19

The Securities Board of Nepal (SEBON) has announced that a four-year strategic plan would be formulated for the development of the securities and commodities market in the country.

"The four-year strategic plan will be implemented for the step-wise development of the capital market," the SEBON said in its Policy and Programmes of the Securities and Commodities Market for the Fiscal Year 2020/21.

Cycle of transaction clearance will be reduced from 'T plus 3' to 'T plus 2' in the current fiscal year. T plus 2 means the securities transactions would be cleared within two days of the securities trading which means the traded securities are deposited in the account of the buyer only in the second day of the transaction. Currently, the securities transactions are cleared within three days of the trading.

Likewise, SEBON Chair Bhisma Raj Dhungana said that the share transaction would be fully automated within this year by synchronising the investors' bank account and Dmat account.

The capital market regulator has unveiled plan to promote and facilitate the real sector companies' entry to the share markets, invite strategic partner at the Nepal Stock Exchange Limited and implement structural reforms, and give licenses to the commodity exchanges.

"Commodities exchange company will be established as per the legal provisions and licenses will be given to the commodity trading companies," read the policy and programmes.

The SEBON had almost completed the process to establish two commodities trading companies in the last fiscal but it scrapped the process, for the second time, and has announced another process for the same.

Likewise, framework and formats required for the companies listed at the NEPSE, and share brokers to submit the transactions and other details to the SEBON would be developed in coordination with the Institute of Chartered Accountants Nepal (ICAN). Nepal Financial Reporting Standard would be implemented in the share market.

A separate SME trading platform for the small and medium enterprises and Main Board for other companies will be developed in the share market. NEPSE will get necessary support from the board in implementing the new trading facility.

The SEBON has also announced plan to create provision to completely dematerialise the listed government bonds and activate their transaction in the secondary market, provide license to a stock dealer to increase the size of transaction and maintain price stability in the secondary market, and run specialised investment funds such as private equity fund and venture capital.

Similarly, a centralised KYC (Know Your Customer/Client) Management would be established through the CDS and Clearing Limited for the effective management of the customers of the securities market.

"A draft of Trust Act will be created for the long-term development of the market and will be submitted to the Ministry of Finance. To make the board a powerful regulator of the capital market, Securities and Exchange Board of Nepal Act will be drafted," read the policy. A bylaws related to bond market will also be formulated to make the secondary market of the bonds more robust and developed.

The SEBON has also announced that it would discourage the insiders' trading in the share market, and book building system will be implemented by creating a directives.

In the last fiscal, the share market in the country witnessed the capital mobilisation of Rs. 33.65 billion through the Initial Public Offerings (IPOs), bonds, mutual funds of 34 companies. Bonus shares of 99 companies worth Rs. 33.67 was registered at the board.

The total securities market capitalisation has reached Rs. 1792.7 billion by the end of the last fiscal year. There are 212 companies listed at the NEPSE and the number of securities is 4698 million. This is 12.17 per cent higher than the previous fiscal year 2018/19.

Published in The Rising Nepal daily on 20 July 2020.