USAID's Rs. 18 billion grant to be disbursed soon

Kathmandu, Apr. 16

After about one-and-a-half months of the ratification of the Millennium Challenge Corporation (MCC)'s grant assistance, the United States of America has decided to provide US$ 659 million (Rs. 79.71 billion) grant support to Nepal for development programmes identified by the latter.

Cabinet had decided to accept the support on Wednesday.

The development assistance will be provided to Nepal through the USAID over five-year period, and Rs. 18 billion of it will be disbursed immediately. According to the Ministry of Finance (MoF), a meeting will be held within a week to release the money.

This is the largest ever grant support extended to Nepal by the USAID. "It is the largest grant support provided to Nepal by any donor agency. Nepal had obtained a large-scale loan support prior to this," said Ishwori Prasad Aryal, Chief of the International Economic Cooperation Coordination Division at the MoF.

This support marks a significant shift in Nepal-USA cooperation as the grant will be mentioned in the annual budget of Nepal and the financial activities will be audited by the Auditor General here.

So far, the US grant support has been mobilised by the USAID in the areas prioritised by it. "This is a framework agreement and we will jointly select the programmes primarily in the social sectors like education, health, disaster management and utilisation of natural resources," said Aryal. Infrastructure development in these areas could also be developed through the grant, he added.

According to him, the details of programmes and implementation modalities are being finalised and the MoF will soon publish it.

Representatives of Nepal government and USAID had rigorous discussions for about eight months to finalise the modality of the framework of the support.

The support will be provided to Nepal from 2022 to 2027. Meanwhile, the MoF said that the USAID could increase the support and make it US$1 billion.

In 2019/20, the USA had provided about Rs. 15.5 billion support to Nepal. Earlier in February, Nepal had ratified the US$ 500 million MCC grant for Nepal Compact that would be mobilised in the development of cross-border transmission lines and upgrading of national highways.

The MCC is a five-year grant and in case of inability to spend it, the remaining support would be returned to the USA.

According to USAID's Country Development Cooperation Strategy 2020-2025, it will make significant investments to increase self-reliance, prosperity, and inclusiveness that will advance Nepal's development trajectory and allow it to make impressive development gains.

It includes building capacity and institutions necessary the journey to self-reliance, and advancing federalism, democracy and human capacity. 

Published in The Rising Nepal daily on 17 April 2022. 

Nepal for furthering SAARC process

Kathmandu, Apr. 13

The Ministry of Foreign Affairs (MoFA) has said that Nepal is putting its efforts to further the process of the South Asian Association for Regional Cooperation (SAARC).

"As the current chair of the regional association, Nepal wants to continue the SAARC process," Spokesperson of the MoFA, Sewa Lamsal said at a press meet organised by the ministry.

Nepal is the chair of the SAARC since November 2014. Prolonged tensions between India and Pakistan has disturbed the SAARC process and the organisation has failed to organise regional summit since 2014. The last summit was held in Kathmandu.

Likewise, Lamsal said that Nepal and Bangladesh are planning for the secretary-level meeting which would be held soon.
The two countries are doing homework to finalise agenda for the meeting.
"Agenda are yet to be set. However, trade, energy, investment, high-level exchange as well as exploiting trade and business opportunities wi be priority agenda," said Lamsal.

Similarly,  Bangladesh and Nepal are strengthening climate change cooperation.
We are also studying Bangladeshi model for LDC graduation, she said.
Bangladesh is graduating from the Least Developed Countries (LDCs) in 2026. Since Bangladesh is faring better than Nepal in terms of business development, investment attraction and economic progress, the latter can learn from it.
Meanwhile, Nepal and Bangladesh are celeberating golden jubilee of their diplomatic ties. Presidents and prime ministers of both the countries have recently exchanged congratulatory notes.

Published in The Rising Nepal daily on 14 April 2022. 

Govt for proper utilisation of land: PM Deuba

 Kathmandu, Apr. 14

Prime Minister Sher Bahadur Deuba has said that the government was taking special initiative for proper utilization of land.

Addressing the centenary celebrations of land registration in the land administration on Thursday, he informed that the land use regulations for the protection of land are in the stage of approval and will be approved soon.

"It is necessary to make the land administration clean, transparent and systematic by resolving the problems seen in the land administration," he said.

The land registration was approved on the first day of the Nepali New Year a century ago.

PM Deuba said that the government has accorded a high priority to solving the problems of landless squatters, Dalits and unorganized settlers.

he said the government was moving towards implementing the issues ensured by the constitution including providing access to agricultural land to farmers, managing landless squatters, freed Kamaiyas, Haliyas and unorganized settlers.

According to PM Deuba, National Land Commission has been formed to solve the problems of landless squatters, dalits and unorganized settlers across the country forever. The commission has already started the work of identification, verification and registration of landless people in different places and distribution of spare parts.

He also showed concerns over the decline in production and growing food insecurity due to improper use of land, widening trade deficit caused by agricultural imports, growing trend of government land encroachment, and impact of climate change.

Speaking on the occasion, former PM Jhala Nath Khanal stressed on the need to pay special attention to modernise the land administration with the adoption of technology, and consolidate the land to solve the land and people's land related problems.

He said that Nepal's border was yet to be finalized, so it is necessary to mark it scientifically through diplomatic initiative.

Minister for Land Management, Cooperatives and Poverty Alleviation (MoLMCAP), Shashi Shrestha said that work has already started to make the services at the land administration user-friendly. "We have given special emphasize on the use of technology in service delivery," she said.

Minister Shrestha said that land use regulations are being passed to protect the cultivable land which is rapidly declining due to uncontrolled urbanisation and destruction of productive land. The regulations will help in the consolidation and protection of agricultural land, increment in agricultural produces and productivity, and creation of jobs.

She said that work has been started to solve the land related problems of landless Dalits, squatters, unorganized settlers as well as Haliya, Kamaiya, Kamalari, Harwa, Charwa, and Badi community.

He also said that an interaction and discussion has been held with the stakeholders for the drafting of Guthi Act and the law is being drafted in such a way that everyone can take ownership of it.

Secretary of the MoLMCAP, Ram Prasad Thapaliya said that special emphasis has been laid on the use of new technologies to make the land administration sector more effective and customer-friendly.

Published in The Rising Nepal daily on 15 April 2022. 

EPS agreement to be renewed soon

 Kathmandu, Apr. 12

Ambassador of South Korea to Nepal Park Chong-suk said that necessary preparations will be made to renew the Employment Permit System (EPS) agreement with Nepal as soon as possible.

During a courtesy call on Minister for Labor, Employment and Social Security, Krishna Kumar Shrestha on Tuesday, he said to expedite the work to renew the agreement which is the process since 2020.

Minister Shrestha had urged Ambassador Park to conclude the bilateral agreement on the EPS.

The last bilateral agreement on the EPS between Nepal and South Korea signed in 2007 was last renewed in 2018 and has been in the process of renewal since 2020.

Minister Shrestha had requested the ambassador to make arrangements to take 10,000 Nepalis who have passed the Korean language test to Korea, and increase the quota for Nepal under the EPS.

South Korea has been taking Nepali workers since 2008 by allocating quotas. Under the EPS system, foreigners from 16 countries take the Korean language test for employment and work in Korea. Ambassador Park said that the South Korean government is positive to increase the number of Nepali workers under EPS.

Stating that 2,000 Nepalis who passed the language test under EPS in 2018 could not participate in the process due to the expiration of their stay in the roster, Minister Shrestha requested to extend the deadline and include them in the process. He said that the ministry is making preparations to start language test for those going to South Korea for employment under the EPS from May 30 this year.

He also urged Ambassador Park to include the Nepali flag carrier Nepal Airlines Corporation to be listed in Korea since a large number of Nepalis go to the country for employment. It will make air fares cheaper. Minister Shrestha also informed that Nepal Airlines Corporation was trying to operate Kathmandu-Korea flight.

On the occasion, the minister also expressed interest in the opportunity for seasonal workers in South Korea. He said that the government is ready to move ahead by maintaining policy clarity on the issue.

He also requested South Korean support for the ministry's plan in establishising skill development training in provinces as well. 

Published in The Rising Nepal daily on 13 April 2022. 

Price of oil, vegetables, milk products goes soaring

 Kathmandu, Apr. 13: 

The economic crisis has its toll on price inflation of goods and services.

Consumer price inflation more than doubled to reach 7.14 per cent in the eighth month (mid-March) of Fiscal Year 2021/22 compared to 3.03 per cent a year ago, according to the Current Macroeconomic and Financial Situation report of the Nepal Rastra Bank (NRB).

Food and beverage inflation stood at 7.51 per cent whereas non-food and service inflation stood at 6.84 per cent in mid-March. In mid-April 2021, food and beverage inflation was 3.80 per cent and non-food and service inflation stood at 2.42 per cent.

Price of ghee and oil went up by 26.34 per cent, vegetable by 13.96 per cent, milk products and eggs by 11.30 per cent, and pulses and legumes rose by 10.30 per cent on year-on-year basis.
Likewise, under the non-food and services category, the prices of transportation, miscellaneous goods and services and education sub-categories rose by 16.27 per cent, 9.01 per cent and 8.79 per cent respectively.

In the review month, hill area experienced the highest inflation of 7.69 per cent. The Kathmandu Valley, Terai and Mountain witnessed inflation of 6.31 per cent, 7.36 per cent and 7.56 per cent respectively. Inflation in these regions was 2.50 per cent, 3.25 per cent, 3.40 per cent and 1.31 per cent respectively in mid-March 2021.

Remittances continue to slump
Remittance inflows decreased by 1.7 per cent to Rs. 631.19 billion by the end of the eighth month of the fiscal year against an increase of 8.7 per cent of the previous year.
Number of Nepali workers taking approval for foreign employment increased significantly to 227,900 in the review period. It had decreased by 82.9 per cent in the same period of the previous year. The number of Nepali workers taking approval for making re-entry for foreign employment increased by 240.9 per cent to 178,262. It had decreased by 70.2 per cent in the same period of the previous year.

Net transfer decreased by 2.0 per cent to Rs. 704.33 billion in the review period. Such a transfer had increased by 7.2 per cent last year.

Current account deficit reaches Rs. 463 billion
The report states that the current account remained at a deficit of Rs. 462.93 billion in the eighth month of this year compared to a deficit of Rs. 151.42 billion in the same period of the previous year.

Likewise, capital transfer decreased by 41.2 per cent to Rs. 7 billion and net foreign direct investment (FDI) increased by 60.0 per cent to Rs. 16.30 billion. In the same period of the previous year, capital transfer and net FDI amounted to Rs. 11.91 billion and Rs. 10.18 billion respectively.

BOP deficit continues to grow
Balance of Payments (BOP) remained at a deficit of Rs. 258.64 billion against a surplus of Rs. 68.01 billion of the previous year.
Similarly, gross foreign exchange reserves decreased by 16.3 per cent to Rs. 1171 billion in mid-March 2022 from Rs. 1399.03 billion in mid-July 2021.
The central bank said that based on the imports of eight months of 2021/22, the foreign exchange reserves of the banking sector is sufficient to cover the prospective merchandise imports of 7.4 months, and merchandise and services imports of 6.7 months.

Similarly, deposits at Banks and Financial Institutions (BFIs) increased by 4.1 per cent in the review period compared to an increase of 11.0 per cent in the corresponding period of the previous year.
Private sector credit from BFIs increased by 12.8 per cent this year compared to an increase of 17.4 per cent last year. 

Published in The Rising Nepal daily on 13 April 2022. 

Awasthi appointed DG of FNCCI

Kathmandu, Apr. 12

Gokarna Raj Awasthi has been appointed as the Director General of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI).

He is serving the organisation as the Deputy DG until now.

The ninth meeting of the executive committee of the FNCCI on Sunday had decided to appoint him to the post.

Awasthi, who holds a Master's Degree in management from the Tribhuvan University, has a diploma in Development Journalism from the Indian Institute of Mass Communication.

He is well-versed in economics, private sector, sustainable development and other issues, and was earlier the chairman of the Nepal Economic Journalists' Society (SEJON) and the economic editor of Kantipur daily. He has been an economic journalist for more than two decades and also has experience working as an advisor to the United Nations Sustainable Development Goals.

Published in The Rising Nepal daily on 13 April 2022. 

Public-private partnership vital for development: Speaker Sapkota

Kathmandu, Apr. 11

 Speaker of the House of Representatives of the Federal Parliament, Agni Prasad Sapkota, has said that Nepal was bestowed with natural resources and immense potential but it lacked willpower, commitment and vision to exploit them.

"We have been putting our efforts to achieve  the short-term goals while long-term policy, planning and development have been largely ignored," he said while addressing the inaugural session of the 57^th annual general meeting of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), and Industry and Commerce Day, 2022 in Kathmandu on Monday.

Stating that the country was facing an economic challenge, Speaker Sapkota said that a joint effort by the government and private sector should be launched to resolve it.

"They are the two wheels of a chariot in terms of leading the country on the path of economic development. Since economic development cannot  happen without the participation of the private sector, the government must take their demands seriously," he said.

He also said that a good entrepreneur is a good leader. Saying that it is not easy to do business, he suggested continuing public-private dialogue to improve business and investment environment in the country.
Speaker Sapkota said that the private sector should always be given high priority in consideration of  their contribution to  the country's economy, employment, capital formation and investment attraction.

FNCCI President Shekhar Golchha urged the government to make the investment process easier.

"We invest, make the process simple. We produce, don't interrupt. We provide employment, don't strike. We export, encourage. We bring tourists, welcome. We pay the revenue, don't let us be insulted," he said.

Since Nepal's upgrade from the Least Developed Countries in 2026 will affect international trade, especially exports to Europe, the United States and Canada, Golchha urged the government to take proactive steps to support the businesses in export promotion.

"We want the policy to be formulated with the cooperation of the government and under our leadership as the private sector will be most affected by the upgrade," he said.

Expressing concerns over the growing gap between remittance inflows and trade deficit which has reached Rs. 475 billion, he said that remittances can no longer cover the losses.

Likewise, FNCCI Senior Vice President Chandra Prasad Dhakal said that Nepal has about 57 per cent working age people, and it must utilise the strength for economic development.

"If we do not make full use of it within the next few years, there will be more difficult days for us," he said.

He expressed worries over the recent irregular supply of electricity. He said that the discount given on hydropower should also be available to the indigenous investors. Likewise, government facilitation is needed in tourism infrastructure, and the sector requires revenue exemption.

Likewise, according to him, revenue rebates and other facilities are required for the revival of entertainment sector including movies.

On the occasion, senior expert of the FNCCI, Hansa Ram Pandey, and office assistant Shri Krishna Shrestha, who have been serving the federation for 25 years, were honoured with cash and certificates.

Published in The Rising Nepal daily on 12 March 2022.