FNCCI, TiE sign MoU to bolster entrepreneurship

The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) on Sunday signed a Memorandum of Understanding (MoU) with The Indus Entrepreneurs (TiE) to bolster entrepreneurship in the country by encouraging foreign entrepreneurs to start business here.
The MoU will pave the way for tapping ideas from global entrepreneurs and to use the network of TiE for entrepreneurial development in Nepal, FNCCI President Suraj Baidhya said.
Baidhya and Nikesh Sinha, charter member of TiE, signed the MoU on behalf of their respective organizations.
TiE is a group of successful entrepreneurs, corporate executives and senior professionals with roots in the Indus region. Started in 1992, it currently has 13,000 members, including 2,500 charter members across 14 countries.
"Nepal can benefit from the global connect program of TiE," Sinha said after signing the MoU. "The recent positive political developments and success of constitution writing process will create a favorable environment for investment in Nepal."
Larraine Hariton, special representative for commerce and business affairs of US Department of State, was also present in the MoU signing ceremony.
"This MoU can help identify promising entrepreneurs in Nepal and attract more international investors here," Hariton said, adding: "Time has come for the government of Nepal and private sector to work together in order to boost the country´s economy."

Developed countries agree to address LDCs woes multilaterally

The developed countries have pledged to work together with the least developed countries (LDCs) under the multilateral approach to advance and halve the number of LDCs by 2020.
The developed countries expressed such a commitment during the 13th United Nations Conference on Trade and Development (UNCTAD), which concluded in Doha, Qatar on Friday. They made such announcement after the conference strongly flayed their approach to deal with LDCs bilaterally, something which has weakened multilateral initiatives in recent years.
"The bilateral approach is a bias one," the Conference has concluded and urged the developed country to switch back to multilateral approach, referring that difference in size and capacity largely disables LDCs from enjoying fair say in bilateral deals. "Only multilateral approach can address the problems that the world is facing now," the 6-day long conference declared at the end of the meeting.
The conference adopted an outcome document termed as Doha Mandate, which was prepared after lengthy intergovernmental negotiation for months, to guide the global leaders for the coming four years to address the multitude of challenges facing the world. There are around 13 multilateral including the UN and more than 50 bilateral donor agencies working in Nepal.
Shanker D Bairagi, permanent representative of Nepal to the United Nations and Other International Organizations in Geneva, in his address as the coordinator of the LDCs highlighted the role the UN can play to address the global problems. Nepal is the chair of the all 48 LDCs and around 70 million people live under the extreme poverty in these countries.
“The conference helped to identify the structural constraints and vulnerabilities, and garner international support for addressing those constraints in the LDCs,” Bairagi said at the closing plenary of the conference.
Referring to the last minute agreements on a number contentious issues, Bairagi stated that the consensus in Doha was the manifestation of the collective commitment of the international community to work for a better future for all.
Bairagi expressed the hope that the conference´s outcome will contribute meaningfully in the process of implementation of the Istanbul Program of Action for the LDCs -2010, which envisions enabling half of the LDCs to reach the level of graduation from the LDC category by 2020.

WTO urges effective use of EIF

World Trade Organization (WTO), which initiated Enhanced Integrated Framework (EIF) to advance the trade of least developed countries by removing supply-side constraints, has warned that LDCs themselves were responsible to use the EIF to better address their weaknesses and utilize strengths.
Pascal Lamy, director general of the WTO, has asked LDCs to work themselves to fully utilize the EIF process.
“They have to use the EIF as a platform to solidify trade within their national development plans and priorities,” Lamy said in high level meeting in Doha, Qatar last week. He urged LDCs to leverage additional Aid for Trade (AfT) support to consolidate current efforts. Government of Nepal is also one of the recipients of the EIF facility.
The EIF is about placing trade as an engine of growth, poverty reduction and employment by creating a platform where demand and supply of trade-related assistance can be expressed and bridged. In Nepal, the Ministry of Commerce and Supply (MoCS) is implementing the EIF program. 30 out of the 46 EIF beneficiary countries have accessed for Tier 1 project funds for institutional capacity building to support National Implementation arrangements. Furthermore, four Tier 2 projects have been approved and an additional ten Tier 1 and 26 Tier 2 projects are in the pipeline.
Nepal is implementing the Tier 1 and is preparing to access for Tier 2 of EIF, which provides increased, predictable and additional funding on a multi-year basis. It helps build strategy for the national development -- Nepal Trade Integrated Strategy (NTIS) -2010, a blueprint to boost the export of the country was prepared under the EIF process.
The EIF will undertake its mid-term review later this year. “This independent process will provide an assessment of how the EIF has been delivering on its mandate,” Lamy said. “For the EIF to continue to deliver; it will need continued commitment from the LDCs and commitment from development partners as well on the sustainability of funding.” He further requested developed countries to invest in trade capacity.
Lamy also urged UN, World Bank, IMF, and the WTO to support these processes and LDCs. “LDCs are an integral part of the WTO and they stand to lose more than any other member if the current stalemate in the Doha Development Agenda is not resolved,” Lamy said, pushing for the earliest resolution of the stalemate.

Chinese red tape negating zero-tariff facility: Report

For long officials beleived zero-tariff facility pledged by China for 4,000 Nepali goods would boost the country´s export to the northern trading partner, but a latest study has reckoned that letter of exchange (LoE) that Nepal signed with China in 2010 itself has turned out to be a major barrier to export growth.
"Under the LoE, Nepali exporters are required to stringently comply with all relevant domestic procedures if they want to export their goods under duty-free facility. This has subjected Nepali traders to a vast bureaucratic maze, constraining our exports growth," reads the report.
The report based on a study conducted by South Asia Watch on Trade, Economics and Environment (SAWTEE) says that under the Chinese rules, only goods having local value addition of 40 percent in manufacturing country (Nepal in this case) can enjoy zero-tariff facility.
"The existing list of duty-free exportable items included in the bilateral agreement includes only one-third of Nepal´s exportable items to China. And unfortunately, even they are facing trouble in getting the facility," says the report. The report even notes that the Chinese government, despite all promises of favorable trading environment, has been imposing multiple tariff and non-tariff barriers.
The report lists out a number of hassles faced by the Nepali exports. Of them, major barriers to export are lack of information sharing, lengthy procedures, multiple paper works, and the lack of recognition of the Nepali quarantine certificates by Chinese authorities.
The report, which analyses Nepal-China trade keeping it in a bigger framework of the Nepal´s international trade, says that Nepal´s performance on trade with China is far worse than the country´s overall international trade.
For instance, Nepal´s export to import ratio in 2003/04 was 39.7 percent, while China´s was 22.2 percent. But by 2010/11, these fell to 16.3 percent and 2 percent respectively.
The report also sheds light on the flip side of bilateral trade with China and says that import from China was also not healthy for the economy, raising question over the quality of Chinese products.
The trade balance with China is not in favor of Nepal as the government has not been able to work efficiently even when it comes to following up on implementation of bilateral agreements.
"Even though existing bilateral agreement on Mutual Recognition asks the Chinese authorities to recognize food and other goods quality certification issued by Nepali labs, China has largely overlooked this provision," says the report.
Interestingly, the report also highlights poor road conditions and transport syndicates as another major hurdle to giving impetus to exports to China. It urges the government to take immediate steps to scrap transport syndicates.
The report also asks the government to work out a formal payment modality for bilateral trade and push China to include more items of Nepal´s export interest in the facility list, among others.
The report has identified 20 goods possessing high export potential in the Chinese market. They include vegetable, iron and steel, tea, juice and lentils. The report has suggested to the private sector to make serious efforts toward tapping potential of those products.
It has suggested to the private sector to brand products and urged the government to construct dry ports along the northern customs points to facilitate bilateral trade.

Intellectual Property Day marked

Concerned stakeholders have expressed worry over the government´s inability to implement laws related to protecting the intellectual property rights (IPR) in the country.
Representatives from different sectors shared their knowledge about the laws related to intellectual property and their practice in Nepal at an interaction program organized by Nepal Copyright Register´s Office (NCRO) in association with Society of Economic Journalists to mark the World Intellectual Property Rights Day.
The participants, who represented different sectors such as music, publication and production companies, expressed grave concern over the government´s inability to implement the existing laws on protecting the IPR.
“There is a massive misuse of IPR in Nepal though the laws of the country treat such activities as a criminal act,” Bisu Kumar KC, registrar of the NCRO said at the interaction. “IPR is not just an issue of morality and ethics, it is also a major instrument to establish the economic rights of innovators and producers.”
While there are no authentic statistics available in our country showing the benefit of protecting IPR, developed countries have seen significant gain in their gross domestic productions resulting from IPR protection.
The IPR day was first celebrated in 1970. Since then it is observed all over the world each year to respect the economic rights of innovators.

Investment Board yet to get concrete shape

The government has failed to give the Investment Board -- a high-level agency entrusted the responsibility of carrying out the ambitious plan of attracting foreign investment for mega projects - a complete shape even though less than three months remain for the Investment Year 2012/13 to kick off.
The board even does not have a full-fledged office and adequate human resources to run its daily operations. Furthermore, he government has been failing to approve the Investment Board Regulation (IBR), a prerequisite to implement the Investment Board Act (IBA) 2011.
The delay in approval of the regulations has been reflected in the board´s daily works. The board cannot recruit staffers and expand its areas of operations without approval of the regulations.
The board of the IB, which is chaired by the Prime Minister, appointed Radesh Pant to the post of CEO about six months back. According to Pant, the board immediately needs 4-6 staffers.
The regulation, whose draft was prepared about one and half months ago, has yet to be approved. “The draft has been finalized. I think it will be approved within a week,” Pant said.
Interestingly, Pant had told the same thing to this scribe around three weeks ago. He, however, refrained from making comment when asked what is hindering the approval of the regulation.
Ironically, the board, which has the responsibility of formulating policies to create investment friendly business climate and selecting priority areas for investment, is failing to get its regulations approved by the government.
According to Pant, the board is working on institutional development, project management and investor services, resolving specific investors´ problems and making necessary preparations to start Investment Year from mid-July.
More than a dozen investors from countries like China, Japan, Germany and India have already approached the board in order to know about the prospects of making investment in Nepal.
Officials at the Prime Ministers´ Office say the board must have something in hand like a compilation of projects for which the government is looking for foreign investment. “The office and human resource in the board should be sound, modern and dynamic since this is the first door where all the investors come to knock first,” an official at the Prime Minister´s Office said, preferring anonymity.
The board plans to bring investment worth US$ 1 billion in the first six months of 2012/13.

Nepse hits 13-month high

Nepal Stock Exchange (Nepse) index hit 13-month high, gaining 21 points to close the day´s trading at 409 points on Wednesday, after investors showed more confidence in the market and put their money on shares of banks and hydropower companies.
The rejuvenation of the market, which grew by 5.43 percent, caused total market capitalization to jump to Rs 386.63 billion. The turnover at Nepse touched Rs 54.17 million on the day, when a total of 145,289 shares changed hands through 453 transactions.
Officials attributed the Nepse´s massive rebound to sharp rise in transactions of shares of banks, hydropower companies and development banks.
Index of banking sector, which commands lions share in the stock market, had risen by 30.96 points on the day, recording 8.34 percent growth over previous day´s closing and closed at 402.3 points on Wednesday.
Likewise, the hydropower sub-index rose by 40.69 points to close at 633.82 points. The sub-index of Development Bank too increased by 2.14 percent to end the day´s trading at 262.62 points.
Standard Charted Bank, Grand Bank Nepal, Bank of Kathmandu, Citizens Bank and Sunrise Bank were the top gainers of the day. Share prices of Standard Chartered Bank increased by 10 percent to Rs 2,178 on the day. Similarly, share values of Grand Bank also rose by 10 percent to Rs 231, while Bank of Kathmandu saw its share price jump by 9.98 percent to close at Rs 694 per unit.
Despite the rebound, the sub-index of finance company slid by 0.26 percent and closed at 260.91 points.

Nepal-India crafts festival from Friday

Nepal is hosting a week-long Nepal-India Crafts Festival (NICF) from Friday in order to enhance bilateral relationship between the two countries in the field of arts and crafts.
The festival will have more than 20 stalls from Nepal and India and will showcase the crafts and products which inherit the cultural and historical meaning of the two countries.
South Asia Foundation (SAF) in association with Embassy of India, state government of Goa and Nepal Tourism Board are jointly organizing the festival, according to Apoorva Srivastava, an official of the Indian Embassy in Kathmandu.
“The festival will open an opportunity for craft exchange program between Nepal and India,” Srivastava told a press meet in Kathmandu on Wednesday. “Nepal has a very rich crafts tradition and this festival will also provide a platform to the artisans from Nepal and India to exchange ideas and explore larger cooperation.”
According to a press release issued by the Embassy of India in Kathmandu, Goa will be the focus state of India for the festival. The festival will see 25 crafts persons from Goa.
The festival aims to tie up effective and comprehensive collaboration between Nepal and India for a larger participation in the field of arts and crafts.

Surya Nepal settles labor dispute

The long-running labor dispute at Surya Nepal - the largest tobacco manufacturer in the country - has come to an end after the management addressed the demands placed by the workers.
“We signed an agreement with the management on Monday,” Beni Prasad Timilsina, president of the Nepal Multinational Companies´ Workers Union (NMCWC) told Republica on Tuesday over phone.
According to Timilsina, the management has agreed to increase basic salary of workers by Rs 861 per month. The trade union was demanding for increment of Rs 2,000 in the basic salary.
Rabi KC, corporate vice-president of Surya Nepal, said the company lost around 60 percent of daily production during the protest period.
Workers of Surya Nepal had not shut operations of the factory completely. They returned to work for some hours every day.
The management has also decided to provide Rs 311 per month as inflation allowance. Similarly, it has also hiked gratuity amount to Rs 325,000. Earlier, the workers were getting Rs 180,000 as gratuity amount.
The trade union had initially placed 11-point demands with the management. However, it reduced the demands to seven points after Hetauda Appellate Court issued a stay order against the protest at the end of March.
“All our demands have not been addressed,” Timilsina said, adding: “We compromised on some issues and so did the management.”
The company has also agreed to provide up to Rs 300,000 to workers if they become ill while serving the company. Similarly, it has agreed to provide up to Rs 500,000 in case the workers suffer from incurable diseases like cancer, according to Timilsina.
The appellate court in the first week of April had ordered both the workers and the management to settle the dispute through dialogues. Now that the agreement has been signed, the management has assured us that it would withdraw the petition from the court, according to Timilsina.

Focus on getting assistance for trade and production: UN

At a time when Nepal has been expressing concerns over developed countries not fulfilling their pledge of supporting trade growth, experts from United Nation Conference on Trade and Development (UNCTAD) Tuesday suggested the government to utilize more overseas aid for the development of industry and trade.
Presently, foreign assistance makes around 26 percent of the government´s annual expenditure and officials at the Ministry of Commerce and Supplies complain that only a nominal portion of that is being used to support meaningful projects on trade growth.
Interestingly, statistics of Organization for Economic Co-operation and Development (OECD) says one third of total international assistance comes in Nepal as aid for trade.
Despite such contradiction, experts said Nepal must make efforts to win more assistance and use them more aggressively for the development of exportable products, industrial infrastructures and trade facilitating logistics services if the country is to leverage its share in the international trade.
But as such flow of resources in a particular sector is unlikely to happen unless it is given due priority and included in the National Development Strategy (NDS), UNCTAD representative Maneula Tortora urged the government to integrate trade as a central component of the strategy.
“No plans and strategies can generate effective growth and poverty reduction if they ignore trade that has served as engine of growth and development worldwide,” said Tortora.
Tortora said this while addressing the three-day long regional workshop on ´Integrating the Trade Dimension in the UN Development Assistance Framework´ that kicked off on Tuesday in Kathmandu.
Although OECD data shows high flow of aid for trade in Nepal, officials said the assistance pledged so far have come in the form of technical assistance to carry out various studies and those have largely failed to transform the trade´s reality.
“Aid for trade is important, but it must come in meaningful amount and for projects that make contribution on ground,” said Lal Mani Joshi, secretary of the Ministry of Commerce and Supply (MoCS).
He said the government has been attempting to mainstream trade since last few years, referring that Nepal Trade Integration Strategy (NTIS) formulated in 2010 was the first step toward that path.
The NTIS has identified 19 goods and services that can boost country´s exports in a sustainable manner. “NTIS has given us a ground to take steps for advancing trade and gain more share in the regional and international trade,” said Joshi, adding that government was working together with the development partners aiming to tap potentials of those products and achieve NTIS goals.
Other speakers stressed the need to garner more international assistance to create long-term growth and jobs in the domestic market. They urged the government to play a proactive role and asked the private sector to be more innovative in tapping global market potentials.

Additional Rs 300m sought for Ktm-Tarai fast track

The Ministry of Physical Panning and Works (MoPPW) has said it will need additional Rs 590 million to complete the land acquisition -- barring 8 km stretch in Khokana, Lalitpur -- for Kathmandu-Tarai Fast Track Project and has sought Rs 300 million from the Ministry of Finance to pay compensations to landowners during this fiscal year.
So far, the ministry has received Rs 550 million for paying compensatin to landowners in Bara, Makawanpur, Kathmandu and Lalitpur districts along the fast track.
"Though the actual funds requirement for completing the track opening is much higher, we have asked for additional Rs 300 million for this fiscal year," said Tulasi Prasad Sitaula, secretary at MoPPW.
He also told that acquisition of land along the stretch of 8 km in Khokna has become a tough job as locals are demanding huge compensations. Though MoPPW has not done the exact valuation, it has estimated that acquiring land for the 8-km stretch for the six-lane expressway could cost more than Rs 1 billion.
Given that the locals have refused to compromise on the compensation amount, MoPPW has already reported to the Prime Minister´s Office that it will not be able to open the track within the current fiscal year.
As for the fund disbursed so far, officials said MoPPW was using the amount to compensate landowners in Kathmandu and Lalitpur districts. "The initial plan was to distribute compensation to landowners in Makawanpur. But after they agreed on the terms of compensation they agreed to wait for some time so we decided to pay compensations to landowners in Kathmandu and Lalitpur first," said the source.
The government had allocated Rs 400 million for land acquisition in the 2011/12 budget. The Ministry of Finance had released additional Rs 150 million for the project a few weeks ago.
"I think MoF will provide us the amount we have sought," said Sitaula, referring to the prime minister´s commitment that the government would make sure national priority projects do not suffer from funds crunch.
The proposed Kathmandu-Tarai Fast Track is 76 km and so far MoPPW has opened 51 km.
The Ministry even initiated works to prepare the guidelines in order to screen investors in the project that will be developed under build-operate-own-transfer (BOOT) policy.
The Asian Development Bank that studied financial viability of the expressway in 2008 had estimated that the project would cost around Rs 67 billion.