Nepal asks developed world to remove domestic barriers

Nepal has requested developed countries to help overcome domestic barriers of least developed countries (LDCs) such as infrastructure bottlenecks, lack of knowledge, administrative and institutional shortfalls in order to advance the productive capacity.
Underlining the importance of trade as an engine of growth, Shanker D Bairagi, permanent resident of Nepal to the United Nations and other International Organizations in Geneva, reiterated that LDCs should get open access to the global market to ensure prosperity and growth.
Bairagi, speaking during a meeting of the UN Inter Agency Cluster on Trade and Productive Capacity in Doha, Qatar, under the ongoing meeting of United Nations Conference on Trade and Development (UNCTAD XIII), shared with other stakeholders about the country´s blueprint - Nepal Trade Integrated Strategy - 2010 and prospects it has for the future growth.
“Aid for trade should not divert resources away from other development priorities such as poverty eradication,” the release quoted Bairagi as saying during the meeting.
“The commitments made by the international community in the Istanbul Program of Action (IPoA) -2011 to provide enhanced financial and technical support to develop productive capacities in line with LDCs´ priorities are vital,” said Biragi. “International community should work on implementing the commitments made in Istanbul and respective works and program as envisaged in the IPoA.

India to settle DRP dues by March 2013

A month after terminating long-practiced duty-refund procedures (DRP), Nepal and India have agreed to close down all accounts and settle outstanding dues related with DRP by March 2013.
During the bilateral talk, which was led by Director General of Customs Department of the two countries, the two sides have decided to form a technical committee to ascertain and quantify the amount (of unpaid excise duty in bilateral trade) that India needs to refund to Nepal.
The talks were held earlier this week in Kathmandu on formally closing the DRP. Laxman Aryal, deputy director general of the Department of Customs (DoC) told Republica that the technical committee will be formed after having a letter of exchange between two countries.
"Its primary responsibility will be to calculate out the total outstanding duty amount that Nepal is yet to get from India," said Aryal, adding that the committee was being formed mainly to avoid any mismatch of refundable amount.
The committee will have representatives from Customs Department and Ministry of Finance from both the countries. "However, we have not yet finalized who exactly will be in the committee," said Aryal.
Nepal and India had put DRP mechanism in place in 1961 to facilitate import of excisable items from India. Under this mechanism, Nepali customs allowed Indian goods without charging any excise duty, and later claimed the due duty from the Indian government. The volume of claim depended on the basis of import volume and valuation.
But the two sides had agreed to scrap the mechanism while singing bilateral trade treaty in 2009 and terminated it on March 1 this year. The new arrangement has enabled Nepali importers to acquire the goods without paying any duty to the Indian government. It has also empowered the local customs to collect excise duty on all applicable Indian goods at import point.
Officials at DoC said India has not made any DRP refund to Nepal over the last two years. Given that the government used to get some Rs 3 billion in duty refund from India every year, they estimated that the outstanding DRP amount stands at well over Rs 6 billion.

Nepal seeks meaningful assistance for trade, development

Nepal has urged the developed countries - that have been dragging their feet to fulfill long overdue trade and development related promises - to provide special market opportunities and extend meaningful support for the development of trade to the least developed countries (LDCs) so that low income countries could enjoy poverty reduction and other benefits from global trade regime.
Commerce Minister Lekh Raj Bhatta made such a call to the developed countries while attending Investment Advisory Council (IAC) of United Nations Conference on Trade and Development (UNCTAD) in Doha, Qatar, on Saturday.
Speaking at the Council, which was convened to discuss raising investment and productive capacity of the LDCs, Bhatta said that low income countries have been facing diverse obstacles in integrating their trade with the competitive global economy. Even though developed countries have promised support to overcome those obstacles, he said they have failed to live up to their words so far.
“LDCs are constrained by poor infrastructure and other structural problems. Unless these constraints are overcome, we LDC´s will continue to attain meaningful integration into the global economy,” a press statement of Nepal´s Permanent Mission to the United Nations and Other International Organizations in Geneva quoted Bhatta as saying.
Bhatta mainly sought support on areas like enhancing LDCs´ resilience to external shocks, building critical physical infrastructure such as roads, energy, electricity, telecommunications, development of science and technology and social and human development.
“LDCs by virtue of their characters face resource scarcity and even the foreign investment barely flow to such constrained countries,” he said, and called on the development partners to adopt, expand and implement policies that encourage and promote their investors to invest in the LDCs.
IAC, as a joint initiative of UNCTAD and the International Chamber of Commerce (ICC), offers a platform for consultations between government leaders, heads of international organizations and CEOs of international companies.

Nepal offers stable investment opportunities to foreign investors: Minister

Commerce Minister Lekh Raj Bhatta, addressing the thirteenth United Nations Conference on Trade and Development (UNCTAD XIII), said that the country was ready to offer a stable investment environment to foreign investors with peace process gradually coming to a logical conclusion.
According to a press release issued on Thursday by the Permanent Mission of Nepal to the United Nations in Geneva, Bhatta said that despite visible constraints, Nepal offers very attractive and stable investment opportunities in hydroelectricity and tourism sectors.
The conference, which kicked off on Thursday in the Qatari capital of Doha, focuses on economic development and modernization of least developed countries (LDCs).
“Service sector is emerging as a vibrant component of Nepali economy in recent years and its share in the gross domestic production, employment generation and foreign exchange earnings is increasing,” the release quotes Bhatta as saying during the conference.
Underscoring multiple constraints LDCs like Nepal face in the development process of the service sector, including high transaction costs, supply-side problems, stringent market access conditions, inequalities, and formidable structural problems, Bhatta stressed that effective national efforts and adequate and appropriate international support are essential to overcome the deep-rooted challenges.
“Support measures should encompass special treatment for LDCs in the WTO negotiations on trade, and special priority should be accorded to modes and sectors of export interest to the LDCs,” says the statement.

Committees and reports unable to revive sick industries

The government formed around a dozen committees in last 10 years to study and revive sick-industries in the country. All of them recommended ways to revive them but none could precisely categorize which were sick-industries.
As a result, there has been no change in the situation of sick industries since 1994 when the first committee was formed.
Recently the government formed 8-member Sick-Industries Rehabilitation High-Level Task Force (SIRHLTF) under the leadership of Dipendra Bahadur Kshetry, vice-chairman of the National Planning Commission (NPC) to categorize sick-industries, their problems and find solutions. However, the 20-pages report does not clarify on definition of sick-industries.
"It has already been six months since the report was finalized," a ministry official said on condition of anonymity "Report says what facilities to give to the sick industries but does not say precisely which are the sick industries and that is the main reason for not getting anywhere."
“Six industries have applied for immediate relief at the Ministry of Industry,” the official said. “But we can´t proceed since there is no legal categorization of the sick-industries.”
SIRHLTF paves the way for sick industries to multiple facilities such as postponement of bank loan repayment, restructuring of loan, waiver of tax.
In the annex, the report has listed 26 companies that applied to be categorized as sick-industries . "These are the industries that applied for benefits that we have set for sick-industries," Kshetry said, "But, we are yet to make a technical committee which will fix criteria for sick-industries."
Contrary to the Keshtry´s claim, Umakant Jha, secretary of the MoI, said the ministry was preparing to submit the report to the cabinet for approval. The MoI has reserved the process of implementation saying that it doesn´t have any legal ground to execute them without cabinet´s approval.
Previously, a similar high level committee was formed in 2010 under the leadership of secretary of the MoI. The report however, was replaced by a new one of SIRHLTF. “But there is not much difference between two reports,” said a source at the MoI.
According to Anil Kumar Thakur, joint secretary of the MoI, preparations were ongoing to incorporate definition of sick-industries in the Industrial Enterprises Act (IEA) which is in final stages.