FNCCI, MNCCI sign MoU

Private sector of Nepal and Mongolia have joined hands to work together for the development of both the countries by exchanging expertise and knowledge through meetings, conference and technical workshops for businesspersons from both the countries.
Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and Mongolian National Chamber of Commerce and Industry (MNCCI) signed a memorandum of understanding (MoU) in Mongolia last week, agreeing to work together for business enhancement in both the countries, according to a press statement issued on Sunday.
“Pradeep Kumar Shrestha, former president of the FNCCI and S Demberel, chairman of the MNCCI signed the MoU on behalf of their respective organizations in the presence of Benedicto Yujiico, president of the Confederation of Asian-Pacific Chambers of Commerce and Industry (CACCI),” reads the statement.
The private sector of both the countries will help each other to share knowledge and expertise on developing environment for attracting foreign investment.
The MoU also aims to form a Nepal-Mongolia Business Council (NMBC) as a mechanism to bridge the business relationship between the two countries.

Strike ends as govt, transporters reach deal

The transporters have ended their two-day-old strike of public transport after the government agreed to form a task force to study their demand to annul a provision which allowed traffic police to fine motorists up to Rs 1,000 late Saturday night.
During Saturday´s talks, the government agreed to address 14 of the 15-point demand put forward by the transporters. On the most contentious point - annulment of delegation of authority to the traffic police to fine motorists between Rs 200 to Rs 1,000, the two sides agreed to resolve the issue after a field study by the task force comprising representatives from both the sides.
"We have agreed to revisit the government´s decision to provide authority to the traffic police through a study and are ready to address other 14 demands," Tulsi Prasad Sitaula, secretary at the Ministry of Physical Planning, Works and Transport Management (MoPPWTM) told Republica after the meeting.
The transport entrepreneurs have also shown flexibility to conduct a field study over the most crucial point of their demands through the task force within next 15 days. "We have called off our strike after the government agreed to carefully study on our problems and sort out it," Dol Nath Khanal, general secretary of the National Federation of Nepal Transport Entrepreneurs (NFNTE), said. "The government´s decision will be based on the field report of the task force."
Four transport unions including National Federation of Nepal Transport Entrepreneurs (NFNTE), All Nepal Transport Workers Association, Nepal Yatayat Workers Association and Nepal Yatayat Independent Workers´ Association had jointly declared indefinite strike from August 10, accusing the government of failing to address the problems of transport entrepreneurs.
Commuters, who relied heavily on the public transports, were severely affected by the two day strike. The entrepreneurs had called nationwide strike demanding for annulment of the provision for slapping fines of Rs 200 to Rs 1,000 for every single violation of traffic rules. Additionally, the transport entrepreneurs have urged for annulment of Metropolitan Traffic Police Division´s decision to reward 15 percent of revenues collected as fine from drivers to traffic police who was involved in fining the violator.
Hundreds of thousands of commuters suffered as public vehicles such as micro-vans, tempos, buses and taxis stayed off the road due to the strike for the second day Saturday. The second round of talk between government and transport entrepreneurs had ended inconclusively on Friday afternoon.
The transporters had then threatened to stop even the private vehicles from operating from Sunday to press their demands.
"The provision for slapping fines ranging from Rs 200 to Rs 1,000 is not practical as drivers of public vehicles, who need to be on the road throughout the day, cannot afford to fork out such huge amounts and it´s not practical," Khanal, said referring to the four-month-old decision of the government to delegate authority to increase fines to the traffic police.
As black-plated vehicles -- a broad categorization of public transport vehicles -- stayed away from regular service, Nagdhunga checkpoint, the main entry and exit point to and from Kathmandu Valley, recorded only 200 private vehicles passing through on Friday and it was almost same on Saturday as well. Normally, 3,000-5,000 vehicles use the Nagdhunga point every day, according to Metropolitan Traffic Police at Nagdhunga.

Govt-transport union talks fail

Even as hundreds of thousands of commuters suffered due to the indefinite strike called by four public transport unions, the agitating transporters have threatened to prevent all vehicles, including private and government, from plying the streets from Sunday, after the two-hour negotiations ended inconclusively on Friday.
The warning came after the second round of talks between the government and agitating transport entrepreneurs could not yield positive results as both sides remained adamant in their positions. This means the latest public transport shutdown first clamped on Friday will continue on Saturday and keep 425,000 public vehicles off the road, affecting normal life across the country.
According to Tulsi Prasad Sitaula, secretary at the Ministry of Physical Planning, Works and Transport Management (MoPPWTM), the meeting between the government and transport entrepreneur representatives held at Singha Durbar Friday afternoon foundered after the government rejected the transport entrepreneurs´ demand for scrapping the powers that have been delegated to the Metropolitan Traffic Police.
"The demands of the transport entrepreneurs are not practical as they are seeking annulment of the provision for slapping fines of Rs 200 to Rs 1,000 for violation of traffic rules," Sitaula told media after the meeting. He further said the government is ready to discuss their other demands.
The other demands of transport entrepreneurs include formation of a separate transport ministry, recognition of the transport sector as an industry and annulment of the Metropolitan Traffic Police Division´s decision to reward 15 percent of revenues collected from motorists as fines to traffic police personnel.
However, the agitating entrepreneurs said that they won´t review their demand at any cost since the government was not being rational while formulating laws for ensuring smoother traffic flow. "Reviewing our demands is next to impossible," Dol Nath Khanal, general secretary of National Federation of Nepal Transport Entrepreneurs (NFNTE), told Republica, adding that the next meeting will be held only if the government changed its impracticable stance.
"The provision for slapping fines ranging from Rs 200 to Rs 1,000 is not practical as drivers of public vehicles, who need to be on the road throughout the day, cannot afford to fork out such huge amounts," Khanal said, referring to the four-month-old decision of the government to delegate authority to increase fines to the traffic police.
NFNTE along with All Nepal Transport Workers Association, Nepal Yatayat Workers Association and Nepal Yatayat Independent Workers´ Association joined hands Wednesday to declare an indefinite strike from August 10, accusing the government of failing to address the problems of transport entrepreneurs.
As black-plated vehicles -- a broad categorization of public transport vehicles -- opted to refrain from regular service, Nagdhunga checkpoint, the main entry and exit point for Kathmandu Valley, recorded only 200 private vehicles passing through on Friday.
Normally, 3,000-5,000 vehicles use the Nagdhunga point every day, according to Metropolitan Traffic Police at Nagdhunga.

PAF to form ad hoc committee for national ID distribution

Poverty Alleviation Fund (PAF) has decided to from an ad hoc coordination committee comprising representatives from public and private sector under the leadership of PAF vice chairperson Janak Raj Joshi to distribute the proposed the national identity cards to poor households until an over-sight agency is formed.
According to a press release issued on Friday, PAF board meeting decided to form an ad hoc committee and also proposed to develop an over-sight agency to ensure the effective implementation of national identity cards distribution program.
The meeting decided to distribute the national identity card in three phases. “It will distribute the cards in 25 districts in the first phase,” said the press releasing without identifying the districts.
The committee will start work on distribution of national identity card formally from from Sept 17.
The PAF, which is entrusted to carry out the national identity cards distribution program, will also review the report prepared by the technical committee on poor households. “The report will be submitted to the government after the review,” read the release.
The government launched the program to distribute the national identity cards to the poor households within this fiscal year 2012/13.

Special unit at commerce ministry to facilitate Nepal-China trade

The government has set up a technical unit, a special cell, at the Ministry of Commerce and Supplies (MoCS) in a bid to promptly address technical problems, concerns and other confusions faced by the traders doing business with China.
The unit has been formed after Nepal-Tibet Trade Facilitation Committee (NTTFC) -- an inter-governmental special mechanism between Nepal and China -- decided to set up the unit in the commerce ministries of both the countries to facilitate direct communications and prompt solution to technical problems.
“The cell has been developed to resolve problems that traders face from day to day,” Naindra Prasad Upadhyaya, joint secretary at MoCS told Republica. “We have already informed the Chinese government about its establishment and hope to receive a positive news from them as well.”
Going by the cell´s operation guidelines, traders involved in exports and imports from China can directly file their complaints at the cell if they face any problems.
The officials deputed at the cell are entrusted to promptly communicate their problems to the Chinese authority in Nepal as well as officials of similar cell in the Chinese commerce ministry and suggest solutions to resolve them.
The officials had been strongly raising this issue mainly as more Nepali traders were filing complaints at the ministry in recent years over various problems at the customs due to language barrier, lack of proper disclosure of tariff and procedures, among others.
Upadhyaya, who is also the focal person of the unit, said that the unit will stay in close touch with the traders and coordinate with the Chinese government agencies to solve problems.
However, officials said that the success of the cell will depend on how promptly the concerned Chinese officials respond to Nepal´s queries and explanations. “Given the type of bureaucracy and procedures China follows, we will have to wait for the time being to be sure it will deliver the desired result,” said a source.
If the unit did work in the manner Nepali traders wish, they believe it will greatly facilitate and ease trade between the two countries, mainly exports. Data of Trade and Export Promotion Center (TEPC) shows, Nepal suffered trade deficit of Rs 46 billion with China in 2010/122.

Indian decision to operate major ports 24/7 elates Nepali traders

India has decided to operate its customs at leading airports and sea ports, including Kolkata, round the clock throughout the week. The move is expected to speed up clearance of goods in transit to Nepal.
The decision, if truly implemented, is expected to speed up customs clearance, thereby lowering detention and demurrage charges for Nepali traders. Thus lowering of the transit cost can impact the final pricing as well, ultimately bringing some respite to general consumers who have been bearing the brunt of high transit and transportation costs.
“This is really a good decision for us,” said Rajan Sharma, president of Nepal Freight Forwarders´ Association (NEFFA). “It will ease our day-to-day business and made trading cost effective.” He also said decrease in detention and demurrage charges will benefit Nepali consumers.
The Prime Minister´s Office of India had decided to facilitate round the clock customs operation at major seaports and airports on Tuesday in a bid to remove the constraints for international trade. It has instructed the customs and other authority to implement the decision within 15 days.
“In order to remove this customs-related bottleneck, it has been agreed that customs clearances will now be available at seaports such as Kolkata, Chennai, Kandla and Mumbai and airports such as New Delhi, Bangalore, Chennai and Mumbai round the clock in order to facilitate trade services,” reads a press release that the Indian PMO issued on Tuesday.
So far, the cargos dispatched to and send out of Nepal were required to wait for days at Kolkata port and airports in India due to the lack of prompt and round the clock clearance facilities.
“Hopefully, the decision will significantly cut those detentions now,” Nikhir Jaisani, a Biratnagar-based trader told Republica over phone. “We hope our consignments, once this decision is implemented, will not be forced to be parked in the port by paying everyday demurrage and detention charges.”
Along with the customs, the Indian PMO has also asked other agencies such as port and airport authority, drug controller office, Food Safety and Standards Authority of India, quarantine and private players such as custodians to operate round the clock to facilitate international trade.
Once the new arrangement comes into force, the customs house agents, banks and transporters also will need to work round the clock to synchronize with the extended work hours.
As Nepal uses only Kolkata port to carry out its imports and exports, the goods that are imported won´t be piled up due to closure of customs clearance during the weekend. “We have to wait for two days to get the customs clearance if it comes on Friday,” Sharma said. “We won´t have to waste time and money after customs offices at ports started operating round the clock.”

Political instability, labor unrest pull down FDI by 30 percent

The deepening political instability and frequent labor unrest has dragged down the inflows of foreign direct investment (FDI) to Nepal by around 30 percent during the fiscal year 2011/12 compared to the figure a year earlier.
The whopping decline in FDI inflows has resulted in 17 percent fall in employment generation with creation of only 9,050 new jobs in the country.
The decline in FDI inflows was witnessed in crucial sectors of the national economy such as manufacturing and agriculture.
The statistics compiled by the Department of Industry (DoI) showed the number of new jobs created in the market had fallen despite a rise in the number of industries approved under FDI across the country.
The number of firms approved by the DoI increased to 227, up by 18 compared to the figure recorded earlier year. However, the flow of investment fell to Rs 7.14 billion, down from Rs 10.05 billion a year ago.
“We didn´t get much investment in areas such as manufacturing and agriculture which took away a significant chunk of FDI inflows in to the country,” Bipin Rajbhandari, director at the DoI told Republica on Sunday.
Statistics further showed that agro-based industries saw a decline in FDI by staggering 56 percent falling to just Rs 162 million and creating 840 fewer jobs in the market compared to earlier year.
Likewise, the FDI inflow in the manufacturing sector also dropped by 84 percent to Rs 988 million. The fall in FDI in this sector also led to fewer job creation.
The FDI, however, in the sectors such as energy and service industries went up during the fiscal year 2011/12. “However, these areas do not create more jobs in the market,” Rajbhandari added. The country could see zero investment in the construction sector during the year. The construction sector had received Rs 150 million as the FDI during the fiscal year 2010/11 generating 90 new job opportunities in the market.
On the back of slowing FDI, the government is stepping up the process to endorse the new Special Economic Zone (SEZs) bill, Industrial Enterprises Act (IEA), Foreign Direct Investment and One Window Policy to lure more investment from foreign as well as domestic investors.
The government is establishing SEZs in 10 different places including Bhairawa, Biratnagar, Bara and Siraha in a bid to create conducive industrial environment.
Despite the increase in the number of industries registered during the year, the number of large and medium scale industries - key generator of jobs opportunities - fell in the fiscal year 2011/12.
According to the statistics, 10 large scale industries were approved by the DoI during the review year. The figure was 15 during the previous fiscal year. Likewise, the number of medium scale industries has fallen from 17 to 14. Large scale industries comprise more than two-third of total FDI inflow in to the country.
However, the number of small scale industries increased marginally from 177 to 203 in the fiscal year 2011/12.