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.