Officials from eight South Asian countries are convening in the capital
next week to shorten the existing list of ´sensitive items´ on which
they have refused to trade at zero tariff so that regional economic
integration could gain momentum, generate more trade and job
opportunities to the people in the region.
Likewise, another working group of technical officials from South Asian
Association for Regional Cooperation (SAARC) is also meeting in the
capital to work out a framework for opening services trade in the
region.
“We will have separate back-to-back meeting of two different groups
under South Asia Free Trade Area, starting from Monday,” said Naindra
Prasad Upadhaya, joint secretary at the Ministry of Commerce and
Supplies (MoCS).
The first - Working Group on Reduction of Sensitive List (WGRSL) - will
negotiate on Monday for downsizing the existing negative list of trading
items by 20 percent, as mandated by the SAARC Summit. The second team -
Group of Experts - meeting on Tuesday will hold discussions to evolve
out a frame work of South Asia Trade in Services (SATIS).
Upadhyaya refused to elaborate, but sources at the MoCS said all member
countries have respected the mandate of the Summit to further open up
their markets for intra-regional trade and proposed a revised sensitive
list, downsizing it from existing long list.
Although SAARC members, including Nepal, India, Bangladesh, Bhutan,
Pakistan Sri Lanka, Maldives and Afghanistan, started to trade without
tariff barriers from 2006, the intra-regional trade has not yet made
significant headway largely due to the long sensitive list. Presently,
the sensitive list has as much as 20 percent of total regional tradable
items, and worse still, each member countries have largely included
items of others exports interest in the list.
“The commitment is there from all members to further open up their
markets, but we are still to see how sincerely they will present
themselves in this endeavor,” said the source, adding that WGRSL will
discuss a new lists that the member countries will table.
So far, countries have not disclosed what exactly they will reduce from
the list. “We ourselves are still preparing the list of the items that
can be removed from the existing list,” he told Republica.
If the Working Groups finalizes the cuts, officials said member
countries will immediately open their trading under zero tariff
facility. If Nepal cuts the list, it will still have 998 items in
sensitive list for the least developed countries (LDCs) and 1,086 items
for the non LDCs.
Presently, Bangaladesh has 1,233 products in the sensitive list for the
LDCs and 1,241 for the non-LDCs. Similarly, India has 480 items in list
for the LDCs and 868 for the non-LDCs, Maldives has 681 for all seven
SAFTA nations, and Pakistan has 936 items, Srilanka has 1,042 and
Afghanistan has 1,072 items on the list.
As for the meeting on SATIS, officials said member countries are still
to propose sectors that they will open for service trade. “Negotiations
were still on in very basic issues. Hence, the meeting will largely
focus on nitty-gritty of the framework accord for trade in services,”
said the source.
Governor of the Nepal Rasta Bank Dr Yuba Raj Khatiwada on Friday asked
NIDC Bank -- a financial institution that was established with a motive
to promote industrial sector -- to increase its capital so that it could
invest more and facilitate growth of productive industries.
"We safeguarded NIDC over the past five decades with a sole motive to
lend and facilitate the development of mega industrial projects. It must
live up to this expectation," said Dr Khatiwada.
Dr Khatiwada, who was speaking at the 54th annual general meeting of the
NIDC Bank, promised all possible support from the central bank´s side.
Chairperson of NIDC Shanta Bahadur Shrestha expressed concerns over the
institution´s bad loan. "Recovering the bad loans has become a major
challenge for the bank, but it must overcome this challenge, if it is to
create opportunities for itself and do better in the highly competitive
banking sector," he stated.
Issuing a press release on the occasion, NIDC Bank has announced that it
is aiming to earn profit of Rs 300 million in the current fiscal year.
In a major development, the Investment Board (IB) on Thursday approved a
format for power development agreements (PDA) that it is to adopt while
awarding hydroelectricity projects of above 500 MW capacity to international investors.
The format, which will be applied while developing Tamakoshi III (650
MW), Upper Karnali (900 MW), Upper Marsyangdi (600 MW) and Arun III (900
MW) under build-own-operate-transfer (BOOT) arrangements, assures a 30
year concession period for the developers. It also sets the condition
that the projects developed should last 100 years.
What this means is, the developers will be allowed to own and operate
mega hydropower projects for 30 years, and once the contract ends, the
government will reclaim the ownership. But developers will still be able
to operate the projects for the next 70 years. "This will protect the
interests of both the people of Nepal and the power developers," said a
senior IB official.
The PDA template equips the government with guidelines for negotiating
sound hydropower deals. It aims to ensure maximum benefits in terms of
revenue, spending, industrial employment benefits and electricity.
"The PDA ensures fair returns to the developers, enabling them to get
financing at competitive costs. This agreement is bankable," said Radesh
Pant, CEO of IB.
Among other things, the PDA template commmits to putting in place a
timely mechanism for approval from the government and also promises that
the government will fulfill its commitments. It seeks developers to
follow the best-practice international environmental and social
standards, ensures packages that benefit local communities and commits
itself to fair resettlement and rehabilitation, Pant told Republica
after the board endorsed the template on Thursday.
Prime Minister Dr Babu Ram Bhattarai, who chairs the IB, stated that the
government will assure investors work on their projects will proceed
unhindered.
The PDA is just an agreement template though. The IB will negotiate and
tailor individual agreements for different projects based on project
circumstances and economics, local community needs and aspirations.
The template clearly cites the roles and obligations of the government
and power developers. In the event of disagreements, it assures
impartial processes for quick resolutions.
It also deals at length with dam safety, appropriate design and
maintenance and handover provisions. "Issues such as protection against
basin silting are also covered so that these hydro assets continue to
benefit the country for many decades after the investors hand them back
to the government," Pant told Republica.
The PDA template furthermore provisions for full financial disclosure so
that the government understands how it will benefit from projects.
"Shareholder agreements -- yet to be drafted -- will ensure profit and
dividends and other policies and procedures to protect the government´s
equity interest over the 30 year term," reads the template.
Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has
urged the government to forge national consensus among all political
parties and bring a full-fledged budget to give continuity to
development and pump in new life to businesses.
“We strongly request the government to agree on common minimum economic
agendas,” Bhawani Rana, acting president of the FNCCI, said. She also
urged political parties to form a national consensus government at the
earliest and end uncertainty.
“The failure to bring full-fledged budget for the upcoming fiscal year
will have a negative impact in the economy,” Rana told media persons on
Wednesday.
The apex body of Nepali private sector has also requested government to
extend the deadline for bank loan repayment and provide compensation to
the private sector for losses they incurred during bandas and strike in
the last week of May. “We request the government to waive off interest
amount for the month of May extend loan repayment date by three months,”
she added.
FNCCI also lambasted the government for pushing for revenue mobilization
without creating environment conducive for businesses. “Unfortunately,
the government is pushing for revenue growth at a time when private
sector has lost confidence due to factors like strikes, power shortage
and labor unrest,” Rana added. “The government should make banda
organizers compensate for the loss incurred by businessmen during bandas
and strikes.
The federation has also requested the government to ensure security for
businesses so that the business sector can operate without any fear. “It
is becoming extremely difficult for the private sector to run their
business enterprises due to fear of extortion,” Rana said, informing
that former Maoist combatants have been collecting cash from businessmen
in Makawanpur district.
FNCCI concerned about Narayanghat incident
FNCCI has voiced concerns over recent attack on members of revenue investigation team by Narayanghat-based businessmen.
“We denounce violence. But the modus operandi of Department of
Investigation (DRI) in that particular case was not practical,” Bhawani
Rana, acting president of FNCCI, said. “The entire business community
has lost confidence due to the Narayanghat incident.”
DRI has decided to freeze assets and bank accounts of the proprietors of
Laxmi Narayan Bastralaya and Bhagawat Bastralaya. These two apparel
stores have been found evading revenue worth millions of rupees.
Businessmen had attacked team members and torched their vehicle after
they sealed the stores, suspecting them of evading taxes.
Nepal Trade Integration Strategy (NTIS), a national document developed
with objectives to give new impetus to faltering exports, has largely
remained unimplemented even though two years have elapsed since it came into being.
Under the strategy, the government had identified 19 key products in
which Nepal enjoys competitive edge and can bank on for sustainable
trade growth, promised to support development of those products and
services, apart from providing infrastructural support for their trade.
However, leave aside making concrete support for the product
development, the strategy has not even managed to get enough allocations
to deliver the promises of infrastructure development. “Unfortunately,
Ministry of Commerce and Supplies (MoCS) - the implementing agency - has
not even been able to spend even that meager allocations,” said a
source.
According to MoCS, the government had allocated Rs 30 million in 2010/11
and pledged Rs 50 million in 2011/12 for the implementation of NTIS.
“But the implementing institutions are so weak they even cannot make
their periodic publications, forget about implementing the action-plans
that NTIS has,” former commerce secretary Purushottam Ojha told
Republica.
No wonder, the much-desired export growth of most of the products listed
in the NTIS has not gone up over these years. Rather, some of the
products that were identified as highly potential items have suffered a
drop in exports.
For instance, ginger exports went down by 38 percent in 2010/11, lentils
and handicraft too suffered drop in exports by well over 10 percent
each during the year. The NTIS has enlisted cardamom, tea, instant
noodles, medicinal herbs and essential oils, germs and jewelry, iron and
steel, wool products and pashmina, as products through which Nepal can
fulfill its dream to expand exports.
Some, however, argue that two years is too short a span for realizing
any visible change. “NTIS´s objectives are to establish backward and
forward linkages, so that farmers could enjoy substantial positive
changes in their lives. Now you do not expect that to happen in two
years,” said a MoCS official.
However, knowledgeable people like Ojha said the strategy has suffered
mainly because the political leaderships at the ministry have not owned
it seriously. “They (ministers) have so much interest in Nepal Oil
Corporation, I haven´t seen any political leadership being sincere about
the NTIS document in last two years,” said Ojha.
However, the government´s plan to consolidate all the foreign assistance
that comes as aid for trade through this strategy has somehow been
addressed. For instance, the bilateral and multilateral donor agencies
now have to go through the document.
“We refer NTIS document while the negotiation goes on with different
agencies,” Jib Raj Koirala, under secretary at the MoCS said,
“Comparatively, it has been useful to negotiate with the bilateral and
multilateral donor agencies.”
The NTIS has specifically highlighted its four basic objectives such as
strengthening trade negotiations (especially bilateral), strengthen the
technical capacity of domestic non-tariff barriers/other business
supportive institutions, and strengthen the export capacity of inclusive
export potential goods and manage the aid for trade.
The government has failed to hold bilateral trade talks with Bangladesh,
China, Bhutan and the US, citing reasons like political instability.
Confederation of Nepali Industries (CNI) and Alternative Energy
Promotion Centre (AEPC) have signed a memorandum of understanding (MoU)
to promote renewable energy.
They have agreed to enter into an institutional collaboration for
implementation of renewable and alternative energy technologies along
with promotion and development of renewable energy in the country.
The MoU envisions certain terms and principles that
guide, coordinate, lobby and harmonize the relationship and work on a
private-public partnership modality for alternate energy promotion.
Binod Chaudhary, president of the CNI, and Krishna Gayawali, secretary
of the Ministry of Environment, Science and Technology (MoEST), signed
the MoU on behalf of their respective organizations, according to a
statement issued on Tuesday.
"The two institutions´ services will focus on rural areas with the
objective of enhancing energy access and employment while reducing
poverty through public private partnership to foster growth of
industrial sector," Chaudhary said at the signing ceremony.
The CNI and AEPC have also agreed to work with community based
organizations, private sector, non-governmental organizations and other
institutions for maintaining energy systems at affordable level, meeting
basic quality standards, and maximizing use of energy for income
generation activities.
Federation of Handicraft Association of Nepal (FHAN) in coordination
with the Ministry of Commerce and Supplies (MoCS) and Trade and Export
Promotion Centre (TEPC) is organizing handicraft trade fair from November 22 to 26.
According to a press statement issued by FHAN on Thursday, the event
will also be supported by Federation of Nepalese Chambers of Commerce
and Industry (FNCCI), Federation of Nepal Cottage and Small Industries
(FNCSI), Micro Enterprises Development Program (MEDP), district
handicraft associations, among others.
"The event is expected to develop as business hub for the SAARC region´s
handicraft entrepreneurs as there will be participation from India,
Bangladesh and Pakistan," reads the statement, "There will be 20
participants from Bangladesh and 15 each from India and Pakistan." FHAN
is trying to arrange participation of Maldives, Bhutan and Sri Lanka in
the event, according to the statement.
"There will 250 stalls of handicraft and 12 pavilions and others
individual handicraft booths of pashmina along with Nepali handmade
paper, leather products, natural fiber products, wood products, ceramics
and many more other handicraft," read the statement.
FHAN has estimated that the fair would draw more than 300,000 visitors.
"A turnover of Rs 50 million is expected during the event," read the
statement.
